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Thursday, 26 April 2018


Israeli investments are back

16.05.2010  |  20:32

6009.jpegGeorgian-Israeli economic cooperation has passed onto a new level with the sides agreeing to cancel double taxation and take a new portion of Jewish investments after a pause caused by the crisis. Remarkably, Israeli food producers are invited to the Georgian market this time. Nodar Khaduri told GeorgiaTimes whether it will boost exports of Georgian produce and if it will help substitute Russian markets.


The visit of Zurab Pololikashvili, Georgia's minister of economic development to Tel Aviv was quite productive resulting in signature of an agreement cancelling double taxation with Israeli Minister of Finance followed by a Georgian-Israeli business forum held in the diplomatic capital.

The minister managed to attract interest of local investors by speaking about handsome prospects of starting up businesses in Georgia.

Pololikashvili went on a tour around a carton factory whose owner - Kargal Group - has already announced its intention to build a similar plant in Tbilisi. The minister also met with the owners of Zim Group, a supermarket chain that also controls a few food factories. The company too expressed willingness to enter the Georgian market.

Georgian-Israeli economic relations are characterized with dynamism. Current volume of Israeli investments in Georgia is slightly over half a billion US dollars.

Before the war in 2008 the countries were close partners, particularly in military sphere. Israel updated aircrafts and was shipping arms. Right before the conflict the shipments were halted under pressure from Moscow, they say.

However after tragic events in South Ossetia Israeli companies took up restoration of Georgia's infrastructure wrecked by Russian air strikes on military facilities. Besides, contractors from the Promised Land were actively building homes for refugees with the humanitarian monetary aid allotted by Western countries.

Last spring Israeli investments in Georgia were reduced to zero. As it turned out Ashara state insurance company (Israel) stopped providing services to investors willing to work in the post-war country hit by protest rallies. As then minister of economic development Lasha Zhvania explained Israel could no more comply with its obligations under the program on construction of 100 new hospitals in Georgia.

Later the insurers changed their mind about Georgia though it didn't bring Israeli investments back to the country's hospital sector. Only in April 2009 Aihop company confirmed its desire to take part in the suspended state program promising to construct 27 regional hospitals for the total of 1000 beds.

Israeli media are surprised noting that companies "have been failing to construct one hospital in Ashdod for decades". Nonetheless, they compete for the right to build 100 new clinics in Georgia. Jews are equally eager to invest in Georgian real estate, communications and agriculture.

Reciprocal tourism is developing too - not without mishaps though. Recently 45 Georgian pilgrims fled their guides and applied for political asylum in Israel.

Any investments are important to small Georgia with developing economy. Well-off Jews, ex USSR compatriots offer great hopes, ex deputy economy minister, now expert Nodar Khaduri says.

- Attracting investments - from abroad in particular - is very important to Georgia. All opportunities Georgia has must be taken including those coming from Israel. Considering that a lot of Jews who were born in Georgia now reside in Israel, and they are rather advanced businessmen, we have certain hopes that these ties will help attract Israeli investments.

- At the time of last year's opposition protests Itsik Moshe, head of the joint business group declared halt on Israeli investments to Georgia making journalists guess whether Russian-Israeli relations could influence that.

- You used the right word - guess. I won't make guesses - I will simply say that in the aftermath of global financial crisis and Russian-Georgian war in 2008 not only Israeli but many other investors decided to freeze their projects in Georgia. There was a fear that the conflict might resume. Global lack of finance was also a problem. If the situation changes for the better we will naturally expect that the interest will revive. I don't think that Israeli businessmen won't invest in Georgia in fear of Russia. The most important thing is get resumption of the military conflict off the agenda.

- Aihop company (Israel) is planning to take part in 100 hospitals project. But last time Israeli were a failure, weren't they? They were supposed to invest but like many investors under this program went back on their promise.

The Czech side took part in the program too. Because of the global crisis, as far as I understand, they failed to ensure required financing.

- Not only Czech companies were there.

- Expobank (Czech Republic) was supposed to grant a loan but unfortunately it didn't. The project was suspended and underwent significant changes.

- Does it have a future now, with Israelites in charge of it?


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