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Journal number 3 ∘ Giorgi Kraveishvili
Inclusive economic growth of Georgia in the context of post-Soviet countries

Expanded Summary

Doi: 10.36172/EKONOMISTI.2022.XVIII.03.Giorgi.Kraveishvili

The purpose of the article is to conduct a comparative analysis of the inclusive economic growth of the post-Soviet countries, for which the index of the inclusive economic growth of the post-Soviet countries is presented in the article. The obtained results allowed us to evaluate the inclusive economic growth of Georgia against the background of post-Soviet countries. We saw the directions that promote or hinder the country's inclusive economic growth. Based on the results, recommendations are presented at the end of the article.

The main concern of any country is to ensure economic prosperity and a high standard of living for its people. Therefore, it is important that the economic growth and development of the country be equally beneficial for every citizen of this country. Today in the world there is inequality between different groups of the population, as well as a high percentage of people living below the poverty line. To solve this problem, the need for inclusive economic growth has been on the agenda of world economic policy since the beginning of the 21st century. Inclusive economic growth is economic growth that benefits the wider population, reduces poverty and eliminates inequalities between different segments of the population.

Several indicators are used to measure inclusive economic growth. The indicators measure GDP per capita, as well as poverty, inequality, and how equitably the benefits of economic growth are distributed among different groups of the population and how their standard of living improves.

The article presents reports of international organizations on the importance of inclusive economic growth and the methodology for its assessment. Based on the proposed methods, the article developed an index of inclusive economic growth in the post-Soviet countries, which allows to see the leading countries in terms of inclusive economic growth in the post-Soviet countries, as well as Georgia's place in this direction.

The article examines 35 indicators proposed by the Asian Development Bank and 12 indicators proposed by the World Economic Forum, which assess the country's inclusive economic growth in different directions. For comparison with the post-Soviet countries, the article identifies 4 groups of areas that combine important indicators of inclusive economic growth. These 4 groups are: standard of living, inequality, governance, public finances. Each group combines 3 indicators, as a result we have an inclusive growth index of the post-Soviet countries, consisting of 12 indicators.

According to the index, Georgia ranks 10th among post-Soviet countries. As a result of the study, directions were identified that contribute to or hinder the inclusive economic growth of Georgia. Basically, Georgia lags behind other post-Soviet countries in terms of gross domestic product per capita, poverty, and inequality.

The Baltic countries occupy a leading position in comparison with the post-Soviet countries. In the first place is Estonia, which has a good value of GDP per capita, as well as factors that ensure a fair distribution of this benefit among the population. An analysis of the reforms implemented in the mentioned countries, in terms of experience sharing for Georgia, can be considered as a further direction for this study.

Second place is occupied by the countries of Eastern Europe, the overall high result of which is mainly due to relatively low levels of unemployment and inequality. Russia is in third place, and the South Caucasus is in fourth place. As a result, the countries of the South Caucasus, including Georgia, have indicators below the average in almost all areas. The last fifth place is occupied by the countries of Central Asia, which are characterized by the lowest rates among the post-Soviet countries.

As a result of the study, it can be concluded that the main challenge for Georgia today is inequality and the high level of poverty in the country. It is these indicators that mainly contribute to the low result of Georgia on inclusive economic growth among the post-Soviet countries. It is also important to increase spending on education and reduce public debt to ensure intergenerational equity. Increasing GDP per capita also remains a common goal, which is a necessary but not sufficient precondition for inclusive economic growth.

Many factors are required to achieve inclusive economic growth. We especially want to highlight the need for a high level of education among the population. Because inclusive economic growth needs the involvement of a significant part of citizens in economic activities, they must have the appropriate education and skills. For this, it is necessary to pay maximum attention to the perfection of the education system, and the formation of an educated society should be the main priority of the state.

The second important factor is to create a fair environment in the country so that all people have equal opportunities. It is also important to give proper attention to the population living below the poverty line and support them. This will help to eliminate the existing inequality between different social groups of the population and achieve inclusive economic growth.