Government calls 2013 ‘transitional’ for Georgia’s economy
Monday, December 30
Addressing past abuses, ‘hurt its economy’ was the focus of Georgia, the government states and believes that they enabled the economy, as well as businesses to be free from political pressure and entrepreneurs have the opportunity to define their business priorities themselves.
"The transitional period is always difficult, mostly for businesses and the first half of 2013 was heavy for Georgia’s economy but despite of our political opponents claim of possible apocalypses, the local, as well as the international businesses realized the new opportunities offered by the government,” said the Vice Prime Minister and the Economy and Sustainable Development Minister Giorgi Kvirikashvili at a conference on December 25, as he summed up Georgia’s economy achievements, challenges, and the future plans for development.
"Accordingly, Georgia has the improvement of economy in figures, indicated that the turnover of Georgian companies increases by 8.4% in Q3 2013 comparison to Q2 that composed 30 billion GEL,” Kvirikashvili noted.
Assessing the results of the year, Kvirikashvili said that export with the EU member countries increased by 65% year-to-year in the first eleven months of 2013 while the total exports grew by 20 % reaching 2.618 billion USD, which is the recorded figure for Georgia.
The GDP in Georgia increased 1.4 % in the third quarter of 2013 over the same quarter of the previous year while it was planned 6% growth. "Government expects the GDP to grow by 2.5% this year,” he said.
DCFTA, a successful project
Kvirikashvili noted the initialing of the Deep and Comprehensive Free Trade Agreement (DCFTA) with the European Union that is part of Association Agreement from November.
"In the nearest future, the EU 500 million EU market will be opened for Georgian businesses to expand successfully, that will be the result of launching the new companies, creating the job places, increasing the export, and FDI,” Kvirikashvili noted.
According to Kvirikashvili, the Anaklia Black Sea Port project construction would be a historical project for Georgia. "Anaklia Black Sea Port will change and modernize the country and expects 5 billion USD, to be invested in this project. The feasibility research on defining the capacity and construction importance of the Port will be conducted to attract the investors,” he said.
The government also plans to build a new international airport. "The port will be constructed in Anaklia instead of in Poti (black sea port city), as the territory of Poti is the swamped and flown over by birds,” Kvirikashvili said.
According to him, the government needs the high quality research for the document that they will subsequently submit to the banking institutions.
The Ministry of Economy is working feasibility studies for investment projects, Kvirikashvili stated.
"We would like to present the investors the complete feasibility studies of the projects in each economy sector and the investors have to decide themselves the priority sectors for investment,” he said.
Mulling over the investments, Kvirikashvili underlined that there is a great demand from investors in Georgia’s hospitality sector, in particularly building low budget hotels.
Foreign direct investments (FDI) in Georgia amounted to 239 million USD in the third quarter (Q3) of 2013 (preliminary data) up 3 % from the preliminary data of Q2 2013 and 20% from the adjusted data of Q3 2012, according to the Minister.
Government of Georgia pardoned more than 40 investors that were fined for not fulfilling the investment liabilities. The total amount of pardoned fines composed 16 million USD and 6.5 million GEL.
According to Kvirikashvili, the temporary state commission that was composed to study the property management agreements, considers only those cases that the imposed fines exceeds more than 100 thousand GEL and the requested period for delaying the liability of the investment is one year. After the pardon act, the investors renewed the projects worth 360 million USD.
Kvirikashvili also commented on Georgian-Russian trade relations and gave advice to Georgian importers to diversify the markets.
"I warn Georgian businessmen to not use Russia as their main market, but a means for market diversification. Russia has already expressed serious investment interest in the wine sector. I consider that risks are great regarding Russian market. We want to hope that we'll not oppose Russia and EU. On the contrary, we want Georgia to become a place of agreement. We also hope that Russia will not make the same mistakes as in the past against Georgia. I mean political embargo,” Kvirikashvili stated.
Development challenges for 2014
Next year, the government plans to continue work to increase the inclusive development of economy, in particular, developing the private sector and creating the additional opportunities.
"For this regard, there is a planned institutional as well as legislative reform,” Kvirikashvili stated.
In the first quarter of next year, the agency of Free Trading and Competition will be established. The agency will be responsible to monitor the competition on free market and disclose the cases of breach of competition law by market players.
The important steps will be made for supporting the development of innovations and technologies.