Georgia's development path washighly uneven after the country gained independence in 1991.Civil war, secessionist movements, and economic crisesresulted in a sharp and protracted fall in output andhyperinflation in the immediate post-independence years. In1994-96 the country implemented a successful stabilizationprogram, reining in hyperinflation and restoring growth. Butin subsequent years the government failed to overcomeproblems arising notably from economic mismanagement andwidespread corruption, leading to poor public services, adeepening energy crisis, and political and economicuncertainty. After the November 2003 raised revolution, thenew government executed an ambitious reform program thatquickly produced results: rapid economic growth, improvedgovernance, and better living conditions. The WorldBank's experience in Georgia closely followed thesuccesses and failures of the country's development.Three distinct sub-periods can be identified, based on thetiming of the Bank's country strategies, changes ingovernment policy course, and exogenous factors: 1994-97,1998-2003, and 2004-07. With Georgia now on the path tointernational Development Association (IDA) graduation andbecoming eligible for International Bank for Reconstructionand Development (IBRD) borrowing, the challenge for the Bankis to sustain a strong partnership with an emergingmiddle-income country.
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