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Regions should Vitalize Economic Potential

Competitive and knowledge-based economy in regions can ensure stable economic growth, create more job places and attain high social-economic welfare.

Over the past decade, social and economic condition of regions has improved. The Authorities have shaped economic models for social equality. As a result, social inequality has shrunk; stimulation of innovations and market platforms revived region’s environment and intensified region’s economic activity (however, influence of the mentioned factors is assessed as unsatisfactory).

The existing facts prove that economic sector in regions are not flexible, incomes of employees in regions are low, economic potential in regions are not employed, while government’s interventions and initiatives are inefficient.

It should be noted that because of political environment, economic problems of regions of Georgia are diverse:

  • Highly qualified persons in regions stay unemployed or work in other fields of specialization or migrate to other countries. As a result, resources are not used and spent rationally;
  • political circles do not change discussions and approaches around economic policy; governance is not efficient and reformatory; Consequently, it is impossible to create flexible and new economy.
  • Despite global and local economic challenges, academic character and strategic skills of administrative resources are not perceived as a key strategy for economic competitiveness and growth in a region;
  • Strategy and approaches of regions cannot make essential influence: on improving living conditions in regions, growth in revenues and welfare; improving productivity and eradicating inequality; maximum use of current or mobilized resources (financial, academic) and reception of profits; competitive capacity of separate regions and growth in ratio of economy.

Research works prove that development of regions depends on economic thought, approaches of interventionism, various political perspectives and GDP growth volumes.

It should be stressed that aspiration of regions should be based on: new political and governance force, academic and active resources, new leaders and intellectuals.

Research works prove that  central and local governance environment of Georgia requires fundamental transformation in line with modern economic requirements, where regional policy will be focused on:

  • Efficiency of governance environment, quality of governance and flexibility; implementation of progressive policy;
  • Improving economic activity in regions; economic policy, economic growth, creating job places;
  • shaping of business community and national middle class;
  • growth in institutional potentials on regional level;
  • mobilizing dispersed economic and social welfare resources;
  • narrowing social and economic inequality between cities and villages and growth in welfare;
  • Employment of academic resources;
  • employment of academic resources;
  • necessity of Economic Policy Deviation, based on challenges of local governance.

Based on the issue summary, it should be noted that:

  • More and more people suffer from economic deprivation amid low economic indicators, weak economic activity, small social assistance, unemployment, subsidization policy, problems with governance and economic policy efficiency in regions;
  • Despite GDP growth in the country, if priorities and directions are not determined in right way, the regions will not be developed at high paces. These directions are as follows: development of education and science and upgrading their role; investing in education and science is one of the efficient methods for economic growth of regions and equal distribution of welfare. Therefore, central and local governments should realize the value of making investments in education and science and management of academic resources;
  • The role of strong human resource is a driver of economic progress in the region. Therefore, it is necessary to transform governance environment and upgrade management efficiency;
  • regional development should be seen from the position of all social systems;
  • The Authorities should ensure economic potential of a region, resolve infrastructural needs, carry out digital policy, upgrade economic ratio through regional potential; be first to show the sample of assuming responsibility for problems and fulfilling plans;

Regions should perform a leading role in activation of young intellectuals, professionals, attracting academic resources and governance space.

It should be stressed that the country should become economic development hub, which will enable to shape all sorts of hubs (transport, logistics, finance, educational, digital and other fields) in the region (South Caucasus Region).

Finally, it should be noted that results of invasion of successful economic policy of one region is reflected on activation of other regions too.

Article by Rati Abuladze Professor, Doctor of Economics