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Flood Influence on Georgian Economy

The June 13 Tbilisi flood has left incurable wound on the heart of Georgian citizens.

We have lost lives of our compatriots, many families remain unsheltered, motorways and infrastructure have been demolished, animals have been drowned. Besides these losses, the flood has inflicted significant economic and environmental damage to our country. At this stage, it is difficult to precisely estimate the losses, but there are general economic aspects that will be definitely affected by the natural disaster.

Annihilated Infrastructure

The economic infrastructure is of vital importance, as the developed infrastructure grows productivity, facilitates transportation and communication sector. Valuable infrastructure and quality makes the investment environment attractive. Much time and huge budget funds are required to rehabilitate the destructed roads and infrastructure.

Slowdown in Tourism Business

Summertime is considered to be a tourism season. This sector was very important for the Georgian economy, but the GEL rate devaluation has further enlarged its significance in 2015. At the same time, the recent flood in the capital city declines the tourism attractiveness of both Tbilisi and the whole country. As a result, the tourism sector may face serious slowdown.

Flood Influence on Georgian Economy

The natural disaster has brought healthcare problems to many citizens. People need both physical and psychological assistance. In general, the flood disaster, even more so, along with animal carrions, grows the risk of various diseases. A major part of the civil volunteers needs tetanus vaccination. All the above-mentioned factors grow healthcare expenditures and affect the state budget.

Threats to Business Sector

The companies located within the natural disaster zone have been also damaged. The building of Vake meat processing plant has been damaged. All machineries have been annihilated. Swatch and ArtTime stores have been also damaged. The Georgia-American Future School, Happy Lounge entertainment center and Matrioshka restaurant have been also damaged.

Household Losses

The natural disaster has left over 260 persons unsheltered. People have lost living houses, all household things and essentials.

Decline in Production

Major part of our citizens remains stressed by the natural disaster and their performance at offices has shrunk. Problems in the transportation sector also lower their performance. As a result, the economic activity has declined.

Increased Environmental and Sanitation Expenditures

The flood has resulted in growth in environmental expenditures. The landslip has demolished a part of the woodland. Sanitation losses for environmental cleaning, transportation of died animals and the territory disinfection are also very huge.

Zoo Restoration Expenditures

The capital city will have to spend much money on restoration and construction of the ZOO and bringing variety of new animals there. All these costs will be taken from the state budget.

Based on the above-mentioned, the following works must be performed in the capital city:

  1. Cleanup and rescue activities (ongoing);
  2. Environment protection works;
  3. Water system management works;
  4. Infrastructure and zoo construction/restoration works.

Today, all Georgia stands united and overall support is being provided to the natural disaster victims. This is an encouraging ground for seeing optimistic future. At the same time, the money will turn from one sector to another and no economic progress will be made, in practice. Investments injection into the business sector is one of the main ways for the economic revival, but today the frustrated companies are facing the natural disaster results and the business environment in Georgia has become less attractive. Consequently, the Authorities have to draw a huge amount of grants and international financial resources to withstand these challenges.