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Economy of Georgia in 2015: Natia Turnava Assesses the Year

GDP rose by 2.8% (averaged indicator for January to October period in 2015) after 4.5% upturn in 2014. Foreign direct investments declined by 17% to 1.019 billion USD (the January to September indicators), foreign trade plunged by 14%, while international tourism turnover rose by about 7% – these indicators reflect the outgoing economic year’s main parameters.

Natia Turnava deputy director of Partnership Fund overviews the year of 2015 and evaluates Georgia’s economy during the year.

The outgoing year was very problematic, but successful simultaneously, because we have faced serious challenges and we have overcome them with dignity and honor and I believe this is a success.

The economic crisis from currency shocks and sudden frictions in the currency markets generated major problems and complications in the Region, including in Georgia, the country tightly integrated in this region. All these developments would have definitely affected Georgia. Negative results were reflected in deteriorated trade balance, reduced sales in exporter companies. In general, various business sectors have faced serious problems and many questions and the feeling of instability started dominating in the country.

Finally, our economy has withstood this test. We have settled the situation in a short period, compared to other countries in the neighborhood. We maintained a positive dynamics of economic growth, while there are many examples in the Region, when the countries lost positive dynamics of growth and fell to the zero point, at best, or sank under the minus indicators.

Thus, we have managed to stabilize the economy in 2015 and this factor makes us hopeful for 2016 too.

As to the Partnership Fund, it is one of the major economic agents and instruments that carires out the state economic policy. Therefore, we provide adequate reaction and response to all challenges that arise every year.

Our objective was to work more flexibly with our potential partners, add more attractiveness to investment projects. We have demonstrated more flexibility, more liberalism and adequacy amid the new risks and shocks in the Region. Therefore, the year of 2015 has brought real results. Namely, the Partnership Fund has launched about 10 new projects of various scales and put them into exploitation. I would like to stress the new projects in the power sector.

Two major projects were implemented with our active involvement: 1)  Gardabani steam power plant was put into exploitation in 2015 and currently the power facility successfully supplies electricity to the Georgian power system.

The energy security is of vital importance, especially amid various challenges. 2) Nenskra HPP project is another major project. The HPP construction works started in 2015 and we have achieved agreement with the investor. The process of making investments is underway and the project implementation paces are geared up.

Moreover, other smaller but very important projects were inaugurated that reflect the diversification of the fund’s portfolio. For example, the tourism and hotel sector has acquired a new 5-star Rixos hotel in Likani. The complex opened at the beginning of 2015. In Kutaisi we started constructing a small, but very interesting hotel– Best Western. This is the first branded hotel in Kutaisi. The construction works are being carried out at high paces and the complex will be unveiled in 2017.

The Fund has also taken active steps in the industry and building materials sectors and promoted the inauguration of an enterprise that manufactures building sandwich panels. The company has already introduced first product in the retail sales network and plans to launch exports to foreign markets.

When talking about the general economic context, the imports replacement is of crucial importance and this project aims to replace the imports by domestic products.

The Partnership Fund has also promoted creating an airplane spares enterprise and we are implementing the project jointly with Israeli company Elbit Systems.

At the end of 2015, Georgia has intensified efforts to the eastern direction. Namely, we have launched implementing joint projects with China. At this stage, we have already signed several memorandums with the Chinese party, including in the textile and Chinese pottery production fields. These directions will be further promoted in 2016. The main thing is that in 2015 we laid foundation of these perspective projects.

The Fund also plans to strengthen the agribusiness sector. We have already launched two projects, namely, the bog whortleberry production in the Ozurgeti district. We have already started financing the project and the first exports sales have been already carried out.

Another important agribusiness project was recently inaugurated in Samtredia. The project calls for expansion of the existing greenhouse. In the future, the Partnership Fund will intensify efforts for the agribusiness sector development.

As to new hazards and challenges that may arise in the economy, the main objective of our fund, as well as the Authorities, in general, is to transform potential hazards into revenue sources and turn all challenges into profitable deals. This objective is always achievable through adequate tactics. Currently, we are working on the model that will enable the Partnership Fund to provide adequate reaction and response to the future requirements and challenges. One thing is evident: The existence and role of the Partnership Fund in the Georgian economy is very significant. The Fund will intensify efforts to attract more investments to the Georgian economy.

The Partnership Fund’s legal status is a joint stock company and it is an efficient instrument for carrying out important economic and investment policy. Therefore, our performance fully corresponds to the policy of the economic team of the Authorities.

Anyway, we adhere to our mandate that is more flexible and efficient compared to all other state structures, because the Partnership Fund is a private entity in terms of a legal status, but the body belongs to the state sector. The effect of this synergy, first, will be directed to attracting new investments, as this direction was a main challenge in 2015 and will remain a main challenge in 2016 too.

“Today, the Authorities Take Pride in the Achievements that Take Origin from Our Government