The FINANCIAL — It is estimated that Russia will deliver USD 8 billion worth of investments if the presidential candidate from the party Georgian Dream wins the elections in October 2013, a person close to the Georgian Government told The FINANCIAL. Representatives of the Ministry of Economy and Sustainable Development of Georgia and the Georgian National Investment Agency, however, said that they are not aware of this figure.
Japan, the Netherlands and Azerbaijan are the main investors in Georgia, while Russia is at the bottom of the list.
In the first quarter of 2013 Georgia received the record lowest volume of Russian investments, amounting to USD 597,600. The figure was USD 4,990,700 during the same period of last year and USD 21, 434, 500 in the first three months of 2011.
“Russian investments are necessary,” said Giorgi Pertaia, Director at the National Investment Agency. “For nine years we have been telling Russians that they are not welcome in Georgia. Russian investors knew that if any problem were to arise their government would not protect them, which is why Russians did not invest in Georgia. The opening of the embassy, and visa-free regime, will stimulate Russian investments in Georgia. You cannot erase in a day what they have heard over the course of nine years,” he said.
“We welcome investments from any country,” said David Gongadze, from the Ministry of Economy and Sustainable Development.
PM Bidzina Ivanishvili, the Georgian-born billionaire, who built his business empire in Russia but sold his assets before the election to focus on his bid to oust President Mikheil Saakashvili’s ruling party in the October parliamentary poll, welcomed Russian investors in Georgia 3 days after his victory in the elections.
“On my part, I will render big support and am ready to contribute to this with my personal capital,” Ivanishvili said in an interview with Forbes magazine.
After that, in April Ivanishvili again expressed hope in an influx of Russian investments into Georgia’s economy.
“Russian businesses are showing big interest in Georgia, many own companies and are injecting their money here,” he said in an interview with ItarTass. “I very much hope that in parallel to the process of the normalization of relations, businesses will make different investments in Georgia.”
He said he had invited Russia’s big businesses to invest in Georgia’s new areas, modern technologies in particular.
“There is not a bad investor, there is only a bad contract. All the risks that we are afraid of can be regulated by a good contract,” said Pertaia.
Relations between Georgia and Russia saw a sharp increase in tensions during Saakashvili’s rule, which culminated in a five-day conflict in 2008 over the breakaway republic of South Ossetia. Georgia suffered a humiliating defeat, and the de facto loss of one-fifth of its territory, as Russia recognized the independence of South Ossetia and another breakaway republic, Abkhazia.
- "If the candidate of the Georgian Dream party loses the presidential elections then that will negatively impact the investment environment in the country".
READ >> Who Invests in Georgia?
Moscow and Tbilisi have had no diplomatic relations since then. Standard & Poor’s said in a recent country report that these relations will not improve in any short period of time.
Aleksi Aleksishvili, Chairman of the Board at Policy and Management Consulting Group (PMCG), said that investors do not care much about the individual candidates. “Stable investment climate that incorporates stable political, economic, trade and financial environment is the key factor for investors.”
“If Georgia will not create such an environment then none of the candidates can save it and we should not expect either Russian or other foreign investments,” said Aleksishvili.
Aleksishvili was the Minister of Finance from 2005-2007 and the Minister of Economic Development of Georgia from 2004-2005.
“Everything must be done for Georgia to become a good investment country for European, American, Russian, Hebrew and Arab investments. This is an essential condition for the development of Georgia,” Aleksishvili told The FINANCIAL.
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