The US Department releases a report about Georgia
By Anastasia Sokhadze
Friday, September 11
The document published by the US Department of State, which assesses investment climates in various countries, notes that despite its high sensitivity to regional and global shocks, the country has undergone extensive economic reforms since 1991, resulting in a relatively well-functioning and stable market economy. The report reads that Georgia's economy has been greatly affected by regional developments, including economic sanctions imposed by Russia.
According to the document, the global challenges posed by COVID-19 during this period and the measures needed to mitigate the spread of the virus put significant pressure on the local currency and the local economy.
The State Department believes that overall business and investment conditions in Georgia are healthy, even though some companies are unsure of the ability of the judiciary to handle commercial cases independently or in a timely, competent manner - some business disputes are delayed by the court system for years.
"Overall, business and investment conditions are solid. However, some companies have expressed a growing lack of trust in the judiciary in terms of competently, timely, or independently reviewing commercial cases. Some business disputes linger in the court system for years. Other companies complain about inefficient decision-making processes at the municipal level, shortcomings in the implementation of intellectual property rights, lack of effective antitrust policies, selective enforcement of economic legislation, and difficulties in resolving property rights disputes. The Georgian government continues to work to address these issues and, despite the challenges, Georgia holds a high position in the region as a good place to do business," the document reads.
The report states that Georgia is a world leader in terms of ease of doing business and the current business environment in Georgia is positively characterized. Georgia's leading positions in such areas as the World Bank Doing Business and Transparency International Corruption Perceptions Index are highlighted. In a positive context, the following reforms are mentioned by the government: changes in the Tax Code (Estonian model), pension reform, insolvency reform, constitutional changes, changes in the Labor Code, and also, justice reform. The progress made by the government in the fight against corruption is positively mentioned, however, the report also mentions the Elite corruption.
After the restoration of independence, the civil war, the events in Abkhazia, and the separatist conflicts in South Ossetia are mentioned to be the reason Georgia is developing slowly.
"Russia invaded and occupied Georgian territories in 2008. Russia continues to occupy these regions and the Tbilisi central government has no effective control over these territories. The United States supports Georgia’s sovereignty and territorial integrity within its internationally recognized borders and does not recognize Abkhazia and South Ossetia. Tensions are still high in the occupied territories as well as near the administrative border," the statement said.
The document noted that government programs are aimed at encouraging women to do business. It emphasized that with the existing regulations and free trade agreements, Georgia is open, transparent, and attractive to foreign investors.
As for the strategic points, the statement is talking about the Baku-Tbilisi-Kars railway and the Anaklia deep-water port.
The Baku-Tbilisi-Kars railway has increased Georgia's transit prospects. The Anaklia deep-water port project has faced many delays since its initial contract in 2016. The government terminated the contract with the Anaklia Development Consortium in 2020.
According to the Minister of Economy and Sustainable Development, Natia Turnava, the report published by the US Department of State on the investment environment in Georgia is absolutely objective. She also stated that the new report of the US State Department fairly, very positively assesses the reforms carried out by the Georgian government in recent years, not only in the field of the economy but also in other areas, including reforms in the justice system.
The US Department of State's Annual Investment Climate Report includes information on the investment climate in 170 countries, prepared by economic officers from local US embassies. They analyze the economies of countries that are recipients of American investment or have the potential to attract American companies.
