Doi.org/10.52340/eab.2026.18.02.13 

As a result of government measures implemented in recent years, Georgia’s unemployment rate has declined to some extent; nevertheless, it remains high, at 13.3% of the economically active population. Moreover, unlike in previous years, the number of individuals classified as “outside the labor force” is strikingly large—nearly equal to the total number of unemployed—which is cause for concern. A substantial share of this group (working-age individuals who are neither employed nor seeking employment) may consist of external migrants. Whatever the reason, the government must take a proactive role in identifying the factors behind the inactivity of this segment of the working-age population. The sooner those currently “outside the labor force” are integrated into social and economic activities as a potential workforce, the more favorable the overall outcome will be.
To improve the employment and unemployment situation in the country, the government must implement a series of measures across several key areas. In a market economy, business is the primary employer; therefore, the government should prioritize the development of enterprises, particularly micro, small, and medium-sized businesses (MSMEs). Significant potential exists in the regions, where diverse raw agricultural products – such as meat, fruits, and vegetables – are produced, yet their processing remains a major challenge.
It must also be emphasized that Georgia is an import-dependent country, with import volumes nearly three times greater than exports. A considerable share of imports consists of meat, dairy, fruits, vegetables, and their processed derivatives. Many of these products – meat and meat products, milk and dairy, fruits (apples, pears, grapes, citrus, and processed jams/preserves), and vegetables (beans, onions, garlic, potatoes, eggplant, etc.) – could be produced domestically in larger quantities with proper organizational support. While importing goods that cannot be produced locally due to natural or climatic conditions is justified, it is indisputable that a large portion of the current import basket could be substituted by local production. Promoting domestic output would reduce foreign currency outflow, generate employment, and – critically – curb rural migration, preventing villages from becoming mere “shelters for the elderly.”
Accordingly, a thorough analysis of the commodity structure of imports is essential, followed by the development of strategic plans for import substitution wherever feasible. The state should encourage business growth through tax exemptions, low-interest loans, and support for personnel training and retraining. In addition, financial assistance for rural populations must be expanded to facilitate access to pesticides, fertilizers, and technical equipment.
It is equally important to strengthen Georgia’s legislative framework on employment and unemployment. In this regard, the Law of Georgia on Employment Promotion requires clarification across several dimensions. The development and implementation of targeted employment programs should involve the direct participation of the state – rather than mere facilitation, as currently stipulated – similar to the approach adopted for environmental programs. For instance, Georgia is presently implementing the Fourth National Environmental Action Programme (NEAP 4) for 2022–2026, and following its evaluation, a fifth national program for 2027–2031 is anticipated – a highly commendable initiative.
To effectively address unemployment, the adoption of an active labor market policy is indispensable; however, passive measures should not be overlooked. During the transition from unemployment to employment, individuals require financial support – such as unemployment benefits or fixed term unemployment insurance – provisions that are notably absent from the current Employment Promotion law.
Furthermore, the Employment Promotion law should explicitly designate the governmental body responsible for coordinating employment and unemployment measures. The current legal framework establishes a complex mechanism that is unlikely to achieve its intended objectives. In the author’s view, this coordinating function should presently be entrusted to the Ministry of Internally Displaced Persons from the Occupied Territories, Labor, Health, and Social Affairs of Georgia.
In addition, it would be appropriate to re establish the Ministry of Labor and Social Protection, which functioned as an independent entity for many years. While the notion of an “expensive government” generally argues against the creation of new ministries—since superior outcomes in state governance should be achieved through enhanced management efficiency rather than an increase in ministerial structures – the practice of recent government transformations suggests otherwise. For example, the Ministry of Culture and Sports was divided into two independent ministries, and the former Ministry of Regional Infrastructure was likewise transformed into two separate entities. In this context, such a decision appears justified.
Within Georgia’s highest legislative body – the Parliament – employment and unemployment issues, according to its charters and committee regulations, primarily fall under the purview of the Committee on Healthcare and Social Affairs, which is considered the lead committee in this regard. Certain matters also fall under the jurisdiction of the Committee on Education and Science and the Committee on Sectoral Economy and Economic Policy. Given the committees’ functions and the professional composition of their members, the author believes it would be appropriate for the Committee on Sectoral Economy and Economic Policy to serve as the coordinating parliamentary body for legislative activities related to labor, employment, and unemployment.

Keywords: Law, unemployment, employment promotion", "population outside the labor force", unemployment reduction, role of business, sectoral economics.
JEL Codes: J21, J65, J68, O13, H53

References:
• Tugushi M. (2022) dasakmebis kanonidan dasakmebis khelshetsqobis shesakheb kanonamde. [Employment Law on Employment Promotion Before the law. "Economics and Business", #4.] in georgian
• Law of Georgia “On Employment”, Tbilisi, September 28, 2001; https://matsne.gov.ge/ka/document/view/15664?publication=6, (last viewed 15.12.2025)
• Law of Georgia “On Employment Promotion”, Tbilisi, July 14, 2020; https://matsne.gov.ge/ka/document/view/4924109?publication=1(last viewed 15.12.2025)
• Organic Law of Georgia, "Labor Code" of Georgia, Tbilisi, September 17, 2010; https://matsne.gov.ge/ka/document/view/1155567?publication=21(last viewed 15.01.2026)
• Regulation of the Ministry of Internally Displaced Persons from the Occupied Territories, Labor, Health and Social Protection of the Population of Georgia (Resolution of the Government of Georgia #473, Tbilisi, September 14, 2018); https://matsne.gov.ge/ka/document/view/4325651?publication=0(last viewed 15.12.2025);
• Regulation of the LEPL-State Agency for Employment Promotion, Approved by the Order of the Minister of IDPs from the Occupied Territories, Labor, Health and Social Protection of the Population of Georgia of October 31, 2019 (№01-110/N); https://matsne.gov.ge/ka/document/view/4690652?publication=0 (last viewed 15.01.2026
• Geostat Information on Employment and Unemployment, 2025; https://www.geostat.ge/ka/modules/categories/683/dasakmeba-umushevroba
• Institute for the Development of Freedom of Information (IDFI) Survey 2024.https://mtavari.tv/news/167629-gaizarda-sakhelmcipo-sektorshi-dasakmebulta raodenoba. . .