Recent difficulties have included the conflict in bordering Chechnya, the Russian economic crisis, a severe drought, a low growth economy, and a budget crisis caused by falling revenues. Despite these problems, Georgia continues to build the foundation for an open market and western-style democracy in partnership with international donors. The Government of Georgia has affirmed its western orientation by regular passage of legislation in economic, legal, and fiscal policy reform, and the strengthening of democratic institutions. With support from the United States and other donors, notable headway was made this past year. Major accomplishments include accession to the World Trade Organization, the Supsa pipeline opening, land privatization, relatively free and democratic parliamentary elections last October, and qualifying exams for the judiciary.
Formidable challenges remain, however.
The international community and the Georgians themselves see endemic corruption, a lack of fiscal discipline, and regional separatism as serious obstructions to building a more democratic and prosperous state. Several important problems were identified during that exercise. Unemployment, under-employment and constraints on credit conspire to keep living standards low, while state social programs are inadequate to address the population s needs, especially in the regions outside the capital city. Civil service reform is needed to introduce more responsive and effective government professionalism. Health care and education do not receive sufficient human or monetary resources to address the basic needs of the population.