The FINANCIAL — The Georgian Chamber of Commerce and Industry has returned the right to issue a Certificate of Origin, which for some time was passed to the Ministry of Economics of Georgia. The document is only for exported products and states the origin of production. Moreover, the President has appointed representatives of GCCI and the business federation as members of the Council of Dispute (Appeals Board).
The Georgian Chamber of Commerce and Industry was founded in 1960 and is celebrating its 50 year anniversary this year.
In his interview with The FINANCIAL, Jemal Inaishvili, President of GCCI, spoke about the milestones of GCCI’s 50 years of operations, the country’s sectors’ development and potential, and recent changes at GCCI.
“GCCI is actively engaged in development of the country. We support Georgian export in mastering new markets and strengthening their positions in existing markets. We chose wine as one of our priorities and have conducted numerous activities and exhibitions in foreign countries as well as in Georgia,” said Jemal Inaishvili, President of GCCI.
Q. GCCI is celebrating its 50 year anniversary. Which important milestones would you distinguish from these 50 years?
A. GCCI operations can be divided into two periods: during and after the collapse of the Soviet Union. Despite the fact that there was not a market economy, business, there did exist a Chamber of Commerce which was founded in Georgia in 1960. The competence of the Chamber was to support Georgian production in export, engagement in different exhibitions, as well as support of foreign businesses which were interested in relationships with Georgia.
Moreover, the Chamber’s functions included expertise of all the import/export production thus protecting and providing the market with high-quality products. Furthermore, the issuance of certificate of origin, the certificates of force majeure circumstances as well as approval of different international contracts.
After the collapse of the Soviet Union, the Chamber of Commerce acquired similar functions to those of foreign countries. We took a European model in the formulation of GCCI, the Chamber was formed as a juridical person of public law and the parliament approved the law about GCCI.
The first Chamber of Commerce was formed in Marcel in the 17th century, as the unity of merchants and owners of business to protect themselves. Later, an organization was formed in Germany and the rest of Europe.
Q. The main objective of the Chamber is to represent and protect its member’s interests in Georgia as well as in foreign countries. How is Georgian business supported in Georgia and outside its borders?
A. Within Georgian borders, our main objective is to support and help businesses. However, sometimes we cannot manage to fulfil this as there should be willing participation in the processes by all organizations concerned with the business. In this regard there is still a lot to be done.
As in foreign countries, in the case of need or problems concerning our businesses, we first try to contact our colleagues and ask them for help.
Q. There was a memorandum formed between the Georgian Ministry for Diaspora Issues and GCCI, according to which the Georgian businessmen living outside the country will be appointed as official representatives of GCCI. How will this memorandum help trade relationships and in general trade development of Georgia?
A. The fact that we appoint representatives of GCCI from Diasporas gives them the opportunity to form good relationships with local chambers of commerce, business unities, and with the Government. Moreover, they have the possibility to support their business as well as contribute their share to the popularization of the country and recent significant changes which our country has undergone.
This is a pretty good opportunity to obtain investments from those countries as well as raise awareness about Georgia in the region or country the representatives of Diasporas live.
The initiative of the Ministry is fairly good. Today, the relationship between government and Diasporas has taken an official form. We have cooperated with the Ministry to appoint the chosen candidates as representatives of GCCI. Practically there did not exist a relationship between us and the Diasporas, if we do not include the relationship and communication of Georgian Diasporas with their relatives.
Q. How would you access the potential of Georgian production development?
A. Georgia has trade deficit, which means there is no high production in the country. The country imports more than it exports which is negative for the country’s economy.
Recently, a special department for support of increase in exports was created in the Ministry of Economics. Export is quite important, however it is important to provide substitution of import.
It is impossible to provide substitution for all imported products, however, the food production that can be manufactured in Georgia should later, as our internal market is small, be exported.
Q. Which sector is the most developed in Georgia?
A. The banking sector is pretty well developed in Georgia. The energy sector is developed and has high potential for the county. In a short-term period the problem of electricity has been solved. What’s more, at present not only maintenance but export of electricity and many energy projects are being developed, which in turn will strengthen our country and help Georgia to become a large-scale exporter in the field of electricity.
The transportation sector is developed, giving a source of revenue for our country. The country provides transit service by ports, railway, logistics and there is also vast opportunity in the Asian Corridor. The telecommunication sector is also highly developed with three GSM operators and the enhancement of new modern internet technologies. Tourism is also developing with high prospects.
Q. Representatives of the business sector in interview with The FINANCIAL remarked that the agriculture sector has high potential for development. What is the development stage of the agriculture sector at present? What activities should the Government conduct to support this field?
A. The agriculture sector is important in many aspects. It is one of the highest employing sectors. The Government can provide support with the point of certain privileges. It is necessary to develop and finance target projects as investment in agriculture is more long-term than other economical sectors and calls for better conditions for crediting.
Moreover, in the bigger picture of the country’s economy the majority of businesses and employed people are in Tbilisi and in the country’s major cities, creating a problem in the regions. By developing agriculture and SME industries the problem of the regions will be solved.
Every developed country, including France, Italy and Germany, has strong agriculture and it is down to their governments supporting that sector.
In Georgia there is high potential of tea development. We were one of the largest-scale importers in this field. Today we are facing problems as the tea we use today is 98% imported and there are thousands of unused hectares of tea.
Q. How is Georgian production presented in international markets?
A. The production of Madneuli has a high share in export. Moreover, mineral fertilization, Rustavi Metallurgical plant already started working on export. In terms of agriculture: wine, one of the best export products together with mineral waters, and according to the season – citrus.
Q. How competitive is Georgian production in international markets?
A. If the exported products were not of high quality and competitive, we would not have sold them. The quality of wine has increased significantly and there are many Georgian companies who produce high quality and competitive products, as well as mineral waters.
Nowadays, if a product is bad quality there won’t be demand. Many plants have opened in Batumi, which produce products under the order of large-scale companies. If we produce high-quality and good products there will always be demand for them.
Q. What challenges does Georgian production face in Georgia as well as in foreign countries?
A. Despite the fact that we are small country we are part of the global economy. Negative occurrences in the global economy have an influence on our country – have an influence on attracting investments. We have to position ourselves in the global economy and there is still a lot to do in this respect.
Q. At present which are the major trade partner countries of Georgia?
A. The majority of our trade partners are our neighbour countries: Turkey, Azerbaijan, Ukraine and Central Asia. We have large-scale import from Turkey including food production and building materials. However export is not so high; the majority over the last few years has been scrap-iron and timber.
From Azerbaijan we import oil and oil products. From Ukraine – wheat, agricultural products and iron, and export our wine and agricultural products.
Q. You have awarded the representatives of successful small and medium size businesses. How would you assess the development of SME businesses in Georgia?
A. In developed countries’ economies 85% and more consists of SME businesses. This number itself indicates the importance of SME businesses in the development of the country’s economics. In Georgia, SME business does not have a large share in the country’s economics.
With the award we motivate the development of SME businesses. Each year we seek and choose the best SME companies throughout the country. In general there is a lot to do from this perspective.
Q. How would you assess the banks’ activity in supporting the country’s development?
A. Banks always played a vital role and have a big share in the country’s development. The banking sector managed to show high resilience to the economic downturn and turned out to be quite stable and this is a good example of how successful the sector is in Georgia.
