Georgia - Economic sectors

In terms of volume of goods and numbers employed, agriculture plays a key role in the Georgian economy and is crucial in reducing poverty in rural areas. The liberalization of prices and the privatization of the land were important steps taken during the 1990s to improve the agricultural sector, though lack of capital has prevented the development of modern systems of management and the attraction of new markets.

The industrial sector has enjoyed modest advances in recent years. In 2000, industrial output grew by 10.8 percent, amounting to GEL1.051 million. Industry accounted for 21.5 percent of GDP in 2000. One positive trend was the increase in the number of small businesses, which totaled 2,296 in October 2000, though they only accounted for 14.5 percent of total industrial production. There is an unequal share of production among the

industries—43.8 percent of industrial production is produced by 52 of the 2,713 industrial companies—indicating a low level of diversification. In addition, the shadow industry, a legacy from Soviet times, continues to hinder growth. The volume of informal or shadow industrial production was estimated to be 177 percent of officially produced goods in 2000. Industry employed 20 percent of the workforce in 1999.

The service industry constituted 51 percent of Georgia's GDP in 2000. Trade and transport both play a major role in the service industry and each accounted for more than 10 percent of the sector, respectively, by 2000. Tourism remains one of Georgia's great unfulfilled potentials, but the loss of Abkhazia and poor infrastructure continue to hamper development in this area. The banking sector has consolidated greatly since 1994 but there are still too many banking groups relative to both the population and the resources of the Georgian people. Approximately 40 percent of the workforce was employed in the service industry in 1999. The remaining 5.9 percent of the GDP was accounted for by net taxes.

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