Georgia’s Export Potential: Mapping the Pathway to Global Competitiveness

The "Georgia Exports and Value Chain Study," published by the Asian Development Bank (ADB) in October 2024, analyzes the export potential and value chains of key sectors in Georgia. The report highlights the strategic opportunities in pharmaceuticals, apparel, jewelry, almonds, and electric vehicle battery recycling. It provides policy recommendations to diversify the economy and enhance Georgia’s global competitiveness. The study emphasizes a comprehensive Export Promotion Strategy 2030 and calls for building export-oriented programs to address current challenges like low productivity, limited integration in global value chains, and regulatory bottlenecks.

Georgia is making bold strides to position itself as a key player in international trade, leveraging its unique geographic location and competitive advantages. A recent study by the Asian Development Bank (ADB), titled the Georgia Exports and Value Chain Study, provides an in-depth look at the country's export potential. This detailed report, published in October 2024, assesses multiple high-potential sectors and outlines a strategic roadmap to propel Georgia’s economy into the global spotlight.

The report identifies key sectors with the highest export potential, including pharmaceuticals, apparel, jewelry, almonds, and the burgeoning electric vehicle battery recycling industry. However, realizing this potential requires tackling deep-rooted challenges, streamlining policies, and crafting targeted interventions that can transform Georgia into a strong and resilient export-driven economy.

Analyzing Georgia’s Key Export Sectors

The study highlights five sectors as pivotal for Georgia’s future export growth.

Pharmaceuticals stand out for their robust research and development (R&D) capabilities, particularly in the production of phage treatments and herbal medicines. Georgia has the potential to capitalize on its niche capabilities, yet the sector faces hurdles such as compliance with international Good Manufacturing Practices (GMP) and limited production capacity. Addressing these gaps could help Georgia position itself as a pharmaceutical innovator, especially in regional markets.

Apparel is another sector brimming with potential. Georgia boasts a skilled workforce and cost advantages that make it an attractive hub for garment manufacturing. The country’s proximity to European and Central Asian markets, along with existing free trade agreements, provides a significant edge. Yet, the lack of advanced manufacturing technologies and limited integration into global supply chains hinder its full potential. The report suggests that Georgia could emerge as a leading apparel exporter with the right investments in technology and infrastructure.

Jewelry production, with its blend of modern creativity and traditional craftsmanship, is garnering international attention. Georgian jewelry, known for its unique designs, is gaining traction in global markets. However, the sector needs greater support to streamline production, access export markets, and secure intellectual property rights.

Almonds have been identified as an agricultural product with significant room for growth. While Georgia currently has a modest presence in the global almond market, strategic investments in cultivation and processing could unlock new export opportunities.

The Electric Vehicle Battery Recycling industry is recognized as a future opportunity. With the global push toward sustainability, Georgia’s strategic location could serve as a gateway for recycling operations in the region, offering a new revenue stream that aligns with green economic policies.

Overcoming Challenges to Unlock Potential

Despite the promising prospects, Georgia faces several challenges that impede its path to becoming a global exporter. Low productivity, inadequate R&D investment, and a lack of skilled workforce are common hurdles across sectors. The study also points to limited integration into global value chains, making it difficult for Georgian products to reach international markets at a competitive scale.

Another significant barrier is the regulatory environment, especially in the pharmaceutical sector, where meeting international standards is crucial for export success. Without proper GMP certification, many Georgian pharmaceutical products are barred from entering lucrative markets like the European Union. Similarly, the lack of trade insurance and financing schemes poses a major obstacle for small and medium-sized enterprises (SMEs) seeking to expand abroad.

Strategic Recommendations: Building a Path Forward

To tackle these challenges, the report offers several recommendations:

Export Promotion Strategy 2030: Developing a comprehensive strategy that aligns public and private sector initiatives is crucial. The proposed "Team Georgia" coordination platform would serve as a focal point for export promotion activities, providing a unified strategy to navigate complex trade environments.

Enhancing Trade Agreements: Expanding and refining trade agreements can open new markets for Georgian products. Addressing bottlenecks in current agreements and establishing new ones, especially in the Middle East and Asia, could significantly boost export volumes.

Capacity Building and Innovation: Investing in R&D and building capacity for innovation will be essential for all sectors. For pharmaceuticals, this could mean creating more GMP-compliant facilities. For apparel, it could involve upgrading production technology to meet the quality standards of high-end global brands.

Market Access and Brand Building: Increasing awareness of Georgia’s unique offerings through targeted marketing campaigns and participation in international trade fairs can help Georgian products stand out. Facilitating partnerships between local firms and global players will also be key in gaining a foothold in new markets.

A Promising Future for Georgia’s Exports

The Georgia Exports and Value Chain Study presents a clear and structured plan for the country’s economic future. By focusing on its strengths, addressing critical challenges, and implementing strategic reforms, Georgia can build a diversified, resilient, and competitive export ecosystem. The roadmap laid out by the ADB, if executed effectively, could transform Georgia into a prominent exporter in multiple sectors, boosting both its economic resilience and global standing.