Government better shift focus from ratings to action plans
13 January, 2011
Government better shift focus from ratings to action plans

Georgia received encouraging international ratings for the past 2010 that picture the country as one of the best place for doing business and investment haunt. The fact is that Georgia still remains investment-deficient.
Georgia seems rolling the right track to win hearts of international investors. It eased tax burden, red tape and corruption problem and gained the name of reformatory country worldwide even against the backdrop of the global financial. But investors still shun the country. In 2010 Georgia failed

to attract even the pessimistic investment prognosis of USD 800 million [the optimistic was USD 1.2 billion] it  could  attract in the most problematic 2009 year  affected by financial crisis. 
Government names the August war and global financial crisis as a reason. Bigger part of economic analysts say the problem is bad management skills and advise government to focus on drafting detailed economic programs rather than chase after international acclaim on papers.
“The years of 2008 and 2009 were difficult from crisis point of view not 2010, it is much better and arguments that financial crisis is a reason of sluggish investments inflow in 2010 is not well-reasoned,” Davit Narmania, Director Executive of the Institute of Caucasus Economic and Social Research, told Georgian Journal. “There is GEL 400 thousand built in the state budget on purpose to pay for service of international credit agencies like Fitch and Standard & Poor’s that is a waste of money in fact as far as you cannot attract investor through exposure ratings alone. Moreover some of them are of notorious fame. Investors sued Fitch for example past year for their misleading assessments. The money earmarked on service-payment of credit rating agencies is better to be diverted on remedies stimulating Georgian economy.”
Indeed Georgia seems a pet to almost all international ratings except the World Economic Forum (WEF). The political tension and short-lived war with Russia in 2008 somewhat affected its international ratings but by 2010 Georgia regained the lost scores back again.
In 2010 Standard & Poor’s improved the rating from B to B+, while Moody’s granted the first ever sovereign rating Ba3 to Georgia. The country improved its ranking by 22 positions in the annual report of Economic Freedom of the World and moved from 45 to 22 in the ranking of 141 countries for 2010.  The World Bank’ named Georgia as a top reformatory among 174 countries  in its Doing Business 2011 report  and one of the most open countries to investments according to Investing Across Borders 2010 report that covers 87 countries. All the ratings stress that Georgia is a simple place to start business: number of licenses and permissions is reduced to insignificant number and they are delivered in few days while the process takes months in other countries, property acquisition and registration can be processed with similar easy terms, and that investors can feel protected. Forbes based on all these ratings and attainments named Georgia 61 among 128 Best Countries for Business 2010.
The fact is that irrespective this positive acclaim of rating coutures investments diminish rather than increase in the country starting 2008 that bespeaks of problems. 
“No serious investor enters country without its own in-depth research based only on the ratings. Besides investors have bigger trust in the WEF report that [unlike other rating reports] presents much more comprehensive picture of country’s image based on deeper economic, political and social analyze according to at least 100 criteria,” Levan Kalandadze, Director Executive of Association of Georgian Small and Medium Enterprises, said. “And WEF’s Global Competitive Index of 2010-2011 ranks Georgia 93 among 139 countries.”
In the WEF report Georgia ranks 120 on property right protection, 104 in judicial independence, and 97- in intellectual property protection that indicates that country still has serious problems with key issues important for investors to feel safe. It makes investors think twice before coming here. 
Common approach of Georgian economic analysts is that most ratings except WEF focus on terms that made easier to start business in Georgia that is really well-done. But when it comes to further business operation here entrepreneurs face serious problems in key issues including tax administration and property right protection.
Dirikh Muller, one of the founders of Georgian Investment Group (GIG), assures that Georgian business environment is the best in the region and it deserved the improved international ratings fairly as far as Georgia handled with the post-crisis situation better than most EU countries and the US. Many EU countries including Portugal, Ireland, Greece as well as California of the US suffer of huge budgetary deficits while Georgia managed to reduce its deficit by 4%.
However Muller acknowledges that the year of 2010 was the worst in GIG practice and to lure investors Georgia needs more comprehensive approach.
“Georgian government has to think over why irrespective improved business climate investment inflow is sluggish here. The problem is that they have to undertake more complex action plan stimulating economy and back their good ideas with detailed programs. Usually government puts out good ideas and do not follow with a well-calculated action plan, it does not work. Investors need to see calculations and detailed analyze. All the EU countries stimulate agriculture via subsidies but look there is a food crisis and they enjoy profit of doubled prices. We have to know where we go not only by words,” He said.

Print
Other Stories
Inovative and reliable online shop in Georgia - Momitane.ge
Status of Georgia as a business and tourism interesting country is growing from year to year.
Tbilisi TV Broadcasting Tower – Better than the Eiffel Tower?
It is planned to renovate the Tbilisi TV Broadcasting Tower, one of the landmarks in the capital.
Georgian Fusion Menu by The Biltmore Hotel Tbilisi
5,895,914 international visitors have visited Georgia between January and August of 2018. Compared to the previous year the number has increased by 12.2 per cent.
Advertising of gambling and lucrative games may become banned in Georgia
Advertising of gambling and lucrative games may become banned in Georgia. Those who violate the new rule would be fined GEL 10 000.
Lebanese café-lounge Beirut opens in Tbilisi
What is necessary to organize an unforgettable event? – Fun, emotions, lots of surprises, good music and delicious menu.
Georgia second among the fastest growing tourist destinations in Europe
Georgia is among the fastest growing tourist destinations in Europe. The data is published by the UN World Tourism Organization.
Bitmain launches world digital mining summit in Tbilisi, Georgia
Bitmain CEO Jihan Wu and Roger Ver, CEO of Bitcoin.com Head Speaker List featuring Circle, DEX.top and Genesis Mining when Digital Mining Leaders Convene In Tbilisi on September 21-23
GAZELLE FINANCE GEORGIA AND TBC BANK HELP THE WESTERN REGIONAL CENTER OF MODERN MEDICAL TECHNOLOGIES EXPAND ACCESS TO QUALITY HEALTHCARE SERVICES IN KUTAISI, GEORGIA
TBC Bank and Gazelle Finance have teamed-up to support Medical City, a leading healthcare provider in the western region of Georgia to launch the Western Regional Center Of Modern Medical Technologies.
Equiavlent to buried treasure – resources that are underused in Georgia
For 2018 the IMF Commission has forecast an annual economic growth for the Georgian economy of about 5,5%.
Does the quality of Georgian wine increase and how the export affects it
If we look at the data collected about modern Georgian wine, we will find out that the Georgian wines produced between 2015-2017 are much better in terms of their quality and Oenologic features rather than the wines produced between 2009-2011.
Japan simplifies the visa requirements for Georgian citizens
Diplomatic and economic relations between Georgia and Japan are now moving to a new phase. Recently Japan has decided to simplify the visa requirements for Georgian citizens.
M&S (Marks and Spencer) and H&M collections to be produced in Georgia
Garments manufacturer MGMTEX will start production of the M&S and H&M trendy collections from this September.
The World Digital Mining Summit to be held in Georgia
The summit is scheduled to take place between 21st-23rd September in the Hualing Hotel, Tbilisi, Georgia.
Galt and Taggart - Tourism Boom Continues in Georgia
Tourism has become one of the key drivers for the Georgian economy. Galt and Taggart has recently published research about the Georgian tourism sector in the first half of 2018.
"The worst dream for Putin is that Russians want to live in Georgia"
This year, visitors to the Adjara region would notice that there is a boom in construction in and around Batumi.
Underground gas storage facility to be built in Georgia
KfW, a German government-owned development bank signed a EUR 150 million promotional loan with the state-owned Georgian Oil and Gas Corporation (GOGC) for the construction of the first underground gas storage facility in Georgia.
New gambling rules for Georgia
Georgian lawmakers are preparing a new draft law relating to online-casinos and gambling that will seek to curb gambling addiction in Georgia.
How expensive is it to visit Georgia?
The Georgian Lari (GEL) is the official currency of Georgia and is the only legal means of payment in the entire territory of Georgia.
Trade with the EU and the Commonwealth of Independent States (CIS) has grown significantly
Trade with the EU and the CIS has grown by 26% and 33.5 % respectively, says GeoStat, the Georgian National Statistics Office.
The unemployment rate decreases in Georgia
The unemployment rate decreased in Georgia by 1,9% and amounted to 12.1% in the 2nd quarter of 2018 compared with the previous quarter,
Memorandum of Understanding to be signed between Georgia and Malaysia
According to the Georgian Ambassador to Malaysia Nikoloz Apkhazava, Georgia plans to sign a Memorandum of Understanding (MoU) with Malaysia.
“Blauenstein Georgia” due to expand in Georgia
“Blauenstein Georgia” is planning to open more shops in Georgia. It is an agriculture company that sells meat products, meat and convenience food.
The amount of Direct Foreign Investment rises in Georgia
According to the information of the National Statistics Office of Georgia, the amount of direct foreign investment in Georgia has risen
It’s going to get  harder for foreigners to get residence permit in Georgia
It’s going to get harder for foreigners to get permit of residence in Georgia.
Mziuri Park in Tbilisi to be renovated soon
It was the dream of prominent Georgian writer Nodar Dumbadze that when the original Mziuri park was constructed and opened in 1892 that it should be a park for children,
PHOTO OF THE DAY
Exchange Rates
GEL Exchange Rate
Convertor
16.11.2018
17.11.2018
USD
1
USD
2.6818
2.6727
EUR
1
EUR
3.0299
3.0268
GBP
1
GBP
3.4332
3.4240
RUB
100
RUB
4.0185
4.0447
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.6727
EUR
1
EUR
3.0268
GBP
1
GBP
3.4240
RUB
100
RUB
4.0447
November 2018
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30