IMPACT OF FOREIGN TRADE ON THE ECONOMICAL AND SOCIAL DEVELOPMENT OF GEORGIA

Today, regional and foreign trade is inevitable for a geographically small country like Georgia where resources and markets for sustainable and economic growth are limited. The role of agricultural exports in the economic performance of Georgia was clearly demonstrated by the experience of the collapse of the national economy after independence from the Soviet Union, when Georgian farmers lost the export potential to former Soviet Union countries. As one of the tools, this struggle to re-start agricultural production and trade, in recent years, Georgian countryside experiences abrupt increase in number of agricultural cooperatives that are being established as a result of joint endeavor of international programs and Georgian government. For local farmers, who typically hold small plots of fragmented land, cooperatives are promoted as a tool for better market access and consequently increase of income and poverty reduction. The crucial product, with traditionally highest potential for exports is wine. Georgia, a country located between Caspian Sea and Black sea is also known as cradle of wine. Countrys wine industry wants to diversify the markets and expand the export potential. The proposed dissertation thesis will evaluate the Constraints and opportunities of small farmers market access in Georgia. The whole research is based on econometric time series techniques Granger causality, Co-integration test, Gravity Model, Probit Model, and first-hand experience through personal interviews of authors with members of cooperatives. The results from the research will have important implications for policy-makers in order to implement appropriate growth and development strategies of agriculture and to agricultural trade