Before the collapse of the USSR, poverty was relatively unknown in Georgia. Since then, the standard of living has declined. In June 2000, 53 percent of the population was below the national poverty line, which meant that average spending was less than US$2 per day per person. Georgia's tradition of an extended-family support system has acted as a buffer against the worst privations of severe poverty, however.
Access to land has alleviated some of the hardships for the rural population. In 1997, the poverty gap and squared poverty gap index were 40 and 60 percent higher
|GDP per Capita (US$)|
|SOURCE: United Nations. Human Development Report 2000; Trends in human development and per capita income.|
in urban areas, respectively, than those in rural areas. There are also significant differences in poverty rates and poverty gaps among the geographic regions, with poverty rates in the richest areas (Samegrelo/Poti, Adjara/Batumi) being half those of the poorest ones (Imereti, Guria). The people of the most impoverished region, Imereti, live in remote, mountainous areas that are almost inaccessible during winter partly due to lack of infrastructure maintenance. The former centers of Soviet heavy industry were most adversely affected while those that possessed diversified agricultural and agro-industrial sectors proved less vulnerable to the dramatic upheavals of the 1990s.
The minimum subsistence levels established by the U.S. State Department for Statistics (SDS) were GEL113.2 a month for a working man, GEL99.3 for an average consumer, and GEL197 (US$100) for a family of 4. In 2001, the country's 800,000 pensioners received payments of GEL14 (US$7) with GEL2 deducted for electricity. This represents only 12 percent of the SDS's suggested minimum subsistence income level. Pensioners, therefore, invariably rely on family, neighbors, street trading, or begging. The dependency ratio is 1:1.2, which is dangerously high compared to the suggested 1 dependent per 3 people. The large proportion of workers not paying taxes worsens the government's ability to introduce an adequate pension scheme. The pension system also suffers from a large number of "ghost" recipients: the 1999 registration revealed payments to 37,743
|Household Consumption in PPP Terms|
|Country||All Food||Clothing and footwear||Fuel and power a||Health care b||Education b||Transport & Communications||Other|
|Data represent percentage of consumption in PPP terms.|
|a Excludes energy used for transport.|
|b Includes government and private expenditures.|
|SOURCE: World Bank. World Development Indicators 2000.|
deceased pensioners. This unusual situation is partially explained by the high cost of funerals, which force many people to bury their relatives without registering their deaths. Postal workers, however, earn bonuses for withholding the delivery of pensions to unreported, deceased pensioners.
While the Soviet health-care system had imperfections, it was far superior to that of independent Georgia. In 1999, government spending on health care constituted 0.59 percent of GDP, a figure that compares unfavorably with Latin America (2.6 percent), eastern Europe (3.9 percent), and high-income nations of the western world (6 percent). Georgians are expected to pay for their own health care, but surveys indicate that almost 80 percent of Georgians spend less than US$5 a month on it. Because of the strong sense of family obligation that is a fundamental part of the Georgian culture, financial support for ailing and aging citizens often becomes the responsibility of family. This family contribution is one of the factors that allows Georgians to enjoy an average life expectancy of 73 years.
The Georgian educational system was one of the few institutions that did not collapse during the wars of the early 1990s, but the standard of education has diminished since the Soviet period. The university system is notoriously corrupt. Teachers are rarely paid. There is an acute lack of resources at all levels. Once renowned for their educational achievements, Georgians face an education crisis that may ultimately undermine one of the main attractions for potential investors—an educated workforce.