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Enormous Amount of Negative Investment Recorded in the Country in 2013 -2014

In 2014, the negative investment from a total of 20 countries amounted to  $ 114 million.
According to the National Statistics Office data, in addition, the negative investment made by the international organizations amounted to $ 106 million and from the countries which are not known –  $ 84 thousand.

In 2013, volume  of negative investments from  20 countries amounted to $ 148.5 million.

As for the situation in the end of 2012, negative investment from 13 countries totaled $ 13.7 million in 2012.

Sakstat explains that the reasons for FDI reduction may be the non-resident’s share concession to resident, reclassification of  non-resident direct investor into portfolio’s investor and the reduced current liabilities for a non-resident direct investor by the resident company.

At the same time, they say if we consider FDI data in the long-term dynamics  not only in Georgia, but also in different countries, it is easy to detect a trend that   the volume of foreign investments in the second half exceed the value of the first half.

However, none quarter has been distinguished in terms of the lack of negative investments in Georgia.

It should be noted that in 2009, when the 2008 war  significantly affected the country’s economy, USD 105.7- million negative investment from 19 countries was  recorded.
In 2008 negative investment in the amount of $ 37.7 million  from  11 countries were recorded.

It should be noted that in the past two years, a moratorium on the purchase of agricultural land by  foreigners may be a primary factor  which have slowed investment or increased outflows.

On June 28, the Georgian Parliament passed a bill imposing a moratorium on land acquisition by foreigners and foreign-owned legal entities till the end of 2014. The bill effectively reversed an earlier policy that welcomed foreigners to settle and invest in Georgia’s agricultural sector, a policy culminating in the seemingly outlandish program seeking to bring to Georgia – and offer fast-track naturalization to – dozens of expert farmers from South Africa.

“Transparency International – Georgia” wrote in February 2014 that foreign citizens owned about 18 500 hectares of agricultural land, which is about 0.7% of the country’s whole agricultural land.

 Against this background, it is unknown what caused a negative investment in the country.

Overall, as per the preliminary data, in 2014  $ 1.3 billion was invested that is 35% more  compared to 2013.

Inflows in the country amounted to $ 2.2 billion while  liabilities to investors reduced  by  $ 925 million.