Country Report on
Georgia
Presented by: Irakli Kipshidze Assistant to the President Georgian Chamber of Commerce and Industry
Georgian Chamber of Commerce and Industry www.gcci.ge Georgia: Country -profile
• Geography
• • • • • Area: 70 thousand sq. km.; Agricultural land – 43%; Forest – 41%; Water basin – 3%; Other – 13%.
• Population
• Population density: 65 per sq. km. • Population size: 4.3 million (2004);
• St. Petersburg
Euro-Asian Routes
Rotterdam •
• Gdansk • Hamburg• Bandar Abbas
35 Nort ,8 m h R o ln ton ute –5 5%
EUROPE EUROPE
• Trieste
Barcelona •
• Marseilles
CENTRAL ASIA CENTRAL ASIA
Constantza • Varna •
• Aktau
CAUCASUS CAUCASUS
•
Istanbul
Silk Road 12,9 mln ton – 20%
•
Poti
Baku •
• Turkmenbashi • Bandar-e Amirabad
Piraeus •
ute % Ro 25 th n – ou n to S l m ,3 16
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General Overview of economic environment
Macro-Economic Indicators
2003 Nominal GDP (USD m) Nominal GDP (GEL m) Real GDP Growth (%) GDP per Capita (USD) Unemployment (%) Inflation (%) Net FDI (USD m) GEL:USD Exchange Rate (average) 3.995 8.582 11.1 877 11.5 7.0 336 2.15
Georgian Chamber of Commerce and Industry www.gcci.ge Georgia: Country Profile
2004 5.166 9.846 5.9 1.139 12.6 7.5 490 1.92
2005 6.401 11.629 9.3 1.416 13.8 6.2 539 1.81
2006 7.8 13,784 9,4 1.766 13,6 8.7 1026 1.77
Georgian Economy in Figures 2007, Ist half
Georgian Chamber of Commerce and Industry www.gcci.ge Georgia: Country Profile
GDP: GDP growth: GDP per head: Sectors:
4.4 USD Billion (preliminary) 12.5 % (preliminary) 1006 USD
Banking and Financing Transport Trade Mineral Resource Industry Processing Industry
Inflation:
26,1 % 19,8 % 16,1 % 15,2 % 14,1 %
7,3%
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General Overview of economic environment
Georgian Chamber of Commerce and Industry www.gcci.ge Georgia: Country Profile
Main Strengths of Georgia
• Favorable geo-political location • Abundant natural resources
• Forests, hydro resources, agricultural land, metal ores, coal, copper concentrates, natural resorts, etc.
• Government committed to economic reform
• Privatization, liberalization, deregulation, …
• Infrastructure well developed
• Roads, transport, telecommunications, energy, financial infrastructure, professional services
• Qualified Labor inexpensive and easily available • Proximity with large export markets
• Cultural Richness:
General Overview of economic environment
Main Strengths of Georgia
• High GDP growth • Increasing consumer spending • Significant government spending on infrastructure • New simplified tax code
Georgian Chamber of Commerce and Industry www.gcci.ge Georgia: Country Profile
• Majority of customs duties abolished, simplified new customs code • Increased foreign investor activity • Named number one reformer by the World Bank (Doing Business 2007) • Well ahead other CIS countries in the Heritage Foundation Index of Economic Freedom
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Government Policy
Georgian Chamber of Commerce and Industry www.gcci.ge Georgia: Country Profile
• Government committed to free market and economic reform • Profit repatriation unrestricted • Tax Code recently amended
12% income tax down from 20% 7 taxes down from 21 20% payroll tax down from 31% 18% VAT down from 20%
• New Law on Permits and Licenses dramatically reduced barriers to business
50 various permits down from 423 107 various licenses down from 555
• Law on Entrepreneurs recently amended • Privatization is ongoing
Business company may be registered in 3 days
Ukraine
Georgia On the World Transit Map
Kazakhstan
Russia
Σ
CPC
Tengiz
Isobilnoe Novorossiysk Jugba
Blue Stream
NREP
Uzbekistan Georgia
WREP
Aktau Tbilisi Baku
Supsa
Ankara
Samsun Erzurum
BTC
SCP
Armenia
Turkey
Azerbaijan
Turkmenistan
Turkmenbashi
Ceyhan
Cyprus
Syria
Iraq
Iran
4
Gross Domestic Product
USD Billion
Georgian Chamber of Commerce and Industry www.gcci.ge Georgia: Country Profile
8 7 6 5 4 3 2 1 0 3,1 3,2 3,4 4 5,2 6,4
8.0
4,4
2000 2001 2002 2003 2004 2005 2006 2007 6m
Foreign Direct Investment
Mlrd. USD
Georgian Chamber of Commerce and Industry www.gcci.ge Georgia: Country Profile
1200 1000 800 600 400 200 0 131 110 167 340 499 450
1119
644
2000 2001 2002 2003 2004 2005 2006 2007 6m
5
Major FDI per countries
USD Million
210,0 180,0 152,3 150,0 120,0 90,0 60,0 30,0 0,0
No rw ay Az erb Isl aij an an ds of Vir gin ia Gr ea tB rit ain
Georgian Chamber of Commerce and Industry www.gcci.ge Georgia: Country Profile
186,8
182,7
129,7
77,9 77,8 58,6 47,2 42,5 40,1 20,4
Ita ly De nm ar k
US A Ka za kh sta n
Foreign Trade Volume
USD Million
Georgian Chamber of Commerce and Industry www.gcci.ge Georgia: Country Profile
4671 5000 4500 4000 3357 3500 2778 3000 2495 2500 1602 2000 1500 1032 1071 1142 1000 500 0 2000 2001 2002 2003 2004 2005 2006 2007, 6 m.
Cy pr us Ge rm an y
Tu rke y
6
Major Trade Partners
2007, 6 month
USD Million
550 500 450 400 350 300 250 200 150 100 50 0
Georgian Chamber of Commerce and industry www.gcci.ge Georgia: Country Profile
Trade
Ch Tu in a rk m en ist an
Export
Ru ss ia U kr ai ne A ze rb ai jan G er m an y
SA Bu lg ar ia
ke y
U
Tu r
U
A
E
Import
Georgian Chamber of Commerce and Industry www.gcci.ge Georgia: Country Profile
TRADE WITH GEORGIA: Produce in Georgia Georgia has one of three most liberal import duty systems in the world, with an average weight import duty of 1, 5%. 90% of all imports have 0% duty. No export duties. Streamlined customs clearance: Export and import permits and licenses required only for 8 exceptional types of goods. World’s most liberal Labor Code and most literate labor force.
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TRADE WITH GEORGIA: Sell to the World
Georgian Chamber of Commerce and Industry www.gcci.ge Georgia: Country Profile
Georgia’s WTO membership brings most favored nation status with WTO members. Free trade with CIS countries: Armenia, Azerbaijan, Russia, Ukraine, Moldova, Belarus, Kazakhstan, Uzbekistan, Tajikistan, Turkmenistan. Special preferential trade regime (GSP+) with the European Union and Turkey. Preferential trade regime (GSP) with USA, Canada, Switzerland and Japan.
General Overview of economic environment
Sectors with best potential
• Export
Georgian Chamber of Commerce and Industry www.gcci.ge Georgia: Country Profile
oriented
Tourism & hospitality services Agribusiness (fresh, frozen and processed fruits and vegetables, nuts) Wine Building materials Wood Processing •
Import Substitution
Agriculture (cereals & flour, sugar) Food production (sugar, canned food) Pharmaceuticals Energy
•
Consumption growth
IT & Communications Construction Banking and Financial Services Transport and Freight Forwarding Wholesale and Retail Trade
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