2016-06-28
Georgia offers enormous business potential to those who seek new investment destinations, across a range of the country's fastest growing sectors: clean energy, tourism, manufacturing, regional services, logistics and agribusiness, - with these words Prime Minister Giorgi Kvirikashvili addressed businesspersons gathered at the Swiss-Georgian Business Forum.
Head of the Government invited investors to Georgia for them to see what Georgia has to offer, choose from the country's menu of opportunities, and give a start to their business in Georgia.
Giorgi Kvirikashvili assessed Georgia-EU Association Agreement including the DCFTA as one of the biggest achievements with regard to FTAs, which means more Georgian products and services on the European market. Prime Minister is convinced that this agreement brings Georgia-EU relations to a qualitatively new level of cooperation.
Prime Minister thanked and congratulated the respective delegations for negotiating and concluding the pre-signature procedures with remarkable efficiency. He noted that in view of the recent developments in the context of United Kingdom's referendum on leaving the EU, achieving higher level of integration with the EFTA countries is crucially important.
"Georgia concluded FTA with EFTA and Iceland beat England in football match yesterday - I think there is some common sense about it. In the wake of this important milestone, today's event is a perfect platform to introduce Georgia to Swiss investors and present the latest economic trends and investment opportunities to you," - Prime Minister noted. He also elaborated on recent successes and short-to-medium plans that are relevant to the national and regional economic agenda.
Giorgi Kvirikashvili listed opportunities that Georgia can offer to its fast-growing network of international investors,
"First and foremost, we are a country with an open-door policy and a favorable investment environment. According to the World Bank, we are one of the easiest countries in the world to do business in. We have the 9th lowest tax burdens in the world, according to the World Economic Forum.
Despite the tough security challenges and political turbulences we face both regionally and transnationally, Georgia remains a politically stable safe haven, where all companies can enjoy a secure and predictable business environment.
Moreover, while these regional challenges inevitably disrupt economic development processes, Georgia still maintains decent economic growth. All the major credit rating agencies consider us stable. The compound annual growth of GDP in the recent period of 5 years is 4.9%, and Georgia is widely expected to maintain steady growth for years to come.
FDI inflow in the Georgian economy over the last years is characterized by growth. In Q1 2016, FDI showed 103% growth compared to same period of last year. This is the highest FDI volume since 2008. In fact, FDI in Georgia amounted to $1.35 billion in 2015," - Prime Minister indicated.
As for the access to international markets, Giorgi Kvirikashvili noted that Georgia sits at the heart of a vast and growing network of free trade deals, spanning from the EU, Turkey, the CIS countries and now EFTA states (Iceland, Liechtenstein, Norway, and Switzerland).
Prime Minister assessed Georgia-EU Association Agreement including the DCFTA as one of the biggest achievements and added that this agreement makes Georgia's political and economic integration with the EU irreversible.
"It brings Georgia-EU relations to a qualitatively new level of cooperation. We are confident that this should contribute to the transformation of the country into a genuine European State. We have embarked on a demanding process of implementation of wide-scale reforms, including approximation of the EU acquis, which will bring Georgia in line with European business standards and practices.
While we are beginning to enjoy closer trade and economic integration with the EU, soon we will become the first country in the region to enjoy a free trade agreement with both the EU and China. We are in the final stages of FTA negotiations with China, which we hope to see concluded by the end of this year.
Georgia is a country of only 3.7 million people. Relying solely on our pro-business environment and enlarged market size through FTAs is certainly not enough to fully maximize profit. The next most important factor contributing to the state's overall competitive advantage is Georgia's favorable location and proximity to different trade-heavy markets. Georgia has historically played an important geostrategic role in the South Caucasus region, and this is most certainly still the case today. Georgia provides the shortest possible route linking East with West and North with South. Looking ahead, Georgia will be key to unlocking this region's ultimate success as a superhighway of trade and communication," - Prime Minister stated.
According to Giorgi Kvirikashvili, Georgia has become an important transit country and energy corridor.
"Pipelines linking Caspian oil and gas fields to Turkey and Europe pass through Georgia, as well as new road and rail networks that make Georgia an important logistical hub. The further development of our Black Sea ports, including the new Anaklia Deep Sea Port, strengthen Georgia's role as a Silk Road shortcut. To sum up, Georgia is progressively growing into its natural role of a regional hub," - Giorgi Kvirikashvili indicated.
Prime Minister outlines one of the fastest growing and thriving business sectors of Georgia - which is Tourism & Hospitality. According to the Head of the Government, over recent years, Georgia has seen its number of international visitors multiply - from 2007, the average annual number of international travelers has been increasing by a yearly 23% average.
"In 2015, the number of international visitors stood at 5.9 million, which exceeds the 3.7 million population of Georgia.
There are no Real Estate Ownership Restrictions and Georgia offers considerable potential to develop Hotel & Leisure premises, including beach resorts, wellness and SPA destinations, winter-ski resorts and four season resorts. The tourism sector is also boosted by the secure environment in the country.
For example, The World Economic Forum's Global Competitiveness Index -2015/2016 ranks Georgia as the 16th most secure country in the world, just 5 steps behind Switzerland, which stands in 11th position.
The number of international tourist arrivals is expected to grow by 8-10% during the next five years, generating more demand for infrastructure and stimulating investments" - Prime Minister stated.
According to him, Georgia is committed to sustain engagement with global markets and ready to compete for investments.
Giorgi Kvirikashvili listed several success stories with regard to the Swiss investments in Georgia, including "Blauenstein Georgia", which was established with Georgian-Swiss investment in Racha region in 2008.
"The company has created unique cooperation model that is fully in line with local reality. We are ready to provide support, including financial assistance through Georgian sovereign fund. I would like to emphasize once again that this model fully meets demands of the Georgian reality. Namely, local farmers retain ownership over the land parcels and company reaches economy of scale without obtaining plots from small farmers. Hence, the process of implementation of new models and expertise in Georgian agriculture is ongoing. Government of Georgia believes that respective model may be applied in all mountainous regions of Georgia and Government continues to support the process of expanding this model to other regions.
Another success story is the Joint Stock Company "Margebeli", a holding established by Georgian and Swiss private investors on the Georgian market through conglomeration of the four biggest companies operating in various sectors of our economy. Nowadays, Margebeli JSC owns five operating companies, including one of the leading producers of mineral water in Georgia, Healthy Water JSC, and a food processing company, Marneuli Food Factory. I believe that today's event will open new opportunities for Georgian and Swiss companies to increase cooperation in the future", - Prime Minister stated and thanked Georgian businesspersons who arrived in Bern to attend the meeting as well as Swiss businesspersons present there.
Head of the Government elaborated on Government's 4-point reform plan that ensures sustainable and inclusive development and aims at making Georgia a smarter place to invest and to do business.
„The pillars of 4P Reform Plan are: Education reform that covers professional education and remodeling of the higher education funding mechanisms; Economic Development reforms, Education, Infrastructure Service Development and Open governance. We have already initiated the Corporate Income Tax Reform, with the aim of fostering an efficient and growth-friendly tax system. Under the new system, which will be effective from January next year, only distributed income will be taxed - retained earnings will be exempt. We have also started a Pension Reform and Reforms for capital market development. These are only a few examples of our very rich Economic Development Reform agenda. Considerable investments and efforts will be aimed at further reforming the educational system in order to bridge the gap between professional supply and impending demand. Our plan is to significantly accelerate the development of spinal road infrastructure by building east-west and south-north corridors. Georgia's potential as a key "Silk Road" country between Europe and Asia must be fully unlocked, as it will also increase population mobility and the country's touristic potential. Finally, by fostering open governance, we seek to further increase private sector involvement in the legislative process, and to modernize the delivery of public services", - Prime Minister indicated.
Prime Minister is convinced that there is a perfect possibility of lasting partnership between Georgia and Switzerland.
"I can see and appreciate your interest. And of course, I can just say thank you!"- Prime Minister addressed businesspersons gathered at the Swiss-Georgian Business Forum organized by the Georgian Investment Agency. Around 60 businesspersons attended the meeting.
Head of the Georgian Investment Agency Giorgi Pertaia conducted a detailed presentation on the investment opportunities in Georgia. Successful investments in Georgia and business0friendly environment was discussed by founder of "Blauenstein Georgia" Max Blauenstein and noted that the company intends to increase the volume of investments in Georgia.
Prime Minister's Press Office