ABU DHABI // A high-ranking delegation from war-weary Georgia has visited the UAE in an attempt to attract investment to the country, including investment in iconic buildings, airports and beaches. Dozens of plots of land are available to bidders and Georgia is giving the UAE the first investment opportunities on many. With investments of more than US$1.5 billion (Dh5.5bn) by the UAE and discussions of boosting that figure, the Georgians said their economy was thriving even after its week-long conflict with Russia over the breakaway region of South Ossetia last month.
"Ironically, Russia did us a favour," said Ekaterina Sharashidze, the country's minister of economic development. "The conflict with Russia drew the attention of the whole world to Georgia, where within just two weeks after the conflict, we had eight heads of state visit our country and officials from across the world." Ms Sharashidze was in Abu Dhabi for a two-day visit with a delegation at the invitation of the Minister of Higher Education and Scientific Research, Sheikh Nahyan bin Mubarak, one of the UAE's biggest investors in Georgia.
"The UAE stood by Georgia in its toughest times, and we hope our bilateral relationship will keep growing and developing," she said. "People in the UAE don't realise just how close Georgia is to them, we are less than three hours away, and we are a meeting point of East and West." Ms Sharashidze said she would return to the UAE next month with Mikheil Saakashvili, the Georgian President. "Georgia survived Russia, so it is a clear signal that it is a safe and resilient economy to invest in and a country that hopes to strengthen its political ties with the international world and the EU," she said.
The country of 4.4 million people is heavily dependent on foreign investment. Its net foreign direct investment (FDI) was 19.8 per cent of the gross domestic product in 2007. Net FDI reached $2.014bn in 2007 compared to $1.076bn in 2006 and $542m in 2005. The UAE interest in Georgia started in December last year when it signed an open sky air services agreement and a memorandum of understanding with Georgia in Tbilisi. Investments by the UAE began to flow in 2007 and reached $400m, representing four per cent of the FDI.
Sheikh Nahyan has invested in the banking, telecommunications and property sectors of Georgia, and is renovating a Marx and Lenin institute building into a luxury Kempinski hotel in Tbilisi, to be completed by 2011. The Crown Prince of Ras al Khaimah, Sheikh Saud bin Saqr, owns 51 per cent of the port of Poti, and there are now plans to open an RAK cement factory in Georgia, along with numerous property projects.
There are also discussions with other UAE officials about investments in the energy sector, particularly electricity. Huge amounts of Georgian land and property are being offered. The delegation distributed booklets to UAE officials highlighting property sector and privitisation opportunities, with elaborate pictures of the Georgian landmarks for sale that include beaches, airports and ski resorts.
"Georgia went from one of the most corrupt countries to one of the most reformed ones, where now the world, and more importantly the Georgians themselves, have more confidence in their own county," said Ms Sharashidze. The minister quoted the latest ranking by World Bank in 2008 for ease of doing business that ranked Georgia 18th on the list, compared to its 37th position last year and a rank of 112 in 2006.
"Our direction is irreversible, we are a democratic and independent country that aspires to join NATO and the EU based on the similar shared values," she said. "We want better relations with Russia, but Russia needs to respect us as an independent sovereign country and stop bullying and weakening its neighbours," said Ms Sharashidze. "Russia doesn't want an alternate energy route, and it definitely doesn't want any of its neighbours to be successful and independent."
Georgia has major oil pipelines, including the Baku-Tibilisi-Ceyhan (BTC), which runs through Azerbaijan, Georgia and Turkey, plus natural gas pipelines. The US has a major strategic interest in Georgia, having invested heavily in the BTC. The minister said Russia has been imposing visa restrictions and economic embargoes for years, while bombing Georgian villages. She added that Georgia was ignored when it accused Russia of "ethnic cleansing" in South Ossetia, and a second breakaway region, Abkhazia, both of which Moscow considers Russian territory.
In August, Tbilisi submitted an official request to the International Court of Justice to impose provisional measures to prevent racial discrimination by Russia that has been reportedly going on since the early 1990s. "No one believed us, and no one wanted to admit there is a problem and take on the responsibility of solving it," Ms Sharashidze. "Appeasing the bully never works, it just keeps on pushing its boundaries and will not quit."
"Georgia has 400,000 internally displaced people, the Georgians have been systematically kicked out of South Ossetia and Abkhazia by the Russians all of which is weighing heavily on the Georgian economy," she said. Ms Sharashidze said Georgia did not declare war on Russia when it began operations against South Ossetian separatists on Aug 6. However, Russia in response sent troops into Georgia on Aug 8, with Moscow arguing that it was protecting South Ossetians who had been granted Russian citizenship.
The conflict was resolved by Georgia agreeing to Russia-French six-point plan that called for a ceasefire, with Russian and Georgian forces withdrawing to the positions they held on Aug 6. Direct damage to the civilian economy is estimated at around $1bn. Ms Sharashidze said Georgia was in the process of rebuilding and that international pledged assistance would trickle over the next year. These include a $750m "stand-by" arrangement between the International Monetary Fund and Georgia, and the US pledged $1bn economic recovery assistance package. An international donor conference is to be held within the next few weeks."Georgia is back on its feet and its doors are open for a new page and hopefully new investments," she said.
rghazal@thenational.ae
