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Competitive Capacity of Georgian Economy Grows

Over the past 5 years Georgia has moved to 59th position from 88th place in Rating of Global Competitiveness.

Georgia has occupied 59th position with 4.32 point among 138 countries in the 2016-20167 Global Competitiveness Rating published by the World Economic Forum (WEF). The country has improved positions by 7 places as compared to the 2015-2016 rating.

According to the Global Competitiveness Rating, in Eurasian Region, major advancement was made by Georgia and Tajikistan. “Both countries have increased GDP by more than 2.5%. This is less than average indicator over the 10 years, but it is higher compared to other countries of Eurasia”, the report reads.

Tajikistan ranks 77th in the rating. The country has advanced by 5 positions compared to the previous year.

According to the Global Competitiveness Rating, Georgia’s major challenges for doing business consists in unqualified workforce, access to finances,  inflation, inefficient state bureaucracy, insufficient supply of infrastructure.

The WEF is a Swiss non-commerce foundation that has been publishing annual reports since 1979. The report reflects competitive capacity of countries and business environment analysis. Every new report is based on indicators of the previous year. For example, the 2016-2017 report is based on the 2015 indicators.

The competitiveness ratings are based on 12 main criteria and many other sub-criteria, including: state institutions, infrastructure, macroeconomic environment, commodity market efficiency, labor market efficiency, technological readiness and so on.

The lowest indicators are reported in innovations and refined business  criteria. A part of these criteria is based on official statistics of the government. Information on such criteria as court independence, level of criminal situation and education is based on inquiry of small, medium and major enterprises. About 200 companies are  inquired in Georgia every year.

It should be noted that, over the past years, Georgia has been improving positions in the Global Competitiveness Rating year by year. Over the past 5 years, the country moved to 59th position from 88th place. It should be also noted that Georgia’s indicators have especially improved in terms of property rights protection issues. For example, in 2011-2013 reports, Georgia deserved low rating in terms of property rights protection and ranked 120th because of private property rights violation for many years. In the 2016-2017 Georgia has advanced by 4 positions to the 54th place. However, in this respect the previous report recorded a significant advancement, when Georgia improved 27 positions and occupied 58th place in terms of property rights protection.

As noted above, the Global Competitiveness Rating of WEF is based on more than 100 characteristics. Each country earns score due to each criteria, for example: in certain categories Georgia is leader: state regulations easiness on economy, small taxes, low customs tariffs, simplicity of business registration and so on.

However, there are many problematic issues, including attainability of finances that remains one of the major problems in the Georgian economy, as well as adequate education level of workforce and so on.

As to other countries, in the Global Competitiveness Index (according to the 2016-2017 report), Armenia ranks 79th, Azerbaijan is 37th, Turkey is 55th, Russia is 43rd, Ukraine is 85th, Moldova is 100th. In the rating the first place is occupied by Switzerland, Singapore is second, the USA is third.

The Global Competitiveness report clearly demonstrates strong and weak sides of a country and assists governments to properly identify priorities and implement corresponding reforms. At the same time, the Global Competitiveness Rating is a significant information for investors. Therefore, Georgia’s advancement in the rating will make positive influence on the investment environment of our country.