The State Department for Statistics is publishing the first quarter results and providing the society with figures for analysis.
Last years’ indicators reveal comparative economic revival over the past two years. In the first quarter, high growth rates are observed in many spheres though the larger part of economy still remains high.
We speak to Temur Beridze, chairman of the State Department for Statistics:
– What are main statistic indicators of the first quarter? Has there been a positive trend over the past years? Are we moving forward or just marking time?
– It is necessary to exactly estimate where we stand now and which vectors are to be developed in the future. This cannot be done without appropriate analysis of past year experience.
Development of Georgia was quite discontinuous since economic development process was influenced by interests of other countries. Because of this, Georgia was deprived of the opportunity to embark on the natural way of development and therefore, achieve its purposes. Despite this, in the XXI th century Georgia has the not-to-miss chance.
Analyzing our present-day situation we, certainly, compare it with the past years as well as with the end of the 90s when there happened a “break-up” of economic and social model of Georgian economy. There were two periods in it, too: before and after 1995. Up to 1995 political factors had quite strongly influenced Georgia’s economic development. A certain revival is observed in 2001-2003. I would like to stress the 10% growth of GDP in 2003 as compared to 11% in past years. As for the first quarter of 2004, there has been 9% growth. Given the inflation indicators, last year it was approximately within 7% and today, in the first quarter, inflation rate is 1%. It will remain within 5-6% provided there are no force-majeure developments. The figure reflects specific information for analysis. Simply I would like to accentuate that Georgia faces completely different tasks today that are, on the one hand, dependent on purely economic factors and, on the other hand, there are tasks of non-economic nature connected with Georgia’s existence as an integral country. I mean that there will be 25-35% GDP growth provided problems of territorial integrity are settled. The second issue is that a country should meet specific requirements for entry into the Euro Union such as absolute GDP , GDP per head, territorial integrity, guarantees and other indicators.
As for GDP per head, a certain positive dynamics is observed here. GDP per head is approximately 850 dollars, but the figure is very low compared to the similar indicator of developed countries. Much still has to be done for Georgia to become a candidate for membership in the EU.
Like any other country, Georgia should make use of the advantages it has compared to other, first of all, neighbouring countries. I mean intensification of agriculture development strategy, development of tourism, engineering industry, solution of existing problems and, what is most important, there will not be positive trends in the country’s economy without correct administration, appropriate management and wish for taking appropriate decisions, which is fully dependent on the ruling team of the country.
– I wonder whether the share of shadow economy has diminished over this period?
– Shadow economy is characteristic of all countries. The difference is in its GDP share. It makes up 6% in the US, 14-16% in Italy; in Georgia the indicator ranges from 30% to 33%. Today, we can maintain that due to the development of legal business, share of shadow economy decreases, but 28-30% is still a high indicator. If we take for example profit-oriented commercial sector, share of shadow economy is higher in it reaching 50-52%.
– What admissible level of shadow economy in Georgia should be?
– Admissible level is a very conditional notion. It is very difficult to name a concrete figure, yet with share of shadow economy exceeding a third of GDP, the sectors and institutions responsible for solving the problem should strike alarm. On the one hand, the objective of the statistic service is very complex, on the other hand, It is simple, as study of shade economy is difficult in itself. This requires creation of special instruments, collection of appropriate information and resources, etc. It is simple because our service does not take responsibility for solving the problem. Other services confront the task. Yet, we should make our contribution to the solution of the task by indicating where and how production is produced and determining the sphere of shadow economy.
– In any case, Tbilisi will probably remain the most economically active region with a quarter of population living in Tbilisi. A third of economic potential is also located in the capital. Accordingly, the greater part of economy as well as the shadow one also falls at the share of Tbilisi. We should start to solve the problem in Tbilisi. That is what we do within our system. As far as you know, there is a statistic service in Tbilisi that has carried out an interesting study. It has been carried out in one of the largest Tbilisi districts and demonstrated the processes going on in the city’s economy and in the country’s economy on the whole. Yet drawing parallels is not purposeful and useful, but approaches and methodology for further statistic activities is quite evident.