TBILISI LOOKS EAST

According to the Georgian National Investment Agency (GNIA), a 2010 priority is to attract investors from the Middle East and the Gulf states, particularly in agricultural production and hydro power.

A composite drawing for the Al Zubara Tower project in Qatar

With foreign direct investment (FDI) down a reported 80% this year, the Georgian government is aggressive about investment.

In October, President Mikheil Saakashvili and Economic Minister Zurab Pololikashvili, together with the head of the President’s administration and former economic minister Eka Sharashidze, traveled to the Qatar to promote investment in Georgia; according to Georgian media reports, the president is expecting as much as $2 billion in investments from Qatar over the next two years.

The financial coup, if the projects go through, underscores a concentrated effort by the Georgian government to attract investment from the Middle East.

And Georgia needs foreign investment. According to official statistics, foreign investments have dropped to pre-Rose Revolution levels over the past year, creating a burden for a government that relies on high FDI to keep the country moving.

The United Arab Emirates are a good fit, according to Georgian officials. For the past two years, it has remained Georgia’s largest investor, as well as one of the most diverse. Various holdings from the UAE have invested in, or bought, assets in telecommunications, real estate, manufacturing, tourism, and transport over the past two years.

There is also, according to the government, real potential for Arab countries to invest in agriculture production and hydro power.

In an interview with Bloomberg, Saakashvili noted that he has been to the UAE and the Gulf region several times this year – and interest is strong, in particular from Qatar.

He maintains that as much as $1 billion in investment will come from the UAE alone.

According to Beso Chantladze, an account manager at the Georgian National Investment Agency – the investment promotion body at the economy ministry – investment from the Middle East and Gulf states is a priority for the government next year.

The Aspire Tower is 300 meter (984 ft), Doha, Qatar.

“In 2010, agriculture will remain one of the biggest priorities to promote for overseas investor. We are planning on promoting agriculture to the Middle East and Gulf State countries,” he said. “They are diversifying their money into different sectors and when we analyze the Gulf countries, they will [should become one of the top] countries for the agricultural product consumers…we aggressively try to promote our agriculture for the Arab, Gulf Stream countries.”

In the past, the government’s priority has been on tourism – and it remains to be an important sector to draw in more funds – but agriculture production is the way to the future, according to Chantladze.

He noted that today – after the war and the financial crisis – it is a bit harder to promote Georgia that it was. But interest remains high.

According to Chantladze, GNIA receives multiple email and phone enquires from foreigners interested in investing in Georgia. The government has revamped GNIA’s website to make it more user friendly, and a commercial promoting Georgia as a top investment destination is on CNN.

“People know Georgia as a hot conflict country and they think it is very undeveloped,” he said. “But when they look at the economic digits and the economic prospects, they are getting more interested how [such a quick level of development] is possible.”

[top]