CHALLENGES OF MIDDLE CLASS FORMATION IN THE CONTEXT OF ENTREPRENEURSHIP DEVELOPMENT IN GEORGIA

Abstract

In order to ensure irreversible development and stable social-economic conditions of a State, it should have a strong middle class, defining the country’s social and economic development targets. Considering the said, economic policy of development should be directed to the implementation of the measures supporting the formation of the healthy middle class in Georgia. Share of the population belonging to the middle class is still low in Georgia. According to the studies conducted by the World Bank, in 2014 only 7% of the population of Georgia belonged to the middle class. According to the economic- statistical study conducted in Georgia in 2018, share of the population belonging to the middle class in 2016 was 16%. The same study, with exclusion of the employment factor, shows the growth of the said share to 24,6%. Ignoring the employment – very important determinant of the middle class – naturally puts the last figure far from reality. Current income inequality and high level of poverty negatively impact formation of the middle class in the country. In order to form a middle class, Government of Georgia must overcome the problems faced by country’s entrepreneurship and society by means of the purposeful implementation of the rational policy of economic development. Achieving the said target requires: a stable political-economic environment; elaboration of the small, medium business development programs oriented on the inclusive growth, increase the scales of the currently existing program; development of the special professional training and employment programs for the population below the poverty line; promotion of economic activities based on the start of entrepreneurship, development of the start-ups, innovations and advanced technologies.