Major Challenges of Mountain Regions of Georgia

Koba Arabuli

Summery
Major Challenges of Mountain Regions of Georgia
Koba Arabuli

The article mainly deals with the description and characteristics of Georgia’s mountain regions (geography, history, economic system) as well as social issues, geopolitical environment, economics, ecology etc. the article provides modern approach to mountain regions generally and to Georgia’s mountain regions as well. You can also find the analysis of state policy regarding these regions.
The second part of the article deals with the recommendations and proposals for government of Georgia as well as for experts and specialists with the purpose of developing Georgia’s mountain regions.

Summery
Tourism – major priority for whole regions’ sustainable development
Koba Arabuli
The article deals with geopolitical and economic aspects of the importance of mountain regions. Major negative economic policy events implemented by government over the past 12-15 years. Particular attention is paid to modern tourism, issues in the hospitality industry, positive and negative aspects of current relations among tourists and local population. The article generally deals with mountain regions and Georgia’s mountain regions as well. Major part of the work is dedicated to analysis of tourism potential of Georgia’s mountain regions and principles of sustainable development in this sphere.

Summery
Types of tourism and possible perspectives for the development of Georgian tourism
Koba Arabuli
The article deals with the characteristics of modern and popular types of tourism. It also provides analysis of practical works of Georgian tourist companies is the sphere of creating modern competitive tourism product. You can find a significant question – why should a tourist visit Georgia (considering famous negative situation and inadequate price policy) as well as the answer to it in the article.

Summery
Direction of regional policy for business safety maintenance
Vakhtang Datashvili, full professor, European University
Ia Gelashvili, Researcher of Doctor’s academician degree, Assistant-professor of Akhltsikhe Institute
Due to implemented reforms in 90’s of the past century, Georgia was deprived of several industrial sectors. It will be negatively reflected on the country’s economic safety. Major trends for state regulation of economy has been analyzed and formed on regional level to maintain country’s regional economic safety. Regional economic policy transformation process has not been completed yet. Formation of integrated structures and the development of interfiled cooperation are necessary. Policy of regional authority should be directed to re-production of local resources as well as institutional maintenance of own advantages in the sphere of business climate 9including investments). The role of a centre should be related to the creation of common federal conditions that do not exclude local initiative in the growth of region potential. Just vice versa, it should be supported.
New stage of development should begin in formation of regional economic policy. Probably the new regional policy will manage to realize ‘two sector development’ principle.
Georgia’s economic potential is defined by its industrial business development level. Therefore, the success of economic reforms will depend on the way modern industry overcomes crisis and on the effectiveness of its functioning.

Summery
Regional characteristics of modern labor market functioning
Ia Gelashvili, Researcher of Doctor’s academician degree, Assistant-professor of Akhltsikhe Institute
Studding population’s unemployment problem is an important issue while forming labor market and market relations in Georgia. The article deals with the major elements and forms of employment relations. Employment reflects the level of balance between supply and demand of labor forces within market economy. Total employment is regulated by labor market. The latter implies the application and separation of human resources. Besides, mechanisms of labor market regulation operate in certain conditions of employment policy. Reforms have less affected employment over recent years. In order to turn employment into a successful and socially acceptable part of market economy, we need to adopt principally new approaches on macro level. Social and economic programs directed to the country’s development should include employment maintenance. Defining the role and place of employment, as well as forming its priorities and goals, is necessary. Employment perspectives should be well estimated and actual challenges should be overcome while working out a long term strategy. Elements of market economy, including labor and employment regulation, on its stage of development can not be formed without state interference.
State and market, two major forces for the development of economy, should be merged and commonly developed.

Free Economical Zone and Perspec-tives of its Development in Georgia
Professor Lamara Qoqiauri
Transferring to the market economy, growth of the scales of financial globalization, widening of competition environment and its processing gave rise to new occasion today. Involving more innovations and reforms became the most important nowadays.
Inflow of the investments and their effective management is the showing of rise and development of Georgian economy. As Georgian economists say, there is “investment hunger” in Georgia.
Our government has mentioned several times, that within the bounds of this project, they will register more then 450 large-scale enterprises and make more ten 20 thousand vacancies. More then 200 million dollars of investments have been attracted to our country during last several years. Circulations of cargo in new port is defines with 21 million tones. It this work we tried to represent and analyze every basic aspect of the project about founding free economical zone in our country.
There are more then 3000 kinds of free economical zones all over the world. The most spread ones are services of industry, program provision, industrial technologies, and tourism, logistic and finance; though only 20% of these zones are really successive.
An idea of founding free economical zones in Georgia first has beer set in the 90s of last century. It was set by Acharian government. Poti supported this idea immediately; also Kazbegi, which desired to become a free economical zone, as it has common border with Russia, then came Lagodekhi and Akhalqalaqi, having common borders with Azerbaijan and Armenia; Tbilisi also named reason of having international airport.
Min goal of founding every free economical zone is to liberalize investment climate, attract foreign capital and give rise to the growth of national economy. The zone is governed by the administration, which makes decisions independently, except political ones. There is advantage custom, tax and credit-currency regime in the free economical zone.
Today we can speak about definite results, privately prices of land and apartment in Poti has been incredibly growing during last period. We hope that all these projects will give real results and will support economical development of our country.

Summery
Fiscal Decentralization Challenges in Georgia
giga gvelesiani
The article deals with the fiscal federalism and fiscal decentralism – significant problems of the modern world state arrangement and organization of public finances. The issue itself has been well discussed and number of researches has been contributed to its examination. However, it has not been well studied in Georgia yet. This fact emphasizes the importance of the research. By using rich theoretical as well as practical materials, the article discusses the challenges of this field not only in Georgia but also generally. It provides means of reaching effective fiscal decentralization and highlights the following significant aspects: which level of the authority is responsible for providing various public services; who determines tax types and rates; which taxes and fees may be administrated by self governments; what are horizontal and vertical financial equation etc. The article describes supporting and hampering factors of fiscal decentralization, revenues distribution challenges. Together with tax incomes some other types of financial maintenance of local self-government are well analyzed (such as grants, transfers, loans).
Territorial budgets of Georgia as well as their misbalance are examined. Certain actions are planned in order to improve the misbalance.

Summery
General characterization of Samtskhe-Javakheti Geopolitical environment, significant factor for social and economic development of the region
Revaz Sandroshvili
Geopolitical situation has always been conditioning growing interest of foreign countries towards Georgia. Geopolitical location of Samtskhe-Javakheti gains significant importance to the region and conditions international attention towards it. Great number of international organizations, international foundations and donor states operate and implement various projects in the region. International relations, significant motor way system in Trans Caucasus, Karsi-Akhalkalaki-Tbilisi railway create important perspectives for using the region’s rich resources as well as for social and economic development.

Summery
Midterm forecasting of electricity production in Georgia
Davit Japaridze, Full Professor, Tbilisi Technical University
Tengiz Maghradze, MA, Tbilisi Technical University
The article deals with the analysis of existing forecasting methods of electricity as well as generally economic development. Methodology of midterm forecasting of electricity production in Georgia has been worked out on the basis of analysis. The methodology is based on mathematic trend. Optimal function has been chosen and initial data has been worked out and transmitted. Ministry of energy of Georgia and National Commission of Energy Regulation 2003-2007 annual reports have been used as initial data. As a result of research mathematical-statistical methods showing midterm forecasting of electricity and total GDP production volumes has been worked out as well as a correctional connection between electricity and GDP production volumes. Regressive equation reflecting this relation is shown. Midterm forecasting of electricity production in Georgia is done on the basis of this equation. Regulation between GDP and electricity production volume growth rate as well as indicators are defined. Outcomes are recommended to use while working out electricity production midterm program in the country.

Abstract
ECONOMIC THEORY – A GUIDE FOR TRANSITION TO MARKET ECONOMY
Revaz Kakulia, Doctor of Economics, Professor, I.Javakhishvili Tbilisi State University, Georgia
One of the acute problems among those of modern economic systems is an unsatisfactory level of the economic theory analysis. But the successful realization of the current economic. Reforms in a country are impossible without a theory developed on a scientific basis.
It is underlined in the work that the market economy formation has no alternative. However, the analysis of the past reforms in our country enables us to consider reality and note that the process of economic reforms in Georgia has begun without any preparation and knowledge of the economic theory. Basing on the monetary system studied at an amateur level, only a part of the“shock therapy” has been carried out in which the liberalization of trade and prices is considered as a starting point of the reforms.
The paper deals with the current state of the economic theory analysis as well as with some theoretical problems of our country; ways and directions are given to overcome these problems.
The author shows that it is of no benefit for us to put directly into practice the principal conclusions of the current economic theory. It is more reasonable to develop the main theoretical conclusions on the basis of the modern advanced theoretical regulations and conform them to the requirements of our country taking into account the efficient distribution and use of resources to be correlated with the values like: justice, respect to human life, disapproval of exploitation, despotism and authoritarism, freedom of choice of morals and manners.
In conclusion, it is underlined that, only on the basis of theoretical knowledge, the reformators are able to study current events in the process of passing to market, to analyze success and weak points of economics as well as to check the transformation factor of the market co-ordinates.

Summery
Certain issues on effective regulation of using Samtskhe-Javakheti resource potential
Revaz Sandroshvili
According to economic and social principles, optimal transport and other types of conditions among various regions of the country, Georgia is divided into 8 economic units. Southern economic unit of Georgia is totally covered by Samtskhe-Javakheti region including Akhaltsikhe (Samtskhe) and Akhalkalaki (Javakheti) sub-regions.
Analyzes of current economic reform in Georgia has shown that the most effective method of regulating social as well as economic processes is the working out of scientifically proved social and economic development conception that will include all aspects of social and economic sphere of a region and its sub-units.
Considering geopolitical location of Samtskhe-Javakheti region development perspective can only be presented as a complex program that will enable full application of the region’s rich resource potential.