After three years of structural adjustment, inflation in Georgia fell from 19,000 per cent in 1996 to 7 per cent in 1998 and the economy began to grow at around 10 per cent/annum. Such positive macro-indicators belie the harsh realities on the ground. Unemployment and poverty are high and growing (affecting between 40 and 50 per cent of Georgians), the economy remains one-third its 1990 size, and tax revenues are some of the lowest in the world. Public investment is non-existent, and most revenues are disbursed recurrent costs or debt service payments. Following the economic crisis in Russia late last year the Georgian economy suffered a further setback: the Georgian lari almost completely stable from its introduction in 1995 fell against the US dollar from 1.35 to 2.15 (at time of writing).
On the political front, ethnic tensions and power politics have compounded Georgias economic problems resulting in population displacement and civil unrest. Since independence there have been sporadic threats to the stability of the state from anti-Shevardnadze forces whose primary base is in western Georgia. In addition, two unresolved conflicts (in the secessionist zones of Abkhazia and South Ossetia) have left parts of the country beyond the control of central government and in the hands of groups which are unable to support public infrastructure in territory under their control.
Approximately 250,000 ethnic Georgians have been displaced from Abkhazia, which faces severe depopulation, and several thousand have gone from South Ossetia. In addition, thousands of ethnic Ossets have fled areas of Georgia to the Russian Federation; with UNHCR help they have been returning since 1997.
Over the last two years internally displaced persons (IDPs) have also started to return to their former places of residence and UNHCR-supported rehabilitation is underway in both conflict zones. However, this process has been completely disrupted in Abkhazia due to the outbreak of hostilities and renewed displacement in May 1998.
The Abkhaz conflict appears the most intransigent of the two, and continuing bouts of partisan/militia clashes and mining and hostage taking severely impair the freedom of movement and security of returnees, aid workers, peace-keepers and international military observers. South Ossetia, meanwhile, has re-established grassroots links with the rest of Georgia, and there are numerous contacts between the parties to the conflict under the auspices of a UNDP rehabilitation programme.
An integrated approach to aid
In 1993, the UN issued a Consolidated Appeal for the southern Caucasus. This process ended in mid-1997 when the relevant governments, donors and the aid community reached a consensus that the situation was no longer an emergency, nonetheless acknowledging ongoing pockets of outstanding humanitarian need.
In order to address these needs the Department of Humanitarian Affairs (DHA, now OCHA) issued the innovative Post-Appeal Framework: Linking Humanitarian Needs and Development Strategies in June 1997. This was followed by Georgias Country Strategy Note which aimed to provide donors with an understanding of the governments long-term development strategy.
It is now broadly accepted that although Georgia is no longer a classic complex emergency it is a complex aid situation. Reinforcing the growing recognition that it is false to speak of, or plan aid according to, an aid continuum, the situation in Georgia demands the whole spectrum of aid. Emergency relief previously the major focus is still required among the newly displaced and among some vulnerable population groups and institutions.
Increasingly, rehabilitation programmes are being called for to help communities and individuals re-establish themselves. Finally, major development assistance is recognised as a crucial corollary to all of the above in order to enhance Georgias chances of overcoming systemic economic and political challenges.
Aid agencies are increasingly working toward an integrated approach in recognition of the mutually dependent nature of the aid spectrum in Georgia. In mid-1998, the UN Resident and Humanitarian Coordinator established a working group on enhancing capacities for self-sufficiency. The broad range of humanitarian and development actors in the group seek to catalogue and elaborate upon agencies experience in the relevant programming spheres in order to address outstanding needs and to share findings with the government and donors.