International Investment Forum aims to spark joint global projects

Georgia has been described as a politically stable investment destination, efficient with a pro-business and corruption-free Government, a growing market size due to free trade agreements, a solid sovereign balance sheet and more at the International Investment Forum in Tbilisi.

Georgian Government high officials noted these and other advantages of the country at today’s forum, titled ‘Georgia – Regional Hub and Asia’s Gateway to Europe’, which aimed to introduce investment projects to potential business partners. The event mostly focused on the logistics and manufacturing, energy and tourism sectors.

Georgia’s Prime Minister Irakli Garibashvili opened today’s business forum and addressed more than 200 delegates representing energy, construction, tourism, finance, food production and engineering industry fields from all over the globe.

In his speech he stated he believed investing in Georgia was as safe as investing in any country in Europe, except that business costs and taxes would be lower.

"If you invest in Georgia there will be fewer regulatory burdens and your returns will be higher,” Garibashvili stressed in his speech to forum participants, who were in Georgia to share their experiences and present investment plans with their Georgian colleagues.

 (From Left) John Defterios, CNN's Emerging Markets Editor and anchor of Global Exchange and Georgia’s Prime Minister Irakli Garibashvili at the International Investment Forum in Tbilisi entitled "Regional Hub and Asia’s Gateway to Europe”.

Garibashvili further highlighted that a country like Georgia could have the lowest tax rates in the world and many other business incentives, but investors would not come if there was no rule of law – at least not the investors they want.

"Georgia is not only open for business but it is safe for business,” he said.

Policy and Management Consulting Group’s (PMCG) director Aleksi Aleksishvili, who was one of the organisers of the forum along with the Asian Development Bank (ADB) and the Ministry of Economy and Sustainable Development of Georgia, believed law conditions including tax environment of the country was stable and this supported attracting investors to Georgia.

"In any business climate, stability of the country is the most important issue for the investor. But stability does not only mean the domestic political situation, it also means the judicial and geopolitical stability,” Aleksishvili said.

"Georgia is not in a peaceful geopolitical condition if we refer to the developments in Ukraine and the Middle East. Thus, it was the role of the Government to give a clear message to investors that Georgia is a stable country.”

Managing partner at Kohl & Partner, Andre Partner, who consulted with the Georgian Government for tourism, shared the same opinion in an interview with Agenda.ge and said investors need stability for investing.

"Stability is very problematic at present as Ukraine is very close to Georgia and investors sometimes does not know difference and is very scared. Otherwise the political and administration environment is perfect in Georgia,” Partner said.

Georgia – an economic hub between Europe and Asia

At the forum the Government focused that the country was uniquely positioned to capitalise on increasing trade flows between Europe, the Caspian Region and Central Asia and China and the shortest route transport infrastructure between the Black Sea and the Caspian Sea region.

The President of the Confederation of Asia-Pacific Chambers of Commerce and Industry (CACCI), a regional grouping of apex national chambers of commerce and industry, business associations and business enterprises in Asia and the Western Pacific, believed Georgia was attractive for Asian investors because it connected the East to the West.

"The free trade agreements that Georgia has with the EU and some other countries is the main argument for investors to set up a business in Georgia,” CACCI president Jemal Inaishvili said.

He believed investors had to use these opportunities if they wanted to export products via Georgia to the EU, the United States or other post-Soviet countries.

Georgia’s Minister of Economy and Sustainable Development Giorgi Kvirikashvili expected businessmen from Asia would be interested in investing capital in Georgia’s economy thanks to Georgia’s Deep and Comprehensive Free Trade Area (DCFTA) agreement with EU which launched in September 2014.

Meanwhile, when Investment Forum vice president of the Asian Development Bank Wencai Zhang addressed the audience, he said Georgia’s recent agreement with the EU regarding the DCFTA had generated interest among Asian and European companies in search of new manufacturing and logistics hubs that conveniently linked Asian and European markets.

"Georgia aspires to serve as a bridge between Europe and Asia in the midst of rapidly evolving global economic landscape,” he noted.

Georgia can be second hazelnut producer in the world, Balsu says

Foreign businessmen have shown a keen interest in doing business in Georgia. One of these was Turkish-based company Balsu, a leading hazelnut processing company that provided premium natural and processed hazelnuts to the world.

Balsu general manager Muzaffer Taviloglu attended the forum and noted he was in the country to find a local partner to invest in Georgia’s hazelnut sector. More than 90 percent of hazelnuts produced and processed in Georgia was exported to eastern and western European countries. Photo by Nino Alavidze/agenda.ge

"Georgia is the neighbour country of Turkey, which creates favorable conditions for the successful development of the nut business. In the next seven to 10 years we are expecting Georgia to become the number two producer of hazelnuts after Turkey,” he said.

"Other large producers of hazelnuts such as Italy is not growing as fast as Georgia. Georgia has really efficient land with its suitable climate for hazelnut growing,” Taviloglu said.

Balsu expected to invest $4-6 million USD in Georgia’s agriculture. "Until now we could not find the right size land for farming,” he noted.

More than 90 percent of hazelnuts produced and processed in Georgia was exported to eastern and western European countries including Italy, France, Germany, Holland, Belgium, Spain, the Czech Republic, Turkey, Ukraine and other Baltic states.

Mulling over the potential of Georgian market, another investor from South Korea Taek-Won Seo, who oversees the business division of Korea Water Resources Corporation (K Water), noted that his company planned to invest in Georgia’s energy sector.

"K water in interested in operating the hydropower plants in Georgia, in particular the Neskra Hydro Power Plant (HPP) in Svaneti (in northern Georgia). In total we have the potential to invest $800 million USD in Georgia’s energy sector,” Seo said.

Nenskra hydro power plant in Svaneti would be the first large dam project in Georgia since Inguri, which opened in 1987. Photo by TI Georgia

Georgia’s Government believed the country’s energy sector was attractive from the perspective of its existing natural resources and developing infrastructure, as the country possessed huge hydro resources and offered untapped potential for investment.

Figures showed that in 2013, foreign direct investments (FDIs) to the energy sector amounted to almost $200 million USD, with a 10 percent growth rate on an annual basis.

In recent years Georgian has become the net exporter of electricity and currently utilized only 18 percent of its vast hydro resources.

Georgia’s Ministry of Energy recently approved 80 HPP projects with a total investment of up to $1.2 billion USD.

At the end of today’s session, delegates formed business-to-business meetings with their Georgian colleagues, where they swapped business cards and exchanged ideas with the hope that this forum would have a follow-up meeting for future business agreements.