In contrast to that and very surprisingly, during the same period of time, for the same twelve years, FDI is still about the level of year 2006, which is totally shocking by any standard; this is the result of the systematic and deliberate harassment of foreign investors over the past years which has gained the country a terrible reputation within the spheres of the investors’ community abroad, notwithstanding the ranking of Georgia in the above mentioned World Bank report.
To justify itself, the government is claiming that the 662 million Dollars decrease in FDI year on year is due to two main factors:
1- BP’s project came to an end.
2- Geocell was purchased by Silknet a local company, falls therefore now under local company denomination instead of being a foreign investor.
Worthy to note that BP’s investments in 2017 totaled 600 million Dollars whereas in 2018 their investments totaled 354 million Dollars, that’s a decrease of 246 million Dollars compared to the previous year.
As for Geocell their investments in 2017 totaled about 23 million USD
Based on the above, if we totally remove from the figures BP’s investments for both years and Geocell’s investments for 2017, Georgia did loose about 377 million USD of FDI year on year in 2018, and this is totally unjustifiable.
If the figures for 2018 are bleak, I can only express my great concern for 2019 that I believe will make 2018 look prosperous in comparison.
For 2019 we do forecast an additional decrease in FDI that will be compounded to a slower economic growth due to the lending policies of the National Bank that are seriously affecting construction, real estate and consumers goods sectors.
We anticipate a cascade of bankruptcies in the mentioned sectors and those bankruptcies will no doubt impact the commercial banks in the country.
In 2016, in support to then Prime Minister Kvirikashvili and to increase FDI, I established a Consultancy Firm in the UAE called Channel Georgia, aiming at boosting investments from the GCC countries into Georgia; since June 2018 and due to the xenophobic policies of the government against investors from the GCC and to avoid further embarrassment with our investors, we have decided to divert those investors to the Central Asian and Eastern European markets.
In early summer 2018 our Firm initiated the creation of a European investment fund of 100 million USD to invest in Georgia, on February 18, when the attacks on TBC became public, I instructed my team to freeze this Fund.
If I, the Chairman of the International Chamber of Commerce in Georgia don’t feel safe or confident to invest in my own country how can I encourage any foreign investor to do so?
Dear Prime Minister, ICC’s agenda is the improvement of the business climate, we do favor good relations with the government, but surely not at the expense of the business climate nor at the expense of our member companies who are being deliberately attacked and pressured by government structures on orders of Bidzina Ivanishvili.
ICC is celebrating this year its 100th Anniversary; we are the largest business organization in the world, counting more than 6 million major businesses globally and actively present in 140 countries, we work closely with the G8, G20, the World bank, the IMF, the WTO, the WCO and we are a permanent observer member of the United Nations.
If the pressure and the blackmail against our member TBC will not totally stop in the coming days including the closure of the fabricated investigation by the Prosecutor Office, and if our member Omega Group will not be allowed to resume their activity, the government will leave us with no other option but to officially inform and warn all ICC National Committees worldwide of the aggressive attacks, pressure and blackmail exerted by the Georgian government on local businesses and foreign investors alike.
As you will appreciate it, this will have a devastating effect on investment in Georgia and on the reputation of the country; ICC-Georgia has never gone to such extremity before, but considering the exceptional aggression against local businesses and foreign investors, we cannot close our eyes anymore and witness other innocent businesses pressured and harassed again and again.
In this contest and as you will understand it, it is our responsibility to warn foreign businesses of the risks associated with doing business in Georgia.
We sincerely hope that finally Mr. Ivanishvili will realize the gravity of the situation in which he has put the country, and will act according to the best interests of Georgia, by stopping the pressure on businesses he is attacking and by keeping the doors wide open to foreign investment and to all Georgian businesses alike, notwithstanding their political orientation or their opinion, so jobs and wealth are created for Georgian citizens.
Chairman of the Board
International Chamber of Commerce in Georgia