Liberalization of the world economy creates new opportunities to take full advantage of the market economy.  The trade policies of national governments and the activities of the World Trade Organization (“WTO”) have a significance influence on the economic and social development in the world.   

The  modern global marketplace is characterized by a high degree of monopolization. It is very difficult for the developing countries to access these markets. Such countries are unable to compete for trade due to serious domestic political and economic problems.

Georgia became the 137th member of the WTO in June 2000. Georgia was the fourth former Soviet republic to join the WTO. Accession to the WTO was a significant step in the process of transition to a market economy. The process of accession into the WTO was preceded by a series of substantial changes in national legislation in the areas of intellectual property; trade-related investment regime; trade in services; government procurement and etc.

The Georgian government hoped that by assuming a place in the global trading system it would achieve prosperity and stability and expand its activity in the world economic arena. The membership  in the WTO has encouraged Georgia’s integration with Europe. The Georgian government has committed to implement all international obligations regarding tariffs, international investments, and a favorable business climate in Georgia, which are supposed to facilitate  the growth of economic development. But  due to the asymmetric development of the  political and economic processes in the country,  these conditions have not been implemented.

As a result, Georgia had experienced the following effects: rapid decline of national economy; a trade policy oriented towards imports only; limited potential to increase exports; a flourishing shadow economy, and increased prices of goods  and services in the country.  Additionally, political and social instability, corruption, and security concerns  have hampered the growth of direct foreign investment.

Georgian exports are partially concentrated on low value-added commodities such as ferrous metals, copper, aluminium, iron steel, and mineral fuels. However, the dynamics of exports  indicates that the concentration of exports on low value-added commodities will decrease gradually over time. Imports are dominated by mineral products (importantly including natural gas, oil and oil products), and electricity, which indicates the dependence of Georgia on foreign  energy. ^[1]

The advantages created by membership in the WTO have not been fully realized. Transitional mechanisms for domestic market protection are insufficient.  Approximately 51.1 percent of the population lives below the poverty line, and 23.6 percent is unemployed.  Widespread illicit activity has undermined the competitiveness of legal imports and locally produced goods.  Most Georgians earn their livelihood in the agricultural sector. As a result of land reform, 57 percent of arable land is now privately owned and 27 percent is leased by the state to farmers. ^[2] However, agricultural output is limited by inadequate access to credit, poor irrigation, and the high cost of inputs such as fuel, pesticides, and machinery. Profitability is also affected by exorbitant transportation costs and constrained manufacturing growth, resulting in an urban unemployment rate that is greater than 40 percent.

The process of globalization and trade liberalization has  impacted negatively the population of Georgia. It is interesting to analyze these effects  from gender perspective . Currently, there is a lack of information and research on this issue in Georgia. The effects of trade on women, who make up the vast majority of Georgia’s poorest citizens, should be carefully examined.  If trade is to reduce poverty, then there should be positive benefits for poor women. A small increase in income could have an enormous impact on a poor woman’s quality of life. Processes of reforms, that affected practically all sectors of economy and social sphere, conditioned significant differentiation of women based on income, level of life, conditions in labor market, and demands in particular forms of social support.  In addition, there were  impacts of such factors as a difference regarding the  access of men and women to financial and credit resources, and property, including land and realty.

Although Georgia is strategically located as a bridge between Europe and Asia, is a European Union (EU) neighboring country, and has access to Commonwealth of Independent States (CIS) markets, a democratic and liberal policy, a competitive export regime, a liberal and simplified tax code, an agricultural sector with significant potential, and a transport and communication infrastructure, but still there has been a lack of foreign investment. This impeded the process economic stabilization aimed at strengthening the country’s foreign economic relations and increasing the volume of trade, finance and investment. Georgia's main economic activities include the cultivation of agricultural products such as citrus fruits, tea, hazelnuts, and grapes; mining of manganese and copper; and output of a small industrial sector producing alcoholic and nonalcoholic beverages, metals, machinery, and chemicals. The country imports the bulk of its energy needs, including natural gas and oil products. Its only sizable internal energy resource is hydropower.

Despite the severe damage the economy has suffered due to civil strife, Georgia, with the help of international donors, has made substantial economic gains, achieving positive gross domestic product (GDP) growth and curtailing inflation. The Georgian new government is making progress in reforming the tax code, enforcing taxes, and cracking down on corruption. However, low wages and pensions, increasing social injustice, and decreasing purchasing power of the population remain crucial issues for Georgia. 

Georgia also suffers from energy shortages; it privatized the T'bilisi electricity distribution network in 1998, but payment collection rates remain low, both in T'bilisi and throughout the regions. The country is pinning its hopes for long-term growth on its role as a transit state for pipelines and trade. The construction on the Baku-T'bilisi-Ceyhan oil pipeline and the Baku-T'bilisi-Erzerum gas pipeline have brought much-needed investment and job opportunities to the country.

The transformational processes underway in the country have greatly influenced the development of gender equality. As a result of neo-liberal economic policy, restructuring has taken place in various fields of the economy. The implementation of a macroeconomic policy that did not consider social factors brought about a sharp decrease of social guarantees and a mass exodus of women from production facilities.

The sectors of the economy in which women majority traditionally participated  have changed dramatically in recent years. Gender inequality in terms of the accessibility of resources, has become more acute, and women’s security and the protection of their labor rights have become considerably worse. The socioeconomic situation and gender-neutral policies create specific barriers that obstruct women’s successful political and professional careers. The economic reforms launched in the country, the restructuring processes, and privatization have caused the polarization of the population into rich and poor strata. A social layer of entrepreneurs and private owners was formed, which, through the initiative of the state, appropriated privatized facilities.

Great hopes were pinned on the privatization process, because it was believed that it would create new jobs, but all those hopes proved unfounded.  Meanwhile, a huge number of unemployed persons was created, without any social guarantees. The sharp reduction in the number of jobs has caused the decrease of the demand for labor and the fewer employment options for men and women.  On one hand, this can be explained by the fact that the traditionally “women’s fields” (textile industries, food industry, chemical production, the social sphere, etc.) experienced the greatest negative effects as a result of the economic restructuring  and trade liberalization in Georgia.  Unemployment among women has reached a massive scale.  Unfortunately, official statistics hardly reflect the existing reality.

In 1994, the first stage of privatization in Georgia gave birth to a new stratum of enterprisers in the country. The existing legal basis (specifically, the law on privatization) did not restrict the participation of the population in this process. This paper will not give a legal assessment of the privatization process, but it is clear that a large part of state property was appropriated by those entrenched in the governmental hierarchy, i.e. those who already exercised great power. Because women’s participation in the top levels of state management was practically negligible, they were unable to acquire any large industrial or agricultural facilities and managed only to become proprietors of small enterprises in the service field. They did not possess the capital needed to purchase the facilities which were available for purchase through the privatization process.

The data show that women are the majority in the education and health care sectors only, which are typically less profitable. Other business sectors that are likely to hire women are the mass media and entertainment sectors. The mass media is well known as a “women’s sector;” two-thirds of reporters are women, and there has been a sharp increase in the number of women holding leading administrative positions. Another example is the entertainment business, where young women are working as artists, designers, and advertising agents.Especially striking is the small number of privatized facilities in the fields of banking, energy, and building. In those spheres, where the opportunity to gain profit is higher, women’s participation is non-existent, which means that women’s enterprising opportunities are developed in Georgia in accordance with professional gender segregation.

In 2004, with the help of the US Agency for International Development (USAID), the Entrepreneur Support Association conducted a special survey in order to study the situation in 50 large companies in Georgia. The study showed that only two women occupied high-level positions in these companies.  Women are mostly involved in small businesses, especially in the service areas, such as education, health care, trade, restaurants, hotels, pharmacies, publishing houses, etc. In recent years, economic growth in Georgia has been concentrated in sectors such as communications, transport, financial services, industry and trade; most of those engaged in these fields and in leadership positions within them are men.

It is interesting to note that the majority of officially employed women (70 percent) belong to the so-called self-employed group, and only 30 percent of them are occupied in various enterprises and organizations.  Only 15 percent of the total number of self-employed women works as employers in the informal sector, whereas the vast majority of the self-employed are on the verge of poverty. ^[3]

The link between working in the informal economy and being poor is stronger for women than for men. Working in the informal sector has become a common form of occupation for women. The combination of formal work with secondary work in order to earn a sufficient income has become a widespread practice.  The overwhelming majority of women are employed in the agricultural sector. Work in the informal sector is regarded as a necessary strategy for physical survival, especially in cases when there is no other alternative for finding a job. Many women are similarly engaged in unpaid labor in their households. 

The difference is especially significant in terms of income. The average salary and income of employed women lags behind that of men considerably.  In particular, the average salary of women working in the state sector on the basis of contracts amounts to only 55.1 percent of men’s compensation.  In the budget organizations and the organs of state management, this number stands at 46 percent; in the non-governmental sector it is 63.6 percent, in agriculture – 82.5percent, in trade – 71.2 percent, in education - 72.6 percent, in health care – 71.3 percent, and in other fields of social services this figure amounts to 51.7 percent. ^[4] . 

This difference is significant among employers as well as the employed.  The income of women entrepreneurs is 34.7 percent less than that of male employers, and among women hired as employees it is 21.8 percent less than men. This data indicates that women (especially hired employees) are mostly engaged in low-qualified work and can only obtain relevantly low positions (with the corresponding low salaries).

In the top positions in management organs, men outnumber women 26 to 1. In contrast, women constitute a majority of highly-qualified specialists – 1.7 times the number of men, though close to an equal number of men and women have received professional education of this level. Half of employed women are unskilled laborers, as compared to 48.5 percent of men.

The research materials show that the informal sector is more dominated by women, whereas the private sector is primarily occupied by men. ^[5] Women’s participation in the private sector is rather limited, and their labor rights are frequently violated; in the current situation, chances for improvement of their material welfare are almost non-existent.  Women take such work only for the sake of saving their families from starving.  Unfortunately, due to scanty information, gender analysis of the private sector is very difficult, but disproportion between the sexes is still apparent in this sector.

The unfavorable environment for entrepreneurship in Georgia creates more problems for women than for men. Because of unfair competition in business management and women’s lack of experience “cutting deals” (often illegal) with public or private officials, women have great difficulties acquiring the trust and confidence of potential partners when starting businesses. Even in the period of uncontrolled allocation of large-scale credits, no women businessmen were able to obtain such credit.

Entrepreneurship automatically does not  follow from liberalization and privatization.  An entrepreneurial   economy must be promoted through appropriate policies and adequate institutions in many areas, such as education and training and starting capital.  The first step must involve research on businesswomen and their status in the labour market, to be used as the basis for subsequent policies.

One of the biggest problems faced by Georgia on the path to economic growth is that micro and small businesses have a hard time gaining access to credit.  In every vibrant economy, micro and small businesses are at the core of job creation and inceasing incomes. 

If Georgia’s small entrepreneurs continue to find it difficult to gain access to credit, the country’s economy will have a hard time developing.  Georgia could very well address the big issues faced by large business – taxes, overregulation, lack of investment, etc. – but without making the business environment friendlier to the micro, small, and medium businesses, a large section of the economy will not grow.

At the same time, the government cannot expect to maintain a system in which only large business constitutes the nation’s tax base – without tax contribution from small business, the government will never have sufficient resources to provide the services it is charged with providing.

Currently, there is an additional problem faced by micro-, small-, and medium-businesses in Georgia.  Following the Rose Revolution, many of the micro-sale “stores” (the so-called “outside salespeople”) as well as flee markets across Georgia were closed down in a very abrupt way.  This happened very quickly, with virtually no warning and no planning for how to ensure that the thousands of individuals engaged in this work would not suffer tremendous adverse consequences.  The majority of them were women.  They  have faced bankruptcy, job loss, and large debts to some of the micro-credit banks. It essential to help these individuals in light of the problems that they have faced.

Violence against women in the workplace has become a serious problem. Because of the high rate of competition in the labor market, women are afraid of losing their jobs and therefore, in most cases, do not report abuse perpetrated against them.  However, most Georgians are aware that such acts are committed in many offices and institutions.  Prestigious and highly paid jobs, along with those in professional sectors create discriminatory requirements for women seeking employment, i.e. physical appearance requirements and age restrictions. In cases of pregnancy, it employers often deny  women the privileges they are entitled to by law.

All of these factors impede the involvement of women in the private sector. It should be emphasized that women have a lot to contribute to business, and it is detrimental to society when their participation in this sphere is limited.  Equalizing the work opportunities of men and    women requires a whole range of measures, such as credits with discounts, micro financing, improving legal protection of women’s labor rights, etc.  

It is important to analyze global trade issues from different perspectives.  On the one hand, trade expansion can cause displacement, unemployment and new hardships.  Those sectors likely to suffer most from international competition should therefore be targeted for public support and financial and technical assistance. On the other hand, many new income and employment opportunities emerge with liberalization.  Efforts should be made to identify such potential growth areas, and women should be provided with the necessary skills, training, information and contacts to be able to take full advantage of these openings. ^{[6] .}

As mentioned above, the globalization process has influenced the structure of employment in Georgia considerably.  On the international market, the demand for women’s work as a relatively cheap labor source has increased greatly.  Therefore, the number of women and their share among labor emigrants has become quite substantial.  Feminization is considered to be a new   stage in the development of working emigration and is regarded as important progress on the road to achieving gender equality. ^[7]

Before 1990, the migration of Georgian women abroad for work was highly uncommon.  Within Georgian society, it was completely unacceptable for a woman to leave her family and go abroad to earn a living.  But as a result of the existing reality and the deep social crisis, as well as the sharp fall in the standard of living, labor migration became one of the ways for the people of Georgia to meet their most basic physical needs.  This gave way to the broad involvement of women in labor migration.

In developing countries all over the world, women have had to move to a lower stage of the service infrastructure, and therefore the majority of them are obliged to work as nurses, shop assistants, waitresses, and in other unskilled positions.  In the free economic zones of the countries of South Asia and Eastern Africa, women constitute 80 percent of the total labor force (cheap working force). Many women become victims of trafficking. More often women find the jobs not adequate to their qualification while being abroad, its subsequence is a total devaluation of value of women  labor force. No guarantee for social protection is available for them. All above mentioned have had negative impacts on women and families and was reflected in the demography situation and the devaluation of family values as well. 

Globalization also tends to privilege large companies (in which the majority of employees are men) as they can capture new markets quickly and easily to the disadvantage of small and micro entrepreneurs (where women are the majority), which face difficulties gaining knowledge of and access to emerging markets. In sum, globalization puts pressure on low-skilled workers and petty producers by weakening their bargaining power and subjecting them to increasing competition. These trends have negative impacts on women, especially in the form of low wages, lack of benefits, and lack of security in the workplace.

The recent events that have taken place in Georgia (namely, the so-called “Rose Revolution”) have considerably accelerated changes in the political and economic life of the country; the belief that the country will embark on a road of economic revival and fully adopt European values has become quite tangible.  Yet greater efforts are needed to turn Georgia into an economically powerful state capable of occupying its rightful place in the globalization processes that are underway in the world.

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About the author:

Charita Jashi, Ph.D., (Georgia), Associate Professor of Tbilisi State University, Founder and Head of the Association of Gender For Social Economic Development, President of the Association for Economic Education. Formerly served as Georgia’s National Coordinator for the United Nations Development Programme’s (UNDP) “Women in Development” and “Gender in Development” projects. She has worked on gender issues and economics issues for nearly a decade.   is  Currently, she is a consultant for the UNDP project “Gender in Politics in the South Caucasus” on Gender Responsive Budget”.She is a member of a number of organizations, including the Network of Women in Development Europe (WIDE), the International Association for Feminist Economics (IAFFE), Gender Expert Panel/OSCE office of Democratic Institutions and Human Rights and the Coalition of Georgian Women’s NGOs.  She is author of 5 books and 40 articles  on gender and economic issues in Georgia and recently published the book Gender Economic, The Case of Georgia, Tbilisi: UNDP (2005).
Contact: charita@access.sanet.ge

^[1] Trade Policy and external Trade , Invest in Georgia, Tbilisi: Georgian National Investment and Export Promoting Agency, 2005

^[2] World Bank Report, Economic Trends of Georgia, o.26964, GE. Aug. 20, 2003 

^[3] Household enterprises with little land , the informal petty traders booth and market stalls, as well as people employed in the service create the category of self-employed. According to the mitigal  criteria of the definition of unstable employment if an individual work for a at least one hour a week ,he/she will be considered self-employed.

^[4] See:  Women and Men, Statistical abstract, Tbilisi, 2005

^[5] Studies  from Hungary and East Germany indicate that as banking, insurance and the entire financial sector have become privatized, increasingly central to the economy, and significantly more lucrative, men have streamed into jobs there.  Men started to occupy leadership positions even though women have dominated banking for decades before, when it consisted largely of routine accounting.   See, Karadenizli, M. “A Research Agenda For the Analysis of the Impact of Economic Reform and Structural Adjustment on Women`s Economic and Social Rights in The Transition Countries,”, in Dokmanovic, M.(ed.), Transition, Privatization and Women, Subotica: Women’s  Center for Democracy and Human Rights, 2002, p. 37 

^[6] Carr, M and Chen, M. Globalization and Informal Economy : How Global Trade and Investment  Impact on he Working Poor , Cambridge: Harvard University, 2001.

^[7] Castles S. and Miller J. The Age of Migration, International Population, Movements to the Modern World, London, 1993