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A "third world" country

The Iveria hotel inhabited by refugees 1997. Photo: Peter Nasmyth
The Iveria hotel inhabited by refugees 1997. Photo: © Peter Nasmyth

While the security situation gradually improved, the Georgian economy collapsed completely. It was the most dramatic economic collapse of all former Soviet republics: in 1992 GDP fell in real terms by 40.3% and in 1994 by 35%. Gas and electricity shortages were commonplace.

The treasury was overwhelmed by the burden of 250,000 refugees – most now crammed into Georgia's empty tourist hotels. The middle-class intelligentsia suffered terribly as academies and institutions were closed. Professors could be found driving buses, architects labourers, oncologists hustling in cross-border trading, if they were lucky – unemployment or a token state salary (USD 10 a month) more common.

The United Nations, Oxfam, Médecins sans Frontières, the Red Cross and a clutch of others set up their offices to begin employing local staff, ironically becoming the first major foreign investors in Georgia's new economy.

[pp.206-207]

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