• NAME OF RESEARCH

    Dependence on Russia - Why Georgia is different from Ukraine

  • NAME OF AUTHOR

    Bank of Georgia Research

  • CATEGORY

    Economy

  • YEAR

    2014-05-08

  • Download PDF

Despite a similar political past with Ukraine and similar economic diversity, the respective paths of Georgia and Ukraine and their economic relations with Russia have split over the last decade. This was a result of differences in reform initiatives, in the internal political climate, and the Russian embargo on Georgia that forced it to redirect its focus. Georgia’s key positives lie in its trade diversification and lower export exposure to Russia, its limited energy dependence on Russia, the success of implemented reforms, its macroeconomic resilience, lower public debt levels, stronger banking sector, and the underdevelopment of the stock market, which shields Georgia from negative shocks. In short, Georgia is unlikely to experience any of the economic troubles Ukraine is currently facing.