Is Georgia facing default?
By Messenger Staff
Friday, December 4Economic analyst Demur Giorkhelidze thinks that although Georgia has a very high foreign debt of up to USD 5 billion this could be handled properly if a correct and well designed economic policy is implemented. As a proportion of GDP this debt is not greatly alarming but if efficient steps are not taken it could grow further and destroy Georgia’s economy.
According to Giorkhelidze much of the money allotted to Georgia by donors has been spent in directions where the economy has received no benefit. Most of it has gone into infrastructure, which was one the reasons the money was granted for, but parallel to this certain moves should have been taken to activate the private sector. Had this been done jobs would not have been lost and the economy would have remained sustainable. Support from friendly countries and institutions has so far prevented Georgia from defaulting, but the leadership should take adequate and well designed measures to ensure the country remains economically viable.