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STRATEGY Power through Knowledge
G E O RG I A Economy | Finance | Regional Development & Infrastructure | Agriculture Environmental Protection & Natural Resources | Cities & Regions
President’s Welcome Note Mikheil Saakashvili
Solid Ground RAK Group
Keen Eyes DLH Piper
Age of Refor ms
Minister of Finance
2010
2010
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STRATEGY B U S I N E S S G RO U P
06
16
Economy 12
Introduction 06
President’s Welcome Note A message from Mikheil Saakashvili, the President of Georgia.
07 09
13
15
Prime Minister’s Welcome Note A message from Nikoloz Gilauri, the Prime Minister of Georgia.
16
Time Tested Georgia has stood the test of time as a link between the East and the West.
18 20 22 24
09
25
Forward March An overview of the Georgian economy.
Changing Gears Georgia has seen radical reforms and stable GDP growth under Minister of Economic Development Zurab Pololikashvili.
Invest in Georgia Georgian National Investment Agency.
Capital Country Georgia’s reputation in the FDI arena makes it a haven for investors across sectors.
Solid Ground RAK Group.
A Burst of Energy Georgian Industrial Group.
Goodwill Rising Goodwill.
Keen Eyes | Legal Ace DLA Piper | BGI Legal.
Watchful Eyes | Entry Point International Chamber of Commerce, Georgia| German Business Association, Georgia.
Finance 26 28
30
Top Reformer An overview of the Georgian financial sector.
Age of Reforms Minister of Finance Kakha Baindurashvili has developed the financial sector of Georgia into a leading economic driver. Bank Republic.
Bank Statement | Strong Banking
33
Strategic Partner
HSBC | Cartu Bank. Caltrider Advisors.
Regional Development and Infrastructure
35 37 38
Growth Engines An overview of the Georgian regional development and infrastructure sector.
Building a Nation Minister David Tkeshelashvili has put Georgia on the global investment map as a link country.
High Seas Poti Shipyard.
Flying High TAV Georgia.
Agriculture 40 41
42 43
Money Plant
32
34
Environment Protection and Natural Resources
Deep Roots
46 48
Minister of Agriculture Bakur Kvezereli is taking Georgia beyond its traditional strengths.
A Fine Balance Minister George Khachidze has ensured that Georgia balances growth with ecological sensitivity.
Power for Good Rompetrol.
Gold Rush Quartzite.
Cities and Regions 50 52 54
Tbilisi through the Ages A roundup of one of Europe’s oldest and most vibrant cities.
City of Promises Mayor Giorgi Ugulava has transformed Tbilisi into an investor haven.
Home Away from Home Betsy’s Hotel.
56
The Plus Factor
57
Spirit to Serve
58 59
An overview of the Georgian agriculture sector.
Fertile Ground
Clean Growth An overview of the Georgian environment protection and natural resources sector.
62
MSG Plus. Marriott Hotel.
Garden Trail | Vedzisi Calling Hotel Beaumonde Garden | Vedzisi Hotel.
Front Runner An overview of the Autonomous Republic of Adjara.
Mapping Georgia An overview of Georgia’s component regions.
Editor-in-Chief: Maria Johnson Editorial Director: Marco Cabello Country Director: Mary Mnatsakanyan Senior Research Analyst: Bradford Miller Managing-Editor: Manali Das Editorial Contributor: Seetha Natesh Senior Production Designer: Karin Haggård (k.haggård design) Contributing Production Manager: Tanmoy Goswami Contributing Production Designer: Sasidharan EM A NOTE TO READERS: The views expressed in the articles are not the opinions of Strategy Business Group. Strategy Business Group cannot accept liability for errors contained in the report or for any loss, financial or otherwise, sustained by any person using this report. PRODUCTION: No part of this publication may be reproduced or transmitted in any form or by any means without prior approval from Strategy Business Group.
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*Financial numbers quoted in this publication are in USD, EUR or GEL, depending on data availability.
President’s Welcome Note Dear Readers, A sincere and warm welcome to the readers of this exclusive report! As you probably know, Georgia has an ancient history and a deep cultural heritage, but recently it has confronted political and economic challenges. Nonetheless, our path to development is steady. We are committed to looking for new opportunities and to maintaining economic growth and stability. Our main goal is to rise above our current difficulties, minimise the impact of the world economic crisis, and preserve the peace and well-being of the Georgian people.
Mikheil Saakashvili President
Georgia has enjoyed significant economic growth in recent years, largely because of the robust inflow of foreign direct investment. When we adopted our reform agenda, we understood that the country’s business climate needed drastic change, and we rose to the occasion. Since 2003, we have drastically reduced corruption, minimised red tape, deregulated and liberalised all key sectors of the economy, simplified the tax system and issuance of licences and permits, and lifted trade barriers.
revitalise our domestic business climate; they also made Georgia a more attractive place to invest. Today, we are pleased to have both diverse sources of investment and an abundance of sectors into which those funds flow. Georgia has friendly and rapidly developing economic relations with the UAE and Gulf countries. Both sides derive significant benefits from these relations, and interest in developing them is mutual. Some of the investments from the UAE, due to their scale and scope, are strategically important for Georgia and the investors alike. We have established transparent relations based on trust and appreciation of each other’s interests, and this gives us the opportunity to sustain and deepen our cooperation. We hope this trend continues and fosters even greater interest from the Gulf Cooperation Council. fields and sectors where our cooperation can grow. Agriculture, food processing and production, for instance, have outstanding investment potential. Georgia has significant competitive advantages in tourism, energy (including renewables and hydropower), and light manufacturing industries such as textiles. Partnerships in these areas could be highly beneficial for all of us.
Georgia has enjoyed significant economic growth in recent years, largely because of the robust inflow of foreign direct investment.
As I mentioned, some of the UAE investments—such as the Free Industrial Zone in Poti by RAKIA—are strategic because of their size and scope. Trade-transit capabilities are a key service that Georgia has to offer. Poti Port has long been a critical component of this sector, and the FIZ greatly enhances our trade-transit capabilities through improvements in infrastructure and services and by increasing economic activity. It is my sincere belief that relations between our countries will only grow warmer. We have a strong foundation upon which to build, and we extend our hand to new friends and potential investors. I wish the readers of Strategy Reports success in all their endeavours and invite you to visit Georgia to explore the potential of our country. 06
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