Georgia turns eyes to USA market
16 September, 2010
Georgia turns eyes to USA market

To promote new trade and investment relations between the US and Georgian Companies the second US-Georgia Business Summit was held in Tbilisi, Georgia on September 8-9, 2010  under the initiative of US Department of Commerce. Tourism, franchising and agriculture were the focus sectors for the business summit.


Having lost Russian market in 2006 Georgia turns  eyes toward the over-ocean US market, one of the biggest market worldwide, to compensate the lost. The market is far and sets out  strong st

andards and regulations, but Georgian government thinks it is  much easier to access compared to the European one for American consumer is less conservative [than its  European peer] and open to new brands and products.
“The US market is enticing because it is huge and irrespective drop in expenditures  caused by financial crisis demand is still very high at US market,” Giorgi Pertaia,  Georgian Prime Minister Aide on Business Affairs, explained to Georgian Journal.
On the other hand US is interested to invest in Georgia once considers this country to be  its strategic partner in the region and tries to help Georgia to develop from economic and democratic points of view. US government held the first US-Georgian business summit in fall of 2008 in the wake of the August war with Russia so as to support the country to keep trust of oversea investors.
The second US-Georgia business summit held on 8-9 September of 2010 in Tbilisi aimed to deepen trade and investment relationship between Georgian and US companies against the backdrop of the underway global financial crisis.
“We consider Georgia as our important strategic partner and ally,” said Juan Verde, Deputy Assistant Secretary for Europe and Eurasia at the US Department of Commerce, visiting Georgia to host the summit. “US government supports Georgian democracy and economic development. We try to increase trust of investors toward Georgia.”

 


He believes Georgian economy is really becoming more liberal and barriers are reduced.
The Business Summit summoning about 150 American and Georgian businesses together featured panels on the US government resources, opportunities for commercial cooperation in Georgia, international support for business development, and best prospects for cooperation, including franchising and tourism.
Representatives of Georgian government and private sector, the US Embassy Georgia, representatives the US Department of Commerce, US Export-Import Bank, US Overseas Private Investment Corporation (OPIC), USAID Georgia, and multilateral development banks were among attendants.
Summit attendees were provided opportunities to have one-on-one meetings with select Summit speakers. The American Chamber of Commerce in Georgia managed a Trade Mission, certified by the US Department of Commerce, for US companies interested in the Georgian market.


According to Irakli Matkava, Director of Georgian National Investment Agency at the Ministry of Economic Development of Georgia, the summit is of great importance to Georgia since the US is the country that can play important role to boost investments to Georgia.
“When there are some success stories [of American-based investments in Georgia] in the past it means that the [investment] potential of the country is big and to deepen this potential it is important to work to inform the US. The US is far and it is not easy to send information there. So this kind of meeting works on this end. Specifically the thing that it is held under initiative of US Commerce Department and  participation  adds more trust to the event,” Matkava Told Georgian Journal.
Moreover the presence of the US Export-Import Bank and OPIC at the US-Georgia business summit is additional lure, Matkava accentuated.
“When they speak of investment and trade financing opportunities [in Georgia] today against the backdrop of global financial crisis when everybody seeks for access to financing sources it can significantly boost planning and implementation of concrete projects between US and Georgian businessmen,” He elaborated.


Potential priority investment sectors are tourism, agriculture, energy, logistics, and production. The follow up business summit was held on September 13, 2010 in San Francisco. Georgian government plans to continue this kind of meeting till the US market potential is not used as much as possible from investment point of view.


According to Pertaia, the ideal project of US-Georgia business relationship is attraction American investors to Georgia with their direct investments so as to establish and develop a high tech-based business here that in close partnership with local business will increase competitive power of Georgian product and boost export ultimately.
Pertaia believes that distance and strong market regulations is no problem for Georgian business to hit US market if they find their niche there. Modern logistic technologies make US market as accessible as for example neighboring Turkey to Georgia. Expenses related with hitting Turkey and US market may be just cents, Pertaia assures due to huge volumes of product that can be exported to US. But to hit this market Georgian business can either via finding their niche there or by creation a demand for product. Anyway they have to research the market to figure out what’s to what.


“Usually we speak of wine and mineral water as of traditional Georgian export product but nobody researched the US market and nobody thinks of producing the product that is in demand in US,” Pertaia said adding that this kind of research is quite expensive and since underdeveloped Georgian business cannot afford such a luxury they have to unite under one umbrella and hit the US market via joint effort. 
“The state can raise awareness via participation at many forums abroad and to advertise Georgian product and market generally, but the remainder is up to business to do it, state is no obliged to find a partner to concrete business. Business should be always in quest of new markets,” Pertaia said. “The US is interested in Georgia specifically after statements of Donald Trump that he intends to invest in Georgia. He outlines business trends in the US and knows where get the money.”

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