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Georgia Foreign Trade
In the Soviet period, Georgian trade with the world outside
the Soviet Union was severely restricted by Moscow's foreign
economic policy (see
table 23, Appendix). Almost all of Georgian
foreign economic activity was conducted by fourteen central
enterprises, most of which operated under the direct management
of Moscow. Bulgaria, Czechoslovakia, Germany, Japan, and Poland
were among the most important of Georgia's trading partners (see
table 24, Appendix). Gamsakhurdia, suspicious of businessmen
who
sought to export Georgian goods, banned all export activity. The
Shevardnadze government, however, created conditions for
significant improvement of international investment and trade. In
May 1992, licensing requirements for import or export activities
were dropped except for the import of goods in the military and
medical categories. This change represented a significant
expansion of the rights of enterprises to engage in foreign
economic activity. Export of twelve commodities, mostly
foodstuffs, was still prohibited at the end of 1992. Fees and
other restrictions on the registration of joint ventures were
removed, and the state tax on all imports was canceled. Import
duties ranged from 5 to 55 percent, and export duties from 5 to
90 percent, with an exemption for former Soviet republics; the
VAT on exports dropped to 14 percent in late 1992. The National
Bank of Georgia imposed a tax of 12 percent of exporters' hardcurrency earnings. In early 1993, new trade policies had not led
to major increases in foreign trade and investment. Continued
political instability, ethnic warfare, and extremely poor
transportation and telecommunications facilities continued to
discourage foreign investors in 1993.
In the second half of 1993, continued military upheaval did
not entirely deter progress in foreign investment. The Renault
automobile company of France, the German Tee Kanes tea company,
and British and Dutch liquor companies signed contracts in
August, and officials of Mitsubishi and an American shipbuilder
visited Georgia to assess investment conditions.
Data as of March 1994
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