The FINANCIAL — “With a lethal financial haemorrhage and huge loss of credibility, Russia cannot afford those manoeuvring games anymore. I am therefore convinced that we have a permanent and stable cease-fire,” Fady Asly, Chairman of ICC Georgia, President and CEO of Agritechnics Holding, Co-Chair of Foreign Investors Advisory Council Parliament of Georgia, The World Business Organization, says in an exclusive interview with The FINANCIAL.
Mr. Asly who served for years as a President of the American Chamber of Commerce says that Georgia remains the beacon of progress, democracy and leadership; “Our country was invaded for a short period but no invasion has ever destroyed the Georgian spirit; this is why Georgia has gone through centuries of foreign occupation and prevailed”.
“Georgia has a unique geographical location that is irreplaceable with access to more than 100 million consumers in the Caucasus and Central Asia; the investment environment is unique and the Government permanently accessible and open minded to new ideas that would improve it. Considering Georgia as a regional base for business is the smartest option for any American investor who is eying the region.”
Fady Asly graduated from the American University in Beirut in 1982 with an Agricultural Engineering Degree. Since 1985 he has been chairing the Agritechnics Group of companies.
Upon moving to Georgia in 1998, Mr. Asly became President and CEO of Agritechnics Group and Agritechnics Holding, with shares in more than 25 companies registered in Georgia, Armenia and Azerbaijan. Involved in the distribution of food products, agriculture equipment and media, the Group is active in the Caucasus, Central Asia, and the Middle East.
Mr. Asly has served for years as a leader of the business community in Georgia, including President of the American Chamber of Commerce from 1999 to 2006, Chairman of the Georgian Business Confederation from 2000 to 2006, Chairman of the Supervisory Board of the Georgian Rural Development Fund in 2005, and Co-Chair of the Parliament’s Foreign Investment Advisory Board since 2005.
Q. ICC remitted to Mr. Robert Watkins UN Resident Coordinator in Georgia, a letter from ICC-Georgia to Mr. Ban-Ki Moon General Secretary of the UN, requesting immediate action from the UN for the re-opening of the Black Sea-Tbilisi highway. How supportive has the UN been to your request?
A. ICC works very closely with the UN in this perspective and at the time the Russian forces were closing the Black Sea-Tbilisi highway to punish collectively the Georgian population in an attempt to overthrow the Georgian Government, ICC-Georgia remitted to Mr. Watkins the UN Resident Coordinator in Georgia, a letter requesting the intervention of Mr Ban-Ki Moon for the immediate re-opening of the road.
Mr. Watkins was very cooperative and helpful and took immediate action to forward the letter to the Secretary General. Fortunately and thanks to the pressure from the EU and the U.S. the road was re-opened in the days that followed our letter.
Q. How reliable do you see the current cease-fire situation between Georgia and Russia?
A. I believe that the cease fire is reliable; of course Russia is still trying to outsmart the international community by attempting to keep some new positions in South Ossetia and Abkhazia but the Western world has made it clear that Russian forces are to withdraw to the pre-seventh of August positions. With a lethal financial haemorrhage and huge loss of credibility, Russia cannot afford those manoeuvring games anymore. I am therefore convinced that we have a permanent and stable cease-fire.
Q. Do you think that since the conflict in Georgia the investment climate has slowed down?
A. As mentioned earlier the investment climate slowdown is mainly due to the international financial crisis rather than to the August Russian invasion.
Q. Have you determined new challenges for the post war situation? What kinds of services are more demanded in your business etc?
A. The major challenge for businesses in Georgia right now is to secure a steady flow of credit financing to grow and develop; in this respect ICC-Georgia has established a special ad-hoc commission that is closely working with both Government and Parliament on the creation of adequate financial tools that will guarantee a constant access for credit to the private sector.
Q. As you said, annual German imports from Russia amount to EUR 30 billion out of which 70% are for oil and gas only. In this context, should we expect Germany to hold high the beacon of democracy and freedom and defend those values or will it bow to the painful reality of being taken economical hostage by Russia? Are you satisfied with the German response?
A. Well, considering the huge economic interests between Europe and Russia in general and more specifically between Germany and Russia, I am very impressed with the German response. Germany has been very tough as to the territorial integrity of Georgia; the bottom line for the Europeans was to make sure that Russia withdraws totally and quickly from Georgia and the proper political tools were used to serve this purpose.
Q. In the ICC board sit many of Georgia’s most prominent leaders in the business community and other leading business organizations, including the Georgian Chamber of Commerce; the Federation of Georgian Businessmen; the Bankers Association, French Business Council, and others. Did the board speak in one voice during the war and what are your plans to support FDI flow to Georgia in the coming years?
A. ICC-Georgia had a clear and unified position during the latest events. We had permanent consultations and meetings of all members and the vision was the same for everyone. Of course some people are more vocal than others but this is proper to human nature.
As for attracting foreign investors, the policy is very simple: keep the operating businesses happy and successful and foreign investors will follow. It takes hundreds of success stories to encourage one single foreign investor; however it takes one single failing story to deter hundreds of foreign investors.
Q. You’re also the head of Agritechnics Holding. Has the company faced any problems or losses during the recent war? What were the investments of Agritechnics holdings in 2006, 2007 and 2008 so far? How does Agritechnics encourage foreign direct investments in Georgia?
A. Agritechnics has been very active for the past years and has consistently developed and diversified its activities to other sectors such as agro-industry, industry and real estate. Beside a partial interruption of our activities for a few days in August, the war had no effect on our activity. We are determined more than ever to develop our new activities and we are a success story that is valued by any investor we meet in Georgia.
Q. Are you aware of any cases of cancelled deals by foreign investors or refusal to put money in Georgia since the Russo-Georgian conflict?
A. Yes there have been some cancelled deals. However it is very difficult to determine whether those deals were cancelled because of the war or due to the international financial crisis; some cancelled deals relate to investors who really did not seriously commit; however, all those investors who are committed to Georgia and who visited Georgia several times have resumed their investments as originally planned.
Q. Please list the things investors should know. I mean U.S. companies willing to invest in Georgia? Please mention their initial needs, risks and things they must know in advance.
A. Foreign investors need to know that unlike other countries in the region they will not need political protection to do business in Georgia; they also need to know that Georgia has a very friendly business legislation, that it takes 24 hours to start a business and that from Georgia they will have 100 million consumers at the grasp of their hand. In a nutshell, they will have all the advantages of doing business in Europe without many of the disadvantages.
Interviewed by Levan Lomtadze, The FINANCIAL