Since becoming independent again, in 1990s, Georgia has become the most successful example in the region, according to implemented reforms, stonger democratic institutions, economic development and increasing society awareness. Georgia, with its pro-European direcction, is positioning itself as a hub for doing business in the region, creating attractiv international business environment
Georgia is the leader of liberal economic reforms among post-Soviet countries. It boasts favorable conditions of doing business, what is confirmed by high ratings in different international rankings, as for example in ranking of Doing Business. Dtermined reforms led also to virtually complete elimination of small scale corruption.
Georgia, located on the crossroads of Europe and Asia, is the shortest route between those two regions. Business atractiveness increases the fact of the country’s connection between Europe, the Caspian region, Middle East, Central Asia and East Asia.
Georgia is not only market of 4 mln residents. Is the gate to almost 900 mln people markets without customs duty. Georgia has signed Free Trade Agreements with CIS countries, including Moldova, Ukraine, Belarus, Kazakhstan, Kyrgystan, Tajikistan, Uzbekistan and Turkmenistan, as well as its neighbours Azerbaijan, Armenia and Turkey.
Additionally, Deep and Comprehensive Free Trade Agreement (DCFTA) with Eueopean Union was signes and ratified in 2014. Since 2000 Georgia is also member of World Trade Organisation (WTO).
In February 2016 oficiall negotiations ave started between Georgia and China on free trade agreement. Considering the importance of the New Silk Road project, agreement between sites is expected to be reached very soon.
Gross domestic product in 2014 amounted to about 16 billion $, the economy grew by almost 4,8 %. Georgia regularly recorded a negative balance of trade, in 2014 amounted to 5,7 $ billion, what presented 50 % of general turnover. This gap in the payments balance is offset by transfers from labor migrants (usually around 1,5 billion $), by foreign direct investments, as well as loans and grants from international institutions.
In the first half of 2015, year to year, Georgian export fell by 24 %. The largest decrease was related to re-export of cars to Azerbaijan and Armenia, as well as export of ferroalloys, wine and mineral water to Russia. Import fell by 8,6 %, what is connected to the low rate of lari. There have been significant changes in the structure of export. Share of European Union in export to Georgia rose from 21 to 27 % and the share of CIS countries decreased from 53 % to 39 %. Export from Georgia to the European Union decreased by 2 % and the CIS by 45 %.
The main export markets in 2014: Azerbaijan (19 %), Armenia (10,1 %), Russia (9,7 %). The main directions of import in 2014: Turkey (20,1 %), China (8,5 %), Azerbaijan (7,4 %). The main import goods include: crude oil and oil products (10,7 %), cars (8,3 %), gas (4,3 %), pharmaceuticals (3,7 %), mobile phones (2,3 %).
According to the Georgian Statistics Office, throughout 2014 the import from Poland totaled 94 million $, what was 1,1 % of total import to Georgia. Poland took the 20 position among import directions. Export to Poland amounted to 10,1 million $, 0,35 % of total export from Georgia. In this case Poland took 31 position among export markets of Georgia.
According to Ministry of Economy of the Republic of Poland, export in 2014 totaled only 103 million $ (up 1,3 % in comparison with 2013) and import amounted 21 million $ (up 8,1 %). The increase in export slowed down, in previous five years was growing by an avverage of 20 % per year. The main commodities exported from Poland to Georgia: pharmaceuticals, cosmetics, household chemicals, machinery and equipment, processed food, vehicles, furniture and meat. The main goods imported from Georgia: glassware, nuts, wine, mineral water, metal pipes. Georgia accounted for 0,05 % of Polish export and 0,01 % of import and indicators were twice higher than for Armenia and Azerbaijan.
Georgia is traditionally an agricultural country, which has 22 micro-climates, what allow for longer than normal harvesting season and wide range of growing conditions. Soils are of volcanic origin located in the river valleys. They tend to be quite fertile and reasonably easy to cultivate. In 2014 agricultural sector accounted for a bit more than 9% of GDP and had share of 17 % of trade volume.
Natural advantage of Georgia is location between Europe and Asia, what provides many benefits in sector of manufacturing. Moreover Georgia offers competitive labor and energy costs, low taxes and corruption – free environment in region. Manufacturing accounts for 11 % of GDP and around 5 % of employment. Non – metallic mineral products, chemicals and food are fastest growing industries and there is a big need for foreign investors in those matters.
In addition, there are many incentives and opportunities to produce and export goods, related to the Free Industial Zones and many government programmes. In Free Zones, companies are exempted from all taxes, except Personal Income Tac, which since June is going to be increased.
During recent years Georgia was facing dynamic growth of international visitors In 2014 the number of international visitors amounted around 5,5 million people, while population of Georgia is around 4 million. 6 % of GDP was generated by the hospitality sector. According Colliers International Hospitality Sector Research 2015, the number of arriving tourists is expected to grow by around 10 % per year for next five years.
Real estate accumulates many of foreign direct investments, amounted 87 millions $ in 2014. Comparing with 2013, there was increase by 40 %.
Already – operational hotels in Georgia are: Sheraton, Radisson, Marriot, Rixos, Holiday Inn and Best Western.
Georgia is a corridor of transportation between Caucasus and Europe and between Central Asia and Europe. Georgian transport economy is transit oriented. Around 60 % of cargo flow in Georgia is transit. According to all circumstances Georgia is becoming regional logistics hub. Georgia is developing a new deep sea port in Anaklia, which is expected to have 100 millions tons capacity. Baku – Tbilisi – Kars railway project is completed, integration is planned no later than 2016, aiming 5 million tons capacity per year. This project is meaningful for the region, because will connect Georgia and Azerbaijan with Turkey.
The energy sector is attractive because of the existency of natural resources and developing infrastracture. Georgia posses huge hydro resources. Recently Georgia became net producer of elektricity and is exporting it to the neighbours. From 2010 to 2014, the Georgian energy sector attracted almost 750 million $.