On December 9, 2020 Geocase hosted an online event named ‘Georgia and Policies for Economic Growth’.
Mr Reda Cherif, Senior Economist at the International Monetary Fund (IMF), Mr Fuad Hasanov, Senior Economist at the International Monetary Fund (IMF) and an Adjunct Professor of Economics at Georgetown University and Mr Selim Cakir, Representative of the International Monetary Fund (IMF) in Georgia were the invited speakers of the online discussion. Mr Baqar Palavandishvili, a board member of Geocase, co-hosted the event and delivered a speech.
The Geocase chairman Victor Kipiani, who was the moderator the live session, welcomed the panelists and briefly overviewed the current state and pressing issues of the Georgian economy.
“Over the last decade we have witnessed many varieties of crisis: plunging oil crisis, depreciation of local currency, various types of political instability, etc. All those presented huge challenges and downsides for the Georgian economy but the crisis we are facing at this moment – the Covid19 pandemic - is very unique by its nature, ramifications and implications as well as its long-lasting consequences. Therefore, we are even more focused on what should be those extra unique ways to trigger the growth of the national economy. “- Mr Kipiani stated.
According to him, the challenges Georgia is facing today are common and typical to many countries with similar structure and economy, although more innovative and unorthodox approaches should be applied for finding proper solutions to the existing problems. “Before the pandemic all the parameters for Georgian macro economy were more or less OK but at this point, I think more should be done in order to tackle the crisis and put the economy on the normal track”- Victor Kipiani underlined.
During his speech Mr Fuad Hasanov mentioned the Asian Miracle countries and named 3 key principles as the pillar of their economic growth and success: 1) creating new capabilities in sophisticated industries (computer, electronic, IT, motor vehicles, electrical equipment, machinery etc.) 2) export and 3) fierce competition (at home and abroad) and strict accountability.
Mr Reda Cherif talked about the importance of applying innovations and using technology in order to escape the difficult economic situation and move forward. ”There is no way for a small economy to reach a proper level of development without opening up. Even big economies cannot close themselves. If you look at the success of China, to a large extent, is based on opening up and trading with other economies. India has started growing fast after they started opening up, so, even if you are very big you cannot just close yourself for different reasons: you need competition, access to technologies, exchange and so on”, - he stated.
Mr Selim Cakir’s conducted the presentation reflecting the view of International Monetary Fund on Georgia’s economic outlook for the current and next year.
“We see Georgia’s timely engagement with donor community and the country’s proven macroeconomic policy response enable the country to mitigate the economic impact of the crisis. The country’s financial system remains in good health, the budget provided timely targeted at temporary support of vulnerable households and businesses. Exchange and depreciation remain in check and inflation has already approached the NBG’s target of 3 percent. To despite about 5% contraction economic activity this year, Georgia possibly avoided much worse outcome given the size of the shock. The challenges definitely remain for 2021 but we believe that a combination of right policy response, continued efforts to contain the pandemic and mitigate its economic impact with the help of donor support will enable Georgia to overcome this difficult period and, hopefully next year around this time the macroeconomic and pandemic outlook will look much brighter than it does today” – Mr Cakir summarized his presentation.
Baqar Palavandishvili briefly reviewed the basic structure of Georgia’s economy and its potential measured by the export goods. He discussed the significance of attracting foreign direct investments to enhance current and develop even more domestic capabilities in order to support Georgia’s economy. He also emphasized the importance of amplifying cooperation between public and the private sector for choosing the sectors for development which will support the growth of the economy.
Mr Palavandishvili shared the moderator’s view suggesting to overcome the misconception and too much reliance on the rankings, indexes and focusing more on real economy and real profit instead. “The international rankings in which Georgia takes part can serve some kind of signaling role for the investors though we should not rely on that signaling too much but the real signal for the investor is the other investors already operating and doing business in the country. Looking at how and in what kind of circumstances they operate might be the best signaling role for the investors.”- he added.
At the end of the online session Victor Kipiani thanked the participants for their valuable input and mentioned: “when we speak about a Georgian economy in the first place with the help of our international partners and our good friends but also combining vision, courage and competence on our side we would be able and capable to cope with the difficulties and get to the better days”.
Watch the webinar recording