Some American businesses operating in Georgia are scaling back activities or leaving the country due to a lack of trust in the political and business environment, says Zviad Skhvitaridze, founder of the American consulting company ZTN Consulting.
In an interview with TV program Business Course, Skhvitaridze emphasized that foreign investors place high value on trust and legal stability, both of which he argues are in question in Georgia today.
“It is unfortunate that no one will invest money in a country where the trust factor is zero, where from a political point of view the course of the country’s governance is really under question,” he said.
According to him, several American companies, or firms linked to the U.S. operating in Georgia, have already begun reducing their operations. Others are postponing planned medium-sized projects or shifting investments elsewhere.
“Businesses that had planned to implement medium-level projects have had their projects postponed altogether. Those businesses that I have connections with, including some American businesses or businesses connected to America that operate in Georgia, are certainly reducing their operations and leaving the country, diversifying either to neighboring markets or Eastern Europe. There are also many, I will tell you directly, who want to transfer their business from Georgia to the U.S.,” Skhvitaridze noted.
He stressed that trust in the judiciary is a decisive factor for American investors, yet doubts remain about Georgia’s ability to provide independent arbitration in business disputes.
“For U.S. businesses, where they invest, trust in the country is important. When they see that there is no independent court in the country that they trust and that there will be an independent arbitrator in business disputes... Of course, political turbulence and the issue of elections are added to this, which hangs over Georgia like the sword of Damocles. Restoring this trust is very difficult,” Skhvitaridze said.
