The FINANCIAL — “2,054,382 international travellers visited Georgia in 2010,” Vera Kobalia, Minister of Economy and Sustainable Development of Georgia, told The FINANCIAL in an online interview. More tourists are expected to come in 2011 as more than 2 million international travellers already visited the country during 2010.
The FINANCIAL — “2,054,382 international travellers visited Georgia in 2010,” Vera Kobalia, Minister of Economy and Sustainable Development of Georgia, told The FINANCIAL in an online interview. More tourists are expected to come in 2011 as more than 2 million international travellers already visited the country during 2010.
“The year 2010 was a difficult one largely due to the lingering repercussions of the August war as well as the global financial crisis. But despite all those challenges, the economic indicators of Georgia are still positive. With all due 3 quarters data, the economy grew by 6.5% in 2010, hence the unemployment level was also reduced, albeit slightly.”
“The position of the country has also improved in international ratings as Georgia has been named number one reformer in economic reforms. However this isn’t enough and now we’ve to concentrate on 2011 when we are to create new jobs.”
Q. The growth of the Georgian economy (GDP) was 6.5% in 2010 which has been attributed to agriculture and tourism development. How about 2011’s projections, what could lead to growth of the economy in the next year?
A. In the current post-crisis climate, there are lots of countries like us, who are striving and competing at attracting investors to the country. Hence we should do the maximum we can in this regard for 2011.
To be more specific, investments are most likely to be flowing in from Azerbaijan and Turkey. These two countries are our trade partners. In addition there is huge interest coming from Israel and Iran in investing. As well as these countries we’re also working with other EU countries, the U.S., and Canada.
We are expecting large growth of tourism in 2011. In the last year there was an unprecedented number of tourists visiting Georgia, over 2 million.
Tourism will definitely grow in 2011, as there are construction/infrastructure works going on in Svaneti, Adjara, and other parts of Georgia. Therefore we’re going to be active throughout this year in attracting tourists from CIS and Eastern Europe.
Regarding the priorities of the Ministry of Economy in 2011 – there’ll be much attention paid to agribusiness development in the regions of Georgia in addition to various improvements on sea and air means of transportation, therefore we’ll be fully committed to the necessary works that are to be undertaken.
Privatisation is also among the priorities of the coming year, including state-owned enterprises and other objects. Hereby we intend to generate further growth, employment and income for our citizens, thereafter the state will be seeking profit through taxes out of it. For this purpose we are also planning an online/electronic model of privatisation thus creating a united base of the objects.
In the first half of the year (2011) we’ll be working on creating a strategy to help develop such spheres of the economy as renewable energy, production of organic products, green tourism, and introduction of other green technologies.
Q. Investors/investments was one of the main priorities for the Government when you took office. Have you already achieved what you initially planned to do?
A. In the past year, Georgia stepped up its international rating which is a good indicator for investors to invest in the economy.
World Bank and Int. Finance Corporation placed Georgia in 12th place out of 183 countries in the simplicity of doing business. In the same research Georgia took first place since 2005 by being the number one reformer (out of 174 countries).
These ratings can be attributed to the liberal environment of doing business in Georgia. Hence running such policies we were able to overcome the economic challenges of the last two years. And growth of 6.5 was attained in 2010 too.
There is still huge interest among investors in tourism, agribusiness, and the financial sector. In addition with third quarter data there is interest arising on real estate too. Henceforth we are creating the necessary liberal environment and flexible tax system for those investors.
Q. One of your achievements is also bringing low cost airlines to Georgia. Are you planning further improvements in this sector or are there plans for other low cost airlines to fly via Georgia?
A. Joining European technical and legal airspace will create new perspectives for country development at large. We expect world known companies to enter Georgian airspace, which will itself forge the creation of new workplaces, improving service quality. In addition Georgian air companies will be opened to European airspace, thereby competing with European companies with the same conditions by approaching international standards and making security warranties stricter.
It is important to note that the European Union signed an agreement specifically with Georgia, such an agreement outside Europe has only been made with Morocco.
By putting the agreement into action, Georgia will become a hub of the Trans-Europe-Asia corridor for all air companies. Thereafter EU airlines will be able to make stops in Georgian airports and then proceed to their final destination.
There is also the political aspect of this agreement, as for example if any Russian airline arbitrarily flies to Abkhazia, it will be a violation of Unified European Air Space since Georgia is already now a part of it.
Q. In terms of tourism development being your primary goal, do you think in the last year the maximum was done in terms of what was possible?
A. For the first time in the history of independent Georgia, 2,054,382 international travellers visited the country, representing 37% growth compared to the same period of 2009. Several significant infrastructural projects were implemented during 2010, including rehabilitation of the road system and construction of a new airport.
Creation of Free Tourist Zones in Kobuleti and Anaklia are of particular significance for tourism development in the country. Investors will be exempt from income and property taxes for 15 years and will receive land and hotel construction documents for free.
The year was also marked with the opening of Mestia for skiers with its new tourist infrastructure. Construction of a tourist complex on Lake Kvareli is also of great importance for the industry.
Q. A few large tour operators are still found to be offering travel packages to Georgia, what can be done to increase their number?
A. Georgian travel companies are cooperating with large international tour operators. Currently they receive individual travellers from TUI Travel PLC, Thomas Cook and Kuoni Travel to name but a few.
These companies originally intended to extend their operations in Georgia, but after the conflict of 2008 they suspended their plans due to security considerations. At present, the Ministry of Economy and Sustainable Development is working intensively with foreign embassies and ministers of foreign affairs to improve the travel advisories related to Georgia. Japan has already downgraded the travel risk level for Japanese tourists wishing to arrive in our country (restrictions apply only to occupied territories). As a result, the number of Japanese travellers increased substantially. The GNTA is actively collaborating with the largest travel agency in Japan, JTB Corporation. Japanese tourists are mostly senior citizens opting for organized travel. They buy tour packages from Georgian travel companies via Japanese agencies.
We hope that other large travel operators will follow the example of JTB Corporation and will be entering the Georgian market in the near future.
Q. Georgia’s image worldwide was damaged due to the war practices with Russia in August 2008, as for a long time Google Images search results for Georgia depicted images of violence, war, riots and so on. Also there is a problem with identifying whether Georgia is the U.S. state or Caucasian country – hence what can be done to rightly brand our country in foreign eyes?
A. As you know, the photos of Georgia that appear on Google search come from different websites. Two years ago photos of violence dominated all search engines. Now the topic generates less interest, hence the pictures of violence are less frequent.
The Georgian National Tourism Agency is currently working on country rebranding. Emphasis will be placed on developing a slogan which, among others, will focus on the location of the country. However it should be mentioned that the previous slogan was also chosen with that factor in mind.
The Agency has launched a new website www.gnta.ge and plans to upgrade www.georgia.travel as well. In order to enhance the search engine visibility of Georgia, particular attention will now be paid to search engine optimization of new websites.
Note: The Ministry of Economy rejected a face to face interview with Minister Kobalia claiming it to be part of their PR policy.
Note 2: We failed to find/contact the JTB corporation office in Tbilisi.
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