Home / Business / GEL Volatility Badly Affects Business and Foreign Investors Notice Negative Tendencies

GEL Volatility Badly Affects Business and Foreign Investors Notice Negative Tendencies

Estonian businessman Oleg Ossinovski talks about worsening attitude that Government of Georgia demonstrates in relation to foreign investors. Previously, when I launched business in Georgia, the Authorities were prioritizing foreign investments, but today we see that this priority has been replaced.

Growing bureaucracy and worsening investment process may be a new method of state development … The country has somehow managed to recover, but some officials in armchairs have outlined other priorities and similar attitudes and approaches are absolutely unacceptable, Oleg Ossinovski said.

“In any country, for example in Germany, Angela Merkel would personally attend a presentation of such a large-scale project worth 1 billion EUR. And now let’s see – is there any officials here? I mean this, when I talk about worsening attitudes. The Authorities prioritize other directions than attracting and maintaining foreign investments in the country”, Oleg Ossinovski said.

In terms of profitability, it is illogical to make investments in Georgia, because the profitability rates are the same as in any foreign country, but risks are higher, he added.

“Only thing that admires me is that it is possible to do business anywhere  and how you want. For example, it is impossible in New York to build a town like Tbilisi Hills, but you can do this in Georgia. That’s why, despite a lot of problems and less profitability, I like the mentioned opportunities and that is what makes me stay in Georgia. In the end, money is not everything in this life”, he noted.

Oleg Ossinovski has been implementing various investment projects in Georgia, including Golf Course in Teleti and several hydro power stations in various regions of Georgia.

According to appraisals by Estonian businessman Oleg Ossinovski, the corruption still remains in Georgia. Ten 10 years ago, when I arrived in Georgia, nobody could dare to talk about corruption deals. Moreover, even no hints were made from government officials, Oleg Ossinovski said.

“And now we hear about similar offers. I think corruption level is growing in Georgia every day and I have zero tolerance to this issue and I do not participate in similar dialogues and negotiations. This is an issue of principle, but this is our reality”, Oleg Ossinovski said.

Three years ago, Estonian businessman started construction of the biggest gold course in the village of Teleti. Total investment value of this project is 1 billion EUR. The first stage of the project was finished last week. The businessman has talked about worsening investment environment at this presentation.

The Caucasus Business Week (CBW) has inquired whether other foreign investors also see similar problems in Georgia.

Following the Estonian businessmen, Rahim Abachi, director general for Iran-Georgia Chamber of Commerce and Industry also talks about unfavorable business environment in Georgia. The economic situation in the country has worsened, he noted.

There is heavy social background in the country and this tendency shapes negative tendencies in investors, Abachi noted.

In response to the question how easy investors operate in the country and whether bureaucracy grows in the country, Abachi explained that he had no similar cases personally, however the economic growth low paces and sometimes frozen economic development frightens investors.

‘When the economy does not record monthly growth and there is low-rate performance, this make direct influence on investments. In general, legislation has essentially strengthened in relation to our citizens and restrictions are introduced. These factors also make influence” Abachi said.

In Response to the qquestion whether making investments is profitable is in Georgia and whether business related risks are minimized, Abachi explains that all investors should explore their specific business environment and make investments only after that. Moreover, GEL exchange rate volatility makes quite negative impact on business and foreign investors notice these negative tendencies.

“We suggest to strengthen binational commerce chambers, merge businesses and cooperate with the Government. These components are important for businessmen and for economic ties with the countries “,Itsik Moshe, president of Israel-Georgia Chamber of Business, noted.

In response to the question whether he agrees with the Estonian businessman’s statement, Itsik Moshe explains that business is like water in the river and it balances itself. The President of Georgia-Israeli Business Chamber says that investments follow only profitability. In general, investments from Israel and the global Hebrew communities are different and therefore, problems and results are different too, he said.

“In case of Israel, tourism business sees unprecedented growth. Israeli citizens also demonstrate growing interest in real estate of Georgia. They are also interested in developing high technologies in Georgia. Naturally, problems also exist, but our communication with the Georgian business ombudsman suffice to tackle them.

As to business support and stimulation, this is the discretion of Georgia.

“The country may decide that its does not need investors in a specific field and we, chambers of commerce, have the right to care for only those investors, who entered Georgia with initiatives and offers”, Itsik Moshe said.

Israel-Georgia Chamber of Business has not met corruption cases in Georgia, he said.

“If there are certain problems in this direction, it is necessary to provide active job with due chambers of commerce. We are ready for consultations”, Itsik Moshe noted.