This weekend, Forbes magazine released its new rankings for the Best Countries for Business 2019. This year, Georgia is ranked at 44th place, up eight spots from last year’s list.
Deputy Minister of Economy and Sustainable Development, Ekaterine Mikabadze, reacted to the news on Friday, saying “the Forbes ranking is a good message to international investors that Georgia’s business environment is improving every year.”
Forbes has published the Best Countries for Business list since 2006. There are 161 countries on this year’s list. Georgia was at 68 in 2008. The list that year was published in June, less than two months before the August 2008 War with Russia that led to the occupation of Georgia’s Tskhinvali region and began a downward economic spiral that the country has slowly pulled itself out of over the last decade. In 2009, thanks in part to the global financial crisis that sent other countries further down the list, Georgia increased its position to 64, despite economic growth reversing from 12% in the 2008 ranking to -6.7% the following year and the trade balancing swinging from -1.6 to -19.8 after Russia banned many Georgian imports. Georgia has been steadily climbing the charts each year, improving in nearly all ten categories.
Georgia leads the post-Soviet countries, with the exception of the Baltic states. In the 2019 rankings, Azerbaijan is at 70, Armenia comes in at 81, Russia is at 55, Turkey – 57, and Kazakhstan – 65. Just ahead of Georgia are Malta (43), Greece (42), and Romania (41), and just behind fell Qatar (45), Bulgaria (46), and Thailand (47).
Deputy Minister Mikabadze praised her party’s progress since their election to power. “This rating is the result of the reforms implemented by the Government of Georgia since 2013. Measures for reducing foreign vulnerability and reforms implemented by the government will positively affect investment decisions, which in turn will have a positive impact on economic growth,” said Mikabadze. She also noted that estimates from international investors and international financial institutions predict that the current economic situation makes it possible to carry out reforms that promote resilience to external shocks, economic diversification, and increasing competitiveness of the private sector. Mikabaze promised that reforms will be directed towards ensuring inclusive growth.
Forbes compiles its rankings based on data from the World Bank Ease of Doing Business rankings, the Global Competitiveness Index by the World Economic Forum, Economic Freedom Index by Heritage Foundation, Corruption Perception Index by Transparency International, World Freedom Index by the Freedom House, International Index of Property Rights by the Property Rights Alliance, the UN Human Development Index and the CIA's World Factbook.
According to the ranking, as of December 2018, Georgia’s GDP is $15 billion, GDP Growth: 5%, GDP per Capita: $4,100, Trade Balance/GDP: -8.9%, Population: 4.9M, Public Debt/GDP: 45%, Unemployment: 11.8%, Inflation: 6%. It is worth noting that GeoStat currently puts the country’s population at 3.7 million and unemployment at 13.9% - although it is much higher in practical terms, considering that rural subsistence farmers are counted as ‘employed.’
The 2019 ranking evaluates the countries according to ten components. Georgia’s place on the list reflects an average of starkly disparate rankings in different categories. The country scores particularly high for trade freedom (4th), investor protection (2nd), red tape (2nd), and tax burden (16th), while falling far behind in personal freedom (66th), monetary freedom (70th), property rights (74th) and innovation (83rd). It also ranks 45th for technology and 43rd for corruption.
By Samantha Guthrie
Image source: Imedi