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Tuesday, 19 June 2018


Estonians fell out of the georgian reality

23.04.2011  |  19:52

Estonians fell out of the georgian reality. 16217.jpegGeorgia loses the confidence of its last investors. Even some Estonians, representatives of the country that is seemingly friendly to the Sakartvelo state say that it is unreal to do business in the republic. Meanwhile the Minister of Economy, young and ambitious Veronica Kobaliya, unsuccessfully invites foreign moneybags to participate in some "prospective projects". The GeorgiaTimes correspondent spoke on the investment unattractiveness of the patria of "Borjomi" and "Khvanchkara" to a famous Georgian


expert Giorgy Khukhashvili.

The current Georgian authorities use lots of ways of decoying investors to the republic. For instance, in February the Parliament of the country ratified an agreement with the United Arab Emirates on the avoidance of double capital and income taxation. In March the head of the Ministry of Economic Development Veronica Kobalya went on stage to bone right down to Indian businessmen. "Our authorities will always support the admittance of Indian business to the republic, she promised. - I am sure your business will not have any problems in our country as Georgia and India are those counties that, in spite of the worldwide economic crisis, managed to maintain the rate of their economic growth, which is undoubtedly important".  And in April the Prime Minister Nika Gilauri visited Italy where he made a presentation for the local businessmen with a detailed description of the opportunities of the Georgian business environment.

All the efforts of the high ranks did not bring the expected return. The agreement signed by the APM Terminals company and the seaport of Poti on the purchase of 80% of the port's shares by the Danish was one of the rare good news for Mikhail Saakashvili. "The Black Sea region has a great potential, with high economic growth. The importers and exporters of the region will need a high-quality infrastructure in the port. Naturally, this is the market that aroused our big interest", said the Vice President of APM Terminals and the head of the new terminal Fyodor Sondergaard.

To all appearances, while signing the contract the Dane was not informed on the latest events in the Georgian business environment. Though the press is still actively discussing the arrest of the Israeli investors Roni Fux and Zeev Frenkel who were accused of an attempt to bribe the Deputy Chief of the Minister of Finance Avtandil Kharaidze and were put behind bars for seven years. The Turkish businessman Iyaman Chagatay who is supposed not to have returned to the Georgian state a privileged loan taken for the construction of a fruit processing factory.

As Georgy Khukhashvili, a Georgian expert in economic issues said in his interview to GeorgiaTimes, the country has a system issue: nomenclatural capitalism emerged. "The authorities manage the business, and it cannot develop in such an environment, said our interlocutor. - It is clear one cannot earn much money in Georgia, here business does is not worth one thin dime. So foreign investors are having some issues and will continue having them". 

No wonder that in such a situation Sakartvelo may lose the last people willing to invest in the country's economy. Even the businessmen of the ex-Soviet countries who, in the opinion of experts, are nearly the only prospect for the country. And it has actually started happening. Thus, the Estonian Viljo Vetik, one of the owners of Port Artur Grupp, states with regret that the hopes of the Tallinn undertakers who went to Georgia planning to establish some good political relations were not fully justified, according to Rosbalt. Five years ago Vetik's company bought 60 ha of land in Rustavi and planned to build an industrial area there but, as the businessman confessed, the project implementation came to a standstill. His compatriot Urmas Grauen who bought the Bakuriani hotel is not doing so well, either. Now the hotel on which great hopes were laid is standing idle.

Jaanus Ryatsep, another Estonian businessman, is saying that he came to Sakartvelo three years ago, when his company Koger & Partnerid executed a subcontract for the construction of the building of the Estonian embassy in Georgia. The investor wanted to study the business opportunities of the country and was quite surprised. In Ryatsep's words, his potential partners thought he was just a Western European who has a lot of money and who can be used to get richer. "But when they understand you are just testing the waters the interest disappears quite soon", his words are cited by DELFI. Now Ryatsep and his business partner Peeter Esko are planning to take part in the construction of four sewage systems. Well, there is little to do but to wish the courageous Estonians that their money would not end up in a hole.

Ruslan Chigoev

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