Negotiation brief Assignment Example | Topics and Well Written Essays - 750 words

Negotiation brief - Assignment Example Despite the fact that the Georgia economy has withstood the 2008 war, the aftermath difficulties are causing challenges to the economy. There has been damage in the general environment, infrastructure, and loss of settlements. The war has been a threat to the Georgia banking sector and the national currency stability. The Russian occupation forces in august 2008 had a great effect on the banking systems as the account owners began to withdraw their money from the banks. Within a short period of time, entities and individual had withdrawn not less than half billion U.S. dollars. The big issue with this act was; after the war only small amount of withdrawn money had been deposited back to the banks (Ted, 2008, 71). To deal with some of the challenges that have emerged as a result of the war, the government should be on the first line. The government should increase its spending on the internally displaced persons (IDPs) in Georgia who have been seriously affected by the Russian aggression. This should be through construction of shelters for the IDPs. Although this has led to revival in the economy due to increased demand for the labor and construction materials, it has some negative effects. The negative effects arises due to that, it is the government that is purchasing the materials and labor, and not the private entities, which in turn has lead to increase of the inflation rate within a very short period of time. With the government spending on the distribution of vouchers to IDPs to settle down the electricity and gas bill also will put more pressure to on the increasing inflation rate. There is no shortcut to this as the government must settle the social problems affecting the IDPs in Geo rgia. This will take place in the expense of increasing inflation rate. In Georgia, the foreign direct investment has gone down significantly. The reason to this is that, the investors