The FINANCIAL — David Lee, the general director of Magticom mobile telephone provider, is giving a shot in his career as the President of the American Chamber of Commerce in Georgia (AmCham). The FINANCIAL interviewed the new president, regarding the strategy he’s intended to carry on within AmCham and the vision MagtiCom is expected to maintain meantime.
Lee was elected as president of the Chamber during the General Assembly on June 3. US Ambassador John F. Tefft is the honorary president of the Chamber. Mr. Lee previously served as a member of the Chamber's board of directors.
Q. You’re elected as President of AmCham. How helpful could your prior experience of working as a member of the Board of Directors at Amcham, be for your further work on a higher level?
A. I’ve been elected to the board twice already in 2004 and in 2006. So I’ve served as a board member for four years. This time I also got elected as a president. I think four years of experience at the board of directors is a big advantage.
Q. “My vision is that Georgia will continue to grow rapidly and AmCham must remain the largest foreign business organization in Georgia to maximize its potential and value to the members, the Georgian Government and the Georgian economy,” quoting your words. How do you see this really happening, what are the major arguments you feel yourself capable of managing the above mentioned?
A. AmCham is the premier and most influential foreign business organization. Most foreign companies, when they come to Georgia to look at potential investments, come to the Chamber first and ask us to give information on what’s going on in Georgia. AmCham has a strong network of useful contacts and can arrange for meetings with another industry players or the government.
That’s very useful as it provides what we call one-stop shop. AmCham helps companies get established as quickly as possible. That’s what the Chamber is committed to carry on in future.
Q. "I think the Chamber has developed tremendously over the past two years into something that is an extremely strong lobbying organization," claimed your predecessor. How would you evaluate AmCham’s development strategy and what are the new initiatives expected with your presidency?
A. Esben’s made a very good job; he’s significantly improved the marketing of AmCham. I think it’s essential the Chamber to be popular with its members. The more companies join AmCham the better for the Chamber and the country in general.
Q. In addition to the presidential elections, the General Assembly voted to give non-American members, which make up one-third of the Chamber's membership, representation on the board as well as expanded voting rights. What concrete goals does this decision serve?
A. AmCham is based on American business values and we have a lot of support from the American Embassy, which is fantastic. Our goal is to make Georgia attractive for any company and it’s my vision to see foreign companies from any nationalities, especially European because of the European Union and big Asian companies coming to Georgia. We’ll give all them as much participation as possible, not only as AmCham members, but also how the chamber’s run and to the composition of the board
But in the end it’s always going to be an organization that has an American feel and sense of values.
Q. What’s the overall number of AmCham members and the new ones added in 2008?
A. We have over one hundred members, but we’re growing. Only this year, some 15 new members joined us.
AmCham is growing very quickly as does the economy of Georgia. The Chamber is reflecting the success of the government in attracting new investors into Georgia. Some of our latest members are such very large international companies as HSBC bank.
Q. What’s an annual budget and income of the Chamber? Is the budget set up due to the membership fees do you have other sources too?
A. The main budget is set up with membership fees and the advertising in our magazine invest.ge, which is very popular as it provides one-stop shop to the potential investors coming to Georgia.
The other reason that I was elected as president is that I’m personally committed to Georgia. When I gave my speech half was actually in Georgian. It symbolized that the Georgian economy will be dominated by Georgian companies and that many foreign companies are managed by Georgians and the AmCham must be relevant to them. That’s the vision I want to take forward both at AmCham and MagtiCom.
AmCham works all over the world and I want it to work really well in Georgia.
By the way, I take private lessons in Georgian. I speak Russian and had no difficulties in learning it but in case of Georgian it’s a bit harder. I gave my first TV interview recently in Georgian. MagtiCom has thousand Georgian employees and one foreigner. I love Georgia and it’s in my interests as a General Manager of Magticom and the President of AmCham to own my own properties here.
I have three apartments in Georgia, two in Tbilisi and one- in Batumi and 120 hectare farm in Samtredia, where I go at weekends. I want to see Georgia doing well; I’m committed to working here.
Georgia’s growing fast, AmCham’s growing fast and the latter has a direct role to get new investors into Georgia and not only the American ones.
Q. “I’m a member of the American Chamber of Commerce (AmCham) in Georgia; I’m an elected director of the board of directors. The AGBDC forum was supported by AmCham and naturally MagtiCom was happy to participate in it,” you told the FINANCIAL last October. Now, with your direct heading how intensively is the Chamber going to be involved in such high level international events?
A. We’ll try to get involved in large-scale international conferences and wherever we go we’ll be promoting Georgia. I think our one-stop principle is the best way to promote Georgia.
One can face all kinds of bad press about the country because of the complicated relations with Russia and some people might think the situation in Georgia could be dangerous for businesses. We want to show the world that you can see a pile of international investors putting money in Georgia and put them in touch with the government bodies who are very supportive.
It’s very easy to start business in Georgia right now as it’s one of the easiest countries in the world in this respect. The tax regime is one of the lowest in the region and one of the most attractive in the world. The labor code is probably the most attractive for foreign investors. The bottom line is that if you don’t give a good first impression and don’t get a good account of yourself when people come, you got a problem. AmCham has a part to play in all that.
Of course, we’ll go to the conferences; we’ll try to sell Georgia because it’s what should be done.
Q. MagtiCom proudly claims to be one of the largest taxpayers in Georgia. Now as the President of AmCham, how tightly are you going to cooperate with state bodies in terms of further improvement of tax code? What would be your recommendations? What’s the amount of taxes paid by Magti in 2007? 2008?
A. MagtiCom has paid over half a billion dollars to the state budget since the company was started. It’s a very large sum and more important is that we invest more than 50 million dollars in our network each year.
Recently Magti launched Magti Fix with a slogan Communications for Everybody. Our vision is that all Georgians should have telephone services equivalent to those you would get if you were in London or New York. That’s my vision and that was the vision of the founder and we continue on that level. Magti mobile is already as good as any mobile operator in the World and we’re going to the same in the fixed telephony.
As for the recommendations to the government, it would be to carry on as they’re doing now and try to make the country attractive for foreign investors and make codes as simple as possible. If there’s an opportunity to reduce taxes so that foreign investors could invest more, that would be the next best thing to do.
I also see the free economic zone initiative very exciting. The government’s intention to look at the models like Dubai, Singapore, Hon-Kong, makes a lot of sense and it is an island of opportunity in this region in many ways.
Q. Kakhi Kaladze, a well-known Georgian origin AC Milan Defender and Magti’s advertising face, has started his own banking business. Do you intend to further keep n cooperation with Kaladze or is the company having second thoughts of hiring a new celebrity?
A. We have a contract with Kakha at the moment and it’s worked well so far. He was a wonderful face and let’s see what happens. As for new faces, we’ve no concrete plans currently.
We’re always looking for opportunities, Magti’s been the sponsor of Star Academy and we’ve kind of created lots of stars. What I want to do as far as Magti’s concerned is to show that we’re contributing to the development of culture in Georgia and not only the high culture. There are fantastic pop groups in Georgia right now; we’ve also been involved in DJ contest in Adjar and we’re going to sponsor Jazz festival.
Q. Recently Magticom Signed with Sicap for Interactive VAS in Georgia Georgian Operator Magticom Now Offers Its Customers a Range of Self-Care Services from the Sicap USSD Menu Browser (UMB). Could you please speak more concretely about the benefits offered by the service?
A. MagtiCom is cooperating with several companies in order to make sure we’ve got the latest technologies in terms of new services. Our focus now is very broad; we want to bring every kind of communications. The future is about Internet. Right now we’re developing 3.5 G, we also have WIMAX and our vision is that in the way that we’re working on fixed telephony we also want to do Internet.
We’ve got all the technologies: 2G, 3G, 3.5 G, WMAX, WiFi, CDMA and that I think is a very interesting strategy. What we’re trying to say is that people should be able to select like a salad bar anything they want. We have all the ingredients and people can choose anything they want to. It’s a full service concept.
Q. As for VPN (virtual private network), through this project Magti was intended to connect the central and regional bodies of the Georgian government. How’s has the project developed and which bodies have already joined the network? What’s the overall budget of the project?
A. we’re right on schedule; there are over one hundred offices already connected. It’s such a positive idea that the government is so forward looking and they’re not only building roads and ports, but is also looking at the communications.
Q. Since the well-known developments against Salford Georgia and the closures of Imedi TV, the selling of Standard Bank and all the businesses affiliated with Badri Patarkatsishvili, has MagtiCom suffered any financial loss or other kinds of difficulties?
A. MagtiCom’s faced no difficulties with the government. My job is to run MagtiCom, we have a number of shareholders who on their side have their own issues and I don’t get involved in those issues because I don’t have to.
To be honest, I don’t even look at who my shareholders are. I’m an investor in various companies as a small shareholder in U.K, but no one asks those companies what David Lee thinks. That’s the way MagtiCom works, we don’t have any issues with our shareholders or with the government.
Written by Kate Tabatadze
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