By Shota Gvineria, Ambassador of Georgia to the Kingdom of the Netherlands
When learning about Georgia one cannot escape the general assessment of the country’s progress and the reforms undertaken in so many different areas so consistently in the recent years; Georgia has been awarded as a “Top Reformer” by the World Bank
In the last decade Georgia has undertaken a significant economic reforms process that has transformed its economy. According to the World Bank’s “Ease of doing Business” ranking Georgia has risen from 112th to 9th in the world since 2004.
By implementing extensive reforms to offer a business friendly environment and country’s diversified economy allowed Georgia’s steady annual growth around 6% for the last years, even during and after the global economic crisis.
We are happy to observe the growing interest of the Dutch private sector in Georgian economy for last few years, which resulted in the Netherland being a number one investor to Georgia for last two years in 20011 and 2012. Recently established Netherlands-Georgia Business Council will surely contribute to further strengthening the efforts of the embassy to facilitate trade and economic relations between the two countries (http://www.ngbc.nl).
Georgia’s progress and development have been highly praised by many international institutions. How did a country of 4, 5 million manage to achieve such a success?
With no major natural resources to rely on, Georgia had to hold on something different; and the first step in this direction was eradicating widely spread, almost endemic corruption. Today, Georgia is essentially a corrupt-free investment destination. In parallel, Georgia has significantly limited the regulatory burden, which hampered economic growth earlier, thereby creating a more attractive economic environment for investors. A one–stop shop has been launched to expedite all business-related administrative procedures and today there is a possibility to register any business in just two days. A flexible labor rights, with the minimal state interference in employer-employee relations have been legislated. Due to abovementioned measures and most importantly introduction of the low, fair and efficient tax system to potential investors, Georgia has positioned itself as an attractive destination for foreign direct investment (4th lowest tax burden in the world after Qatar, the UAE and Hong Kong/ excerpt from the “2009 Tax |Misery &Reform index ”by Forbes Business & Financial news). At the same time, two “free industrial zones” have been established and there are already operating, offering investors the most favorable exceptional conditions for doing business (http://www.investingeorgia.org/).
What is also important to know is that Georgia has one of the most liberal trade regimes; the country enjoys free trade regimes with all its regional trade partners (all CIS countries and Turkey). We also enjoy preferential trade regimes with the leading economies worldwide and have concluded negotiations of the Deep and Comprehensive Free Trade agreement with the EU.
Georgia is seeking to attract additional foreign direct investment through making the country a unique destination for investment and offering very interesting governmental incentives in a number of priority sectors like hydro-power sector, tourism, manufacturing, agriculture. Government funds have been established to facilitate and encourage the inflow of the FDI and development of the priority sectors (http://www.fund.ge/).
The combination of the above mentioned favorable business climate, government incentives and unique geopolitical location, makes Georgia an attractive and reliable regional hub and a gateway to the markets of the wider region.