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Georgia experiences lull in foreign investment

By M. Alkhazashvili
(Translated by Diana Dundua)
Friday, January 4
In 2007 foreign investment in Georgia was lower than expected, the magazine Tbiliselebi reports.

Kakha Bendukidze, State Minister for Reforms Coordination, claims that the political turmoil in November meant Georgia has already missed out on some USD 500 million in foreign investment.

“Because of the political tension, foreign investment has been less than expected, an effect that will be felt in 2008 too. The investment decrease is sharp but things will return to normal. The government and the National Bank of Georgia are working toward this direction,” Bendukidze said, according to the newspaper Bankebi da Finansebi.

Former economy minister Lado Papava MP believes that the election process has had the greatest impact on foreign investment in Georgia. “Early presidential elections is already a minus [in terms of attracting foreign investment], as it sends a negative message to potential foreign investors,” the newspaper Bankebi da Finansebi quoted Papava as saying.

Prime Minister Lado Gurgenidze described the lull in foreign investment as natural in the run-up to elections, but emphasized the importance of attractive investment conditions, which he said the government would restore as soon as possible.

Snap presidential elections were called for on November 8 by then-president Mikheil Saakashvili, the day after police cracked down on anti-government protests in Tbilisi.