Experts Believe a Fair Trial is Essential to Attract Investments

Georgian Dream government is looking for ways to attract investments.

The government’s desire to strengthen the economic aspect of diplomacy was named the main reason for the appointment of former Minister of Economy of Georgia Giorgi Kvirikashvili as the head the Foreign Ministry. New Economy Minister Dmitry Kumsiashvili said that ambassadors in various countries should help Georgia in attracting investments.

Ambassadors’ work in this direction will be mainly limited to arranging presentations and increasing the awareness about the country. How correct is the government’s new policy and what is needed to attract investment? Giga Bedineishvili the dean of the Business School at Tbilisi-based Free University, believes that economy and foreign ministries as well as individual ministries and ambassadors, will fail to attract investments.

Bedineishvili thinks that low taxes, low regulation and a fair trial can attract investment.

“What can ambassadors do? They should ask potential investors to invest in Georgia. We do not have anything good to say. The country is becoming more regulated, the business environment has tightened and worsened, we have an informal management, political prisoners, therefore, the court cannot be considered fair,” says Bedineishvili.

According to him, the country which is in need of rapid economic growth should have lower taxes than Georgia has today. In Bedineishvili words, taxes should not exceed 20% of GDP. Today, tax-to-GDP ratio equals 27% -30% of GDP. In the opinion of the economic expert Emzar Jgerenaia, a fair trial is a key prerequisite for attracting investments. He says that it is necessary for the economic cases to be discussed separately and in a short period which does not exist today.

Jgerenaia considers bureaucratic barriers another important problem as well as the Georgian market, which, on the one hand, is very small and on the other hand, depends on the political will. In addition, Jgerenaia talks about the lack of professional staff and the need of vocational education. “On the one hand, we are dealing with serious unemployment, on the other hand, a serious shortage of labor”, says Emzar Jgerenaia.

As for the ambassadors and their activity in the economic field, Jgerenaia says that establishment of economic ties should be one of the main directions of the Georgian diplomacy.