Georgia in the Process of Transition from Planned to Market Economy

Ketevan Rizhamadze ()
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Ketevan Rizhamadze: Turiba University, Latvia

Eurasian Journal of Economics and Finance, 2019, vol. 7, issue 4, 25-31

Abstract: The last two decades of the 20th century was marked with the most noteworthy proceedings in modern economy that has been the socialist countries’ transition from the Soviet-type planned economy to a market economy. The collapse of Soviet Union was a “geopolitical tremor” that profoundly transformed the entire political landscape, revolving the globe on five continents and leaving fifteen independent nations on the place of one single state. The crumple of communism finalized the millenarian politics and the era of planned economy. Newly emerging democracies of Europe had to overcome political and economic obstacles along the way. Market economy and economic systems are highly researched topics. Nevertheless, there are scarcity of researches that explores knowledge, convictions and expectations that people and government officials have held toward change. The purpose of this paper is to identify the challenges and prospects that Georgia had faced in the transition process and to scrutinize the strategies of overcoming the problems. It shall address the following issues: forming a market and market prices via privatization, establishing monetary and financial systems, developing state institutions and fiscal roles of state. This research shall take a closer look at region’s geopolitical dynamics and shall explore the complex nature of transition process. It shall investigate the competing interests, challenges and opportunities during the conversion process. Research paper reveals that changing an economic system through mere economic factors, such as prices and privatization is not enough. People's philosophy must follow and sustain that change for success. Change must obviously have a clear destination and goal. Consequently, people must become more cognizant why these changes are necessary and why this is happening in order to steep them actively in the process of transition.

Keywords: Transition Process; Market Economy; Soviet System; Privatization; Economic Systems (search for similar items in EconPapers)
Date: 2019
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