| Yanukovich Will Not Change Business with Georgia |
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08/02/2010 13:34 (733 Day 13:13 minutes ago) | |||||
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The FINANCIAL -- On February 9 the Central Election Commission of Ukraine will announce the winner of the presidential elections.
Considering preliminary results of exit polls and the first round of elections held on 17 January, 2010, Victor Yanukovich, leader of the Regions’ Party of Ukraine , well known for its pro Russian position, will likely lead the country for the next 5 years. This possible change has already erected caution not only among Georgia’s political elite but also in business circles. Ukraine remains one of the most devoted and biggest trade partners of Georgia. Will Ukraine maintain this course or follow Russia who has been running its anti-Georgian campaign since 2006?
Last week the representative of Ukraine in the European Council from the Regions’ Party said that Ukraine will probably introduce a visa regime with Georgia. Yanukovich earlier called for recognition of Georgia’s breakaway regions. Later he declined to say whether he would fulfil this pledge.
Aleksi Aleksishvili, former Minister of Finance of Georgia and current Chairman of the Board of Policy and Management Consulting Group (PMCG), says that with his pro-Russian statements Yanukovich is just staking on gaining voters.
Aleksishvili says that Ukraine is not going to impose an embargo on Georgian products as Russia did. He is optimistic that the Russian scenario will not be repeated in Ukraine . However Aleksishvili believes that Georgian exporters should diversify markets so as to minimize external risks.
“Diversifying export gives the opportunity to stably develop the economy and reduce risks. Geographical diversification reduces the risks related with currency exchanges, macro economical situation, inflation, and changes of regulating environment.”
“It is difficult to make any prognoses in advance, but I don’t think that relation with Urkaine will change radically during Yanukovich’s presidency.”
“Considering the scales of the Ukrainian market and the volume of trade-economical relations between Ukraine and Georgia, replacement of the Ukrainian market will not be easy. But I don’t think that such a scenario is realistic.”
Alexishvili believes that Georgia will maintain the Ukrainian wine market.
“Wine is a specific product. Its branding depends on various external factors. Among them are the traditions of its use and awareness of the brand. Georgian wine with its economy and traditions are among the segment of the middle and higher wines. Georgian wine cannot be in the same segment as Australian, New Zealand, South Africa or Argentine wines.
People in former Soviet countries still remember Kindzmarauli or Khvanchkara. But in Europe and the USA people have no idea what those names mean. It’s very important to support the brand of Georgian Wine and not any one company brand.
The Free-Trade Area Agreement between Georgia and Ukraine was signed on 9 January, 1995. Export of Georgian wine to Ukraine was reduced by 30%.
Foreign Trade between Georgia and Ukraine (thousand, USD)
Export from Georgia to Ukraine (thousand, USD)
Product 2005 2006 Growth Rate (%-%)
Import from Ukraine to Georgia (thousand, USD)
Product 2005 2006 Growth Rate (%-%)
For the popularization of Georgian wines, a long-term advertising programme was elaborated that contributed to the growth of Georgian exports to Ukraine . In 2006 a trade-economic department was created under the Embassy of Georgia.
Trade Turnover in 2000-2006 (thousand, USD)
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