2013年-世界发展银行全球_Georgia_Sustaining_Rapid_Economic_Growth___Country_Economic_Memorandum_106页_1mb

Georgia: Sustaining Rapid Economic Growth

Core Content

This Country Economic Memorandum (CEM) outlines the challenges and opportunities for sustaining rapid economic growth in Georgia over the next decade. The report focuses on three main areas: savings, firm-level productivity, and export growth. It emphasizes the need for structural reforms and policy adjustments to ensure a more sustainable and inclusive growth path.

Main Views

1. Economic Growth and Savings

• Growth Record: Georgia experienced an average GDP growth of 6.1% per year from 2004 to 2012, with GDP per capita rising from $920 in 2003 to $3,500 in 2012.
• Savings Gap: Despite growth, national savings remained low, at 17.5% of GDP in 2012, and are insufficient to support continued high growth.
• Current Account Deficit: The current account deficit was high, peaking at 22% of GDP in 2008, and remained at 10-12% of GDP in 2010-12, highlighting the need for a shift to domestic financing.
• Savings Requirements: To sustain growth above 5% per year over the next 15 years, national savings need to increase to 27% of GDP by 2017 and 29% by 2027.
• Policy Recommendations:
  • Shift the fiscal framework to lower current expenditures and increase capital expenditures.
  • Improve incentives for private retirement savings through sustainable pension expectations and supplementary savings schemes.
  • Develop capital markets to offer more financial instruments for long-term saving.
  • Implement macroprudential regulations to curb unsustainable credit-fueled consumption booms.

2. Firm-Level Productivity

• Productivity Drivers: Georgia's productivity growth has been driven by nontradable sectors, but tradable sectors (especially manufacturing) have not seen similar improvements.
• Constraints to Growth:
  • High borrowing costs and lari bank spreads.
  • Non-Performing Loans (NPLs) affecting credit availability.
  • Inefficient electricity pricing and regulatory framework.
• Policy Recommendations:
  • Improve the ease of closing businesses to avoid unproductive resource use.
  • Reduce NPLs and encourage bank entry and competition.
  • Reform electricity pricing mechanisms to move toward cost-based pricing and reduce retail-wholesale spreads.
  • Enhance allocative efficiency and productivity growth across the firm lifecycle.

3. Employment and Skills

• Labor Market Challenges: Unemployment remained high (around 15% in 2012), and there was a mismatch between job requirements and available skills.
• Skills Mismatches: A significant portion of the workforce lacked the skills needed by firms, particularly in technical and managerial areas.
• Policy Recommendations:
  • Strengthen job matching services to reduce search costs and improve employment opportunities.
  • Improve the vocational education system and overall education quality to equip workers with more relevant skills.

4. Exports and Trade

• Export Structure: Georgia's exports are heavily concentrated in a few sectors, such as apparel and wine, and remain below 40% of GDP.
• Export Constraints:
  • Appreciating exchange rate leading to price competitiveness issues.
  • Non-tariff barriers in destination markets.
  • High logistics and transport costs.
• Policy Recommendations:
  • Address persistent overvaluation of the currency.
  • Implement trade-related reforms to improve access to EU and international markets.
  • Enhance trade and logistics infrastructure to match leading middle-income countries.
  • Support targeted vocational training and investment promotion in key export sectors.

Key Information

• Currency Equivalence: US$1.00 = 1.6553 GEL (as of July 9, 2013).
• Exchange Rate: The real effective exchange rate has been appreciating, affecting export competitiveness.
• FDI Inflows: FDI was a major driver of growth, reaching 16.5% of GDP in 2007, but has since declined.
• Poverty Incidence: Remained high, around 18-20% of households in poverty during 2006-11.
• Inequality: Gini coefficient remained stable at 38-39%, indicating limited income distribution improvements.
• Fiscal Data:
  • Current account deficit was around 10-12% of GDP in 2010-12.
  • Investment averaged around 29% of GDP in 2012.
  • National savings averaged 17.5% of GDP in 2012.
• Sectoral Insights:
  • The apparel and wine sectors are key for export growth and employment generation.
  • Targeted vocational training and investment promotion are recommended to support these sectors.

Conclusion

To ensure sustainable growth and reduce poverty, Georgia must transition from its current growth model, which is heavily reliant on foreign capital and nontradable sectors, to one driven by domestic savings and productivity in tradable sectors. This requires a multifaceted approach involving fiscal reforms, improved business environment, enhanced education and skills, and better trade and logistics infrastructure. The report emphasizes the importance of policy coherence and institutional capacity to achieve these goals.