The FINANCIAL -- It will be very hard to sell Georgia as an attractive destination for foreign investments., Fady Asly, ICC Georgia President told The FINANCIAL while answering questions related to the impact of COVID-19 on Georgian businesses and the economy.
“There were simply no investments in the country during the past 3 months, this is absolutely normal considering what we have been through, the real picture will show in the coming months when everything will reopen, it will be in my opinion very hard to sell Georgia as an attractive destination for foreign investments”, Mr. Asly told The FINANCIAL.
“Many foreign investors and foreign companies have experiences very serious problems in Georgia in the past eight years and the word of mouth spreads very fast unfortunately.
Government hasn’t showed any willingness to protect foreign investors in the past years and it is now when we need them the most that we will unfortunately be paying the price for the unfriendly attitude of government towards foreign investors in the past”, he said.
Q. Which sectors are affected most?
A. The most affected are those depending on tourists and leisure, so hotels and restaurants and all associated services, smaller groceries that had to close, industries of most kind, seasonal farmers who had to throw their produce, vegetables, strawberries, cherries etc…
Medium and smaller enterprises have been the most affected, some of those businesses were providing for daily subsistence for their owners and for their employees, they have been totally smashed and destroyed by the restrictions, larger companies have more financial firing power and can sustain more damage and still survive but still for larger companies it is extremely painful, several of them had to fire employees and some other had to reduce salaries.
Q. How restrictions on movement affected oil-importers in Georgia?
A. The oil sector was very affected, in the second half of April, the activity was reduced by 90% and overall the sales are down by about 40%.
Q. What are the main challenges to restore business environment?
A. There are many challenges, the major one is to keep small and medium enterprises alive, in numbers SMEs represent the largest chunk of business operators in the country and most of them have been literally destroyed.
Another challenge is to keep larger businesses away from bankruptcy; many of them are already bankrupt unfortunately.
It is imperative to save as many jobs as possible, it is estimated that in total about 350,000 Georgians have lost or will be losing their jobs in the coming months.
We also need to preserve the stability of the national currency that might seriously suffer from a major decrease in revenues from tourism, remittances and foreign direct investments.
We have also to restore the confidence of foreign investors in Georgia; this confidence has been very seriously undermined in the past eight years.
Q. Are there active communications between ICC-Georgia, Georgian Government and investors?
A. The only communication that we do have with government is through the Investors Council; we find it very difficult to encourage investors to commit to Georgia, when we know for a fact that government is either unable or unwilling to protect their investments.
Q. What can be done in order to improve credibility of Georgian investment climate?
It is very simple, Bidzina Ivanishvili has to wake up one of those morning and say: “From today on I will open the country to all foreign investors, and I will instruct the government to do everything possible to facilitate their operation in country and to solve any kind of problem they may face.”
Anything that is not a genuine and honest decision from Mr. Ivanishvili in this sense will be nothing more than empty words and promises and wishful thinking.
Q. Which businesses at the ICC reported the growth during the pandemic?
A. I guess that the major winners from the pandemic are the larger chains of supermarkets, the health and medical companies and the delivery services.
Q. You have criticized recommendations of the government regarding measures to control health conditions of their employees. Does it reflect position of all members at ICC?
A. Of course it does, our board of directors unanimously approved our letter to government, in addition we have received many messages of support from the business community at large when the letter was made public.
Sometimes health officials are totally disconnected from reality, they live in their own world, their books and their scientific papers. In crises situations like the one we are living, they unleash their creativity and artistic side and come up with recommendations that are totally disconnected from reality, unpractical, counter-productive and useless.
Q. Are there ongoing disputes between ICC members related to COVID?
A. At this stage there are ongoing negotiations between some companies that have contractual agreements with each other, and the same goes for companies that have agreements with government, there is no doubt though that many businesses that suffered from the lockdown will claim Force Majeure in case they were unable to fulfill their contractual agreements.
Q. Are you going to travel abroad this summer?
A. No this summer I will be visiting and enjoying every corner of Georgia, tourists come from all over the world to spend a once in a lifetime holiday in our country, it would be insane to go anywhere else when we have the opportunity to spend and greatly our summer in Georgia.