Foreign Investment into Georgia

Since 2007, the level of FDI into Georgia has been decreasing. Government authorities keep repeating that this is due to negative processes underway in the world promising that the situation in the country will improve as the government takes certain measures. Analysts however challenge this position stating that the business environment in the country is the major reason for the decrease of FDI. Official statistics show that in 2007, FDI into the country was more than USD 2 bln. In 2008, the figure came down to USD 1.5 bln. In 2009, it was less than 1 bln. In 2010 it was around USD 800 mln. In the first half of 2011, FDI was around 377 mln. Despite these facts the Ministry of the Economy still gives prognoses that the current year's FDI will come to USD 1 bln. The IMF meanwhile suggests that at best FDI in the country will reach up to USD 850 mln, whereas the EBRD prognoses around USD 750 mln.

Georgian authorities keep repeating that according to different ratings Georgia has excellent results. It is an open country, little time is needed to start businesses, and on other indicators Georgia has become an attractive place for investments. But the question appears if everything is so perfect why are investments not coming? Analysts suggest that the country is not a compatible environment, no new players are allowed to enter the country’s business as in different spheres there are monopolistic tendencies. There are also tendencies of outflow of capital from Georgia to different countries.