Mr. Chairman,
Your Excellency Mr. Ambassador,
Dear Friends,
Ladies and Gentlemen,
First and foremost, I am extremely thankful to President Xi for inviting me and my delegation to the People's Republic of China and to the opening ceremony of Summer World University Games in Chengdu. Last week, I had a great honor to meet President Xi, an exemplary politician, wise and visionary national leader.
I want to express my sincere gratitude to H.E. President Xi and Premier Li for the exceptional hospitality and warm welcome. Elevation of our existing relationship to the esteemed level of the strategic partnership marks a significant milestone and paves the way to more fruitful cooperation between China and Georgia.
On behalf of the Georgian Government and the Georgian people, I am immensely delighted to pay such a productive and friendly visit to your wonderful country. It is also a privilege to attend this valuable business forum today and represent Georgia - our country - while addressing distinguished officials and representatives of the Chinese and Georgian business community.
I eagerly embrace this opportunity to briefly introduce our country - Georgia.
First of all, I want to remind you all that within the Caucasus region, Georgia has been the heart of many civilizations for centuries with the 3,000-year old history of statehood. Like China, Georgia is one of ancient countries with rich history and culture. My country has been strategically positioned at a significant geopolitical crossroads, serving as an integral part of the Silk Road and acting as a connecting bridge between Europe and Asia. This unique location allowed Eastern and Western civilizations to converge in Georgia, resulting in a captivating blend of cultures from these two worlds.
Our heritage reflects the influence of diverse civilizations yet embraces its uniqueness. The Georgian culture radiates a distinctive and enduring charm, from vibrant traditional dances and soul-stirring polyphonic songs, to flavorsome cuisine and the centuries-old tradition of winemaking that has made Georgia renowned as the birthplace of the wine production.
Despite the geographical distance, China and Georgia share many common traits ¬- both our nations carry rich histories and values, underlining hospitality, purity of family, and respect for traditions.
These values form the very essence of the Georgian identity, representing core principles that define us. As we uphold them, we honor our heritage and pave the way for a united and prosperous nation, nurturing innovation and modernity.
In doing so, we place great significance on strategic partnership and friendship with China based on mutual respect and vision for the shared prosperity and sustainable development.
Dear Friends, Georgia highly values China's crucial role in the global economy and its substantial contributions to the development and progress of nations worldwide. China's dynamic growth, innovation, and commitment to international cooperation have made it the essential partner in addressing global challenges and fostering prosperity. I would like to highlight that Georgia supports President Xi's global initiatives, such as Global Development Initiative (GDI), Global Security Initiative (GSI) and Global Civilization Initiative (GCI). And, we express readiness to strengthen cooperation under these frameworks.
I sincerely hope that our bilateral relations will evolve into a resounding success story with deepening of ties and the realization of our common goals. In this light, I firmly state that my country offers friendly environment and all the necessary support and comfort to realize such goals.
Georgia serves as a vital link for eight landlocked countries, facilitating seamless trade and commerce between the two continents with the support of our Government, free trade agreements, human capital and regional connectivity. That is why, in recent years, my country emerged as an exceptional gateway between Europe and Asia for international companies and businesses in the wider region.
Businesses find in Georgia an invaluable entry point not only to the South Caucasus but also to Europe and Central Asia, granting access to diverse markets. As a crucial entry and exit point for trade, commerce, and energy between Europe and Asia, we offer international firms a highly competitive atmosphere to expand their operations across the broader region.
Moreover, Georgia is the only country in the region with free trade agreements simultaneously with China and the EU. Overall, we have the free trade regime with 45 countries (including the EU-27, the United Kingdom, Turkey, China, EFTA and CIS countries), and have many more in negotiation phases. Therefore, Georgian products can enter 1/3 of the world consumer market under the existing free trade regime, which represents about 2.3 billion-consumer market.
Further to highlight impressive advantages of Georgia, currently,
we extend visa-free travel to citizens of 98 countries, allowing them to stay for a full year. Furthermore, individuals holding a visa or residence permit from 50 other countries can also enjoy the convenience of visa-free travel to Georgia.
According to the World Bank, Georgia ranks as the 3rd Least Tax Burdened Country in the world, with 9.9% total tax rate. We offer attractive benefits with some of the lowest tax rates globally and streamlined bureaucracies, making it an appealing choice for investors looking for great value. Beyond the highly attractive business climate, we provide appealing support mechanisms for interested companies, such as the "foreign direct investment grant". For export-oriented IT companies operating in Georgia, we offer benefits through the so-called "International Company Status", which includes preferential tax regime (only 5% personal income tax (instead of general 15% rate) and 5% corporate profit tax (instead of general 20% rate)).
The rise in the Georgia's reputation as a desirable business destination is not a mere coincidence. Over the past decade, the country has undergone significant transformation, embracing a more liberal and free-market economy.
Last year, we adopted "Vision 2030," the Georgia's development strategy - a comprehensive national policy document that outlines the Georgian Government's development vision. This far-reaching outlook focuses on fostering sustainable economic growth, social equality, security and stability.
Implementation of effective and efficient policies and our tireless work led us to tangible results. Namely, despite facing challenging geopolitical landscape in the region, as well as a global economic downturn, Georgia has demonstrated resilience by maintaining economic stability. We have achieved remarkable growth of the Georgian economy reaching significant milestones. Today Georgia is the fastest growing economy in the world.
The following statistics vividly reflect the evidence of our progress. Thanks to our strong economic policies and the increased activity in sectors, such as transport, logistics, financial services, construction, energy, and tourism, we have achieved double-digit economic growth for two consecutive years, recording a GDP growth rate of 10.1% in 2022, following a remarkable growth of 10.5% in 2021. This positive trajectory continues into 2023, with an average economic growth rate of 7.6% from January to June.
Looking ahead, IMF projections indicate that Georgia will have the fastest economic growth among regional and European countries in the medium term (2023 - 2028), with the projected growth rate of 5.1%.
As you are well aware, inflation has emerged as a global challenge, and it continues to be a significant concern for many powerful economies worldwide. However, we have taken effective measures resulting in an inflation rate of only 0.6% in June. Moreover, the inflation is expected to remain below the projected levels for this year.
Additionally, Georgia's sovereign credit ratings have exceeded pre-pandemic levels, reflecting our country's resilience and strong economic performance. Fitch Ratings raised Georgia's outlook from BB 'stable' to BB 'positive,' attributing this positive change to our Government's effective governance, economic development, and credible macro-fiscal policy framework. These favorable ratings underscore the confidence placed in Georgia's economic prospects and policy management.
Our achievements have gained global recognition with Georgia praised by various international institutions for cultivating a supportive legal and business environment. As a result, my country has secured leading positions worldwide:
● According to World Bank's "Ease of Doing Business (2020)", Georgia ranks 7th amongst 190 countries;
● In terms of Budget Transparency, the Open Budget Survey (2021) ranks Georgia as a world leader, placing us at No.1;
● According to the Fraser Institute's Economic Freedom of the World 2022 report, Georgia ranks among the top 15 countries with the freest economies, securing the 15th position out of 165 nations globally;
● The Heritage Foundation Index of Economic Freedom 2023 ranks Georgia 21st in Europe well ahead of 11 EU member states;
● According to the report - "Transparency in the Time of War" by the European Research Centre for Anti-Corruption and State-Building, Georgia has made significant progress, moving from 54th to 17th place in Transparency Index 2023.
These figures provided above represent only a small part of substantial achievements that Georgia has reached over the last decade, and I take pride in stating that enduring success is linked to my Government's dedication to develop Georgia into a land of peace, stability and prosperity.
Our dedication is evident in various large-scale efforts, including initiatives and projects Georgia has initiated, or has been participating in, including sectors, such as transportation, infrastructure, energy, trade, tourism, technologies and innovation.
In light of existing challenges, over the past few years, the Trans-Caspian International Transport Route, the so-called Middle Corridor, has notably emerged as a secure and dependable route for freight transportation between Europe and Asia. The Middle Corridor comprises of two primary routes - the Baku-Tbilisi-Kars (BTK) railway line connecting by land Azerbaijan with Turkey via Georgia; and, the Georgia's Black Sea ports, thereby establishing a maritime connection to the European Union.
Moreover, this Corridor stands out as one of the most efficient ways to connect the East with the West, offering a considerable time advantage of 20-25 days compared to the marine route. Particularly, through the Middle Corridor, Georgia connects China to Europe, and it takes up to 15 days to bring cargo from the Chinese border to the EU market. Overall, the Middle Corridor's inherent competitiveness provides access to vital European markets.
Dear Friends, last year we signed a comprehensive roadmap in Kazakhstan - our friendly nation and also with Azerbaijan, outlining strategic measures to eliminate bottlenecks and develop the Middle Corridor from 2022 to 2027. The roadmap encompasses specific actions related to transport and logistics infrastructure development, operational optimization, the implementation of a unified tariff policy, corridor digitalization and enhancements to the regulatory framework.
Georgia, as a responsible member of international society and an integral part of the Middle Corridor, invests heavily in transport infrastructure development to ensure sufficient capacities for the years ahead.
One of the top priorities for my Government is the coordinated functioning of transport, and modernization and/or construction of transport infrastructure in accordance with international standards. We view the development of such infrastructure as a precondition to facilitate new cargo volumes through Georgia.
The above is reflected in specific large infrastructure projects, such as the Railway Modernization Project, which is underway with the involvement of a Chinese company. Upon completion of this project at the end of 2024, the throughput capacity of Georgian railways will be doubled.
Furthermore, the development of the Anaklia Deep Sea Port is another top priority for the Georgian Government. This is a green-field PPP project to develop, construct, operate and transfer a state-of-the-art deep-sea port on East Coastline of the Black Sea. The Port will be developed in 9 Phases to achieve the annual capacity of 100 million tons. It will be the first Georgian deep-sea port able to handle PANAMAX container vessels and introduce large feeders and direct shipping calls to the Georgian market.
As part of the East-West Highway Corridor Improvement Project, we carried out a feasibility study to explore the need for the development of logistics centers throughout Georgia. Creation of such centers will improve quality of logistics services and strengthen the Georgia's position as a regional transit and logistics hub.
My Government places particular emphasis on improving air connectivity by attracting more airlines with its liberalized aviation market and developing new international directions connecting continents, countries, and people. Our aim is to develop a new Tbilisi International Airport into a world-class transportation hub with efficient air cargo infrastructure and the aircraft technical maintenance center. This will position Georgia as a leading player in the global aviation landscape.
Recognizing the strategic importance of economic and touristic relations with China, we are delighted that flights between Tbilisi and Urumqi were restarted in January this year with three weekly frequencies and there is a huge potential in that direction.
As we embrace Georgia's vast touristic potential, we believe that expanding our air connectivity with China will play an important role in advancing bilateral tourism cooperation, further increasing tourist flows, as well as enhancing economic and business relations within industry stakeholders.
One of our biggest goals is to strengthen the transit function of the country through the existing and new high-capacity fiber-optic backbones, linking Georgia to the neighboring, as well as to the European and Asian countries. Therefore, we consider it expedient to promote the digital connectivity of Europe and Asia through the territory of Georgia.
We are considering establishment of the regional digital hub, which, on one hand, includes international connection with the fiber-optic internet infrastructure to connect Europe and Asia via shortest route through Georgia, and, on the other hand, creation of the regional data centers. Elaboration of the advisory service study for the investment attraction and concept for the development of a digital hub and corridor is currently in progress.
I must also mention that my country is rich in renewable energy resources, with hydro resources standing out as particularly noteworthy. Despite having an economically justified potential of approximately 40 billion kWh in hydropower, only 30% of this potential is currently being developed. Therefore, our goal is to maximize the utilization of renewable energy sources, especially by implementing large hydro power plant projects.
That is why, in order to attract investors, a new renewable energy support scheme based on competition and market principles was developed and approved last year. The support scheme involves capacity auctions for renewable energy sources. The new scheme introduces the concept of the Contract for Difference (CfD), which involves compensation for the difference between the market price and the contract price for electricity. This mechanism gives investors a guarantee that they will get a reasonable income for years.
One of the pivotal projects contributing to the Georgia's green energy production and export is the Black Sea Submarine Cable initiative, which holds significant promise for Georgia's future energy landscape, as it aligns with the country's commitment to developing renewable resources and making steps towards a more sustainable energy future. Our neighboring countries - Azerbaijan, Romania and Hungary are part of this ambitious project.
Importantly, Georgia's long-term development strategies and the above mentioned projects are aligned closely with the objectives of the Belt and Road Initiative (the "BRI"). Therefore, Georgia is actively engaged in the BRI showcasing its commitment as a founding member of the Asian Infrastructure Investment Bank and the first country to approve its Charter.
I would like to express my sincere excitement over signing the Bilateral Cooperation Plan between the Governments of China and Georgia today under the framework of the BRI. I am confident that this groundbreaking document will foster mutually beneficial cooperation.
I also want to mention that Georgia has successfully organized three Tbilisi Silk Road Forums, which I established in 2015. These forums have played a vital role in advancing the BRI, creating an international platform for high-level dialogue among senior policymakers, businesses, and community leaders on a multilateral scale. The 4th Tbilisi Silk Road Forum will take place in Tbilisi this year on October 26-27. This important event will gather up to 2,000 delegates, high-ranking officials, as well as business representatives from over 60 countries. I would like to use this opportunity and extend our invitation to Chinese businesses to attend the Forum. We will be delighted to host you in Georgia.
On a separate note, I would like to mention the Georgian wine. As you all know, Georgia is the cradle of wine. My country's uninterrupted tradition of winemaking dates back to eight millennia. Georgia is the only country in the world, where winemaking methods developed since ancient times were never abandoned and are still practiced. As a proof of its cultural significance, and in accordance with UNESCO principles, the ancient Georgian tradition of winemaking in clay vessels called "Qvevri", has been assigned the status of National Monument of Intangible Cultural Heritage. Qvevri was the first vessel ever to be used in the winemaking, with archaeological finds dating 8,000 years. Georgia's ancient traditions and its wine culture are intertwined with the country's national identity.
The country's distinct traditions have been shaped by an amazing diversity of more than 525 indigenous grape varieties, 10 of which is planted on the territory of China, in the Ningxia region.
The market potential, economic benefits, and prospects for bilateral cooperation make China a strategically important export destination for Georgian wines. Since 2013, the Georgian Government has been carrying out a targeted marketing campaign on strategic export markets, including China, but we have to do more. The increased participation of Georgian winemakers in exhibitions demonstrates the country's commitment to expanding its presence in the Chinese market and highlights a growing interest in Georgian wines. We look forward to Georgian wine companies which are here today to build relationships, generate brand awareness, and ultimately increase their sales and market share in China. The hope that these efforts will help establish the Georgian wine as a recognized and valued choice among Chinese consumers.
Towards the end let me state that the Georgian Government is fully committed to extending assistance to business representatives interested in investing in our country. In 2014, we established "Enterprise Georgia," the nation's pioneering institution dedicated to fostering private sector development. This Agency serves as an intermediary between foreign investors and the Georgian Government offering access to up-to-date information and facilitating efficient communication with Governmental bodies. Functioning as a comprehensive "one-stop-shop," "Enterprise Georgia" is ready to provide support to investors throughout the entire investment process.
In fact, several Chinese companies already enjoy the beneficial environment created in Georgia as well as all the supportive measures our Government provides. We are committed actively to engage with more Chinese companies and introduce them to abundant business opportunities in Georgia. We warmly welcome opportunities in this direction, and "Enterprise Georgia" is ready to provide assistance and support to Chinese companies looking to explore business prospects in our country.
Dear friends, today Georgia is an investment destination where excellent business climate is matched with reduced risks, lower operational costs, availability of green energy, and free trade access to markets with more than two billion population. My country is a true trading hub between Europe and Asia, and is the leading economy in terms of growth in the region.
Georgia is a vital link on the BRI and the Middle Corridor. I would like to use this opportunity to invite Chinese companies to explore Georgia's investment potential and take advantage of opportunities, including benefits that can be gained by moving and/or expanding their manufacturing, processing and assembling facilities to Georgia.
Dear Friends, Mr. Chairman, today I briefly presented our most significant achievements, vast potential and efforts to elevate our national interests while benefiting partnership with China - with this great country and great nation - and its business sector. I firmly believe that the desire to deepen our valuable cooperation is mutual, and this opportunity will enable us to explore new avenues of collaboration with substantial momentum.
I hope my visit will serve as a stepping-stone towards deeper cooperation, fostering lasting friendship, and creating a brighter tomorrow for China and Georgia.
Thank you very much!