Wednesday, 03 November 2004

GEORGIA’S ENDEMIC UNEMPLOYMENT PROBLEM

Published in Field Reports

By Kakha Jibladze (11/3/2004 issue of the CACI Analyst)

In Tbilisi the situation is not better. On any given day, dozens of men stand around the Iliava Bridge in the city waiting for work. Their tools lie on the ground beside them as cars slowly pass by, looking for construction workers or day laborers.
In Tbilisi the situation is not better. On any given day, dozens of men stand around the Iliava Bridge in the city waiting for work. Their tools lie on the ground beside them as cars slowly pass by, looking for construction workers or day laborers. Giga Gogoladze began waiting for work under this bridge after he lost his job eleven years ago at the Chatura Magnumi, a mining complex in western Georgia. \"I came here, to Tbilisi, to see my future as a worker. If I am lucky someone tells me to come with them, and offers me money for my work,\" Gogoladze said. If experts think unemployment is around 20%, from where Gogoladze is standing, it looks a lot more serious. \"The unemployed are not only people here under the bridge. In Georgia 70% of the population does not work. And if they work, their salaries are very low,\" he said.

Georgia has not always had a problem with unemployment. According to Uza Blagidze, who once worked in factories in the industrial town of Rustavi, the government could not find enough workers during Soviet times. People were continually brought in from the countryside; even former prisoners were welcome. Blagidze, like many others, came to Rustavi from a village in western Georgia to find work. According to a report published by Tamaz Zubiashvili and Mirian Tukhashvili at the Institute of Demography and Sociological Studies in Tbilisi, that trend has changed. In their report, they cite the economic crisis in the country as one of the reasons people were moving from urban areas to rural communities. Blagidze was one of the many who left unemployment in the city for farming in the regions. After several failed attempts to create a viable existence for his family, including a son in his late 20s, Blagedze commented that Georgians need work. \"Young people don\'t work...They all just sit around.\" He added that when people don\'t work, it never ends well.

But today, if anything, the situation is worse. Reports from sources as varied as the CIA to the BBC bemoan the lack of development in the economic sector, despite millions of dollars of revenue. Successful economic projects, such as the Baku-Supsa Oil Terminal and the BP Baku-Tbilisi-Ceyhan Pipeline, are promising notes on an otherwise poor report card. There are no serious enterprises in the regions. Tourism has started to take root again near the Black Sea, but that industry is viable only during the months of July to September and the relatively shallow pool of revenue is not enough to employ the scores of unemployed in the villages or towns.

Due to the serious economic crisis in rural Georgia, people are again risking the poor living conditions in the capital for the chance to make a living. \"You see these people here? We are all from Imereti and Samegrelo. Here is much better than in the regions. There are a lot of people here and therefore there is work here,\" Gogoladze said. \"Sometimes they want something built, sometimes something needs to be torn down... various jobs are available.\"

The lack of work can be easily explained by the fact that practically none of the former large factories and processing plants are currently in operation. According to Kote Kavtaradze, responsible for economic development in Kutaisi, there were once 30 heavy industries and 40-50 light industries in the city, making it the industrial center of western Georgia. Now the city is having problems attracting investors, and NGOs in the area complain that even basic services such as electricity are not available in the city. No serious investor seems to be looking at the region.

According to a report issued by the United States Bureau of European and Eurasian Affairs in June 2004, all economic activity in Georgia is operating \'below potential.\' The report goes on to say, \"The low level of increase in trade and GDP are due to fundamental economic problems that have eroded investor confidence in Georgia. The poor fiscal situation, pervasive corruption, and arbitrary implementation of laws and regulations have inhibited economic growth in the country.\"

Georgia is in desperate need of viable investment to rebuild the devastated industrial sphere. On October 18 President Saakashvili visited the site of a proposed new oil terminal in the village of Kulevi, in the Khobi region of Samegrelo. According to reports on the Imedi television station, the oil terminal will, once completed, provide jobs for an estimated 2,000 people. Georgian businessman Badri Patarkatsishvili, who is investing in the project, said that he chose to invest in Samegrelo because there is no work in the region for the local population. \"I decided to start there so local people will have jobs,\" he said, adding that the revenue will be good for the local budget. The terminal is scheduled to open in 2006.

Other investments are planned for the regions, including the redevelopment of tea and citrus industries, which represent the former livelihood of the majority of people in western Georgia and Adjara. \"If we finally decide to invest in these enterprises, by next year we will start working in Adjara and the Adjaran people themselves will be employed in the enterprises\", businessman Gogi Topadze, founder of the Kazbegi brewing company, was quoted as saying.

These investments are crucial for the survival of the population. Through thirteen years of change, reforms and corruption, the people of Georgia have been promised a lot of investments and a lot of jobs. Not many have materialized. After eleven years of struggling to support his family, Gogoladze is counting on this administration to turn the promised investments into real jobs. \"I really believe in Mikheil Saakashvili. I have real hope that he and the Georgian people together can get Georgia back on its feet,\" he said. \"I think Georgia needs five to six years...and these people without jobs will not be here under the bridge. Saakashvili promised us.\"

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The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.

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