In recent years, Georgia has have the potential to invest in new and good economic opportunities, and providing the necessary conditions, especially for foreigners, has led to positive and growing economic growth. This has led to Georgia becoming an economically secure country.
High transparency, the main advantage of Georgia
One of the strengths of Georgia is that its financial and economic corruption is very low, and this economic transparency has made it safer for foreign investors. Georgia has been very successful in combating corruption, which is one of the main obstacles to economic development. This success has been recognized by various global rating agencies. According to reports, Georgia is the leader in the region after Russia in the fight against corruption, and Georgia ranks fifth in the world according to the Corruption Index released in 2008.Georgia’s monetary policy relies on a stable and specific inflation plan, maintaining price stability and minimizing economic growth fluctuations. In the country’s economic development program, inflation rate in 2016 was 5% and 4% in year 2017, and since 2008, the National Bank of Georgia aims to bring inflation to 3% for the long term.
In recent years, Georgia’s tax rates have dropped from 21 percent to 6 percent, and fundamental and institutional reforms have been implemented. In addition, there has been a simplified system of tax disputes in the country, which has made the tax management system so simplified that most taxpayers can afford it. It is noteworthy that Georgia has the highest tax authority in Europe.
Additionally, customs reforms in the country have made the customs process easier. Customs tariff reform has led to lower foreign trade costs. During these reforms, import tariffs have been eliminated for approximately 90% of products and there is only 3% tariff rate instead of 16%. Currently, 86% of tariff lines are exempt from paying duty rates compared to 26% in 2005. The modernization of the licensing system has also reduced the number of licenses and simplified the implementation procedures.
Georgia’s attractive business environment for investment
Georgia’s position on the European-Asian border and on the Silk Road has significantly merged with international markets. Georgia has a diverse GDP structure that is conducive to sustainable growth. Georgia Customs has provided free access to 900 million European markets. Georgia’s public debt levels have been favorable, and their debt levels have steadily declined since 2003. Price stability is a key factor in sustainable economic growth in Georgia.
The new Georgian government since the Rose Revolution has implemented widespread and inclusive reforms that affect various aspects of people’s lives. These economic reforms, in addition to their high diversity, reflect an upward trend that, on the one hand, has led to the liberalization of the economy and on the other hand has provided sustained economic growth based on private sector development. In recent years, Georgia has been one of the fastest-growing countries in the world.
In general, a favorable business environment has created a significant flow of foreign direct investment in the country and made it easier to achieve high economic growth rates. According to research conducted in year 2013, Georgia is in the top ten countries in the market energy growth index. Using this index, emerging countries with strong growth potential based on energy reserves and GDP are identified.
Features such as a stable political environment, a free market economy, competitive labor, low taxes, preferential trading methods and developed transport infrastructures have made the country an attractive destination for foreign investors. Georgia has signed bilateral investment treaties with thirty two countries, and has been a member of the convention since 1992. Georgia’s investment space and opportunities are attracting investors from all over the world.
Foreign direct investment in Georgia amounted to $ 942 million in year of 2013 and $ 1758 million in 2014; an increase of 87% compared to 2013. The number of foreign direct investment reached $ 1351 million in 2015, which is still increasing. Due to the high importance of foreign direct investment and advanced government support, the region has been under the direct control of the Georgian Prime Minister for years.
Economic Benefits of Georgia
Expanding the Georgian economy, creating good jobs and boosting the workforce can be widely based everywhere in Georgia. The effectiveness of factors such as extensive job training opportunities, high wages, tax credits and greater investment in transportation has been proven to attract and retain high-paying industries and jobs. The development of economic solutions in all areas has led to an inclusive economy and maximized Georgia’s ability to compete. The UNDP (United Nation Development Plan) also contributes to agricultural prosperity and rural development and to improving access to services, education and technology for the rural population.
Georgia has been part of the European Union’s free trade area since 2014. The EU is the country’s largest trading partner, with the bilateral treaty accounting for more than a quarter of Georgia’s total trade turnover since 2015. This is while Georgia’s trade with the Commonwealth of Independent States (CIS), such as Russia, has declined 22 percent since the treaty with the European Union.
New Georgia approaches for Export Development in Georgia
Because Georgia’s export base is limited and the world economy is rapidly changing, traditional agriculture and established industries, including metals, are not sufficient to support Georgia’s exports. In this regard, new sectors such as tourism and transport are emerging, and recent free trade agreements are helping to increase economic diversification by creating new markets.
Since 2008, one of the most important actions of the Georgian government has been to provide a transparent privatization policy that has been enhanced to attract foreign investment and at present, the development of the private sector and the effective use of the country’s resources have been examined.
