The FINANCIAL — Recently Georgia hosted 30 Iranian delegates who were testing the potential of Georgia’s manufacturing, trade, production and other sectors. The meeting of the Georgian PM Irakli Gharibashvili with Iran’s President has delivered a positive message to the Iranian business community. Last year’s campaign of Georgian officials to close down the accounts of Iranians did not succeed in deteriorating the two countries’ relations. The Iranian community explains it as being down to pressure from the USA and the West. Amid rising tensions between the European Union and Moscow over Ukraine, Iran is being discussed as a replacement of Russian gas for Europe. Due to this, the possibility of a repetition of the previous incident in Georgia occurring seems highly unlikely to Iranians.
“Bilateral relations between Iran and Georgia have a long history. Iranian investors have always been interested in the Georgian market. From my own practice I will tell you that Iranians have never lost interest in the Georgian market. However, we have never received sufficient support, neither from the Iranian nor from the Georgian governments. I see huge potential for deepening the economic relations between these two countries. I have been involved in the Georgian market for more than ten years and I can say that there is a responsive interest from the Georgian business community. During the UN climate summit, Georgian PM Gharibashvili met with Iran’s President Hassan Rouhani. We are optimistic that the two countries’ relations will deepen following the meeting. Iran is a reliable partner for Georgia in many areas,” Mehdi Saeedozakerin, General Manager at Pars Rastak, International Conference and Exhibition Research and Services Co. told The FINANCIAL.
Amid rising tensions between the European Union and Moscow over Ukraine, Iranian oil officials have repeatedly said that Tehran is ready to supply natural gas to Europe, which currently gets 30 percent of its gas imports from Russia. Iran has the world’s second largest natural-gas reserves after Russia. The EU currently bans the import of Iranian natural gas as part of sanctions over Tehran’s nuclear programme. But Iran may hope the energy offer will add incentives for lifting the international sanctions as Tehran and world powers were holding talks in Vienna aimed at solving the nuclear crisis. (Source: radio Free Europe).
Iranian Deputy Oil Minister for International and Trade Affairs Ali Majedi suggested that Europe could import Iranian gas by pipeline through Turkey and that the level of exports could range from 4 million cubic meters per day to 50. He also proposed a second pipeline route through Iraq, Syria, and Lebanon and a third pipeline route through Armenia, Georgia, and under the Black Sea.
“Iran plans to export its gas to EU markets. So, Iran plans to use Georgia as a transit country,” said Saeedozakerin. Its transparent legislation compared to other CIS countries is what makes Georgia popular with the Iranian business community. The relatively small size of the market has been a shadow over its attractiveness however. Meanwhile, after signing the AA and DCFTA, the opportunities of the Georgian market have significantly increased as it has now received access to EU countries. As Saeedozakerin said, Georgia is now a market of 200 million.
According to Saeedozakerin, Iranians did not see any specific support from the new government before the UN summit. He said that the meeting of the two leaders has been expressed as a green light for them. “There was nothing forcing the meeting of the leaders specifically. The decision of the two countries’ leaders to meet each other was made voluntarily. So, we can conclude that both sides are eager to deepen relations,” he said.
“As I am aware, the Georgian Ambassador to Iran was encouraged by the Georgian PM to attract more Iranian investors,” Saeedozakerin added.
During the past five years more than 100 Iranian delegates visited Georgia. Georgia hosted the largest number of Iranian delegates during the second term of President Saakashvili. “I have witnessed how the cities of Georgia have been developing. The reconstruction of the cities of Batumi and Kakheti were particularly impressive. Georgia has no natural resources and making such a giant leap without them is commendable. We also want to invite Georgian businessmen to Iran in order to introduce them to the economic climate and possibilities of this country,” he said.
Georgia has been criticized for being a country where Iranians have evaded sanctions. In 2013 the Georgian Government and central bank were alleged to have been working to prevent Iranian companies from investing in the country’s banking sector, due to a U.S. concern that Tehran was using Tbilisi to bypass international sanctions rises.
“When local banks blocked the accounts of Iranian citizens, that was forced by the international community. I would not say that it was not the country’s decision. Currently Iran is in negotiations with the West and we are optimistic that the stated sanctions over Iran will be lifted soon. So, Georgia will be freed from external influence and our relations will continue to develop further,” said Saeedozakerin.
“I still have an account in a local bank and have never faced any difficulties. The decision of Georgian banks to close down Iranians’ accounts was due to their western shareholders. Even at that time, Georgian banks continued to serve Iranians,” said Mohsen Kebriaei, Deputy of the Embassy of Iran to Georgia, Head of the Economic Section.
Under Saakashvili’s government Georgia offered a visa-free regime to Iran. It was a time when the U.S. and West were living through the hardest time of bilateral relations. The Iranian Consulate was established in Batumi at that time. In accordance, Saeedozakerin is quite optimistic that even if the sanctions will not be lifted, the relations between Iran and Georgia will not worsen.
In Kebriaei’s words, there have been over 2,500 Iranian companies established in Georgia. Some of the Iranian businesses established in Georgia were registered under the ethnicity of some other countries. Accordingly, Kebriaei found it difficult to name the exact number of Iranian companies or volume of investments in Georgia. The deputy also added that there has been USD 10 million of investments in Georgian agriculture, however it was registered under the name of Georgian co-partners.
“One of the Iranian companies, Jahan Pars, is planning to build up a huge business centre in Georgia. The company also has Turkish partners. The company, with 13,000 employees, has big experience in constructing skyscrapers. Its projects are worth over USD 5 billion,” said Kebriaei.
“Iranian companies have huge experience of establishing big companies in various foreign countries. Georgia is in need of infrastructure. So, the Iranian business community can bring investments and technological knowledge to the Georgian market. In addition, Iran can be used as an export market after products will be produced in Georgia. If we discuss energy power plants, Iranians can invest money for its development and later export to Iran,” Kebriaei said.
Kebriaei underlined the work of Georgian officials that contributed to establishing an attractive business climate for investors. However, like the majority of foreigners he criticized the recent visa regulations, which as he said raised big concerns among investors.
“We all know that investors planning to invest in the country should not have to worry about whether or not they will receive a visa. Under the new law, visas are divided into the following categories: A – Diplomatic, B – Special, C – Ordinary, D – Immigration and T – Transit. This is really good and welcoming. However, it is still necessary to settle further steps. One councillor cannot be solely in charge of solving the visa issues of delegates and it takes too much time. In accordance, Georgia is losing many investors as well as tourists. For example, Jahan Pars was planning to invest in the Georgian energy sector. Due to visa restrictions though, the company cancelled the project and switched its two projects to Turkmenistan. Georgia is eager to attract foreign investors. Meanwhile its regulations are incompatible with its desires,” said Kebriaei.
“There used to be four flights between Iran and Georgia weekly. Now all of them are cancelled. Currently the Georgian Council in Iran is planning to increase its staff numbers and implement electronic visas. We hope that this issue will be solved soon,” he added.
“If you visit Iran you will see that even besides the stated sanctions the development of the country has been an ongoing process. Sanctions are not constant. So, Georgia should not lose the opportunity offered by the Iranian market, due to the sanctions. There are companies and investors even from the West that are waiting for the resolution of sanctions in order to renew business with Iran,” Kebriaei told The FINANCIAL.
The host of the 30 delegates was the Georgian-Iranian Chamber of Commerce and Industry (GICCI). The Chamber aims at developing commercial, economic and industrial relations between Georgia and Iran. The Chamber was founded in 2014.
According to Kebriaei, Georgia is in need of construction development. In his words, together with that, agriculture, tourism, business and trade are the most attractive business sectors for Iranian investors.
“Large-scaled exhibitions are what any country requires for increasing its investment climate. So, the Georgian Government needs to arrange more events in order to increase its attractiveness,” Saeedozakerin, Pars Rastak, told The FINANCIAL.
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