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Georgian Economic Outlook

Ministry of Economic Development of

Georgia

Ministry of Economic Development of Georgia

Country Overview

Area: 69 700 sq km

Population 2008 E: 4 630 841

Life expectancy: 76.51 years

Official language: Georgian

Literacy: 100%

Capital: Tbilisi

Currency (code): Lari (GEL)

GDP 2008E: US$ 12.80 billion

GDP - real growth rate 2008E: 2.1%

GDP - Per Capita 2008 US$ 2 920.3

Inflation rate 2008 (average annual): 10.0%

External debt to GDP 2008: 21.4%


Liberal Reforms for Long Term Sustainable Growth

• Liberal Tax Code

Only 6 taxes left

Significant procedural and institutional reforms

Simplified system of tax disputes discussion

• Customs Reform

Simplified customs procedures

Simplified and sharply reduced the costs connected to the foreign trade

Number of import tariffs were abolished on approximetaly 90% of products

3 tariff rates (0%, 5%, 12%) remained

No quantitative restrictions (quotas) on imports and exports

• Modernized system of Licenses and Permits

Number of licenses and permits reduced by 84%

Licenses and permits are only used in the production of highly risky goods and services, usage of natural

resources and other specific activities

Significantly simplified procedures of issuing licenses and permits

Introduced “one-stop shop” and “silence is consent” principles


Liberal Reforms for Long Term Sustainable Growth

• The reform of Technical Regulation System

National mandatory standards system was replaced by the voluntary standards, giving entrepreneurs

the possibility:

– To select the standard for his activities registered in the country

– To use the standard of any country or any regional or international standard

– To register standards in Georgian National Agency for Standards, Technical Regulations and

Metrology and to use them for entrepreneurial activities

– To elaborate own standard for new goods, register it in the national agency and use it in

entrepreneurial activity

– To obtain consultations for the selection and elaboration of standards

Declined role of state in the system of technical regulation

• Liberal Labor Code – one of the most liberal in the world

Simplified relations between employers and employees

Significantly reduced hiring and firing expenses


Economic Growth

4.0 5.1 6.4 7.8 10.2 12.8

11.1

5.9

9.6 9.4

12.3

2.1

0

5

10

15

0.0

5.0

10.0

15.0

2003 2004 2005 2006 2007 2008

%

bln

. USD

Nominal GDP

GDP real growth

Nominal and Real GDP

Year 2008

Fastest growing sectors of Georgian

Economy

• Mining and Quarrying – 17.0%

• Communications – 14.5%

• Education – 13.7%

• Trade and repair services – 10.4%

• Health care and social security – 5.9%

Components of Nominal GDP 2008

Nominal GDP Per Capita

Trade 13.9

Agriculture 8.9

Manufacturing 8.2

Transport 6.6

Construction 5.3Health care

4.1

Other 53.0

9191 187.6

1 483.51 763.5

2 314.6

2 920.3

18.2

29.2

24.9

18.9

31.326.2

0

5

10

15

20

25

30

35

0

500

1000

1500

2000

2500

3000

3500

2003 2004 2005 2006 2007 2008

%

USD

GDP Per Capita Growth %


Consumer Price Index

Consumer Price Index 2008

• End of period Inflation – 5.5%

Consumer Price Index Trend

5.6

4.85.7

8.2

9.2

9.2

10.0

5.4

7.0 7.5

6.2

8.8

11.0

5.5

0

2

4

6

8

10

12

0

2

4

6

8

10

12

2002 2003 2004 2005 2006 2007 2008

%%

Average Annual End of Period

• Average annual Inflation – 10%


Labour Market

• Challenge: structural unemployment/job mismatch

• Response: State Programs:

Vocational Training and Retraining, Development of

Professional Training Infrastructure “Professional

Education for Employment” (PPP format)

“Cheap Credit”, “100 new Agro Industry

Enterprises”

11.5

12.6 13.8 13.613.3

0

2

4

6

8

10

12

14

16

18

20

2003 2004 2005 2006 2007

%

• Unemployment rate declined to 13.3% in

2007, down 0.3% y-o-y

• Employed population – 1 678.7 thousand, among

which:

Salaried employees – 625.4 thousand (+3.5%

07/’06)

• Accelerated growth rate of the number of salaried

employed and decrease of the number of self-

employed

Unemployment Rate %

Monthly Salary of Employed in

State and Non-state Enterprises

141 158

194

265

306

138165

212

307

442

0

100

200

300

400

500

2003 2004 2005 2006 2007

GE

L

State Sector Private Sector


Poverty Level

Subsistence Level 2004-2008

• Subsistence Level has increased by51.7%

Poverty Level 2004-2008

• Poverty Level has declined by 2.5point

• Poverty depth has declined by 1.1point

• Poverty Severity has declined by 0.8point

Subsistence Minimum

Poverty Level

84.395.8

106.5118.6

127.9

0

20

40

60

80

100

120

140

2004 2005 2006 2007 2008

GEL

24.6 24.1 23.321.3 22.1

8.1 7.6 7.2 6.9 7.04.0 3.6 3.3 3.2 3.2

0

5

10

15

20

25

30

2004 2005 2006 2007 2008

%

Level Depth Severity


Foreign Trade

0

150

300

450

600

750

900

1050

1200

mln

. U

SD

Turnover Export Import

Source: Department of Statistics

10 Main Trade Partners 2008

Foreign Trade Turnover 2003-2008

• Total trade turnover – 7 555.8 mln. USD

(17.2% increase)

Export – 1 497.7 mln. USD (21.5% increase)

Import – 6 058.1 mln. USD (16.2% increase)

In 2004-2008 Georgian trade turnover

increased by 203.2%

Foreign Trade 2008

0.35 0.46 0.650.87 0.93 1.24 1.49

0.791.14

1.852.50

3.70

5.216.06

-0.44 -0.68 -1.20-1.63

-2.77

-3.97-4.57

12.9 17.4

23.525.5

35.639.0

35.7

-15

0

15

30

45

-6

-4

-2

0

2

4

6

8

2002 2003 2004 2005 2006 2007 2008

%

bln

. USD

Export Import Trade Deficit Deficit/GDP (%)

Export, Import, Trade Deficit

1.6 2.5 3.44.6

6.4

7.5

45.556.3

36.0 35.339.1

17.2

0

20

40

60

0

2

4

6

8

2003 2004 2005 2006 2007 2008

%

bln

. USD

Foreign Trade Turnover Growth


Foreign Trade

Foreign Trade With Country Groups 2008

Source: Department of Statistics of Georgia

• Foreign trade turnover with EU –

2000.5 mln. USD (10.7% increase)

Export – 335.2 mln. USD (24.8%

increase)

Import – 1665.3 mln. USD (8.2%

increase)

• Foreign trade turnover with CIS –

2542.9 mln. USD (9.9% increase)

Export – 542.5 mln. USD

(17.4% increase)

Import – 2000.5 mln. USD (8%

increase)

594.9

982.5

1 404

1 792.4

2 314.3

2 543

491

715.8792.6

1 105.7

1 807.4

2 000.5

0

500

1000

1500

2000

2500

3000

2003 2004 2005 2006 2007 2008

mln

. USD

CIS EU


Diversified Trade Structure

Export structure by country 2008 Import structure by country 2008

Export structure by product 2008 Import structure by product 2008


Turkey 17.6

Azerbaijan 13.7

Ukraine 9.0

Canada 8.8Armenia 8.3

Bulgaria 7.2

USA 6.8

Mexico 3.5

UK 2.9

France 2.7

Other 19.5 Turkey 15.5

Ukraine 10.9

Azerbaijan 10.0

Germany 7.2

Russia 7.0China 4.9UAE 4.5

USA 4.0

Italy 3.0

Turkmenistan 2.2

Other 30.8

Ferro-alloys 17.8

Scrap metals 8.6

Ores 7.9

Fertilizers 7

Gold 6.7Cement 5.3

Wines 2.5

Other 44.2

Oil and oil products 12.6

Oil gases 3.4

Pharmaceuticals3.1

Bars and roads 1.8

Wheat 1.8

Flour 1.2

Manganese ores 1.2

Other 74.9


Trade Policy

• Free Trade Regime – with CIS countries and Turkey (since November 1, 2008)

• Most Favored Nation Regime (MFN) – with World Trade Organization (WTO) member countries

• Preferential Regime (GSP) – with USA, Canada, Japan, Switzerland, Norway

• Preferential Regime (GSP+) – with EU (7200 items) since 2005

Possibility of FTA with EU in nearest future

Competitive Trade Regimes

• Low import tariffs (90% of goods free from import tariff)

• Few export/import licenses and permits

• No quantitative restrictions on import and export

• No customs tariff on export and re-export

• No VAT on export

• Simplified export and import procedures

Export Promotion Department was established for export facilitation

Main Features of Georgian Trade Policy


13

Foreign Direct Investment

FDI inflows

FDI breakdown by origin


• FDI – 1 564 mln. USD

• Reduction – 22.4%

• Share of FDI in GDP – 12.2%

Growth in 2003-2008 – 360%

Growth in 2003-2007 – 492.4%

Year 2008

Pipeline and Non-Pipeline Investments

61

231360

265 306

89,5107 109 139 185

884973,9

0

200

400

600

800

1000

1200

2002 2003 2004 2005 2006 2007 9 m.

mln

. U

SD

BP investment other FDI

2006 2007 2008

UK 15.7% Netherlands 14.9% United Arab Emirates 19.6%

USA 15.3% Czech Republic 11.3% USA 10.7%

Kazakhstan 12.8% Virgin Islands 9.3% Turkey 10.5%

Turkey 10.9% Denmark 7.8% Virgin Islands 10.0%

Azerbaijan 6.5% Cyprus 7.4% UK 9.5%

Norway 6.5% UK 7.2% Netherlands 8.7%

Virgin Islands 4.9% UAE 6.5% Switzerland 5.8%

Italy 4.0% Turkey 4.7% Kazakhstan 4.2%

Denmark 3.6% Russia 4.4% Austria 3.3%

Cyprus 3.4% Kazakhstan 4.4% Germany 2.6%

Subtotal 83.6% Subtotal 77.9% Subtotal 84.9%

Other 16.4% Other 22.1% Other 15.1%

Total 100% Total 100% Total 100%

340.1 499.1 449.8

1190.4

2014.81564.0

8.59.7

7.0

15.3

19.8

12.2

0

5

10

15

20

25

0

500

1000

1500

2000

2500

2003 2004 2005 2006 2007 2008

%

mln

. U

SD

FDI FDI to GDP



FDI by Sectors 2007 (%)

Agriculture 0.8

Industry 19.8

Energy 18.0

Construction 8.5

Transport and communicatio

ns 20.7

Real estate 1.5

Other services 19

Banking 6.8Other 4.9

FDI by Sectors 2008 (%)

FDI by Sources 2007 (%)

Enterprises 76

Privatization 17.2

Banking 6.8

FDI by Sources 2008 (%)


Enterprises 81.6

Privatization 17.8

Banking 0.5

Agriculture 0.5

Industry 13.3

Energy 18.9

Construction 3.6

Transport and

communications27.0

Real estate 17.8

Services 18.1

Banking 0.5 Other 0.3


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Dhabi Group

• Georgia’s banking sector represents only a moderate contingent liability of the sovereign

• Entirely private owned since 1996

• No restrictions on foreign ownership of banks

• Well capitalised with average BIS capital adequacy ratio of 19%

Robust Banking Sector


FDI attraction – one of the main priorities of state

FDI supportive policy

• Georgian National Investment Agency

• Simplified regulations

• Reduced taxes

• Legislative basis

Law on State Support of Investments

Law on Free Industrial Zones

• Free Industrial Zones – preferences for investors

Tax incentives

Simplified procedures

• Free Trade Agreements with US and EU in the future


Establishment of Free Industrial Zones – new possibility for investors


Free Industrial Zone

Free Industrial Zones – facilitation of regional economic development, employment generation and job creation

Free Industrial Zones – preferences for investors Tax incentives

Simplified procedures

• Poti FIZ - Rakia Georgia FIZ

More then 105 mln USD in 2009-2013

More then 10 000 employed people

Development of industry, logistic parks, business centers

Possible future projects

• Kutaisi FIZ – Georgian International Holding

More then 3 bln USD during 3 years

More then 20 000 employed people

Development of industry

• Tbilisi iCity – Lilo 1

More then 7 hundred registered companies during 5 years

More then 8 hundred employed people

More then 700 bln capital inflow to Georgian banks

• Airport City


Tax Policy

Reduced number of taxes from 21 to 6 (2004-2008)

Reduced Tax rates (see below)

• Personal Income Tax – 20%

• Corporate Income Tax -15%

• VAT -18%

• Excise Tax – Varies

• Customs Tax - 0%, 5% or 12%

• Property tax -1% on the self-assessed value of property


Tax Reduction

20% 20% 20%

12% 12% 12%

25%

20% 20%18% 18%

15%

0%

5%

10%

15%

20%

25%

30%

2005 2006 2007 2008 2009 2010 2011 2012 2013

Income Tax Social Tax

20% 20% 20%

15%

0%

5%

10%

15%

20%

25%

2005 2006 2007 2008

5%3%

0%

10% 10% 10% 10%

7,5%

5%

0%

0%

2%

4%

6%

8%

10%

12%

2005 2006 2007 2008 2009 2010 2011 2012

Dividends Interest

20%

18% 18% 18% 18%

17%

18%

18%

19%

19%

20%

20%

21%

2005 01.07.2005 2006 2007 2008

Income Tax and Social Tax Corporate Profit Tax

Dividends and Interest Income Taxation Value Added Tax


• Special taxation systems have been adopted for the different regimes aimed at establishing new international financial institutions in the country, encourage economic growth, support sustainable development and the trade-transit function of Georgia

Type of taxAn international financial

companyFree industrial zone Free warehouse company

Corporate Income Tax (from financial services) 0%(for International Companies) 0%

(from re-exporting of foreign goods) 0%

Value Added Tax 0% 0% 0%

Customs Tax 0%, 5% or 12% 0% 0%

Property Tax up to 1% 0% up to 1%

Personal Income Tax 20% 20% 20%

Net Operating Losses (years):• Carry back• Carry forward

00

00

00

Special Taxation Regimes


Fiscal and Monetary Performance

Tax Revenue Performance

*Decrease in budget revenue as percent of GDP is caused by tax cuts effective from 1 January 2009

Source: Ministry of Finance of Georgia

Exchange rate evolution (period average)

Source: National Bank of Georgia

2.151.91 1.81 1.78 1.67

1.49

2.432.38 2.26 2.23 2.29 2.19

3.51 3.503.30 3.27 3.34

2.76

1.4

1.9

2.4

2.9

3.4

3.9

2003 2004 2005 2006 2007 2008

GEL/US$ GEL/EUR GEL/GBP

NBG’s Gross FX Reserves

0

500

1000

1500

2000

2500

mln

. USD

2 2

67

2 8

10

3 6

95

4 9

73

5 7

91

5 8

05

23% 24%27%

29% 30%27%

0%

10%

20%

30%

40%

0

2000

4000

6000

8000

2004 2005 2006 2007 2008 2009 F

GEL

mln

Budget Revenue Budget revenue (% of GDP)


Current Account BalanceCurrent Accoutn Balance

Exports and Imports

-383.3 -353.6 -709.5 -1,174.6-2,008.7

-2,850.5-2,134.0

351.0 479.6 734.81 506.8

2 283.82 905.0

1 300.098.3 160.3

176.7

261.7

276.2

942.0

850.0

-9.6%-6.9%

-11.1%-15.1%

-19.7%-22.3%

-16.3%

1.7%5.6%

3.1%

7.7%5.4%

7.8%

0.1%

-30

-20

-10

0

10

20

30

-4,000.0

-3,000.0

-2,000.0

-1,000.0

0.0

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

2003 2004 2005 2006 2007 2008 2009F

%US$

mln

CAD Total Private capital inflows (TPCI) Donor Inflows (DI) CAD as % of GDP CAD+TPCI+DI as % of GDP

1865.32492.8

3318.1

4412.9

5916.9

7497.0

5247.9

1288.5 1646.92187.5 2551.6

3182.43691.3

2583.9

0

2000

4000

6000

8000

2003 2004 2005 2006 2007 2008 2009

US$

mln

Import of Goods and Services

Export of Goods and Services

Note: Updated as of 10 April 2009

*Donor inflows include both public and private sectors. Donor inflows in 2009 is adjusted according to the banking sector foreign debt outflows

Source: National Bank of Georgia , Minister of Finance of Georgia

Source: National Bank of Georgia

Remittances

165.8 212.7315.4

420.5

755.4

955.2

730

0

200

400

600

800

1000

1200

2003 2004 2005 2006 2007 2008 2009 F

USD

mln

.


Global Financial Crisis• In October 2008, Global Financial Crisis impact on Georgia’s macroeconomic

outlook through decreasing export and other related indicators

23

Real GDP growth - 2008

Source: Department of Statistics

-1.8

%

-1.5

% -0.9

%

0.3

% 0.7

%

0.7

%

0.8

%

1.0

%

1.0

% 1.4

%

1.6

%

1.8

%

1.9

%

2.0

%

2.1

% 2.5

% 2.9

%

3.0

%

3.0

%

3.3

%

4.7

%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

Irel

and

Esto

nia

Latv

ia

Icel

and

Jap

an

Can

ada

Fran

ce UK

Den

mar

k

Bel

giu

m

USA

Ger

man

y

Hu

nga

ry

Au

stri

a

Geo

rgia

*

Fin

lan

d

Lith

uan

ia

Ru

ssia

Ro

man

ia

Bu

lgar

ia

Ch

ina


Tourism

Arrivals of non-resident visitorsCountry 2007 2008 % change

Total1051769 1290107

23

EUROPE 1009666 1243783

23

Europe without CIS 353924 459272 30

CIS655742 784511

20

AMERICAS16865 17489

4

EAST ASIA/PACIFIC9415 9459

0.5

MIDDLE EAST2490 3245

30

SOUTH ASIA 10873 13457 24

AFRICA 883 640 -28

• In 2008 number of visitors to Georgia amounted to 1 290 107 thsd. persons

• Increased by 23% compared to 2007

• The largest share of visitors falls on CIS countries – 61%

Source: Department of Tourism of Georgia

387302 296 313

368

561

9831 059

1 290

0

200

400

600

800

1000

1200

1400

2000 2001 2002 2003 2004 2005 2006 2007 2008

thsd

. pe

rso

ns


• 2003-2008 - 3 494 items were privatized

• Total amount - more then 2,27 bn. GEL

Privatization

761

267

776

441

595654

2473

419

565

644

551

0

100

200

300

400

500

600

700

800

900

2003 2004 2005 2006 2007 2008

Items Income mln.GEL

Privatization 2003-2008


Communications

• New Numbering System and Plan for E-Communications Network ofGeorgia has been elaborated by the MoED and currently takes proceduresforced by law

• The Law of Georgia on E-signature and E-documents was adopted inApril, 2008

• Georgian Government has launched new Georgian Government Network(GGN) project from November, 2006

At the end of 2008, “Magticom” LTD 3 months ahead completed first phase building process of GGN

More than 400 Ministries and other entities are involved in the process

The project considers building the governmental network between state bodies


Statistics

• Main aim

Set up independent statistics body

Ensure high quality and reliability of statistical data

Consider international best practices

• Preparation Process

Creation of special task force by special decree of the Government(December, 2008)

Elaboration of the concept for the reform and submit it to the public andGovernment for discussion

Task Force consists of independent experts, representatives of internationalorganizations and non-governmental institutions

Reform of the National Statistics System (NSS)


Technical Regulations

• Georgian National Agency for Standards, Technical Regulations and Metrology has becomean affiliated member of European Committee for Standardization (CEN) from April1, 2008

• Georgia has been an associate member of General Conference of Weights and Measures(GCPM) from 1st of April 2008

• A bilateral project with German National Metrology Institute PTB – “Promotion ofQuality Infrastructure in Georgia with special regard to Legal Metrology” started inFebruary, 2008

• Implementation phase of EC TACIC project “Support to Implementation of Art. 51”(Quality Management System) has started

• Permanent analysis of Georgian legislation is carried out. 75 laws, applied in the field oftechnical regulation, are registered in the register of standards and technical regulations

• The New and Global Approach Directives and standards harmonized with them (Georgianversion) are being gradually updated on the web page of the Agency

Standardization


Technical Regulations

• Signing of “Cooperation Agreement” between European Cooperation ofAccreditation (EA) and Georgian Accreditation Center

• On April 26, 2008 was sighed an “Agreement between Turkish AccreditationAgency (TURKAK) and The Georgian National Body on Accreditation - Center ofAccreditation (GAC) on Cooperation in the Field of Accreditation”

• A list of international standards in the field of accreditation was translatedand is officially registered by Accreditation Center

• National Accreditation Center and The State Standardization Committee ofByelorussia conducted inter laboratory testing for the accredited laboratoriesof Georgia and Byelorussia in 2008. Test was carried out in accordance withinternational standards and confirmed (wine, brandy) high quality of Georgianproducts and their conformity with international standards

Accreditation


30

Poti

Sarpi

Larsi

Vale

GugutiSadakhl

o

Red bridge

LagodekhiBatumi

Samtredia

Khashur

i

Kartsakhi

Senak

i

Zugdidi

Gantiadi

Gori

Rok

i

Armenia

Azerbaijan

Russia

Turkey

Black

Sea

Kutais

iTelavi

NinotsmindaPartskhisi

TerjolaTbilisi

Bypass

MRN

RailwayRailway – under construction

International Airports

Kulevi

Inoperative Airports

Akhaltsikh

e

Tbilisi

Zhdanovi

Akhalkalaki

Georgian Transport Network

49.8 49.7

49.0

290.1

298.1

305.6

280.0

285.0

290.0

295.0

300.0

305.0

310.0

47.0

47.4

47.8

48.2

48.6

49.0

49.4

49.8

50.2

I-XII'06 I-XII'07 I-XII'08

Total Cargo and Passenger Transportation

Cargo mln. tons (LHS) Passenger mln.(RHS)


Transport Infrastructure

Railway Transport

• In 2008 the Georgian railway carried:

21.2 million tons of cargo

10.0 million tons of crude oil and oil products

3.4 million passengers

• Infrastructure Projects:

Construction of New Railway Line - Baku-Tbilisi-Kars connecting Caucasus rolling stocks toEurope Railway

Rehabilitation of Bridges on the Main Line and Main Line sections

Renewal of wagons and vehicles

• Capacity Improvement Facilitation:

Organization of Direct International Rail-Ferry Connection between Poti/Batumi (Georgia) andKerch (Ukraine) Sea ports

22.6 22.2

21.2

3.83.9

3.4

3.2

3.4

3.6

3.8

4

4.2

4.4

4.6

4.8

5

15

17

19

21

23

25

27


Transported Cargo and Passenger by Railway

Cargo mln. tons (LHS) Passenger mln. (RHS)


Transport Infrastructure (cont.)

Road Transport

• In 2008 Georgian road transport carried:

27.8 million tons of cargo 301.4 million passengers


Modernization of the East-West Highway of Georgia in line with international standardsensuring high safety level

Rehabilitation of more then 450 km of international and local roads (WB loan) Rehabilitation of Samtskhe-Javakheti 300 km roads in MCG grant project frame


Signing of intergovernmental Agreement with the CzechRepublic, Hungary, Slovakia, Poland, Estonia, Finland, Moldova and Tajikistan onInternational Road Transport

Road Safety Policy:• “Georgian National Road Safety Strategy” (adopted)• National Road Safety 4 year Action Plan

27.227.5 27.8

285.7293.5

301.4

250.0

260.0

270.0

280.0

290.0

300.0

310.0

320.0

330.0

15.0

17.0

19.0

21.0

23.0

25.0

27.0

29.0

31.0


Transported Cargo and Passenger by Road

Cargo mln. tons (LHS) Passenger mln. (RHS)



Civil Aviation

• In 2008, international airports of

Georgia served:

0.804 million passengers.


Two new International Airports - Tbilisi and Batumi (constructed)

• new passenger terminals

• modern equipments (ICAO standards)


International Agreement:

• European Common Aviation Agreement - promoting free competition andliberalization air traffic, (negotiation started)

• Agreements on Air Transport with - Republic of Armenia; Swiss Confederation;Azerbaijan (signed)

• Air Services Agreements with - the United Arab Emirates, China, UK and Ukraine(planned to sign)

Integration in the European air navigation system - membership in EUROCONTROL

8,1

12.1

17,1

0.586

0.671

0.804

0.500

0.600

0.700

0.800

0.900

1.000

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0


Transported Cargo and Passenger by Civil Aviation

Cargo thousand tons (LHS) Passenger mln. (RHS)



Maritime Transport

• 18.5 million tons of cargo was processed at the sea ports in 2008:

Poti Sea Port – 8.0 million tones Batumi Sea Port – 8.7 million tones Kulevi Sea Port (constructed) – 1.3 million tons Supsa Seaport – 0.6 million tones


Poti Seaport• totally private -“Ras al Khaiman Investment Authority”• new seaport capacity 20-25 mln tonnes

Batumi Seaport• Totally private – “Kazmunaigaz”• container transportation (started)

Kulevi Seaport• Private management - SOCAR• total capacity - 4 million tones (operating)


Developing existing and new maritime ferryconnections between the Black Sea ports ofGeorgia and other countries

129,100

184,792

209,614

44 197

0

30,000

60,000

90,000

120,000

150,000

180,000

210,000

240,000


TEU/Unit

Handled Containers

Poti Sea Port Batumi Sea Port

6.67.7 8.0

0.6

13.2 11.2

8.7

1.3

0.9

1

1.1

1.2

1.3

1.4

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2006 2007 2008

Poti sea port (LHS) Batumi sea port (LHS)

Supsa sea port (LHS) Khulevi sea port (RHS)


Georgia in International Ratings

• “Easy of Doing Business” (Doing Business

2009) – 15-th place (up from 21-st in 2008)

Improved positions in:

Starting a Business – 6 steps up

Dealing with Construction Permits – 1 step up

Registering Property – 6 steps up

Getting Credit – 33 steps up

Closing a Business – 16 steps up

• “Index of Economic Freedom 2009”

(Heritage Foundation) – 32-nd place (the

same place in 2008, but improved score

from 69.2 to 69.8) – Moderately Free

Improved scores in:

Business Freedom –1.6 points up

Trade Freedom – 9.6 points up

Freedom from Corruption – 6.0 points up

Doing Business

Index of Economic Freedom

145120

5944

33312928

2522

1586

321

Ukraine

Turkey

Azerbaijan

Latvia

Germany

Georgia

UK

New Zealand

152146

11699

8275

6564

4544

3230

1310

6

UkraineRussia

CroatiaAzerbaijan

PolandTurkey

RomaniaFranceLatvia

HungaryGeorgia

LithuaniaEstonia

UKUSA

First Reformer in 2005-2009 in ECA region



• “Index of Economic Freedom 2008” (Fraser

Institute) – 39-th place (up from 44-th in 2007)

Improved scores in:

Legal Structure and Security of Property

Rights – 0.25 points up

Access to Sound Money – 0.07 points up

Freedom to Trade Internationally – 0.74 points

up

Regulation of Credit, Labor and Business –

0.05 points up

• “Inward FDI Performance Index 2007”

(UNCTAD World Investment Report) – 9-th

place (up from 15-th in 2006)

Improved positions because of:

Positive reform

Increased investors protection

Index of Economic Freedom

121118

10190

6967

454039

3128

1711

Ukraine

Azerbaijan

Russia

Turkey

Poland

Armenia

France

Latvia

Georgia

Lithuania

Hungary

Germany

Estonia

2019

1817

1615

1413

1211

109

87

65

43

21

Egypt

Moldova

Cyprus

Tajikistan

Mongolia

Panama

Gambia

Belgium

Bahrain

Guyana

Lebanon

Georgia

Estonia

Singapore

Jordan

Bahamas

Malta

Iceland

Bulgaria

Hong …

Inward FDI Performance Index



• “Corruption Perception Index 2008”

(Transparency International) – 67-th place

(up from 79-th in 2007)

Improved positions because of:

Highly effective reforms in earning public

confidence

Highly effective steps in improving country’s

international image

Post-revolution fallen of petty corruption

Corruption Perception Index

158

147

134

109

109

85

72

70

67

62

58

Azerbaijan

Russia

Ukraine

Moldova

Armenia

Serbia

FYR Macedonia

Romania

Georgia

Croatia

Turkey



• “Bertelsmann Transformation 2008”

(Bertelsmann Foundation):

Status Index – 38-th place (up from

61-th in 2006)

Management Index – 23-th place (up

from 35-th in 2006)

Improved scores in:

• Status index:

Political transformation – 0.75 points

up

Economic transformation – 0.99 points

up

• Management index:

Management performance – 0.55

points up

Status Index

Management Index

87

60

59

41

38

35

32

13

11

3

Azerbaijan

Moldova

Russia

Armenia

Georgia

Ukraine

Turkey

Latvia

Poland

Estonia

99

98

87

56

55

53

24

23

10

2

Azerbaijan

Russia

Moldova

Armenia

Ukraine

Poland

Turkey

Georgia

Latvia

Estonia

Ministry of Economic Development of Georgia2009

Contact Information

Lasha ZhvaniaMinister of Economic Development of Georgia

(+99532) 99 10 11 [email protected]

Irakli GachechiladzeDeputy Minister of Economic Development of Georgia


Lali GogoberidzeHead, Economic Analysis and Policy Department


Tea LoladzeHead of Division, Business activity regulatory impact assessment


Government of Georgia www.government.ge

Ministry of Economic Development of Georgia www.economy.ge

Georgian National Agency for Standards, Technical Regulation and Metrology www.gnims.caucasus.net

Georgian National Investment Agency www.investingeorgia.org

Department of Tourism and Resorts of Georgia www.dotr.gov.ge

Road Department of Georgia www.georoad.ge

Department of Privatization www.privatization.ge

Useful Links

ministry of economic development of georgia - oecd.org · ministry of economic development of...

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