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 Press release - Press Release (CRRC)

 Press release date: 09.06.2006




Economic Development in the South Caucasus: Conference Brings Together Local and International Experts to Share Lessons

Tbilisi, Georgia - On June 1-2, the Caucasus Research Resource Centers (CRRC), in cooperation with the International Monetary Fund (IMF) and the National Bank of Georgia, organized a conference entitled "The International Monetary Fund and the South Caucasus in the 21st Century". Participants discussed a broad range of issues affecting economic development in the South Caucasus, including macroeconomic growth in Armenia, oil revenue in Azerbaijan, and post-revolution expectations and challenges in Georgia. The conference was held at the National Bank of Georgia and brought together over 40 high level participants, including IMF resident representatives from Armenia, Azerbaijan and Georgia, chairmen of the Central Banks of Armenia and Georgia, officials from Azerbaijani Ministries, researchers, and other members of non-governmental organizations from the three South Caucasus countries.

In his keynote address, Tigran Sargsyan, Chairman of the Central Bank of Armenia, presented a comparative overview of the three South Caucasus countries: "Today, [the countries of the South Caucasus] live similarly badly and differently well." The high level of corruption and mistrust between the state and its citizens, the presence of a large shadow economy, and conflicts within the region are ongoing issues that plague the region's development. Mr. Sargsyan also noted that speedy regional economic integration will increase each country's individual economic activity. He suggested that researchers should focus on studying the gap between stated economic policy and reality to identify priority areas for regional integration.

Basil Zavoico, IMF Resident Representative in Azerbaijan, outlined Azerbaijan's economic history since the collapse of the Soviet Union. According to some current estimates, Azerbaijan will be a net importer of oil in about fifteen years. He stressed the importance of developing Azerbaijan's non-oil sector to ensure sustained growth in the future. Mr. Bagirov later highlighted this point by warning of the risks of oil revenue, including a rise in exchange rates, the collapse of the non-oil sector's competitiveness, and an increase in unemployment, all symptoms of "Dutch disease".

The Georgian Minister of Finance, Aleksi Aleksishvili outlined his Ministry's recent progress and reaffirmed commitments to create an optimal macroeconomic environment, to establish a fiscal framework with low tax burdens and simplified procedures, and to introduce free market principles in the financial sector. Georgia seeks to have one of the most liberal regulatory environments in the world, for example by abolishing all import tariffs within the next two years. With this reform, Georgia will become the third country in the world after Hong Kong and Singapore to implement such a policy. The IMF Resident Representative in Georgia, Robert Christiansen, summarized the major risks for the country's development in the next two years, citing deteriorating economic relations with Russia, increases in energy prices, a narrow export base, and an end to privatization revenues as the process draws to a close. He also emphasized the importance of developing a robust judiciary.

Other key speakers included James McHugh, IMF resident representative to Armenia; Azer Alasgarov, head of the monetary and exchange rate policy division of the National Bank of Azerbaijan, Suren Poghosyan, Budget Advisor for the DFID funded program "Support to Programme Budgeting in Armenia", Sabit Bagirov, President of the Azerbaijan Entrepreneurship Foundation, and Michael Djibouti, Chairman of the Association of Economists in Georgia.

For a more thorough report on conference proceedings, please contact Michael Choe or (+994 12) 93 66 18.

About CRRC
Established in 2003, the Caucasus Research Resource Centers are supported by a partnership between the Carnegie Corporation of New York and the Eurasia Foundation. CRRC is a network of resource and training centers located in the capital cities of Armenia, Azerbaijan and Georgia. The CRRC mandate is to strengthen social science research and public policy analysis in the South Caucasus by offering scholars and practitioners stable opportunities for integrated research, training and collaboration. For further information on CRRC, please visit our website at

About Eurasia Foundation
The Eurasia Foundation is a privately managed non-profit organization supported by the U.S. government and other public and private donors. Since 1992, the Eurasia Foundation has invested more than $335 million through more than 7,700 grants and technical assistance projects in Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, the Kyrgyz Republic, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan. For more information on Eurasia Foundation initiatives and for a list of the Eurasia Foundation's independent advisory board members, please visit

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