AT THE PRESENT THE TRANSPORT AND COMMUNICATION ARE MOST PERSPECTIVE BRANCHES


THE MINISTER OF ECONOMICS, INDUSTRY AND TRADE OF GEORGIA IVANE CHARTISHVILI



What are the economical parameters of Georgia today? And what is the portion of transit of power supplies in a revenue of the budget of the country?


On a background of 1996 -1997 years, when the annual growth of the economy was within the limits of 11 %, the today's position of the country looks rather retiring. Under influence of a number of the objective and the subjective factors, since 1998 the high rates of economic growth notably have decreased and are captured on the average within the limits of 3 %. To this there are some causes and these are the disturbed territorial integrity of country, the global financial crisis received development in the second half of 1998, which has called acute exchange- budget crisis in Georgia, unfavorable meteorological and climatic conditions, first of all, continuous drought, big scales of the corruption and shaded quadrant of economics, scarcity of own financial resources and, outgoing from this, dearness of credit resources etc.

In the present year to economics of Georgia, first of all, to its main branch agriculture the irreplaceable loss was plotted by a continuous and unknown drought. The size of the damage only in this branch has exceeded $ 250 million. Under the tentative datas marked by a drought to electric power industry a loss is estimated in $ 9 million., the considerable loss is marked also eclogues. For example, as a result of the private fires the damage has exceeded $ 11 million. According to the experts, the damage will also be solid in the future, in particular, it is possible to suspect, that because of preservation of a source of raw materials the outturn of a process industry will considerably be also reduced. Besides because of shortage of the forages in the autumn is not eliminated mass slaughter of cattle, on recovery of which 2-3 years is required.

Allowing all this, in present year can take place and reduction of an actual gross internal product.

On 1999 account year the volume of production of the gross internal product has compounded $ 2,7 million., or in recalculation per capita - $ 610.

Under the totals of 1999, the monthly average salary held in national economy equals $ 33,3, including in budget quadrant - 26,6 of US dollars. And the officially captured rate of unemployment was within the limits of 4,9 %, that is conditioned by disbelieving and absence of concern of the population to a service of employment. Actually, the rate of unemployment in the country is much higher.

In this background the relevant positive aspects are the preservation for last 1,5 years of a firm course of the national currency with tendency of its constant strengthening and on this basis maintenance of stability of the prices in the consumer market.

In a revenue of the budget of Georgia in normal conditions we have the right to expect the considerable sum of the incomes, which one probably we shall receive from power quadrant, in particular, in hydropower, as the given quadrant makes rather cheap energy. Unfortunately, these capabilities can not be utilized by us while on the known cause. Last years the government of the country under the low prices and frequently without payment releases to customers more than 50 % of the electric power, developed on these stations. Moreover, quite often it is necessary to take on credit energy from the neighbors, including for Azerbaijan energy sector.

Therefore, the power quadrant yet does not give the anticipated incomes of the budget of the country. The incomes received by us from transit of the electric power, also are not large, as average annual the volume of transit of the electric power in Turkey does not exceed 200 million. The êvt./hour, and transit of natural gas in Armenia is reduced up to 1,5 ìëðä.ì3. As if to transit of oil for 1999, amount of transit is up to 5 million. tons of oil.


What is the specific weight of separate branches of economics in a gross internal product of country?


According to the official data, in 1999 the main ranches of the national economy in total amount of the gross internal product, built in the country, were shown as follows: an agriculture and fishing -26,2 %, industry, including production, made in internal facilities - 18,2 percents, building - 3,8 percents, trade - 12,5 %, transport and communication - 11,9 %, hotels and restaurants -2,5 %. The remaining part is on unreal quadrant of economics.


What branches are considered leading and most perspective?


For today the main branch of the economics of Georgia is the agriculture and, in spite of not the tendency of reduction, it and in the long term remain by branch number one. Since 1999 of the tendency of growth are characterized changes of a development of industry - 2 under the score of branch of a national economy. We consider, that the branch has considerable reserves of development and in the near future as a result of their implementation specific weight of an industry in total amount of a gross internal product somewhat will increase.

As to perspective branches of national economy, for today most perspective due to an expedient geopolitical occurrence of country is the transport and communication. For implementation of this factor already much is made. Enough to call even building of an oil pipeline to a Baku-Supsa, as a result of which one the specific weight of the transport in a gross internal product has increased from 5 % in 1996 up to 9,3 % by 1999, and communication- from 1,9 % up to 2,6 %. As a result of the implementation already of officially signed and other perspective projects, which one concern haul of the Azerbaijan oil and gas of Turkmenistan through terrain of Georgia and in implementation which one large value there is a support and activity of the Azerbaijan party, the data parameters even more will increase.


Does today’s condition of oil and gas refining system satisfy requirements of Georgia?


The oil-refining industry of Georgia now disposes of alone serviceable plants (Sartichala), power which one of 100 thousand ton/y. He does not provide requirements of the market. The installations on processing of gas in country misses, therefore considerable proportion of petroleum, natural and liquefied of gas is oriented on import.

Georgia is interested to obtain local reserves of oil and gas, and in the process of increase of their mining to expand oil processing and to run in processing of gas, however, success completely associated with outcomes of activity of the joint oil companies, which one are held by looking up of new sources and after treatment of available sources of power supplies.


How essential are the communications between industrial firms of Georgia and Azerbaijan?


In the economic ties between Azerbaijan and Georgia the considerable lobe is necessary and on are production firms. A broad range and the considerable volumes of industrial output that had been mutually delivered in a near past were conditioned not only affinity of the sires with customers, but also conventional connections, which one were piled and extended for a long time in process of development of industrial quadrant of national economies of our countries. Even today, when the industrial firms of both countries are enveloped by a steep economic crisis, these connections yet are not lost. To what many examples of reciprocal deliveries of an industrial output testify. The Kutaisi electromechanical plant delivers to oil producing firms of Azerbaijan submersed electric motors for downhole petroleum pompes, the metallurgical plant of Rustavi starts manufacturing of the order on 40 thousand tons of steel tubes., cement also deliver to Azerbaijan chemical fertilizings, items of electrical industry etc. the simultaneously Georgian customers from Azerbaijan’s purchase sulfuric acid (chemical center), caustic, steel founding (Baku steelmaking plant) for bodies small electric motors etc.

It is remarkable, that quantity of deliveries step-by-step extends in process of rehabilitation of industrial firms.


Is there opportunity for further enlargement of economic integration not only in oil and transport areas?


Azerbaijan and Georgia not only are neighbors, integrates them a commonality of many problems. It is small countries located in similar geopolitical conditions, received the almost identical patrimony from former USSR, before which one there is an identical problem of construction of independent national economy on the basis of market relations and federating in world economical assemblage. Allowing all this, the necessity of federating for all quadrants of national economy of both countries is obvious, where it is possible and is mutually advantageous. We have restricted financial resources, therefore we are not capable to overhaul economics by broad front. It is possible only on separate priority directions. If we will manage to coordinate and to aggregate our operatings on separate directions of national economy, we will not only be freed from "superfluous" costs (for example, bound with competition in the market), but also we shall achieve indispensable concentration of efforts, sufficient for successful implementation of the intended purpose.


What branches are for this purpose most perspective and what activity is conducted in the given direction?


In development of economic complementation between Azerbaijan and Georgia in a part of dilating of economic integration the most perspective branches, on our view, are, metallurgical, chemical and petrochemical industry, engineering, mild, wood-working and food-processing industry.

For intensification of economical relations between two countries the Agreement " About Free Trade" is made out, pursuant to which one, the goods, displaced(migrated) between two countries, are freed from a customs duty.

Except for close relations in transport and oil, the economical potential of Georgia and Azerbaijan allows intimately to bind effecting these countries.

Activity of metallurgical center of Rustavi on Azerbaijan (Dashkesan) and local (Chiatur) to ore tradition which was adding up still(even) in the Soviet period. The recovery of this tradition will allow to satisfy a great demand of both countries for tubes made by metallurgical center.

Potential of a textile industry of Georgia and adding up tradition will enable to run in raw for this branch in Azerbaijan. A commodity market of finished products should become both home market, and capability of exportation of competitive products for limits of our countries.

Geographic proximity and sharp difference of natural environments allow makes rather miscellaneous agricultural production, and also to create agriculture, the efficiency which one is affirmed by world practice.

The mechanical engineering branch of Georgia largely can satisfy demand for this production in Azerbaijan.

As to mention production produced by chemical center of Rustavi, it has a serious customer in the Azerbaijan Republic, the volume of export of mineral fertilizers in this country introduces stable digit. Same it is possible to say about mineral waters of Georgia, the overflow and effecting which one intensively increases.

For sugar center of Agar there is a potential for processing of local raw, maintenance of a customer by finished products. Brought up in Georgia the filbert and walnut, intensively is mastered by a food-processing industry of Azerbaijan.

In electric power industry the necessity of integrated activity is foregone, as by this way it is possible effectively to run in hydroresources (hydrosafe lifes) of Georgia and power supply of Azerbaijan.

And in summary, the tourist and recreational potential of Georgia historically was and is the best means of a satisfaction of the demand of the people of Azerbaijan.