5 Emerging Markets Finance and Trade, vol. 39, no. 5, September–October 2003, pp. 5–26. © 2003 M.E. Sharpe, Inc. All rights reserved. ISSN 1540–496X/2003 $9.50 + 0.00. Vladimer Papava (papavavladimer@gfsis.org) is a senior fellow of the Georgian Foun- dation for Strategic and International Studies. Thanks are due to Sharon Ray for helpful suggestions. VLADIMER PAPAVA On the Role of the International Monetary Fund in the Post-Communist Transformation of Georgia Abstract: The paper analyzes the role of the International Monetary Fund (IMF) in the process of economic development of independent Georgia. Remarkable achievements have been accomplished in cooperation between post-Communist Georgia and the IMF. There were some errors too. Most of the latter should be attributed to the Georgian Government. The main achievements are creation of the legal framework of the country’s financial sys- tem regulating market-based budgetary and monetary processes, successful implementa- tion of the currency reform, liberalization of prices, and external trade. The main errors are political, methodical and methodological, resulting from confusion and a stereotyped ap- proach, and tactical, resulting from the abuse of powers. At the same time, without financial and political assistance of the West, it will be practically impossible for Georgia to preserve its national independence. As a result, the IMF is a strategic partner of Georgia’s, and it has to stay to remain so even after Georgia has overcome its current position of recipient country. Key words: Georgia, International Monetary Fund, post-Communist transformation. After the regaining of independence by Georgia (see Gachechiladze 1995), per- haps of greatest importance was whether or not the coming to power of healthy and truly professional people who would be able to push economic reforms in the right direction was possible. To be victorious, any good idea needs serious politi- cal and financial support. For a country like Georgia though, which was so weak- ened by exhausting military actions, the mobilization of domestic financial resources turned out to be a very hard—if not practically unsolvable—problem. A great role in addressing this issue has been played by international financial and other insti-