The FINANCIAL — “Now is the best time to invest in Georgia, in five years many sectors will be fully developed and it will be much more difficult to establish a new business,” David Lee, President of the American Chamber of Commerce in Georgia warns potential investors.
He says foreign investors are attracted by three main advantages in Georgia: low corruption, a supportive government and an underdeveloped market in almost all sectors. He thinks that Georgia still remains an attractive location for foreign investments.
David Lee also named the most successful businesses for Americans in Georgia. “Tourism, wine, communications are all growing strongly and have US investors,” Mr. Lee said. “As for the most demanded regions in Georgia among American investors, Adjara and Tbilisi are the main areas of interest right now. But opportunities in hydro-power and agriculture should help to balance out this tendency. America has world leading companies in every segment and the lack of development in most of the sectors here makes the prospect of high growth and first mover advantages compelling. But we need to get the message across,” he added.
“Georgia has favourable economic indicators; relative to Europe in particular it has low borrowing, a stable currency and GDP growth. Americans have an excellent support stricture here, the US Embassy is very strong and influential and of course there is the Amcham,” he added.
The American Chamber of Commerce in Georgia, established in 1998, is a fast growing non-profit, non-commercial organization uniting approximately 150 Georgian, American and international companies operating in Georgia. Mr. Lee was named new director of AmCham just two months before the August War in 2008. He is also the General Director of the American company Magticom, the largest telecommunication operator in Georgia.
“Magticom continues to grow strongly and is bringing new products and better pricing to the market whilst maintaining world class levels of quality and customer care,” Lee said. “Our main challenge is getting the necessary permissions to continue to expand our internet business. In particular we want to lay a lot more fibre-optic cable to increase the speed of internet connection,” he added.
The American Chamber of Commerce in Georgia was recently joined by BG capital, JSC Madneuli, Georgian Lottery Company, Basis Bank JSC, Alliance Group Holding, Goodwill, Holiday Inn, and Microsoft Georgia Holding. David Lee said the company is not oriented only on new companies joining, but supporting joined ones. “We help them to stay connected to the US Embassy, the Government of Georgia and of course to each other and the wider business community,” he said.
David Lee considers agriculture to be a growing business in Georgia. AmCham has made some investments in this sector. “Agriculture represents a huge opportunity for Georgia. The Government is now fully focused on this sector’s development and Georgia has a wonderful climate and land. This is a real natural advantage that is still untapped,” he said.
Mr. Lee found a way how Georgia can be interesting for foreign investors despite it being a small country with a small economy. “Every citizen should promote Georgia as an investment opportunity when they have the chance to talk to foreign businessmen from any country. In the case of trade relations with America, Georgia has to compete with lots of countries. Almost all countries trade with America. So Georgia needs to focus on those areas where it has a natural advantage such as its location, its workforce and its lack of corruption,” said Lee.
Lee also gave advice about how Georgia can compete with other larger emerging economies like China, Russia, Brazil, and India; how can Georgia take its place in the global economy, in trade relations. “Georgia can compete by being more accommodating, more focused and more flexible than its bigger competitors for capital. The Government understands this and is doing their best to give investors what they need to make the decision to invest,” he added.
David Lee said Georgians are interested in foreign investments as well. “All the Georgians I speak to are positive about foreign investment and this is not the case in all countries. Simple issues like visa and custom regulations are much more accommodating here than in most developing countries and this really matters. Georgians are by nature and culture friendly to visitors and this is a huge advantage when people visit for the first time” Lee said.
Lee positively assessed Georgia’s overall economic image. “Georgia is growing at a time when Europe and the US are facing recessions. All global companies need growth to survive and have to move into developing markets if they also wish to grow,” he said.
“The main challenges AmCham faced in 2011 have been the continuing economic crisis in Europe and the USA,” Lee said. As for last year’s challenges, the company had difficulties in discussion with the Government to reduce the severity of the tax collection procedure. “American business investments in Georgia were not intensive this year. Disappointing, but again this is mainly due to the global recession rather than a problem with Georgia. However, our strategy has not changed; all our members are committed to growing their businesses. It is also possible to double US-Georgian trade relations in the coming years; the level of US investment is still far too low,” he added.
In terms of attracting American businesses to Georgia for the year 2012 even one or two large investors could create a huge difference, David Lee believes. “The one good thing about being small is that you can change things quickly and the benefits can be felt immediately,” he added.
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