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Foreign investments decrease

Friday, November 14
The authorities are reluctant to discuss the actual amount of incoming foreign investment at the present time. There were no big investments in the first half of the year, but as a result of the August Russian aggression direct foreign investment has decreased catastrophically.

As analysts remark, the developments in Georgia have created a headache for foreign investors.

Many of those who had intended to invest more gave up this idea. Only a couple of investors have entered Georgia since August.

According to statistical data, in 2007 Georgia received USD 2.15 billion in inward investment. The authorities stated that in 2008 incoming investment would not be of less magnitude, and probably more. In the first two quarters in 2008 however direct foreign investment had only reached just over USD 500 million. This indicates that the investment inflow was already decreasing and the war has practically stopped it. However it should also be mentioned that the decrease in investments is directly connected with the financial crisis, as the IMF mission assessment confirms.

Direct foreign investments are vital for Georgia, as they determine its economic sustainability. Economic analysts think that some very serious steps should be taken to rescue the situation. “When facing Russia’s aggression Georgia received substantial international support, and this is already positive,” - thinks economic analyst Giorgi Ghaghanidze.