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Georgia Gap Analysis
Europe & Eurasia (E&E) Bureau USAID
February 2015
Bulgaria
Croatia
Czech R. Estonia
Hungary Latvia Lithuania
Poland
Romania
Slovakia
Slovenia
Albania
Bosnia-Herzegovina
Macedonia
Kosovo
Serbia
Montenegro Kazakhstan
Kyrgyz Republic
Tajikistan
Turkmenistan
Uzbekistan
Armenia
Azerbaijan
Belarus
Georgia
Moldova
Russia
Ukraine
1
2
3
4
5
1 2 3 4 5
Eco
no
mic
Ref
orm
s
Democratic Reforms
Economic and Democratic Reforms in 2013-2014
Ratings are based on a 1 to 5 scale, with 5 most advanced. Freedom House, Nations in Transit (June 2014), & EBRD, Transition Report (November 2014).
Romania, Bulgaria, Croatia Threshold, 2006
Figure 1
E&E Graduates The Balkans E&E Eurasia CARs
Georgia’s Reform Profile
Figure 2
Economic Reforms, 2014 Democratic Reforms, 2013
Small Scale Privatization,
4.0 Trade and Foreign
Exchange, 5.0
Price Liberalization,
5.0
Large Scale Privatization,
4.0
Enterprise Restructuring,
2.3
Competition Policy, 2.0
Banking Reform, 2.7
Non Bank Fin. Reform, 1.9
Infrastructure Reforms, 2.7
1
2
3
4
5
Drawn from EBRD, Transition Report and Freedom House, Nations in Transit. The blue line represents current reform progress of the 11 E&E graduate countries.
Electoral Process, 2.7
Civil Society, 3.2
Independent Media, 3.0
National Governance,
2.0
Local Governance,
2.0
Rule of Law, 2.3
Anti-Corruption, 2.7
1
2
3
4
5
The projections are extrapolations from the average annual trends from 2009-2013. The economic reform data are drawn from the EBRD’s annual Transition Report, and the democratic reform data are drawn from Freedom House’s annual Nations in Transit series.
1
2
3
4
5
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Eco
no
mic
an
d D
em
ocr
atic
Re
form
Ave
rage
Georgia’s Reform Trajectory
Actual 1998-2013 Projected 2014-2018
Romania-Bulgaria-Croatia 2006 Threshold
Figure 3
Drawn from the EBRD Transition Report (2014 and earlier editions).
Figure 4
Belarus
Azerbaijan Ukraine
Moldova
Russian Federation Georgia
Armenia
1
2
3
4
5
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
1 t
o 5
, wit
h 5
th
e m
ost
ad
van
ced
Macroeconomic Reforms in E&E Eurasia
Figure 5
Georgia
E&E Eurasia
Romania, Bulgaria, Croatia 2006
1
2
3
4
5
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
1 t
o 5
, wit
h 5
th
e m
ost
ad
van
ced
Stage 1 Macroeconomic Reforms
Drawn from the EBRD Transition Report (2014 and earlier editions). First stage reforms include price liberalization, trade liberalization, and small-scale and large-scale privatization.
Figure 6
Georgia
1
E&E Eurasia
Romania, Bulgaria, Croatia 2006
1
2
3
4
5
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
1 t
o 5
, wit
h 5
th
e m
ost
ad
van
ced
Stage 2 Macroeconomic Reforms
Drawn from the EBRD Transition Report (2014 and earlier editions). Second stage reforms include banking reforms, non-bank financial sector reforms, infrastructure including energy, governance, and competition policy.
World Bank, Doing Business 2015 (October 2014). The Distance-to-Frontier score represents the gap between the economy’s performance and measures of best practices across the World Bank’s 10 components of doing business. On the Distance-to-Frontier 0-100 score, 100 represents the frontier, the optimal outcome.
Figure 7
0
10
20
30
40
50
60
70
80
90
100D
ista
nce
to
Fro
nti
er
Sco
res,
th
e h
igh
er
sco
re, t
he
be
tte
r th
e e
nvi
ron
me
nt
2014 Business Environment in the World
Tajikistan
Lithu
ania
Bo
snia -H
Serbia
Kazakh
stan
Armenia
Azerbaijan
Belarus
Georgia
Moldova
Russian Federation
Ukraine
0
10
20
30
40
50
60
70
80
90
100
2009 2010 2011 2012 2013 2014
Pe
rce
nti
le R
ank
, wit
h 1
00
th
e m
ost
ad
van
ced
Business Environment in E&E Eurasia Over Time Figure 8
World Bank, Doing Business 2015 (October 2014).
0
10
20
30
40
50
60
70
80
90
100
Mad
ag…
Ukr
ain
e
Mal
awi
Bu
rkin
a…
Be
nin
Mau
rit…
Nig
er
Cô
te…
An
gola
Zim
bab
…
Mo
ldo
va
Uzb
eki
…
Afg
han
i…
Ind
ia
Cab
o…
Gab
on
Bu
lgar
ia
Mya
nm
…
Leso
tho
Erit
rea
Isra
el
Lith
uan
ia
Slo
vak…
Kaz
akh
…
Ku
wai
t
Latv
ia
Nep
al
Co
mo
ros
Gre
nad
a
Bah
rain
Suri
na…
Lib
ya
Un
ite
d…
São
…
Do
min
i…
Ch
ile
Solo
mo
…
Mau
riti
…
Geo
rgia
Fin
lan
d
Pan
ama
No
rway
Trin
ida…
An
tigu
…
Ho
ng…
Ice
lan
d
Swit
zer…
Ko
rea,
…
Dis
tan
ce t
o F
ron
tie
r Sc
ore
s (t
he
hig
he
r th
e s
core
, th
e b
ett
er
the
en
viro
nm
en
t)
Getting Electricity in the World
World Bank, Doing Business 2015 (October 2014). Getting Electricity is one of 10 components that comprise the World Bank’s Ease of Doing Business rankings. The Distance-to-Frontier score represents the gap between the economy’s performance on getting electricity and measures of best practices globally. On the Distance-to-Frontier 0-100 score, 100 represents the frontier, the optimal outcome.
Figure 9
Tajikistan
Lithu
ania
Bo
snia -H
Serbia
Kazakh
stan
Drawn from Freedom House, Nations in Transit (2014 and earlier editions) and Freedom House, Freedom in the World (January 2015).
Figure 10
Belarus Azerbaijan
Russia
Georgia
Moldova Ukraine
Armenia
1
2
3
4
5
1 t
o 5
, wit
h 5
th
e m
ost
ad
van
ced
Democratic Reforms in E&E Eurasia
Figure 11
Drawn from Freedom House, Nations in Transit (2014 and earlier editions)
Electoral Process
Civil Society
Independent Media
Governance
Rule of Law
Anti-Corruption
1
2
3
4
5
1996 1997 1998 1999/2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
1 t
o 5
, wit
h 5
th
e m
ost
ad
van
ced
Democratic Reforms in Georgia
International Monetary Fund (IMF), World Economic Outlook (October 2014). The Eurasian energy importers include Armenia, Belarus, Georgia, Moldova, Kyrgyzstan, Tajikistan, and Ukraine.
Figure 12
Eurasian Energy Importers
Georgia
-8
-6
-4
-2
0
2
4
6
8
10
12
14
16
An
nu
al p
erc
en
t ch
ange
Economic Growth and Contraction in Georgia vs. the Eurasian Energy Importers
International Monetary Fund (IMF), World Economic Outlook (October 2014).
Figure 13
Russia
Georgia
-8
-6
-4
-2
0
2
4
6
8
10
12
14
16
An
nu
al p
erc
en
t ch
ange
Economic Growth and Contraction in Georgia vs. Russia
Data taken from EBRD, Transition Reports.
Figure 14
Azerbaijan
Belarus
Armenia
Georgia
Moldova
Russia
Ukraine
0
20
40
60
80
100
120
140
160
180
200
220
240
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
% o
f 1
98
9 G
DP
Real GDP as % of 1989 GDP in E&E Eurasia
World Bank, World Development Indicators (July 2014). Data are 2012 for Slovenia, Slovak Republic, Lithuania, Latvia, and Hungary.
Figure 15
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Cu
rre
nt
Inte
rnat
ion
al (
PP
P)
$
Gross National Income Per Capita in Eastern Europe & Eurasia in 2013
Figure 16
Exports
Foreign Direct Investment
Current Account Balance
-30
-20
-10
0
10
20
30
40
50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
% o
f G
DP
Georgia's Economic Integration in the World
World Bank, World Development Indicators (2015 online).
Figure 17
Exports
Foreign Direct Investment
Current Account Balance
External Debt
-30
-20
-10
0
10
20
30
40
50
60
70
80
90
100
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
% o
f G
DP
Georgia's Economic Integration in the World (including external debt)
World Bank, World Development Indicators (online 2015).
Fuels
Fuels & Minerals
0
5
10
15
20
25
30
35
40
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Fue
l & M
ine
ral E
xpo
rts
(as
% o
f M
erc
han
dis
e E
xpo
rts)
Georgia's Natural Resource Exports, 1996-2013
World Bank, World Development Indicators (2014).
Figure 18
EU-27
Russia 0%
10%
20%
30%
40%
50%
60%
70%
80%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
% o
f To
tal E
xpo
rts
Georgia’s Exports to Russia and the EU-27
World Bank, World Development Indicators (2012); EU-27 consists of Belgium, Bulgaria, Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden, United Kingdom.
Figure 19
E&E Eurasia
Western Europe
Russia
Other
0%
10%
20%
30%
40%
50%
60%
70%
80%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
% o
f To
tal E
xpo
rts
Georgia’s Direction of Exports to the World Figure 20
World Bank, World Development Indicators (2012).
ALB
ARM
AZE
BEL
B-H BUL
CRO
CZE
EST
GEO
HUN
KAZ KOS
KYR
LAT LIT
MAC
MOL
MON
POL
ROM
RUS
SER
SLK
SLV
TAJ TRK
UKR
UZB
Eurozone
0
1
2
3
4
5
0 1 2 3 4 5
Fin
anci
al S
ect
or
Size
Financial Sector Stability
Financial Sector Size and Stability
Partners for Financial Stability Program, Deloitte Consulting, LLC for USAID (November 2013). Financial sector stability includes nine measures and the size of the financial sector, four measures. The quadrant parameters are determined by E&E average scores for financial sector size and stability.
II. Large and Unstable
III. Small and Unstable
I. Large and Stable
IV. Small and Stable
Figure 21
World Bank, World Development Indicators (September 2014). Domestic credit to the private sector as % of GDP.
Figure 22
E&E Graduates
Azerbaijan
Armenia
Georgia
Russia
0
10
20
30
40
50
60
70
80
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
% o
f G
DP
Domestic Credit as a Percentage of GDP in E&E Eurasia and E&E Graduates
Figure 23
Armenia
Azerbaijan
Belarus
Georgia
Moldova
Russia
Ukraine
0
10
20
30
40
50
60
%
Unemployment Rates in E&E Eurasia
IMF, World Economic Outlook (2014).
Kovtun D. et.al., Boosting Job Growth in the Western Balkans, IMF Working Paper, January 2014, World Bank, World Development Indicators (2015 online), IMF, World Economic Outlook (October 2014). Remittance data for Serbia is for 2012. Unemployment data for Kosovo and Montenegro are for 2011. All other data is for 2013.
Albania
Montenegro
Macedonia Serbia
Bosnia and Herzegovina
Kosovo
Czech Rep.
Hungary Romania
Poland Slovenia
Bulgaria
Estonia Slovakia Latvia
Lithuania
Croatia
Georgia
Armenia
0
4
8
12
16
20
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0
Re
mit
tan
ces
(% o
f G
DP
)
Unemployment Rate (as % of Total Labor Force)
Remittances and Unemployment Rates in Central and Eastern Europe and Georgia and Armenia in 2013
Figure 24
Figure 25
World Bank, World Development Indicators, Online Database (2015).
Moldova
Armenia
Georgia
Ukraine
Belarus Russia
Azerbaijan
0
5
10
15
20
25
30
35
40
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Remittances in E&E Eurasia, 2000-2013
40 45 50 55 60 65 70 75 80 85 90 95 100 105 110
Yemen
Kyrgyz Republic
Peru
Tunisia
Jordan
Malaysia
Macedonia, FYR
Azerbaijan
Bulgaria
Serbia
Bosnia and Herzegovina
Slovak Republic
Russian Federation
Ukraine
Lithuania
Italy
Latvia
Slovenia
Poland
Finland
Korea, Rep.
PISA Score, 2012
The Quality of Education (or Functional Literacy) in Select Countries in the World: Results from PISA 2012 Tests
Georgia
OECD, Programme for International Student Assessment or PISA (2013). The PISA 2012 survey includes math, reading, science, and problem solving (including an assessment of financial literacy) among high school students. Scores are adjusted so that the OECD average = 100. Scores from earlier PISA tests or TIMSS or PIRLS tests used where PISA 2012 data are not available.
OECD
Figure 26
Figure 27
World Bank, World Development Indicators (2015, online).
OECD
E&E Graduates
Balkans
E&E Eurasia
CARs
Sub-Saharan Africa
Georgia
45
50
55
60
65
70
75
80
85
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Ye
ars
at B
irth
Life Expectancy at Birth
Economic Policy
Economic Performance
Education
Health
Democracy, Human Rights, and Governance
Peace and Security
1
2
3
4
5
2005 2006 2007 2008 2009 2010 2011 2012 2013
1 t
o 5
, wit
h 5
th
e m
ost
ad
van
ced
Country Data Analytics: Development Trends in Georgia
Country Data Analytics (CDA). The indicator composition of the sector indices is shown in Figures 28 and 29. Indicator definitions are available in the CDA Source Guide (January 2015) , available upon request.
Figure 28
Figure 29 Country Data Analytics: Georgia’s Development Profile (I)
Economic Policy, 2013 Economic Performance, 2013
Health, 2012 Education, 2012
Microeconomic Policy,
4.8
Regulatory Quality, 3.9
Trade Policy, 5.0
Fiscal Policy, 2.3
Monetary Policy, 4.7
1
2
3
4
5
GDP Per Capita, PPP,
1.9 Export
Sector, 2.4
FDI, 2.6
Energy Security, 3.8 Economic
Inequality, 3.2
Environment, 2.2
Domestic Credit, 2.0
Economic Gender Gap,
3.7
1
2
3
4
5
Literacy Rate, 5.0
Government Spending on Education,
2.3
Secondary Enrollment,
4.2
Tertiary Enrollment,
2.4
Education Gender Gap,
4.8
1
2
3
4
5Under 5 Mortality,
4.6 Adult
Mortality, 4.5 Out of
Pocket Health
Spending, 1.3
Modern Contracepti
ve Prevalence,
2.8
Government
Expenditure on Health,
2.3
Stunting, 4.5
Access to Improved
Sanitation, 4.7
Maternal Mortality,
4.8
1
2
3
4
5
E&E Countries Receiving USG Assistance
Country Data Analytics (CDA). Indicator definitions are available in the CDA Source Guide (January 2015) , available upon request.
Figure 30
Country Data Analytics: Georgia’s Development Profile (II)
Democracy, Human Rights, and Governance, 2013
Peace and Security, 2013
E&E Countries Receiving USG Assistance
Political Rights, 3.7
Civil Liberties, 3.7
Rule of Law, 2.8
Media Freedom, 2.9
Control of Corruption,
3.0
Government Effectiveness
, 3.4
Political Gender Gap,
1.8
1
2
3
4
5Counter
Terrorism, 3.1
Combating WMD, 2.2
Stabilization and Security
Sector Reform, 3.1
Counter Narcotics, 2.3
Combating Transnational
Crime, 2.5
Conflict Mitigation, 4.1
1
2
3
4
5
NOTES
Figure 31
1 2 3 4 5
Syrian Arab RepublicSouth Sudan
MyanmarIran, Islamic Rep.
Guinea-BissauZimbabwe
Venezuela, RBColombia
Dominican RepublicIndia
Egypt, Arab Rep.Peru
AngolaCambodia
GeorgiaBelize
BahrainDjibouti
MadagascarIsrael
SurinameMoldovaVietnam
GhanaBosnia and Herzegovina
SwazilandArgentina
Equatorial GuineaCosta Rica
MontenegroBahamas, The
FijiMacedonia, FYR
MauritiusSingapore
Korea, Rep.Spain
HungaryPolandFrance
CanadaAustria
BelgiumFinland
1 to 5 , with 5 the most peaceful and secure
Peace and Security in the World, 2013
Georgia
1
2
3
4
5
1 t
o 5
, wit
h 5
th
e m
ost
pe
ace
ful a
nd
se
cure
Peace and Security in Europe & Eurasia in 2013 Figure 32
Country Data Analytics (CDA).
Peace and Security Index
Counter Terrorism
Government Capacity To
Combat Terrorism
Severity of Terrorism
Political Stability
Combating WMD
Control of Chemical and
Biological Weapons
Control of Nuclear
Proliferation
Government Capacity To
Combat Terrorism
Stabilization & Security
Reform
Security Apparatus And
Governance
Physical Integrity Rights
Violent Crime
Political Globalization
Rule of Law
Counter Narcotics
Government Capacity To
Counter Narcotics
Government Effectiveness To
Counter Narcotics
Combating Trans Nat.
Crime
Piracy of Intellectual
Property
Money Laundering
Trafficking in persons
Criminalization of the State
Government Capacity to
Counter Narcotics
Conflict Mitigation
Bad Neighborhood
Conflict History
Risk of Instability
Figure 33
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