Bakhtadze Meets with Amazon Web Service Management in DC
Georgian Prime Minister Mamuka Bakhtadze has been on a working visit to the United States. It began on September 17 with a meeting with US National Security Advisor John Bolton at the White House in Washington, DC. Throughout the trip, he has held several high-level meetings with US government officials, met with Georgian students studying at US universities, and will give a speech at the 73rd session of the UN General Assembly on September 27.
On September 19, Bakhtadze met with Amazon Web Service (AWS) Management in the US capital. According to the Prime Minister’s office, John Brennan, Head of Expansion and Capture at Amazon, briefed the Head of the Government of Georgia on the company’s priorities and activities planned for service improvement.
The key issues discussed during the meeting were the growing role of Georgia in the digital technologies sector, regional projects, and potential avenues for cooperation between Georgia and Amazon.
Bakhtadze emphasized Georgia’s significant potential to develop digital technologies, particularly in the regional context. He also raised the issue of how Georgia could effectively cooperate with Amazon and integrate Amazon services into the local economic framework, and the Digital Silk Road. The Digital Silk Road is a Chinese-led initiative with the goal of “constructing cross-border optical cables and communications trunk line networks, planning transcontinental submarine optical cable projects, and improving spatial and satellite information passageways to expand information exchanges and cooperation,” as explained by the Council on Foreign Relations. One component of the project is a plan to add 35 satellites to its national satellite navigation system, extending coverage to the countries of the Belt and Road Initiative by 2020, aiming to compete directly with GPS – a US project.
The Prime Minister’s Office told the Amazon representatives that Georgia is keenly aware of the development of the digital economy, and government authorities welcome close cooperation and knowledge transfer from leading international companies in the process of successful implementation of the planned measures.
Rumors of an Amazon distribution facility in Georgia have swirled since December 2016, when Giorgi Tsikolia, then-temporary envoy of Georgia to the USA, and Levan Beridze, an advisor at the Georgian Embassy, paid a working visit to Seattle, Washington state, for bilateral meetings with representatives from Amazon and Microsoft to discuss potential cooperation with Georgia. Tsikolia’s team submitted a proposal to Amazon to establish a distribution hub in Georgia.
Amazon “has [distribution centers] in many countries, cities and regions of the world. Those centers follow two business models: 1) delivery of Amazon’s own products to consumers and 2) Amazon acting as a mediator. We discussed both directions and introduced Georgia’s advantages in this respect, because there is no such center in our region…Amazon plans to enter both our region and Central Asia. Naturally, we emphasized the advantages of Georgia and prospects to make our country a hub for Amazon business. They positively appraised our proposals and we agreed to provide more detailed information at a second meeting,” Tsikolia said at the time.
That second meeting came in January 2017. The two sides discussed the idea that Amazon could open a logistics center in Georgia with Amazon operating as a mediator to supply products from major companies to certain markets. Tsikolia pointed out that such a center could help Georgian manufacturers penetrate export markets.
“I believe our communication will continue,” said Tsikolia, noting three key advantages of Georgia’s position: a growing, western-facing democracy, a geographic location at the crossroads of east and west on the New Silk Road, and continued progressive reforms to create a business-friendly environment.
Just a day before the second meeting of Tsikolia’s team with Amazon, the sprawling indoor-outdoor shopping center Lilo Mall, located on the eastern edge of Tbilisi, announced a 250,000 GEL project to digitize the mall’s products. Lilo’s administration boasted that they would create a Georgian version of eBay or Amazon. The project was scheduled to be launched by the end of 2017, but it is not yet online. CEO Levan Gagua announced last week that the project is finally in the testing phase, and he expects it to be functional by the end of 2018. Gagua told Commersant, “We will launch online sales before the end of the year. We have some problems as tenants do not yet have a particular desire to work via Internet, but I am sure that everything will change as soon as they see the benefits of the new format.”
By Samantha Guthrie