The FINANCIAL — In his interview with Tako Khelaia, The FINANCIAL, Itzhak Gerberg reviews the economical relations between Georgia and Israel. He states that the Government of Israel and Georgia will sign an economic agreement in 1-2 months.
Despite decreased investments implemented from Israel to Georgia in 2008, Mr. Itzhak Gerberg, Ambassador of the State of Israel to Georgia, says that the volume of direct investments from Israel to Georgia in the current situation is quite acceptable. Despite the pessimistic data of Georgia’s Department of Statistics, Ambassador of the State of Israel to Georgia sees the year 2009 in a positive light.
According to the Statistics Department of Georgia, the volume of direct investments from Israel to Georgia significantly reduced in 2008. In 2008, Itsik Moshe, president of the Israel-Georgia Chamber of Business, predicted the summer of 2008 to be a peak in Israeli investment. However according to the Georgian Government Israeli investments were one of the lowest compared to partner countries (40.1 thousand). In 2007 direct investments from Israel were USD 9,649 thousand.
In his interview with Tako Khelaia, The FINANCIAL, Itzhak Gerberg reviews the economical relations between Georgia and Israel. He states that the Government of Israel and Georgia will sign an economic agreement in 1-2 months.
“I really think that the year 2009 will be positive in terms of the economical relations between these two countries. Trade relationships have become more active over the last few years and the volume of investments have risen to 185%,” Mr. Gerberg says in an exclusive interview with The FINANCIAL.
Q. How would you evaluate the economic relationships between Georgia and Israel over the last five years?
A. In my view, development of economic relations between Georgia and Israel are really positive. There is a large volume of investments being attracted from Israel to Georgia. Tourism between these two countries is becoming more developed. The Government of Israel and Georgia will sign an economic agreement in 1-2 months.
Diplomatic relations between Israel and Georgia were established in June 1992. The two countries maintain diplomatic relations at the level of ambassadors. The two countries have the following diplomatic-consular missions: Georgia has its Embassy in Tel Aviv, and the State of Israel has its Embassy in Tbilisi. The economic relations of Israel and Georgia are and will stay positive.
Q. Do you think that Georgia could one day become one of Israel’s closest trade partners?
A. I think that Georgia could be one of the closest trade partners of Israel. We have very close collaboration in the fields of agriculture, medical equipment and electric communications. We are trying to develop trade relations between Georgia and Israel and encourage Israeli investors to invest in Georgia.
For instance, we are promoting the field of agriculture between Georgia and Israel. This week we have a very big exhibition in Israel, Agritec 2009. The Georgian Minister of Agriculture has been invited to this exhibition. It’s also worth mentioning that Israel is the only country that has 5 direct flights from Tbilisi to its capital, to Tel-Aviv.
Bilateral Agreements between Israel and Georgia are in the fields of: Technical Cooperation, Cooperation in the field of Telecommunications and Posts, Cooperation in the field of Agriculture, Promotion and Reciprocal Protection of Investments, Agreement in the field of Tourism, Cooperation in the fields of Education, Science and Culture, Air Transport Agreement.
Q. Has the amount of import/export between Georgia and Israel decreased in 2008?
A. It has decreased a bit. The amount of trade between Georgia and Israel consisted of USD 1.30 million for the year 2008.
Q. Which products are the most imported from Israel to Georgia?
A. from Israel to Georgia agricultural and medical equipments are mostly imported and from Georgia to Israel mostly wine and some food products are imported.
Q. Did the August events have an influence on these two countries’ economic and political relations?
A. Actually August’s events had no effect on either the economic or political relations between Georgia and Israel. Relations between these two countries have been very friendly and warm for many years already. Georgian and Israeli governments continue partnership and collaboration on different issues. I can tell you that even after the August 2008 events, Georgia and Israel are continuing to cooperate at a normal pace.
Q. Israel is a country that manages to stay economically stable despite permanent ongoing conflict and war, can you tell us how the Government of Israel manages to be so strong economically under war conditions?
A. I agree with you that it is surprising how Israel manages to stay economically stable despite permanent war conditions. The main reason why this country manages to be economically strong is that it has a strong economic policy including different adjustments.
To remain economically strong, a country should have a well-constructed economical programme. The country should promote export/import issues and encourage attracting investments. The point is to implement the right economical course.
Q. How has the economical crisis affected Israel’s economic situation?
A. The economical downturn has affected almost every part of the world. The recession has influenced Israeli economics as well. For the most recent period, the newly appointed Israeli government published a new economical programme aiming to minimize damage to Israel’s economy. We are looking forward to optimization of the situation.
Q. How do you foresee the year 2009 in terms of economic relations between Georgia and Israel?
A. I really think that the year 2009 will be positive in terms of the economical relations between these two countries. Trade relationships have become more active over the last few years and the volume of investments have risen to 185%.
Israel is very close to Georgia, a friendly atmosphere and warm relations should attract and encourage Israeli businessmen to come and invest in Georgia as it s a country where worthy investing in. I foresee the year 2009 positively despite the economical crisis and I don’t think that the recession will have a large effect on our close and friendly relations.
Q. At the moment, according to your plural data, what is the amount of direct investment implemented from Israel to Georgia in the year 2008 (2009)?
A. It’s a bit early to speak about the year 2009. We have no exact numbers because some of the companies refuse to name exact figures, but according to the companies that give us their information, the volume of direct investments from Israel to Georgia implemented in real estate in 2008 was USD 2.5 million.
Q. There are many Jewish companies in Georgia which have their own businesses here. At the moment are they continuing to do business in Georgia and do they have the desire to stay here?
A. Of course they have reasons to do business in Georgia. I don’t really see any reason why they shouldn’t stay here. Israeli businessmen have a very friendly and traditional atmosphere here in Georgia. There are many Israeli businessmen doing business here in Georgia and also Georgian businessmen in Israel. Bank of Georgia has even opened a branch in Israel.
In my view, Israeli investors have all the desired conditions in Georgia to come and invest here.
Q. Can you name the companies that stopped their operations in 2009?
A. I can’t name any companies which stopped doing business in Georgia. Maybe their levels have reduced a bit but they still continue to operate in Georgia.
Q. What can you say about Israeli Marenico group (Tsavkisi Veli), which claimed that their total amount of investments exceeded USD 100 million? Has this group been implementing its business in Georgia in 2009?
A. My opinion on this issue is that I welcome Marenico Group’s business in Georgia. This is a private company and if the amount of their total investments exceeded USD 100 million in Georgia, then that is quite good and acceptable. I don’t know exactly if Marenico Group will continue to implement its business in Georgia in 2009, but I don’t see any circumstances conditioning their cutting their business here.
Q. According to the Israel-Georgia Chamber of Business (IGCOB), by 2010 flights are expected to be conducted from Israel to Georgia on a daily basis. Do you think this will be possible in terms of the recession and local financial and political instability?
A. Well actually, there are already 5 direct flights a week from Georgia to Tel-Aviv and this almost equates to daily flights. The main point is that Georgian and Israeli people are able to fly from Georgia to Israel 5 times a week. The aircrafts that fly the Georgia to Tel-Aviv route are almost always overbooked.
I have to add that between Georgian and Israeli governments, there was an aviation agreement signed years ago and hope that this agreement will be upgraded in the nearest future.
Q. What should Georgia do to attract investors from Israel?
A. I think the most important thing is to give more information to Israeli businessmen on Georgia. They should expose Georgia’s potential in a better way. Georgia should be more promoted in Israel. There should be more exhibitions and seminars held in Israel in order that more Israeli investors be introduced to Georgia’s potential.
The more information that is available for investors from Israel, the more investments Georgia will attract from this country.
Q. Which Israeli companies can you name that have been conducting business in Georgia for years already?
A. As I already mentioned there are many companies from Israel doing business successfully in Georgia. I can’t exactly give the list of these companies but the fact is that these companies exist and are implementing business here.
In my view Georgia is a country that has been doing quite well over the last few years. The main point is that Georgia overcame the economical crisis. Georgia should encourage foreign investors to invest and take part in the country’s economical stability.
I think that Georgia is a country with quite big potential. It’s not easy to speak about future events and it’s quite hard to say what will happen, but I still believe that Israeli investors will remain here in Georgia.
Written By Tako Khelaia
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