The FINANCIAL — HSBC Bank Georgia and the Ministry of Economic Development of Georgia are collaborating to support Georgian companies’ involvement in international business and develop trade opportunities.
The mission statement is to conduct a series of initiatives, training events and development of online tools for businesses that would like to develop their presence in international trade.
“Georgian products have the opportunity to be as competitive in the world market as other countries’ products are. In today’s world there is no problem with producing high standard products, as the standardization technology that exists in every sphere can be duplicated. If Georgian companies manage to get high-standard technology and produce high-quality products, the production should be fairly competitive throughout the world,” Irakli Matkava, Director of the Georgian National Investment Agency, told The FINANCIAL.
Guy Lewis, CEO of HSBC Bank Georgia, told us that there should be more concentration on attracting investors to help developing the country’s economy.
“We should probably concentrate on investment in Georgia and attracting investors to help develop the country’s economy at this moment. Rather than encouraging Georgian businesses to go abroad.
The reality is that before business moves overseas and sets up subsidiaries, it should be very sure of its business plan, resources and many different factors have to be understood.
HSBC is very well positioned to help companies go overseas and start-up, this is one of our strengths as we have been doing that for the last 150 years,” declared Guy Lewis.
Lewis says that the highest potential for making investment is in three sectors. “Transport and logistics is important, health care in particular is a very good opportunity and most of all hydro-electro power, because such a big project would generate lots of export. Georgian electricity generated by a hydro-electric power station can be exported via a high voltage line in Turkey and thereby there would be an outflow of electricity,” said Lewis.
The volume of foreign direct investment has slightly declined in Georgia. The FDI in 2008 was 1,564 million USD while in 2009 it was 759 million USD according to preliminary data published by the National Statistics Office of Georgia.
Matkava says that the decrease in FDI was not only the case in Georgia but in the whole world and suggests ways how Georgia can facilitate FDI.
“Firstly there are discussions about several large-scale projects to be implemented. Secondly, we are entering new markets and countries, and finally, we are spreading the information about Georgia in new markets, informing them about our opportunities to elicit attention from them. We are continuing to work in this direction with India, South Korea, and Arabian countries. Moreover, we have been for a long time working with several European countries.
On the one hand we have wide coverage of geographic territories, and on the other global finance is changing in a positive way,” said Matkava.
Lewis says that to increase FDI several issues must be considered.
“International investors come here because they think of good investment opportunities. Because of that continual political stability is very important, we have to see that the country has good economical retrospect, moreover, promotion is very important, people should know about Georgia, so that they come and invest. That’s really the main point,” he declared.
Lewis says that the Georgian Government is actively engaged in facilitating international trade.
“The Government has done a great job in terms of reducing the barriers of trade, number of laws and taxes have been reduced, everything that makes trade easier the government did a lot about.
Moreover, Georgia is setting up Free Trade Zones in different places, and I think Georgia is very strategically positioned with its black sea coast line and in the middle of the Caucasus. This is an ideal place for international business to be set up,” he said.
“It is quite difficult to speak of expected increase in volume of imports/exports, however, everything is being done for its support,” said Irakli Matkava, Director of the Georgian National Investment Agency.
Total export was approximately 339 million USD (339,031,900), while import was 3 times more – 1,019 million USD (1,019,661,600) in the first quarter of the year 2010.
There was decrease in the figures of export and import in 2009. Total export was approximately 1,135 million USD in 2009 while the figure was 1,496 million USD in 2008. There was a slight decrease in imports, if in 2008 total import was 6,304 million USD, in 2008 it was 4,378 million USD according to the National Statistics Office of Georgia.
“Service export is quite an interesting issue, and despite tourism export other services are not yet developed in Georgia. At present, we will focus mainly on product export. The main mission is that companies export more. Moreover, we will be supporting those small companies that have high potential of growth to go into international business,” said Matkava.
The first Georgian Trade Academy was held in the framework of agreement on 6 May. Stuart Nivison, HSBC’s Head of Trade and Supply Chain Europe, conducted the workshop to the representatives of 50 companies.