Program Details: 
Georgia: Building a Stronger Democracy Through Economic Development

Georgia’s independence from the Soviet Union in 1991 was much desired; it also brought a
multitude of social and economic hardships. The new state lacked the necessary legislative and financial framework for a true market economy. Living conditions drastically worsened and many communities faced starvation. Most families reverted to subsistence farming.

Then in August 2008, following months of increasing tension, Georgia and Russia became engaged in a full-scale military conflict in the territory of South Ossetia extending into neighboring regions of Georgia. Meanwhile, Georgia’s other breakaway region, Abkhazia, also flared-up, and armed conflict quickly spread to West Georgia. Although a signed truce between Georgia and Russia, brokered by the European Union, established a framework for the cessation of hostilities, the conflict has resulted in civilian casualties, increased ethnic tensions, mass displacement of families and significant damage to infrastructure and livelihoods for hundreds of thousands of citizens.

Until security is sufficiently restored and they can safely return to their homes, tens of thousands of displaced Georgians are living in tented camps, schools, unused government facilities or with home hosts, and their needs are overwhelming the government’s resources. To aid their return, Mercy Corps is working to re-establish local livelihoods and create stable and secure communities in regions most affected by the conflict. At the same time, we are seeking to reduce rural poverty and help alleviate lingering social and ethnic tensions.

Building Healthy Rural Communities
Georgia currently has more than one million family farms producing more than 90 percent of the country’s agricultural output — most of it being directly consumed by the farmers and their families. Many subsistence-level family farms are sorely lacking in even the most basic tools and knowledge needed for success. There is inadequate healthcare for livestock, and small farmers lack milk collection facilities and veterinary services. Farmers have very limited access to agricultural markets and affordable financing. And lingering discrimination, isolation and inter-ethnic feuds have led to tensions between local governments and communities, and even within the communities themselves.

Mercy Corps is helping Georgian farmers by using an integrated approach to address all these issues, rather than treating them as separate and disconnected problems. In the Samtskhe-Javakheti region, we have established a centrally located Rural Service Center that provides communities and local farmers with important agricultural and economic information and training, as well as assistance in connecting with markets and buyers. Community members who need modern production facilities may also lease agricultural equipment. In addition, Mercy Corps is launching a rural development program to help transition the country to a market economy by further developing markets for regional dairy and meat producers.

Mercy Corps provides these small, rural and often isolated communities with the technical know-how to scale up agricultural production. We offer loan guarantees for farmers with viable business ideas, enabling them to obtain the financing they need through banks that might otherwise be reluctant to loan to them.

Pooling Resources to Benefit All
Mercy Corps also helps farmers from different villages and ethnic backgrounds to form
associations. By coming together in this way, these small communities can pool their resources and benefit from their new ability to buy agricultural necessities in bulk, as well as jointly sell their products in regional markets.

In addition, we award competitive grants to successful farmer associations that present the
most viable business plans. Mercy Corps works with these farmer groups to better define their markets, identify potential customers and shift to a demand-based business strategy.

Enhancing Democracy and Resiliency
We will also enhance democratic practices by improving interaction and participatory decision-making between communities and local self- government. Finally, we’ll build resiliency against natural disasters by ensuring that community members are adequately trained and prepared to respond to such events.