The FINANCIAL — “Conducting good elections next year will be crucial for Georgia’s successful development,” Patricia Flor, German Ambassador to Georgia, said in an interview with The FINANCIAL. The Ambassador has said that it is largely because of the huge amount of financial support coming from Germany and other European countries and the US that Georgia has managed to survive its recent crises, although a lot of challenges remain for the country. Flor says that restoration of foreign investments depends on the stability of the GEL and its value against other currencies, “which is always hard to predict.”
“Against the background of internal political instability and the world economic crisis, which had serious repercussions in Georgia, holding good elections at the local level next year will be very important for the country. As well as stabilizing the economy and increasing employment so that more citizens have a steady means of income,” Patricia Flor told The FINANCIAL.
“Considering donors’ commitment toward Georgia and the overall liberal economic reforms which have been done in the country, I believe that Georgia will manage to come through this crisis and restart economic growth,” she says.
Flor cannot give even an approximate term for when Georgia should emerge from the recession. “This is a question that should asked of a person like Nostradamus, someone who can foresee the future; unfortunately I do not possess that skill,” she quips.
Flor underlines energy security and independence as extremely important issues for Georgia. “When we consider past projects which were aimed at solving the problem of internally displaced persons, or refuges, a good step is actually to recreate some stability after the conflict that this country has suffered from. We remain convinced that peaceful development in a European direction, with European standards in terms of democratic rule of law, free economy and social justice is the right way for Georgia to go in.”
“If you look at the past then it is quite clear that in 2008 there was a clear threat to Georgia, you actually had a war on your territory and for that reason recent times have been particularly challenging for this country. I think it is a challenge which needs to be solved by actually focusing on development in the economic, political and social spheres,” Flor says.
Germany will contribute 100 million EUR for construction of the Black Sea Energy Transmission System. The project will connect the Georgian energy network with the Turkish energy network. “This will help Georgia in terms of energy security and also in terms of energy export,” Sebastian Lesch, Deputy Head of Division to South Caucasus and Central Asia in the Federal Ministry for Economic Cooperation and Development, told The FINANCIAL.
“The cooperation between Georgia and Germany has proved to be very good, effective and fruitful,” Lesch notes.
During their two day visit to Georgia the German delegation ran consultations with the Georgian Government. From the German side members participating in the consultations were representatives of the German Embassy to Georgia, the German Federal Ministry for Economic Co-operation and Development (BMZ), the Reconstruction Credit Bank of Germany (KFW) and the society of German Technical Cooperation (GTZ).
“The economical operation which is lead by the Ministry of Economic Co-operation and Development of Germany is targeted at ensuring stability, wellbeing and good future development for Georgia,” Flor says.
Flor is encouraging German citizens to visit Georgia. She hopes that the development of tourism which started before 2008, both in terms of the beautiful Black sea coast and also in terms of the cultural treasures of Georgia will continue in the future.
“On our website we have information about travel to Georgia. This information says that you should not travel to south Ossetia, for obvious reasons. Also, it advises one not to travel to Abkhazia if not permitted by the relevant Georgian authorities,” she says.
In 2008, Germany was Georgia’s principal European trading partner, ranking fourth overall after Turkey, Azerbaijan and Ukraine. Trade was worth 358.42 million EUR, again a marked increase over 2007 (270.5 million EUR). In terms of foreign direct investments, Germany ranked 12th in 2007 with investments totalling 56.987 million USD.
The Agreement on the Promotion and Mutual Protection of Investments, which has been in force since 27 September 1998, and the new double taxation agreement – in force since 21 December 2007 – provide a sound international basis for bilateral economic exchange.
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