The FINANCIAL — For the countries where it invests, the EBRD sees an important role in the Belt and Road Initiative, which was launched by China and to date has won support from over 60 countries around the world.
“Our countries can play an important role in many different ways,” EBRD Vice President of Banking Alain Pilloux said at a Belt and Road Forum in the Georgian capital, Tbilisi, today. “Some will be able to contribute their wealth in natural resources, others will benefit from gaining access to international trade flows and a country like Georgia has the chance to establish itself as a bridge between East and West.”
Thanks to its geographical position and clear policy choices the country has significantly improved its position in the global economy in recent years. Vice President Pilloux praised “ambitious and courageous reforms” which have yielded “impressive results” especially in the fight against corruption and in improvements to the business climate. The EBRD has recently increased its growth forecasts for Georgia’s GDP from 3.9 per cent to 4.5 per cent for 2017 and from 4.2 per cent to 4.5 cent for 2018.
The country’s openness and strategic direction are also illustrated by the development of external trade, which increased by 13 per cent in the first seven months of 2017, according to official figures. While exports increased by 28.9 per cent year on year, imports were up by 8.5 per cent over the same period. The strongest growth was registered in exports to the European Union (EU), with an increase of 33 per cent. Georgia signed a Deep and Comprehensive Free Trade Agreement with the EU in June 2014.
However, Turkey remains the country’s largest trading partner, demonstrating Georgia’s role as a hub. Thanks to massive investment in renewables, Georgia has become a net supplier of energy to its neighbour in the south. Supporting cross-border trade is one of the EBRD’s priorities in Georgia.
In recent years the EBRD has significantly increased its activities in the country. The Bank offers loans to local banks for on-lending to local firms, supports the development of renewables and infrastructure and combines financing with strong policy engagement. Following its 2014 Annual Meeting in Tbilisi the EBRD established an Investors’ Council, which has “become a leading institution for the business community”, according to Vice President Pilloux. With a current portfolio of 206 projects and a total investment volume of €3 billion, the Bank is a leading investor in Georgia.
The Belt and Road Forum in Tbilisi is bringing together more than 2,000 participants in the Georgian capital on Tuesday and Wednesday this week, including government officials, international organisations, experts and business representatives from over 30 countries, to discuss regional and global trade and to explore new avenues for deeper cooperation, according to the EBRD.
The EBRD is one of the key partners in the event. In addition to Vice President Pilloux the Bank is also represented by Bruno Balvanera, Regional Director for the Caucasus, Moldova and Belarus, who participated in the panel discussion titled “Energy – Transregional Opportunities” as well as in “Georgia – Regional Frontier for Global Investments”.
The Belt and Road Initiative has a long-term vision of connecting Asia, Europe and Africa, potentially connecting 70 per cent of the global population, over an area with 75 per cent of known energy reserves. The priorities of the Belt and Road Initiative also include the development of policy coordination, unimpeded trade, financial integration, infrastructure and connectivity, in areas such as energy, telecommunications, e-commerce and connections between people.
Vice President Pilloux emphasised: “The EBRD, with its robust expertise in supporting the development of the private sector, has a strong track record of supporting the development of business, infrastructure and green energy. Given the focus of our work, and with an outreach spanning the continents of Africa, Europa and Asia, today we believe that we can become a perfect fit in the design and implementation of the Belt and Road Initiative for the benefit of all participants.”