Georgia was deemed to have the best business environment of any state in Eurasia, according to the latest rankings by a conservative Washington think-tank. But the data used to compile the rankings predates the Georgian government’s embrace of authoritarian practices.

The Heritage Foundation’s 2025 Index of Economic Freedom ranked Georgia’s business climate as equivalent to that in Belgium, the host nation for the European Union’s executive institutions. Georgia also ranked higher than many of the EU’s eastern flank states, including Bulgaria, Romania and Poland.  

The Heritage Foundation ranked each of the 184 countries surveyed on what it describes as the “12 economic freedoms,” covering such areas as rule of law, government size, regulatory efficiency and open markets. The rule of law category measures the sanctity of property rights, government integrity and judicial effectiveness.

Georgia has long been seen as an economic darling in the eyes of free-enterprisers advocating deregulation. The country shot up the Heritage Foundation’s index in the late 2000s, following economic liberalization reforms introduced by then-president Mikheil Saakashvili’s administration. Georgia’s Heritage Index score peaked in 2021 at 77.2 out of 100. Four years later, its score has steadily eroded to 69.

Georgia’s 2026 score is likely to take a big hit, as the Georgian Dream government took a sharp turn toward authoritarianism in late 2024, shelving the country’s efforts to join the EU. Following a parliamentary election in the fall that monitors said was marred by irregularities, the government has adopted laws to stifle dissent, kneecap the non-governmental sector and solidify its grip on power.

The government’s actions have prompted sharp criticism from business leaders and bankers in the country. In late 2024, the United States placed Georgian Dream’s leader, billionaire Bidzina Ivanishvili, on the sanctions list for “for undermining the democratic and Euro-Atlantic future of Georgia for the benefit of the Russian Federation.” Meanwhile, the rights watchdog Freedom House in its latest country report on Georgia notes that “oligarchic influence affects the country’s political affairs” and “media freedom is undermined by intimidation and pressure against journalists.”

According to the Heritage Foundation, country scores in the 2025 index reflect data for the period covering the second half of 2023 through the first half of 2024. Georgia’s authoritarian departure did not commence in earnest until the spring of 2024, with the passage of the so-called foreign agents law that placed onerous restrictions on non-governmental organizations and independent media outlets.

Concerning the Caucasus and Central Asia, Armenia, Azerbaijan and Kazakhstan joined Georgia in the upper half of the Heritage 2025 Index. Lagging significantly behind were the remaining four Central Asian states: Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan. Meanwhile, Russia’s business climate was ranked near that of Tajikistan.

Uzbekistan, which has pursued a vigorous reform course with a stated goal of membership in the World Trade Organization, was the only state in the two regions that made a significant improvement in its 2025 Heritage Index score, relative to the previous year, rising from 55.9 to 58.

In his preface to the report, Heritage Foundation President Kevin D. Roberts identified China, along with bureaucrats working with “globalist organizations and multinational corporations,” as posing major threats to free enterprise. “Today, economic freedom is being attacked on all sides, both at home and abroad. The Chinese Communist Party (CCP) is working to constrain freedom not only within China’s own borders, but in nations around the world,” he wrote.