POLICY APPROACHES TO STIMULATE GEORGIAN EXPORTS

We examine exporters’ challenges and provide possible solutions for public intervention to promote foreign trade. Based on fieldwork and adopting a qualitative multiple case study approach, we explore which policy approaches can help to stimulate Georgian exports further. Our findings show that exporters face substantial barriers such as navigating complex trade regulations, lack of knowledge about target markets, trade finance gaps, as well as new export promotion programs in competitor countries. Other upper-middle-income countries can learn from our results that exporters can significantly benefit from a comprehensive export promotion strategy combined with an ecosystem-based “team” approach. Our findings confirm previous research that strategic frameworks should be linked to trade-related policies and action plans. In addition, our results show that export promotion programs related to awareness and capacity building in Georgia should focus on challenges such as lack of knowledge about trade practices and international business skills. Furthermore, targeted marketing support and customer matchmaking can provide answers to challenges, such as lack of market access or low sector visibility. Our results also show that public intervention through financial support and risk mitigation is important for firms with an international orientation. The findings offer valuable insights for other upper-middle-income countries by exploring the example of Georgia’s contemporary circumstances in an in-depth manner based on extensive interviews and document analysis. One of the limitations of our work is that is primarily relies on qualitative data, and further research could involve a quantitative study with a diverse range of sectors.


EXECUTIVE SUMMARY
We examine exporters' challenges and provide possible solutions for public intervention to promote foreign trade.Based on fieldwork and adopting a qualitative multiple case study approach, we explore which policy approaches can help to stimulate Georgian exports further.Our findings show that exporters face substantial barriers such as navigating complex trade regulations, lack of knowledge about target markets, trade finance gaps, as well as new export promotion programs in competitor countries.Other upper-middle-income countries can learn from our results that exporters can significantly benefit from a comprehensive export promotion strategy combined with an ecosystem-based "team" approach.Our findings confirm previous research that strategic frameworks should be linked to trade-related policies and action plans.In addition, our results show that export promotion programs related to awareness and capacity building in Georgia should focus on challenges such as lack of knowledge about trade practices and international business skills.Furthermore, targeted marketing support and customer matchmaking can provide answers to challenges, such as lack of market access or low sector visibility.Our results also show that public intervention through financial support and risk mitigation is important for firms with an international orientation.The findings offer valuable insights for other upper-middle-income countries by exploring the example of Georgia's contemporary circumstances in an in-depth manner based on extensive interviews and document analysis.One of the limitations of our work is that is primarily relies on qualitative data, and further research could involve a quantitative study with a diverse range of sectors.

I. INTRODUCTION
Exports are an essential driver of foreign exchange accumulation and economic growth.Trading with other countries allows firms to tap into new markets and access a larger customer base.On average, businesses engaging in exports are more productive and efficient than their counterparts who only operate domestically (Harrison, 1994;De Loecker, 2007;Reis & Farole, 2013).By opening to and fostering trade, economies focus on producing what they are best at and then trade with other countries to obtain required goods and services that are produced more efficiently abroad.Productivity also improves firms' domestic profitability and ability to cover upfront export costs.Specialization and division of labor can thus result in a more efficient use of resources and ultimately increase economic growth.Key factors include trade openness and integration in global value chains, export growth and composition, market reach and shares, as well as trade partners and the nature of export relationships (Edwards, 1993;Hessels & van Stel, 2011;Melitz, 2003;Sachs & Werner, 1995).By trading with other countries, economies can gain access to new technologies and knowledge.Previous research has shown that an inverse relationship between productive capacities and merchandise export concentration exists, i.e., economies with high merchandise export concentration index scores have the weakest productive capacities.Export dependence on a few commodities and vulnerability to negative external shocks can be reduced by facilitating productive capacities (Anwesha & Acharyya, 2007;Hausmann & Rodrik, 2003;Mania & Rieber, 2019;Yanikkaya, 2003).
Exports also play an essential role for Georgia, a small transitional, upper-middle-income country in the Caucasus.With a population of 3.7 million, gross domestic product per capita amounted to $6,667.4 in 2022 (current international US$; World Bank, 2022).The country's business environment improves and benefits from its strategic geographical position between Central Asia, Europe, the Russian Federation, and Türkiye.Important sectors are agriculture, minerals, manufacturing, and tourism.Horizontal export diversification into new sectors in Georgia can generate positive externalities as newly exportoriented sectors gain from contacts with importers and exposure to international competition.Vertical diversification out of primary into enhanced manufactured exports can be linked to growth due to stronger spillovers.Export diversification might thus facilitate additional structural transformation in Georgia.Table 1 gives an economic overview of the country.The research question underlying this paper is: What policymaking approaches can help to stimulate Georgian exports further?The aim is to provide empirical evidence and advanced analyses for strategic directions regarding overall export promotion (EP) elements and detailed export promotion programs (EPPs) in Georgia.This can enable the formulation of essential reforms and the implementation of public interventions aimed at boosting exports.Through the specific proposed actions, the paper contributes to informing the future economic diversification of the country and the Government of Georgia's competitiveness strategy.The structure of the paper is organized as follows: First, it provides the country's background and an overview of the apparel sector in Georgia to provide a concrete example for one of the identified sectors with export potential that were examined.Then, the relevant literature related to public export promotion is discussed in section 3. Section 4 provides the analytical framework that is applied to the Georgian case study.In the discussion of findings and the analysis in section 5, the paper outlines various strategies, policies, agreements, and EPPs that could enhance export performance.Finally, the conclusions highlight policy implications and summarize long-term measures for the Georgian government to enhance export performance and strengthen global competitiveness effectively.

II. BACKGROUND
A.

Georgia's Trade and Competitiveness
Georgia's foreign trade significantly increased since 2021 despite the COVID-19 pandemic.Merchandise export growth accelerated from 27.4 percent in 2021 to 32.3 percent in 2022, driven by higher vehicle reexports, as well as exports of fertilizer, copper ore, and concentrates.Higher commodity prices in the first half of 2022 and strong domestic demand boosted import growth, as shown in Georgia signed several free trade agreements (FTAs) and implemented reforms to reduce trade barriers and improve the business environment, contributing to increased export flows.However, Georgia's trade openness and reliance on tourism income make the country vulnerable to external and global shocks.High dollarization and persistent reliance on external savings further amplify risks (Abuselidze, 2019;Athukorala & Waglé, 2013;Martuscelli & Varela, 2018;OECD, 2019).Although the government took steps toward diversification both regarding products and export destinations, the dependence on commodities exports and a small number of trading partners, i.e., the PRC, Russia, and Türkiye, requires additional steps.This also holds true because the PRC (+30.2 percent), Russia (+79.4 percent), and Türkiye (+29.6 percent) were fast-growing export markets in 2022.
Georgia  , 2023).Skilled labor shortages create problems for business and firm growth (Zubiashvili & Silagadze, 2016).The economy has become relatively less complex, falling to the 64 th position in the economic complexity indicator rank based on trade data.For continuous economic growth and improved resilience against external shocks, it is imperative to export more value-added products by diversifying into sectors with higher productivity and developing innovative capabilities.

B.
Georgia's Apparel Sector as an Example

Overview
The global apparel industry is a thriving sector encompassing the design, manufacturing, and distribution of clothing and accessories.The industry is constantly evolving with complex supply chains, changing consumer preferences, technological advancements, and increasing sustainability concerns.Fast fashion remains a dominant trend, characterized by rapid production and turnover of affordable and trendy clothing (Abbate et al., 2023;McKinsey, 2023;Valaei & Nikhashemi, 2017).Georgia has a rich textile heritage and a growing reputation for producing high-quality apparel.The sector benefits from a skilled workforce and a competitive cost structure, attracting both domestic and foreign investment.Some factories are equipped with modern machinery and technologies.This has contributed to the production of diverse apparel products, ranging from casual wear to high-end fashion.An important development in the Georgian apparel sector is the rise of domestic fashion brands and designers.E-commerce has also made its mark on the Georgian apparel sector.Online shopping platforms and social media have provided a platform for local brands to reach a wider domestic and international audience, expanding their customer base beyond the traditional retail model.Moreover, collaborations between Georgian fashion brands and international designers or brands have accelerated.The Georgian apparel sector is increasingly driven by export-oriented manufacturing.Many local clothing manufacturers cater to international markets, leveraging competitive pricing and adherence to quality standards.European countries, in particular, are major export destinations for Georgian apparel products (Anjaparidze, 2016;Molla & Vantyghem, 2020).The industry composition and trends regarding several companies are shown in Table 2.

Sector Development
The apparel sector in Georgia has seen substantial growth and development.Source: Developed for this study based on National Statistics Office of Georgia, 2023.For 2022, numbers are based on consultants' calculations using preliminary quarterly data (either mechanical sums or simple averages).

Export Potential
Georgia offers substantial business opportunities in apparel production.There is a wide range of apparel products produced in the country.This includes denim, T-shirts, jackets, sweaters, coats, blazers, trousers, sportswear, as well as uniforms.Georgia's local textile and apparel manufacturers have orders from renowned international brands such as Marks & Spencer, Mexx, Per Una, Puma, and Zara.Türkiye is one of the biggest investors in Georgian textiles.There are four large companies and 23 medium-sized companies in the country in addition to more than 800 small enterprises in the sector.Currently, most producers in Georgia are Cut, Make, Trim manufacturers, i.e., mid-stream.Some Georgian fashion houses are producing apparel under their own labels.Exports of apparel from Georgia have risen extensively with dynamic development, reaching approximately $195 million in value in 2022 (Figure 2).The main market for Georgia's apparel is Türkiye, which benefits from an FTA and absorbs about 72 percent of exported products; followed by Armenia (8 percent) and Poland (7 percent), according to Geostat.The export product space can provide further indications of how Georgia's apparel export product fits into Georgia's overall export specialization. 1They are ranked according to the indicator value, the maximum of which is around 0.17, indicating a relatively high degree of relatedness of this product group to Georgia's total exports (e.g., compared to the top product, manganese ore, with an indicator of 0.22).ITC's export potential map estimates that there are opportunities to realize additional exports.This includes economies in the EU such as France, Germany, Poland, and Spain, as well as Russia and the US.
Although contributing with a relatively small percentage to world exports, the apparel sector in Georgia shows export competitiveness performance.The major two of the three apparel sub-sectors show revealed comparative advantages of above 1 (1.9 for group 61 and 1.2 for group 62), confirming the promising export potential (Table 3).

III. LITERATURE REVIEW
Export-oriented government strategies, trade policies, and EPPs help economies leverage positive externalities and enhance economic growth.The role of governments in the economy has evolved from marginal to central.Industrial policy is on the rise (Aiginger & Sieber, 2006;Peneder, 2017;Wigger, 2019).Labor market challenges in generating quality jobs, unsatisfactory rates of productive transformation, as well as low growth dynamics after financial crises created a demand for proactive government strategies to diversify and upgrade economies.Industrial, innovation, and trade policies are now increasingly intertwined.Global trade is undergoing a significant transformation, driven by the 4 th Industrial Revolution, digitalization, and decarbonization, leading to trade policy changes (Aiginger & Rodrik, 2020;Chang & Andreoni, 2020;Dolfsma & Mamica, 2020;Jones & Adam, 2023;Rodrik, 2014).
Challenges faced by exporters that hamper export performance can be addressed by public intervention.Exporters may face a variety of challenges that negatively influence export performance.Market access issues could be related to external trade policy or the national brand and how these variables constrain exporters from entering markets.Supply-side issues might be related to such variables as factor inputs and incentive frameworks, as well as a lack of regional innovation systems, clusters, or entrepreneurial ecosystems (Audretsch et al., 2019;Reis & Farole, 2012;Qian & Acs, 2023;Valaskivi, 2016).Economic policymaking for EP also needs to be embedded in a broader framework to capture all relevant policy aspects or risk negatively influencing elements of export performance.
Public intervention through EPPs addresses various market imperfections that may affect a firm's ability to operate effectively in international markets.These imperfections often include information asymmetries, where firms lack adequate information about foreign countries or potential international buyers.EPPs can provide vital market information to help firms identify and evaluate opportunities in foreign markets.By providing training, networking opportunities and assistance in meeting international standards and regulations, EPPs enhance the global competitiveness of firms, thereby improving their export performance and contributing to economic growth.In addition, EPPs can mitigate high initial costs and risks associated with entering new international markets by providing financial support or risk-sharing mechanisms.This support is particularly important for small and medium-sized enterprises (SMEs), which may not have the resources to explore and establish themselves in the global business environment on their own (Alvarez, 2004;Catanzaro & Teyssier, 2021;Cavusgil & Yeoh, 1994;Durmuşoğlu et al., 2012;Klasen & Janus, 2023;Stiglitz, 1998).
Governments around the globe have introduced a variety of export strategies and trade policies to strengthen export performance.The frameworks are often associated with trade-related policies and action plans in a strategic eco(n)system, also regarding country-level institutional EP support following a whole-of-government approach.Elements include agreements, rules and regulations related to exports, awareness of international business practices and appropriate financial and human capacities, knowledge about target markets and the ability to approach potential foreign customers, the ability to close the export deal, and the possibility to maintain relationships (Ahmed & Brennan, 2019 The EPPs help to increase awareness and develop capacity.Knowledge about the importance of foreign trade for business development and the mechanics of international trade is important for triggering interest in non-exporting firms.Managers, in particular in SMEs, often lack knowledge about cultural differences, export practices, documentary requirements, risks in international business, as well as financing needs.The same applies to knowledge about geographical distance, product specifications, or product usage.Successful educational policies and informational support are thus related to workforce qualification, management training, business seminars, or conferences.In addition, obstacles to export performance regarding capacity include deficiencies in research, development, and innovation.Government interventions can help to mitigate market failure when successfully implementing a system of interrelated innovation and EP tools (De Fuentes & Peerally, 2021;Freel, Lui & Rammer, 2019;Klasen, 2012).Supporting firms in finding target markets and customers is a key objective of EPPs.Lack of knowledge about target markets can lead to missed opportunities.Analyses of foreign markets through country and sector assessments are not only important components of raising awareness and building capacity but also for finding promising target markets (Leonidou, Palihawadana & Theodosiou, 2011;Morgan & Katsikeas, 1997;Reid, 1981;Verwaal & Donkers, 2002).In addition, weak sector visibility and a lack of positive sector image can create challenges in finding customers.Operational support from the government is crucial for promoting exporters' business profiles and helping firms to grow into new and additional foreign markets (Durmuşoğlu et al., 2012;Seringhaus & Rosson, 1994;Wilkinson & Brouthers, 2000).
The EP also includes public support to close export deals.Lack of customer relationships hampers closing export transactions.Trade promotion tools can help to overcome this obstacle.In addition, exporters are often risk-averse and face challenges regarding price competitiveness.Governments in many countries thus provide direct and indirect financial incentives such as export credits and trade credit insurance.They fill gaps in financing, insurance, or guarantee coverage, which would otherwise result in both barriers to exports and an insufficient range of offerings.Public interventions through export credit agencies and export-import banks furnish financial support to firms with international orientations (Jennekens & Klasen, 2023;Klasen et al., 2022;Kurkela, 2008;Rotblatt, 2018;Turguttopbas, 2013).They generate catalytic effects in export development (Bird & Rowlands, 2004;Felbermayr & Yalcin, 2013;Morris & Shin, 2006).Furthermore, EPPs help exporters to maintain relationships with foreign buyers.Governments' promotion and advocacy activities build positive country images, helping exporters to keep long-term connections with clients.Marketing services such as trade fairs, exhibitions, and follow-up services offered by representatives abroad also support businesses in their international operations in the long run (Lederman, Olarreaga & Payton, 2010;Srhoj, Vitezic & Wagner, 2023).

IV. ANALYTICAL FRAMEWORK
This study is based on fieldwork conducted in Georgia and adopts a qualitative multiple case study approach.It explains circumstances and looks at a novel area that has not been researched in Georgia in an in-depth manner.The high-quality, rich contextual knowledge provides significant value and is required to extend and develop robust conclusions.The approach enables an understanding of realworld cases and includes various external factors that are directly related to the ecosystem in Georgia (Creswell, 2014;Corbin & Strauss, 2014;Yin, 2018).The applied multiple case study design enabled the researchers to obtain in-depth data on the different cases and to interpret them according to underlying characteristics.It also enabled a strong triangulation through different views to be achieved (Strauss & Corbin, 2003;Yin & Davis, 2007).
A three-step approach was applied to establish empirical evidence.First, exemplified products or sectors with high export potential were selected including almonds, apparel, jewelry, and pharmaceuticals.
The selection was based on ITC's export potential assessment, which is conceptually based on the assumption that trade flows can be described as a combination of supply performance, ease of trade, and total demand in a frictionless world (Decreux & Spies, 2024).Second, a purposive sampling method was employed for stakeholder interviews from the overall export promotion ecosystem in Georgia.Third, exporters from the exemplified sectors were interviewed to create a strong research basis.The selection of cases was guided by multiple dimensions, aiming to explore a wide range of situations and contexts and achieve high-quality findings.Each exporter represented a single case within the multiple case study, facilitating deep thematic analysis and data and theoretical saturation, as well as informational redundancy (Bryman & Bell, 2015;Creswell, 2014;Onwuegbuzie & Collins, 2007).The data collection process involved conducting 27 semi-structured interviews (see sample interview form in the Appendix 3) with 35 interviewees in Georgian and English between May and July 2023, both in person and through online video meetings (Table A2).Recordings and/or notes were made for reference.To conduct a holistic analysis, previous studies about sectors with high export potential and constraints in Georgia were also collected (e.g., Molla & Vantyghem, 2020;Pangerl, 2021;Rieck & Anjaparidze, 2017;Russo et al., 2020;Welton, 2021).Different perspectives and sources of information, including semi-structured interviews and document analysis, were thus used to explore the research question.This triangulation approach reinforces our research findings not only at the multiple case study level but also at individual case levels.
To enhance theory development and to provide empirically robust findings, this study applies thematic analysis (Braun & Clarke, 2006).Thematic analysis is an ideal way to assess semi-structured interviews, as the aim of thematic analysis is to identify patterns and holistic perspectives in relation to a particular theme or phenomenon.A two-step process was applied to analyze the cases.In the first step, the analysis was conducted within each case, and data were initially coded.Coding was also accompanied by an initial data reduction (Braun & Clarke, 2006).Next, the cross-case analysis enabled initial theme development around clusters, where clusters were recognized and formed from the codes.These cross-case patterns were revealed based on salient similarities and differences.In the subsequent theme refinement phase, the developed topics were checked for correctness, whereby the topics were reviewed on the one hand in relation to the coded data and on the other hand in relation to all non-coded data.

A. Export Strategy and Trade Policies
Export strategies and trade policies in a strategic eco(n)system address key challenges such as lack of government guidance, a non-level playing field, as well as uncoordinated interventions.Our results confirm previous research findings from Meyer & Klasen (2013), Srhoj, Vitezic & Wagner (2023), and Wilkinson, Mattsson & Easton (2000) that a framework with a whole-of-government approach in Georgia should be associated with trade-related policies and action plans related to country-level institutional export promotion support.Analyzing the example of the apparel sector demonstrates the overall need for a cohesive export strategy.The same applies, for instance, for the pharmaceutical sector.There is a decent level of collaboration through a strong sector association and emerging cluster organization, as well as some business-oriented government support programs.However, an "Export Promotion Strategy 2030," including national branding, would be important to show that Georgia offers potential investors favorable conditions in terms of locations and business opportunities.Interviewees mentioned that "a comprehensive export strategy of the government would be very useful" (Interviewee 3), and also that "there is an opportunity and a need for marketing, branding, and promotion of the [apparel] industry with an 'umbrella fashion' brand" (Interviewee 12).
The primary objective of a Georgian export strategy could be to maximize total value creation within the Georgian economy.Like other countries such as Norway and the United Kingdom, a strategy document of the Georgian government might include foundations such as influencing factors and strategic choices, policy priorities, as well as concrete actions to support the export journey.An "Export Promotion Strategy 2030" along with the establishment of key performance indicators would create a sound basis for an export ecosystem, as well as concrete activities regarding EPPs.As a key element of an export strategy, Georgia would also benefit from a "Team Georgia" based on an export ecosystem policy.The "team" approach would be a government-led initiative aimed at promoting and supporting Georgia's businesses in international markets.It avoids disaggregation and structural devolution of EPPs.Previous research showed that "Team Finland" is a successful model of a strategic framework for network development (Klasen, 2020;Valaskivi, 2016).A "Team Georgia" with key domestic public players would recognize the importance of strategic coordination and networking to boost the impact of export strategies and trade policies, as well as EPPs."Team Georgia" would emphasize common goals, collaboration, coordination, and a strategic framework with a focus on measurable results to enhance the competitiveness of Georgian exporters.It would be a strong answer to the growing complexity of challenges requiring collaborative responses for foreign trade promotion.

B. Trade Agreements and Regulations
In addition, we find that new agreements and enhanced regulations can provide answers to key problems of Georgian exporters, such as barriers to temporary exports or lack of knowledge about standards.A significant problem for exporters is dealing with tariffs and trade barriers imposed by importing countries.
As discussed by Beine & Coulombe (2007), Gylfason, Martinez-Zarzoso & Wijkman (2015), and Mahmood & Jongwanich (2018), there is often a need to open additional economic opportunities for export-oriented businesses.A challenge for the pharmaceutical sector is that Georgia does not have a Mutual Recognition Agreement with the EU.Good Manufacturing Practice (GMP) certifications issued by the local regulator are not recognized in European markets.This requires additional inspection in importing EU member states.Interviewees mentioned that "GMP is the single most important challenge for the industry" (Interviewee 9), and that "[it is] difficult to enter new markets; [there are] many non-tariff barriers" (Interviewee 10).
Our research also shows that Georgia would benefit from further leverage of existing trade agreements and negotiation of new ones.In 2023, Georgia agreed to a new trade deal with the United Arab Emirates.Due to the growing importance of the Middle East for export performance, FTAs with other Gulf Corporation Countries would have a positive economic impact on Georgia.Interviewees mentioned that FTAs with countries in Asia would be important as well to facilitate more Georgian exports.The same applies to the US.Although a General Scheme of Preference for Georgia exists, resulting in lower tariffs for numerous exported goods, an FTA with the US would have long-term benefits.There is significant potential to strengthen the value of the Georgian Lari and spur further private-sector investment.Furthermore, the government should support the practical implementation of conventions, particularly on ATA Carnet, for temporary admission of goods.The ATA Carnet simplifies and expedites the temporary export and reimport of goods, making cross-border trade more efficient and cost-effective.Georgian exporters could gain access to streamlined customs procedures, eliminating the need for time-consuming and complex paperwork for each temporary export.The use of Carnets would enable Georgian exporters to benefit from reduced or waived import duties and taxes.

Awareness and Capacity Building
Our results show that EPPs related to awareness and capacity building in Georgia should focus on challenges such as a lack of knowledge of trade practices, international business skills, and innovation.The findings confirm previous research mentioning that government intervention can help to solve the issue that collecting information on foreign markets involves some costs and that firms have no incentive to share this information with potential competitors, making this a market failure that justifies government intervention (Freixanet, 2022;Lederman, Olarreaga & Payton, 2016).There is a need for enhanced knowledge and information about international business activities, for example, how to deal with legal and regulatory requirements in foreign trade.Interviewees mentioned that "for large companies, growth creates challenges [regarding] managerial knowledge […]" (Interviewee 12), and that "there is very low awareness about the required processes regarding the certificate of origin" (Interviewee 21).
Improving knowledge about certified production according to sustainability standards such as the Global Organic Textile Standard would help Georgian apparel exporters gain access to the growing sustainable apparel market.In the pharmaceutical sector, interviewees mentioned that there is a general need for capacity development regarding trade-related skills.Enterprise Georgia already provides capacity development programs regarding the professional skills of employees of Georgian export-oriented companies.Other EPP elements include the identification of tariffs for Georgian manufacturers in specific markets and the description of export procedures.Given the existing gaps, exporters require increased awareness and capacity building, using additional in-house, outsourced, and partner expertise to help resolve short-term and longer-term challenges.In addition to physical trade seminars, a comprehensive online offering in partnership with domestic stakeholders and international partners would help.A dedicated "Export Academy" with certified courses on a one-to-many basis run by Enterprise Georgia could be the most efficient solution, raising awareness of market opportunities, educating on trade processes, informing on sustainability, and providing state-of-the-art e-commerce practices in foreign markets.Furthermore, a "Senior International Management Service" grant program for temporary hire of experienced international managers might be a powerful tool to identify and seize new opportunities.In addition, exporters might benefit from enhanced trade-related educational policies.By offering comprehensive courses, particularly in partnership with foreign universities, institutions in Georgia could provide students with a strong foundation in international business concepts.Such collaborations would offer participants practical exposure and enable them to apply theoretical knowledge in real-world contexts.

Market Access
In line with previous findings, this research confirms that EPPs for targeted market support and finding customers can provide answers to key challenges such as lack of market access, weak sector visibility, and no positive sector image.Operational support from the government is crucial for promoting exporters' business profiles and helping firms to grow into new and additional foreign markets (Durmuşoğlu et al., 2012;Leonidou, Palihawadana & Theodosiou, 2011;Seringhaus & Rosson, 1994;Verwaal & Donkers, 2002;Wilkinson & Brouthers, 2000).In Georgia, market access is often challenging as collaboration with foreign distributors in many sectors is still limited.It is a complex process for many producers in the country to find a foreign distributor and enter new markets, for example, the pharmaceutical sector or almond producers.EPPs can play a valuable role in assisting these Georgian companies.According to interviewees, there is a "[…] need for export market support, such as exhibitions, articles and public relation activities […], partner search, market information, and info tours" (Interviewee 24).
Similar challenges were described by interviewees from the jewelry sector.Although there is a strong history and tradition in Georgia, EPPs could help overcome the low international market recognition.This also includes marketing support.Collaboration is still limited, and the growing e-business in the sector might create new opportunities for Georgian jewelry producers.Firms could benefit from market-oriented government programs, according to interviewees: "Jeweler sales are very much driven by advertising; good online retail sales are often followed by wholesale orders.Hence more efforts are needed in terms of marketing, promotion and participating in exhibitions" (Interviewee 14).
Our research shows that Enterprise Georgia's export promotion activities include coordinating, organizing, and co-financing business-to-business (B2B) exhibitions, supporting local companies in making new trade connections, acquiring potential partners, and diversifying on export markets.Furthermore, Enterprise Georgia promotes exports by planning, organizing, and co-financing business-to-business meetings for Georgian export-oriented companies.However, extended activities with an enhanced and structured "Global Trade Opportunities" program could better support businesses in sectors with high export potential in identifying promising target markets and suitable customers.The challenging regulatory environment in the pharmaceuticals sector demonstrates the need for strong partnerships between exporters and buyers in target markets that require additional GMP certification.Enhanced components in a "Global Trade Opportunities" program can include developing comprehensive sectoral market access activities with technical and financial support for existing and emerging exporters.
Enhanced collaboration with extended trade-related roles of embassies abroad might also help to identify more potential business opportunities in target markets that Georgian exporters could contest.Furthermore, an easily accessible, extended, and up-to-date "Buy from Georgia" online directory would enable foreign buyers to approach Georgian firms more easily, resulting in greater trading opportunities.

Closing Deals and Maintaining Relationships
The EPPs for closing export deals help to solve challenges such as lack of customer relationships in addition to financing gaps and risk aversion.Interviewees mentioned that Georgia can serve as an "export" base to access large consumer markets such as the EU, the Middle East, the PRC, and Russia.However, it is often difficult for exporters from the jewelry sector to participate in international exhibitions, although this would be very important.Our research gives evidence that Georgia could identify and invite international buyers, distributors, and industry representatives who have expressed an interest in sourcing products from Georgia by organizing matchmaking events.The government might create these additional opportunities through industry-specific seminars, panel discussions, and social events to close deals.Furthermore, the government should offer broad assistance in negotiating contracts, navigating trade regulations, or accessing financial resources to help exporters move forward.
Our results also show that public interventions through financial support and risk mitigation are crucial for firms with an international orientation.This is in line with previous findings from Klasen et al. (2022), Kurkela (2008), andTurguttopbas (2013).Key challenges for firms in Georgia include the lack of sufficient public instruments to offer competitive payment terms, leading to financial burdens and market risks.The lack of awareness of existing trade finance instruments and the non-payment of foreign importers not covered by appropriate support schemes indicate a need to establish a government program in Georgia: "SMEs do not have enough collateral […] and risk management is a problem as well" (Interviewees 3).
"Payments from clients [are] somewhat problematic.Some clients choose to delay payments" (Interviewee 14).
"In terms of trade instruments, none of them are used.There are perceptions that it is expensive, [there is] limited awareness" (Interviewee 13).
Exporters would thus benefit from a public export financing scheme.Public export loan programs enhance the competitiveness of exporters by providing them with access to affordable financing options.Georgian exporters often also require significant upfront investments to fulfill large orders or expand into new markets.Access to working capital loans specifically tailored for export activities would enable exporters to secure the necessary capital and meet customer demands.It should thus be considered to add export credits or a trade credit insurance program to Enterprise Georgia's support portfolio.Trade credit insurance or guarantees protect exporters against commercial and political risks in international trade.The instruments provide a safety net against buyer defaults, political risks, or adverse economic events in the importing country.In addition, trade and supply chain programs run by multilateral institutions such as ADB reduce financing constraints faced by Georgian SMEs.For example, ADB's Trade & Supply Chain Finance Program (TSCFP) fills market gaps by providing guarantees and loans to commercial banks (ADB, 2024).

VI. CONCLUSIONS AND LIMITATIONS
This study examined both the challenges faced by Georgian exporters and possible solutions for public interventions to promote merchandise exports.The research revolved around the central question: What policy approaches can help to stimulate Georgian exports further?To answer this question, the study examined Georgia's export performance and value chains using the example of the almonds, apparel, jewelry, and pharmaceuticals sectors.Through a multi-case study involving exporters and other key stakeholders in the country's trade ecosystem, we found numerous challenges to Georgia's export sector performance, as are corresponding export promotion policies derived during this research.These vary in impact and potential to facilitate and diversify exports.It would be best if all of them were considered, pursued, and implemented.However, some of them remain the most critical and impactful for policy objectives and should be addressed first.The summary of export promotion elements is summarized in Table 4.

Trade Agreements and Regulations
Agreements and regulations provide answers to key issues such as high tariffs, barriers for temporary exports, as well as lack of knowledge about standards.

Awareness and Capacity Building
EPPs related to awareness and capacity building focus on challenges such as lack of trade practices knowledge and lack of international business and management skills.

Market Access
EPPs for targeted market support and finding customers provide answers to key problems such as lack of market knowledge, weak sector visibility, and no positive sector image.

Closing Deals and Maintaining Relationships
EPPs for closing export deals and maintaining links look at challenges such as lack of customer relationships, price competitiveness, financing gaps and risk aversion.
Source: Developed for this study.
It is imperative to address the challenges that Georgian exporters are currently facing by adopting an "Export Promotion Strategy 2030".The development of a well-structured export strategy is crucial for Georgia's efforts to expand its market presence, boost export revenues, generate more job opportunities, and enhance its overall competitiveness.Through the successful implementation of an "Export Promotion Strategy 2030" along with the establishment of key performance indicators, the government can create a conducive environment for businesses to thrive on the global stage.This strategy document could encompass essential elements such as identifying drivers and strategic choices, prioritizing policies, and outlining concrete actions that will support the export journey.This comprehensive approach would also lay a solid foundation for a strategic export eco(n)system and facilitate specific activities related to EPPs.A "Team Georgia" led by the Ministry of Economy and Sustainable Development and managed by Enterprise Georgia could be the strategic hub for the implementation of the "Export Promotion Strategy 2030"."Team Georgia" can highlight shared objectives, cooperation, coordination, and the strategic framework based on a policy that encompasses the entire export ecosystem.The emphasis should be on priorities and outcomes to enhance the competitiveness of Georgian exporters in various sectors.Following the "Export Promotion Strategy 2030" and the establishment of "Team Georgia", the government can develop a roadmap, implementing other key recommendations.Most pressing challenges, as well as large impact and effects, might drive the implementation agenda for EPPs.The suggested approach is shown in Figure 3. (i) sector/ecosystem support (e.g., rules and regulations, skilled labour, branding, industry collaboration, trade fairs, matchmaking events); (ii) production capacity (e.g., value chain improvements, labour productivity, processes); (iii) export capacity (e.g., market knowledge, access to finance, risk mitigation);

Any other comments?
Source: Developed for this study.
Firms' turnover has shown a consistent upward trend, reaching GEL 514 million ($187.6 million) in 2021 and an estimated amount of GEL 544 million($198.5 million)  in 2022.The sector experienced a sharp increase in value-added, totaling GEL 140 million ($51.1 million) in 2021.The average monthly salary of employed individuals reached an estimated amount of GEL 983 ($359) in 2022.Employment in the clothing sector grew from 7,767 staff to 9,821 people (Figure1).

Figure
Figure 1: Apparel Sector Developments

Table 1
(ADB, 2023).Top trading partners by exports in 2022 were Armenia, Azerbaijan, Bulgaria, Germany, Italy, Kazakhstan, the People's Republic of China (PRC), Peru, Poland, Russia, Spain, Switzerland, Türkiye, Ukraine, the United States (US), and Uzbekistan.The most relevant growth markets are Asia and Europe, with European integration as a strategic goal for Georgia.The country has close ties with the European Union (EU), being a target country of the EU's European Neighbourhood Policy under the Eastern Partnership initiative.In 2014, Georgia and the EU signed an Association Agreement and established a Deep and Comprehensive Free Trade Area.The country has also been a member of the World Trade Organization since 2000.
(ILO, 2023)ompetitiveness position is relatively weak, and linkages with global value chains are limited.Low productivity and difficulties in creating high-quality jobs are key challenges.Labor productivity growth represents a positive change in output volume for a given volume of hours worked.If more capital is invested in production, capital quality increases, and capital and labor together can be more efficient, resulting in higher levels of productivity.This means higher multifactor productivity growth.In Georgia, labor productivity continues to be behind other European and Central Asian upper-middle-income countries.On average, gross domestic product per hour worked in Georgia amounted to only $17.33(ILO, 2023).Many people in rural areas remain engaged in low value-added agriculture.Human capital formation is often weak, with poor learning outcomes, according to the Programme for International Student Assessment (OECD

Table 2 : Apparel Sector Composition (No. of Active Enterprises)
Source: National Statistics Office of Georgia, 2023.

Table 3 : Trade Competitiveness Indicators for Apparel Sector (2019 2 )
1TableA1shows relatedness indicators for the main apparel export product groups.2Relativelyconsistentup-to-date information is available not until 2021.However, the COVID-19 pandemic which started in 2020, heavily disturbed the world trade flows and distorted the normal picture.Therefore, export related indicators were calculated for 2019, thus with more reliable data and before the external shock of the pandemic.Source: ITC, 2023.

Table 3 : continued
;Ayob & Freixanet, 2014;Belloc & Di Maio, 2011;Freixanet, 2022;Meyer & Klasen, 2013; Srhoj, Vitezic &  Wagner, 2023;Takyi, Naidoo & Dogbe, 2022;Wilkinson, Mattsson & Easton, 2000).Several developed countries, such as the Netherlands in 2022, Sweden in 2023, and the United Kingdom in 2021, have implemented new export strategies.A significant challenge for exporters is dealing with tariffs and trade barriers imposed by importing countries.Trade agreements open economic opportunities for exportoriented businesses.They strip away trade barriers, eliminate or reduce tariffs, and promote investment.Exporters must also navigate complex customs procedures and documentation requirements.Failure to comply with requirements can lead to delays, penalties, or even rejection of shipments.Ratification of conventions can help to improve export performance.Countries also have their own technical regulations and product standards that exporters must comply with.Meeting these requirements often involves additional testing or compliance procedures, which can be time-consuming and costly for exporters.

Table 4 : Export Promotion Elements Summary
Export strategies and trade policies address key challenges such as lack of government guidance, a non-level playing field, as well as uncoordinated interventions.