Jeffrey Sachs says Georgia’s success relies on market diversification, regional cooperation

Jeffrey Sachs, a Columbia University professor and director of the Center for Sustainable Development, on Friday highlighted that market diversification and regional cooperation as the two key factors for Georgia’s success.

In his remarks at an international conference dedicated to the 30th anniversary of the introduction of the Georgian lari, Sachs noted that Georgia had been a transport corridor for thousands of years, and “this reality should continue into the future”.

“Small countries are critically dependent on trade and ties with large economies. For Georgia, this has been true for millennia - it traded wine and other products and served as a transit hub between East and West, North and South. This is not a new idea. Georgia has been a transport corridor for thousands of years, and this reality should continue into the future”, he said.

Addressing the volatility of global trade, Sachs underscored the importance of market diversification for Georgia and emphasised the crucial role of the National Bank in this process.

“Diversification and regional cooperation are the two main success factors. Diversification is essential because disruptions in parts of trade are always possible. It’s also necessary to have alternative monetary mechanisms - such as emergency swap lines with other central banks - which are excellent tools for hedging against instability”, he noted.

Sachs concluded by stressing that trade was not only vital for small economies but also for larger ones - “though for smaller countries, it is a decisive factor for survival and growth”.