Georgia

Beset by ethnic and civil strife since independence from the Soviet Union in December 1991, Georgia began to stabilize in 1994. Political settlements for separatist conflicts in South Ossetia and Abkhazia remain elusive. The conflict in South Ossetia has been dormant since spring 1994, but sporadic violence continues between Abkhaz forces and Georgian partisans in western Georgia. Russian peacekeepers are deployed in both regions and a UN Observer Mission is operating in Abkhazia.

As a result of these conflicts, Georgia still has about 250,000 internally displaced people. In 1995, Georgia adopted a new constitution and conducted generally free and fair nationwide presidential and parliamentary elections. In 1996, the government focused its attention on implementing an ambitious economic reform program and professionalizing its parliament. Violence and organized crime were sharply curtailed in 1995 and 1996, but corruption remains rife.

Georgia has taken some steps to reduce its dependence on Russia, acquiring coastal patrol boats in 1997 to replace Russian border units along the Black Sea coast. In 1998, Georgia assumed control of its Black Sea coast and about half of its land border with Turkey in line with a June 1998 agreement with Russia. Since 1997, Georgia's parliament has sharpened its rhetoric against Russia's continued military presence on Georgian territory.

In February 1998 an assassination attempt was made against President SHEVARDNADZE by supporters of the late former president Zviad GAMSAKHURDIA. In October 1998, a disaffected military officer led a failed mutiny in western Georgia; the armed forces continue to feel the ripple effect of the uprising. Georgia faces parliamentary elections this fall, and presidential elections next spring. After two years of robust growth, the economy, hurt by the financial crisis in Russia, slowed in 1998.

chief of state:

President Eduard Amvrosiyevich SHEVARDNADZE (previously elected chairman of the Government Council 10 March 1992, Council has since been disbanded; previously elected chairman of Parliament 11 October 1992; president since 26 November 1995; note--the president is both the chief of state and head of government

head of government:

President Eduard Amvrosiyevich SHEVARDNADZE (previously elected chairman of the Government Council 10 March 1992, Council has since been disbanded; previously elected chairman of Parliament 11 October 1992; president since 26 November 1995; note--the president is both the chief of state and head of government

cabinet:

Cabinet of Ministers

elections:

president elected by popular vote for a five-year term; election last held 5 November 1995 (next to be held NA 2000)

election results:

Eduard SHEVARDNADZE elected president; percent of vote--Eduard SHEVARDNADZE 74%

Georgia's economy has traditionally revolved around Black Sea tourism; cultivation of citrus fruits, tea, and grapes; mining of manganese and copper; and output of a small industrial sector producing wine, metals, machinery, chemicals, and textiles. 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 the IMF and World Bank, made substantial economic gains since 1995, increasing GDP growth and slashing inflation. The Georgian economy suffered some setbacks in late 1998, including a large budget deficit due to a failure to collect tax revenue and to the impact of the Russian economic crisis.

Georgia also still suffers from energy shortages; it privatized the distribution network in 1998, and deliveries are steadily improving. Georgia is pinning its hopes for long-term recovery on the development of an international transportation corridor through the key Black Sea ports of P'ot'i and Bat'umi.

The construction of a Caspian oil pipeline through Georgia--scheduled to open in early 1999--should spur greater Western investment in the economy. The global economic slowdown, a growing trade deficit, continuing problems with corruption, and political uncertainties cloud the short-term economic picture.