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Poti free economic zone to be a ‘laboratory’ for Georgian development

By M. Alkhazashvili

(Translated by Diana Dundua)
Wednesday, December 19
The creation of a free economic zone in Poti, a port city in western Georgia, “will be a laboratory for the whole of Georgia’s economic development,” announced State Minister for Reforms Coordination Kakha Bendukidze.

A free economic zone is an area with relatively relaxed regulations on tariffs, taxes and customs; it is unclear exactly what regulations would apply in the Poti zone. On December 5, incumbent presidential candidate Mikheil Saakashvili announced that a final agreement on the Poti free economic zone should be signed within a month.

Two UAE companies, Dubai World and Jafza, are ready to invest USD 1 billion into the Poti free economic zone, including USD 300 million to build a new freight container terminal, according to the newspaper 24 Saati.

The Georgian government says the free economic zone will bring more investments into Georgia. If the Poti project is successful, more could soon follow.

Some analysts question whether the free economic zone is a worthwhile project. Given Georgia’s size, they argue, it would be better to offer those breaks on tariffs to all Georgian businesses.

MP and former economics minister Lado Papava is a strong critic of the Poti initiative, describing it as “equal to treason,” according to the newspaper Kviris Kronika. Papava claims that if a free economic zone is created near a conflict region, or in areas populated by non-Georgians, the country’s frozen conflict problems could worsen.

Poti is just south of the secessionist region of Abkhazia.