Georgia’s investment potential is increasing and the country is currently recognised as the top performer in the region, says a new report by international accountancy network BDO.

Globally Georgia has been ranked among the top 25 percent of countries for having an investment friendly environment by BDO in its latest International Business Compass 2015 report.

Head of Georgian National Investment Agency Giorgi Pertaia said the BDO’s latest report offered "very promising” results for Georgia and offered potential investors more concrete information about the country’s business environment.

In the BDO 2015 report Georgia was granted an international ranking of 43 of 174 countries; an improvement of 2014, where the country placed 48th, and on 2013 when Georgia rankd 54th in the world.

Georgia’s score was generated after experts assessed the country’s economic condition, socio-cultural condition and political-legal environment. Higher scores indicated a better environment.

Georgia’s average score across the three categories was 60.93. The country gained a score of 55.87 for its economic condition, 59.37 for its socio-cultural and 68.18 for its political-legal environment – its highest score - which proved this direction was the most developed for attracting investments.

"This is unique research because investors read it, trust its results and take it into account while investing in the country,” said Pertaia.

"After having this research [carried out] and [achieving] promising results we will introduce it to investors and I am sure more investors will become interested in investing in Georgia,” he said.

Georgia’s offers best investment potential in the region

Georgia had the most investment friendly environment of all countries in the Caucasus region. Following in second place was Armenia, who gained a ranking of 66th overall – a drop of seven places compared to 2014.

The report noted other countries in the Caucasus region and other of Georgia’s nearby neighbours also saw an improvement in their investment environments year-on-year. Turkey improved its position by 10 places compared to 2014 and now ranked 57th, Azerbaijan advanced its ranking by 13 positions and took 65th place, while Ukraine jumped 20 positions to gain a ranking of 89. Russia gained a ranking of 100th position in 2015, which was five places higher than it 2014 score.

In 2015 Switzerland was deemed to be the most investment friendly country, followed by Singapore then Hong Kong. The bottom three ranked countries were Democratic Republic of the Congo, North Korea and Sudan.

BDO survey methodology

BDO, one of the world’s largest accountancy networks, ranked countries on their investment potential by comparing them over several categories using measurable factors relating to labour market performance. Countries were compared in three main areas: economic, political-legal and socio-cultural.

The BDO Compass 2015 is released annually and updated with the latest available data, including global direct investment trends by country and by industry.

Pertaia said this research described everything that was connected with the business climate and environment in Georgia. He stressed this BDO research was more comprehensive than other studies and for this reason the results were "very important because it shows every single direction that is needed for making investments”.

Maybe some people think 43rd place is not good but taking into account all aspects of the research this result is very promising,” he said.

Meanwhile, BDO Managing Partner in Georgia Zurab Lalazashvili said: "This research was made with the Hamburg Institute of International Economics and gives valuable information to investors [and allows them] to choose the right place to invest.”

The reason why this research is unique is that it covers all aspects of the investment environment. The methodology of this research is very wide. Georgia has improved across more or less all categories for creating a better investment environment,” he said.

Georgian National Investment Agency pursues new direction

The Georgian National Investment Agency has a new policy and strategy that focusses on conducting more research to better introduce Georgia’s investment potential to investors.

"Before we were asking investors to come and invest in Georgia, while now we offer them exact research and can explain to them more specifically why they should invest in Georgia,” Pertaia said.

The Agency and KPMG, one of the largest professional services companies in the world, was now researching the investment potential of Georgia’s chemical sector.

In several weeks we will take this research to India to introduce Georgia’s chemical sector investment opportunities to Tata Group, which is a global enterprise headquartered in India. At the same time we are going to promote the investment potential of Georgia’s chemical sector in Munich,” Pertaiai said.

Another area of research the Agency was involved in related to business process outsourcing (BPO). BPO is a subset of outsourcing that involves contracting of operations and responsibilities of a specific business process to a third-party service provider.

We should ask ourselves, what are the services that Georgia could export? We have heard from politicians that Georgia has good physicists, mathematicians, etcetera. But there is no source that proves Georgia really has these professionals. We need to create a real basis [so we can] know what we have here and how can we use this intellectual property,” Pertaia said.

A third area of research the Agency was involved in focused on the development project of Georgia’s western town Gonio, located south of Batumi.

In this scope the Georgian National Investment Agency ordered global commercial real estate advisory company Colliers International to conduct a study of the investment potential of a 315 ha former military range in Gonio.

"We needed to know the international demand and what can be sold easily. We have been working with Colliers International for seven months. This company designed a project and concept of developing the Gonio area. We are giving this project to the Government and if they approve it the project will be implemented,” Pertaia said.

He said several non-governmental organisations were involved in creating the Gonio project because of its complicated location.

"There is a danger that migrating birds could create problems. The project does not interfere in the area, which is close to Cholokhi ravine. There will be no developments, just a recreation zone for the local population. This project will not damage the environment and nature of Gonio,” said Pertaia.

Looking ahead the Agency must monitor the Governmental bodies’ negotiations with the business society. At the same time, changes have seen the Agency recently be moved under the control of the country’s Prime Minister.

Source:commersant.ge