Economic Development in the South Caucasus: Conference Brings
Together Local and International Experts to Share Lessons
Tbilisi, Georgia - On June 1-2, the Caucasus Research Resource Centers (CRRC),
in cooperation with the International Monetary Fund (IMF) and the National Bank
of Georgia, organized a conference entitled "The International Monetary
Fund and the South Caucasus in the 21st Century". Participants discussed
a broad range of issues affecting economic development in the South Caucasus,
including macroeconomic growth in Armenia, oil revenue in Azerbaijan, and post-revolution
expectations and challenges in Georgia. The conference was held at the National
Bank of Georgia and brought together over 40 high level participants, including
IMF resident representatives from Armenia, Azerbaijan and Georgia, chairmen
of the Central Banks of Armenia and Georgia, officials from Azerbaijani Ministries,
researchers, and other members of non-governmental organizations from the three
South Caucasus countries.
In his keynote address, Tigran Sargsyan, Chairman of the Central Bank of Armenia,
presented a comparative overview of the three South Caucasus countries: "Today,
[the countries of the South Caucasus] live similarly badly and differently well."
The high level of corruption and mistrust between the state and its citizens,
the presence of a large shadow economy, and conflicts within the region are
ongoing issues that plague the region's development. Mr. Sargsyan also noted
that speedy regional economic integration will increase each country's individual
economic activity. He suggested that researchers should focus on studying the
gap between stated economic policy and reality to identify priority areas for
Basil Zavoico, IMF Resident Representative in Azerbaijan, outlined Azerbaijan's
economic history since the collapse of the Soviet Union. According to some current
estimates, Azerbaijan will be a net importer of oil in about fifteen years.
He stressed the importance of developing Azerbaijan's non-oil sector to ensure
sustained growth in the future. Mr. Bagirov later highlighted this point by
warning of the risks of oil revenue, including a rise in exchange rates, the
collapse of the non-oil sector's competitiveness, and an increase in unemployment,
all symptoms of "Dutch disease".
The Georgian Minister of Finance, Aleksi Aleksishvili outlined his Ministry's
recent progress and reaffirmed commitments to create an optimal macroeconomic
environment, to establish a fiscal framework with low tax burdens and simplified
procedures, and to introduce free market principles in the financial sector.
Georgia seeks to have one of the most liberal regulatory environments in the
world, for example by abolishing all import tariffs within the next two years.
With this reform, Georgia will become the third country in the world after Hong
Kong and Singapore to implement such a policy. The IMF Resident Representative
in Georgia, Robert Christiansen, summarized the major risks for the country's
development in the next two years, citing deteriorating economic relations with
Russia, increases in energy prices, a narrow export base, and an end to privatization
revenues as the process draws to a close. He also emphasized the importance
of developing a robust judiciary.
Other key speakers included James McHugh, IMF resident representative to Armenia;
Azer Alasgarov, head of the monetary and exchange rate policy division of the
National Bank of Azerbaijan, Suren Poghosyan, Budget Advisor for the DFID funded
program "Support to Programme Budgeting in Armenia", Sabit Bagirov,
President of the Azerbaijan Entrepreneurship Foundation, and Michael Djibouti,
Chairman of the Association of Economists in Georgia.
For a more thorough report on conference proceedings, please contact Michael
or (+994 12) 93 66 18.
Established in 2003, the Caucasus Research Resource Centers are supported by
a partnership between the Carnegie Corporation of New York and the Eurasia Foundation.
CRRC is a network of resource and training centers located in the capital cities
of Armenia, Azerbaijan and Georgia. The CRRC mandate is to strengthen social
science research and public policy analysis in the South Caucasus by offering
scholars and practitioners stable opportunities for integrated research, training
and collaboration. For further information on CRRC, please visit our website
About Eurasia Foundation
The Eurasia Foundation is a privately managed non-profit organization supported
by the U.S. government and other public and private donors. Since 1992, the
Eurasia Foundation has invested more than $335 million through more than 7,700
grants and technical assistance projects in Armenia, Azerbaijan, Belarus, Georgia,
Kazakhstan, the Kyrgyz Republic, Moldova, Russia, Tajikistan, Turkmenistan,
Ukraine and Uzbekistan. For more information on Eurasia Foundation initiatives
and for a list of the Eurasia Foundation's independent advisory board members,
please visit www.eurasia.org.