26.Jan .2022 14:00

Four Factors, Which Constantly Bother The Investors – Discussion At The Parliament

Four Factors, Which Constantly Bother The Investors – Discussion At The Parliament
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Sector Economy and Economic Policy Committee held a committee meeting in the parliament yesterday, which was attended by the representatives of the private sector. The meeting was dedicated to the FDI and part of the Thematic Inquiry of the Committee: FDI – Challenges and Development Perspectives.

The meeting was conducted online and was participated by the representatives of ICC, EU-Georgia Business Council, Georgian Business Association, Georgian and Turkish Businessmen Association, Georgian Tourism and Banking Associations, IDFI, PMCG, ISET and TSU.

Director of the Business Association Levan Vepkhvadze named the instability of GEL rate as the biggest challenge for investors in Georgia.

“I would focus on four factors, which are frequently named by our members as the biggest challenge, number one is GEL rate. Foreign Direct Investments are made in foreign currency, while the investor takes the revenue in the national currency, which raises a serious problem”, - Levan Vepkhvadze said.

According to Director of the BAG, regulations were the second biggest problem for the investors.

“For some reason, we are adopting the strictest regulations in the process of harmonization with EU legislation. There are so many countries in the EU and everyone has their own specifics, but we always get the strictest regulation, which I think is really one of the factors hindering investment. Another negative side of those regulations is that they do not show what the legislator wants, because too many regulations are made in the law in a more declarative way and then they break down into specific details that are very important for the businesses. We often make the law so that we do not know what will happen next”, Levan Vepkhvadze said.

Director of the BAG noted that the bureaucratic problems were the third factor which hindered attraction of FDI in the country.

“The third factor is bureaucratic problems, which have been mentioned at the meeting of the Investors' Council with the Prime Minister. This applies to different types of permits, deadlines for issuing these permits, including construction permits, as well as different types of property issues, and so on. Bureaucratic topics are probably to be looked at once and for all. Investors often name the court in the bureaucratic part. Unfortunately, it is a very big problem because there is no uniform practice in the courts. In same case, one court can make a decision, which differs from another and this is a very serious problem for the business. The second problem is jurisdiction issues over the courts and, in particular, knowledge of English. Contracts are mostly written in English and judges sometimes find it difficult to go into the details of the contracts because there are problems with English. Also, time-consuming decisions are a very serious problem”, - Levan Vepkhvadze said.

Director of the BAG noted that the lack of qualified staff is the forth and biggest problem for the investors in Georgia.

“There is a problem of qualified staff for the investors in the country. They often talk about the introduction of new technologies, which we did not have earlier and usually it shows a very serious gap, because the investor always asks how long it takes to train the appropriate workforce and at this time, he can reconsider investing," Said Levan Vepkhvadze.