The FINANCIAL — On January 28, 2008, International Chamber of Commerce Georgia elected a new Board of Directors. Kate Tabatadze, The FINANCIAL interviewed Fady Asly, Chairman of ICC Georgia Board of Directors, regarding his personal outlook for the country as an attractive place for foreign investments and the organization’s concrete tasks and missions for 2008.
The International Chamber of Commerce’s (ICC) newly elected board of directors has started works on establishing an ICC International Arbitration Court in Georgia. This will be the first ever branch opened by ICC outside Paris.
Q. Quoting your words: “Georgia needs now more than ever a vibrant and dynamic business organization to work closely with the government and other different stake holders to create a proper environment for direct foreign investment,” what are your arguments for being confident in the capabilities of the new board?
A. Everyone on the board represents the business landscape of Georgia. They’re all very dynamic people, people who have in the past worked in business organizations that were successful. We have representatives both from local and multinational companies, and this is a real breakdown of the business landscape. Most of these people are well-known and respected and I believe that ICC Georgia will be a very dynamic and vibrant organization.
Plus we bring with us the backing of ICC International, which is based in Paris and includes hundreds of thousands of companies. I have no doubt that the new board will be very successful. As far as I’m concerned, I’ve been very active in working with business organizations over the past ten years.
Q. The ICC Board will start meeting shortly with officials from the government, parliament, political leaders as well as representatives of diplomatic missions accredited to Georgia. What are the concrete issues the board will discuss with the state officials and international bodies?
A. We’ll be working both with the government and the opposition and other stakeholders of the Georgian economy. ICC Georgia is a neutral organization and our aim is to improve trade and business standards in the country.
The main issue that we’re discussing now with the government is the ICC arbitration court in Georgia. The government took this initiative last year. The Minister for European Integration Mr Giorgi Baramidze sent an official letter to the ICC office in Paris, asking them to come and visit Georgia and discuss the possibilities of establishing an arbitration court in Georgia. The President of the International Arbitration Court arrived in Georgia in February 2007 and had several meetings with members of the government. The ICC Arbitration Court got very excited about opening a branch in Georgia. This will be the first ever branch opened outside Paris since the establishment of the Arbitration Court in 1924.
There are some details at present that are still being discussed by the government and ICC. It’s a new experience both for ICC Paris and the Georgian government and there are some negotiations going on at this point. As ICC Georgia, we’ve been closely involved in these processes from the very beginning; that’s actually our main task now because we believe it’s very important for Georgia.
Q. Will ICC to some extent be engaged in the 50 day economic program the government has set to kick off in the near future?
A. We’ll cooperate with the Georgian government on every single aspect. ICC Georgia will be a part of every single decision made, this is what we intend to do. We have the resources, we have the people, we have the profile and the backing from ICC Paris as well, and that puts us in a very comfortable situation compared to other business organizations.
Q. The Georgian Chamber of Commerce and the Federation of Georgian Businessmen are founding members of ICC Georgia. Do FGB and GCC members automatically join ICC?
A. No, FGB and GCC members don’t automatically become members of ICC Georgia but the information that ICC is publishing will circulate among their members through the participation of their representative on the board.
Any business or business organization operating in Georgia can become an ICC member for an annual fee of GEL 1 600. Our aim is to attract as many high standard western oriented businesses as possible. There’s a big need for ICC due to the explosion of investments in Georgia over the past three years, every country has been trying to establish its own chamber of commerce. It’s a good idea when you have a substantial number of people, but when you have 10 or 15 members it doesn’t make sense. Under the umbrella of ICC, it would be a good opportunity for international businesses operating in Georgia to join and express their problems, their opinions, and their vision so ICC can convey the message to the government and other stakeholders.
Q. You were previously the President of AmCham Georgia. Considering your rich experience in dealing with business development in the country and direct enrolment in the processes as a head of Agritechnics Holding, can you specify the basic attractions about doing business in Georgia and the main obstacles foreign investors face in the country?
A. I was President of AmCham Georgia for 7 years. It’s a very serious and respected business organization having done a tremendous job since its inception in 1999. It is a very well managed organization with a very professional Board of directors. Things have evolved in the past 3 years as many international businesses are popping up in Georgia and that’s why we came to the need of ICC. The latter will be working very closely with other business organizations represented in Georgia, including AmCham.
As for Agritechnics, we’ve been operating very successfully for more than 10 years. We went through very difficult times in the past before Saakashvili’s government. We believe lots of progress has been done since the he came into power end of 2003. We acknowledge the huge progress that has been done since then; there are however some issues that should be tackled very seriously and imminently, such as judiciary and property rights for instance. We believe the government is committed to tackling these issues properly in the near future.
Q. Your story as that of a businessman is related to two disputes: one with your previous partner Fadi Nahas and the other, very recent one- with Sadia S.A. and its subsidiary Wellax Food Logistics. Considering your own example, could you say referring to a court is the best way out of such kinds of troublesome situations or are there alternatives that businesses could seek in order to settle a dispute?
A. We’re working now toward having alternative means for dispute resolution and the arbitration court is one of them. I believe that businesses should be given the choice of whether they want to go through the judiciary system, or through arbitration. Arbitration is a good supplement for the judiciary system and will also help the developing judiciary system in Georgia. Competition will be a great incentive for the judiciary system to develop and operate properly.
Q. There are conflicting opinions being forecast by experts that since the November 7 developments (attacking the pro-oppositional protests and the raid on Imedi TV) it will be difficult to rehabilitate the image of the country whereas others say foreign investors are more than ever ready to put money in to the country. What’s your opinion in this respect?
A. Before the November protests in the streets, Georgia had gained a lot of international confidence. Investors are always interested in political stability and Georgia’s image as that of a politically stable country was eroded when the November events started. Some investors stepped back or put their investments on hold waiting for the parliamentary elections to be finished.
The November events definitely became an obstacle to the progress and the growth that we were witnessing. I sincerely hope that we won’t see any more protests in the streets because rallies undermine Georgia as a whole given that the country relies very much on FDI. The trade balance is negative with about USD 2.5 billion deficit and this deficit is offset by FDI. If Georgia stays on the track of instability, FDI will decrease very much and there won’t be enough hard currency to cover the deficit. This will result in the depreciation of the Lari and the bottom line is that Georgian citizens will loose their purchasing power. I don’t think this is what the opposition is aiming at but what they need to understand is that for every action there’s a reaction and very serious reactions will follow any actions in the streets.
Q. Today ICC groups have hundreds of thousands of member companies and associations from over 130 countries. Which of these countries have turned out to have more welcome business relations with Georgia?
A. I think that most of these countries are friendly with Georgia. Georgia has a good reputation and image and I believe that any businessman will be interested in investing in Georgia if there’s stability in the country.
Q. ICC is a representative body that speaks with authority on behalf of enterprises operating in various sectors worldwide. Which sectors do you regard to be priorities in Georgia today?
A. I think the service sector is very attractive as well as infrastructure and real estate, also agriculture and banking sectors, and SMEs.
Georgia stands at the crossroads of the Caucasus and Central Asia and when you start business here you have a potential market of more than100 million consumers, which is an important comparative advantage that influences investors.
Q. The fundamental mission of ICC is to promote trade and investment across frontiers and encourage business corporations to meet the challenges set by the thriving processes of globalization. Could you name the concrete pros and cons globalization could bring for local businesses?
A. ICC works very closely with WTO, G8 and other International instances, it has lot of leverage to assist Georgia in resolving some bigger international issues..
ICC is a huge platform that Georgia can use to tackle any problems related to these issues and ICC can be a strong advocate for Georgia.
Q. The growth prices on oil and gold have surpassed the U.S population’s concern of war in Iran. Do you think, in parallel to these global spreading economic inconveniences, Georgia still has the potential to remain number 1 reformer country?
A. You cannot be the number 1 reformer all the time, reforms serve particular economic purposes. Once you have done a number of successful reforms there are only few more reforms left.. I believe that Georgia has huge potential so long as it is granted political stability. I’m extremely optimistic about the potential of the country but I believe that politicians from all sides bear a huge responsibility for the decisions they’re making because they can bring either very positive or negative impacts to Georgia. I believe that the future of Georgia should not be jeopardized by small short sighted political gains.
Q. Founded in 1919, ICC has been helping businesses in formulating sound policy position at national and international levels. Could you please define how ICC policy has developed through the years since the early 20th century?
A. ICC started in 1919 and has developed into a huge organization with130 national committees; this means that ICC is present and active in 130 countries worldwide. ICC focuses on 3 main issues: rule setting- such as Inco terms or banking rules. The second strength of ICC is arbitration. Since the start of the Arbitration Court more than 14 thousand cases have been completed successfully, out of which 515 cases in 2007. The last issue is policy making such as trade and investment, transportation, anti-corruption measures, environment, financial services, information technology, ethics, telecommunication, competition, intellectual property among others. – any issue that relates to businesses is tackled by ICC and conveyed to decision makers. Since 1919 this has been the profile of ICC..
We started ICC in Georgia in 2002, I was the founding Chairman.. Back then we didn’t have any individual companies and worked in cooperation with business organizations only. Now we are feeling the need and necessity to expand ICC Georgia and to open it to all companies. The interest expressed is tremendous and in the very few days since we have a new Board, more than 20 companies have expressed their wish to join. I believe that within a year time the members will easily exceed one hundred.
In 2008 we’re looking to strengthen ICC Georgia, by engaging dialogue with the different stake holders; we are also aiming at jump-starting the Court of Arbitration. We will be also listening very carefully to our members and conveying their apprehensions or ideas to the decision makers..
ICC Georgia’s new Board of Directors:
o Chairman: Fady Asly, Agritechnics Holding
o 1st Vice- Chairman: Gilbert Hie, Bank Republic (Societe Generale)
o 2nd Vice- Chairman: Gia Bazgadze, Ernst & Young
o Board member: Burak Birhekimoglu, Tav Urban Georgia
o Board member: Halim Daou, CoolZone
o Board member: Nick Gvinadze, DLA PIPER
o Board member: Giorgi Isakadze, Federation of Georgian Businessmen
o Board member: Steve Johnson, Betsy’s Hotel
o Board member: Gia Kakabadze, Georgian Chamber of Commerce
o Executive Director: Rusudan Dzigrashvili
Interviewed by Kate Tabatadze, The FINANCIAL
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