Public Expenditures on Education and Health in Georgia before and during the Global Crisis

After years of stagnation and political cataclysms, Georgia tried to recover by launching radical economic and political reforms starting in 2004. The results of the reforms appeared to be impressive. The country’s GDP has more than doubled; the total volume of bank deposits is five times what it used to be.

The occupation of the Georgian territories by Russia in August 2008 and the global financial crisis have significantly changed the current macroeconomic environment in Georgia. This conflict undermined investor and consumer confidence, put pressure on public finances, damaged physical and other infrastructure and undermined the banking system with a large volume of deposit withdrawals. The deepening of the international financial crisis put further pressure on currency and foreign investments.

The purpose of this paper is to consider the nature and magnitude of the impact of the global financial crisis on Georgia’s social services sector and on the country’s economy as a whole. The global financial crisis had a sharp impact on the most disadvantaged members of the society.

The project has been funded by the Local Government and Public Service Reform Initiative of the Open Society  Foundations and implemented in collaboration with CASE Ukraine, CASE Moldova and CASE Kyrgyzstan.

Read more in CASE Network Report No. 101 by Maka Chitanava, Maya Grigolia and Lasha Labadze.