“..I hope, U.S. banks will be interested in opening branches in Georgia”

“..I hope, U.S. banks will be interested in opening branches in Georgia”

“..I hope, U.S. banks will be interested in opening branches in Georgia”

tefft_f.jpg“Right now, the energy, real estate, hotel, tourism and agriculture sectors seem to be attracting the most investment, from both U.S. and other foreign investors”, says John F. Tefft, United States Ambsador to Georgia in exclusive interview with FINANCIAL.  "We want all the countries of the former Soviet Union to have the opportunity to develop free and independent nations; to achieve stable, democratic political conditions;

 

The FINANCIAL -- “Right now, the energy, real estate, hotel, tourism and agriculture sectors seem to be attracting the most investment, from both U.S. and other foreign investors”, says John F. Tefft, United States Ambassador to Georgia in exclusive interview with FINANCIAL. He believes, if the Georgian economy continues its upward trend, U.S. banks will be interested in opening branches in Georgia.


FINANCIAL: Mr. Ambassador, what do you see in common about the U.S view of the post-Soviet countries?


A: We want all the countries of the former Soviet Union to have the opportunity to develop free and independent nations; to achieve stable, democratic political conditions; to be secure and peaceful within their borders and in their regions; and to have free and prosperous economies.


Q: What were your expectations about Georgia before coming here?


A:I was very excited to serve my country in a nation which was such a good friend of ours; which was developing into a modern nation so rapidly. I have high hopes for myself and my team at the Embassy in helping Georgia build a democratic nation with a market economy with a strong rule of law. 


Q: How is the America-Georgia Business Council (AGBC) forum going to encourage Georgia to better promote itself as a favorable place to invest?


A: Since its founding, the AGBC has been dedicated to raising awareness in the United States about Georgia. The AGBC supports the steps the Georgian government has taken to improve the business climate here. This is a positive story and I know the AGBC wants to tell it.  AGBC’s recent conference in Tbilisi attracted a number of U.S. businessmen who learned first-hand what Georgia offers.  I know the AGBC will continue its activities, including more such conferences, to promote U.S. investment in Georgia.


Q: What are the most interesting things about the USG's Country Commercial Guide?


A: We update the State Department's Country Commercial Guide annually.  It is one of the most up-to-date sources of information about the business climate in Georgia.  The Embassy officers who prepare it live in Georgia and have firsthand knowledge of developments.  We work hard to make the CCG a fair, balanced and realistic assessment of the trade and investment climate.  It contains detailed information on how to market products and goods in Georgia;  on how the economy is growing and in what sectors; and on new opportunities for trade and investment.  It is full of links to helpful government and private sector organizations and other reliable sources of information.


Q: How successful has BISNIS been in helping Americans find export opportunities in Georgia?


A: BISNIS (Business Information Service for Newly Independent States)the U.S. Government's primary market information center for U.S. companies exploring export and investment opportunities in Georgia and in the other countries of the former Soviet Union.  BISNIS provides U.S. companies with the latest market reports and tips on developments, with export and investment leads, and with strategies for doing business.  Since 1992, BISNIS has facilitated more than $4.0 billion worth of U.S. exports and overseas investments to all the counties of the former Soviet Union.  Through BISNIS, Georgian businesses can find U.S. partners for both trade and investment.  Our BISNIS representative at the Embassy is ready to help.


Q: What are the key factors conditioning OPIC's special success in Georgia?


A: The Overseas Private Investment Corporation (OPIC) facilitates the participation of U. S. private capital and expertise in the economic and social development of Georgia.  OPIC assists U.S. companies by providing financing, for everything from large structured finance to small business loans; political risk insurance; and investment funds. OPIC helps companies manage risks associated with foreign direct investment.  OPIC's active interest in Georgia stems from Georgia's own record of reform, as reflected in the World Bank's "Doing Business" report; our government's strong interest in the success of the Georgian economy; and the existence of reliable partners in Georgia such as GMT, which has developed the Marriott hotels and other projects in cooperation with OPIC.


Q: What are your expectations of Georgia's growth potential after the five-year MCC compact is finished?


A: MCC projects were chosen in close cooperation with the Government of Georgia to be sure they meet the development needs of the country.  On September 12, 2005 U.S. and Georgia Governments signed an agreement “Compact,” which serves as a governing document for operation of Millennium Challenge Georgia Program.  MCC will fund a new road to Samtskhe-Javakheti that will reduce the region's isolation, help farmers get their produce to market, and encourage local growth of business.  Water projects in Poti and elsewhere will bring clean water to Georgian citizens, improving their health and the attractiveness of these cities to investors.  The $30 million Georgia Regional Development Fund will help business in the agriculture and tourism sectors develop, and spur even more investment in those areas.  Renovation of the North-South pipeline will ensure the security of a strategic national asset and reduce environmental damage.  All these projects enhance Georgia's growth potential.


John F. Tefft has been a career Foreign Service Officer for thirty-five years.  Before assuming his current position, Tefft served as the Deputy Assistant Secretary of State for European and Eurasian Affairs and was responsible for US relations with Russia, Ukraine, Belarus and Moldova. 
From 2003-2004 Tefft was the International Affairs Advisor at the National War College in Washington, D.C.  Tefft served as the United States Ambassador to Lithuania from 2000 to 2003.  He was Deputy Chief of Mission at the US Embassy in Moscow from 1996 to 1999, and was Charge d’Affaires from November 1996 to September 1997.  His other Foreign Service assignments include Jerusalem, Budapest and Rome. 


Tefft holds a Bachelor’s Degree from Marquette University in Milwaukee, Wisconsin and a Master’s Degree from Georgetown University in Washington, D.C. 


Among his awards are the State Department’s distinguished Honor Award in 1992 and the DCM of the Year Award for his service in Moscow in 1999.  He received Presidential Meritorious Service Awards in 2001 and 2005.


Tefft is married to Mariella Cellitti Tefft, a biostatistician and nurse.  They have two daughters, Christine, a lawyer and Cathleen, an Executive Assistant at Arena Stage in Washington, D.C.

Q: USAID also has a variety of small microfinancing opportunities.  How close are your relations with AmCham Georgia, donor organizations and the investors themselves?


A: I just attended the opening of a cheese factory in Terjola that USAID's AgVantage program helped finance and equip.  The factory will provide jobs to the community and produce high-quality cheese that will compete as an alternative to high-priced imports.  Another project, USAID’s Small and Medium Size Enterprise Support, helps local banks and microfinance organizations to mobilize loan guarantees helps borrowers access loans, and helps banks to provide specialized financial products such as agricultural finance and leasing.  USAID works closely with its contractors and grantees to ensure the success of its programs. Also, AmCham members and large and small businesses operating in Georgia that have ties with America.  They know from experience the advantages and problems of doing business here.  We at the embassy respect their views and we work together to bring to the government’s attention the ways the business climate can be further strengthened.    


Q: How big is the demand for U.S. Exports to Georgia?


A: If U.S. exports to Georgia increased from $213 million in 2005 to $263 million in 2006. In the first half of 2007 they are an impressive 81% higher than during the same period in 2006.  Our Export-Import Bank opened for business in Georgia in October 2006 and is ready to offer financing help to Georgian partners who seek quality U.S. products and technology.


Q: How soon do you think U.S. financial sector giants from the U.S. will get interested in setting up businesses in Georgia?


A:  There is already U.S. investment in Banks like the Cascade Bank and, via its recent IPO, in Bank of Georgia. If U.S. trade and investment continues to grow, and if the Georgian economy continues its upward trend, I hope, U.S. banks will be interested in opening branches in Georgia.


Q: What is the best solution to the problems of the judicial system in Georgia?


A: A fair and efficient court system is important for foreign investors to have confidence in investing in Georgia. Judges in Georgia should keep that in mind as they carry out their duties.  I am encouraged by the recent law on ex parte communication with judges, which should discourage outside pressure on judges.  That law will now need to be enforced.  Judges need specialized training in procedures, commercial law and other areas of the law. The USG is supporting the government's training efforts through the High School of Justice.


Q: Which sectors of the Georgian economy are most interesting for U.S. investors?  Could you name the top success stories and failures of U.S. companies in Georgia?


A: Right now, the energy, real estate, hotel, tourism and agriculture sectors seem to be attracting the most investment, from both U.S. and other foreign investors.  I I think that Georgia's favorable location and open investment climate deserve the attention of manufacturers as well. 

 

Georgia's National Investment Promotion Agency has a major role to play in getting the word out about the advantages of investing here.  I am not aware of any failures of companies with significant U.S. investment since 2004 when the new government brought in a new approach to the economy and began efforts to reduce corruption.  Since then, we have seen very interesting investments in hotels, office buildings, dairy products, and cold storage facilities, to name just a few. For example, in December 2006, a small Virginia company obtained a $3.9 million loan from OPIC to assist in construction of a cold storage facility in the Black Sea port of Poti. Partnering with Georgian company, BISNIS provided critical information and analysis of the market which prompted Richmond Cold Storage to pursue the transaction.  The 7200-square-meter cold storage facility will be used to store and distribute frozen cargos such as poultry products, primarily from the United States, to the markets of Georgia, Armenia, Azerbaijan, and further to the countries of Central Asia.


Q: What influence did George Bush's visit to Georgia have on awareness of Georgia in the United States and the world?


A: The President's visit to Georgia put a spotlight on the new Georgian government's commitment to democracy, free markets, and friendship with the United States and Europe.  Since the visit in 2005, Georgia and its people have shown their dedication to reform and peaceful development, despite all the obstacles.  This has won the admiration of many in the United States and Europe, and I have seen an increasing number of articles in the press and on television that have reinforced the positive impression of Georgia from abroad.  There is even a new caucus of U.S. congressmen interested in Georgia's development and eventual membership in NATO.  Georgia's continued progress on the path it has set for itself will ensure that the country will continue to draw positive attention and increased foreign investment.

 

Interviewed by Kate Tabatadze, The FINANCIAL, 2007