04.Jun .2021 12:00

Georgia Loses Great Opportunity Due To The Delay Of Digital Silk Road – Expert

Georgia Loses Great Opportunity Due To The Delay Of Digital Silk Road – Expert
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Expert of Economics Irakli Makalatia considers, that Georgia is losing great opportunity to due to the delay of digital Silk Road. According to Irakli Makalatia, appointment of a special manager at Caucasus Online hinders its new owner to develop a digital silk hub project, so the process of digital transformation of the country's economy is delayed.

"I think we are losing a great opportunity by delaying this project. Supposedly, the process will be prolonged, but it will fit into the frame in which it should be. There is the conclusion of the Venice Commission, which notes that there has not been the similar precedent in Europe when the regulator has such broad functions. The second is the International Arbitration Tribunal with the World Bank, which has issued a negative conclusion. Consequently, Europe is already concerned about our actions”, - Makalatia told Business Morning.

According to the expert, this process will come to the logical conclusion and Georgia will become participant of the digital hub.

“As a result, we will paly a main role in Silk Road route connecting Europe to Asia. At the same time there are announced construction of new data centers and the possibility of creating new startups. We should not ignore these issues, because the service sector is not developed and this project will help it," Irakli Makalatia said.

The GNCC announced the appointment of a special manager to the board of Caucasus Online in October 2020. Before adopting this decision, NEQSOL Holding acquired beneficial ownership of shares in the parent company of Caucasus Online.

With the purchase, NEQSOL Holding planned to integrate Caucasus Online’s existing assets - a 1,200km submarine fibre optic cable - into an international fiber optic transit infrastructure system it is developing, connecting Central Asia to Europe, thereby positioning Georgia as a regional digital hub with tremendous benefits to the Georgian economy.

Despite this, the Georgian National Communication Commission (GNCC) stated that Caucasus Online had breached the Communications Law for failing to seek the GNCC's prior approval on the change in its shareholders. Neqsol Holding noted that they did not need the GNCC's prior approval on the acquisition of Caucasus Online, as the deal was not concluded under Georgian jurisdiction. In addition, the company notes that the government of Georgia was informed about the project.