Economic Conference: Georgia & The World 2020

On February 26, Sheraton Grand Tbilisi Metechi Palace hosted an economic forum with the title: 'Georgia and The World 2020’. The conference was attended by a number of high-officials from both the government and the private sector. The event was moderated by George Sharashidze, the publisher and the founder of the Georgia Today Group, which owns the Entrepreneur and The Economist annual magazine franchises in Georgia.

The convention was held under the media support of The World in 2020, The Economist magazine’s annual publication, and was organized for the second time by the Ministry of Economy and Sustainable Development of Georgia. This year’s conference was attended by nearly 200 participants and invitees, including the distinguished economist, Professor at the Warsaw School of Economics, former Deputy Prime Minister, Finance Minister, and Chairman of the National Bank of Poland, Mr. Leszek Balcerowicz.

The conference covered three panels, with guests allocated according to the discussion themes.

Before the panel talks kicked off, the conference began with welcoming remarks from the Georgian Prime Minister, Giorgi Gakharia. Leszek Balcerowicz also offered welcoming remarks to the audience, which will be detailed later in the article, after which Giorgi Khistovani, a representative from PMCG (Policy and Management Consulting Group), delivered a presentation on ‘Georgia’s Economic Outlook’.

The first panel, with the title ‘Economic Development Model of Georgia – Balanced Interests Between the Public and Private Sector’ included the participants Ivane Machavariani, the Minister of Finance of Georgia; Selim Cakir, the Resident Representative of the International Monetary Fund for Georgia; and Leszek Balcerowicz.

The second panel of the conference covered the topic ‘Competitiveness of the Georgian Economy in a Global Context, Infrastructure Development: and its Role in Increasing Competitiveness’. The invitees for the second panel were Maya Tskitishvili, the Vice-Premier and the Minister of Regional Development and Infrastructure; Natia Turnava, the Minister of Economy and Sustainable Development, and Sebastian Molineus, the World Bank’s Regional Director for the South Caucasus.

The third panel included participants from different sectors, including the government, EU and assorted NGOs. The title of the third panel was ‘Georgia in the EU Market – Achievements and Existing Challenges,’ and the speakers were Genadi Arveladze, Deputy Minister of Economy and Sustainable Development; Carl Hartzell, the EU Ambassador to Georgia; and Nino Zambakhidze, President of the Georgian Farmers Association.

The event was also attended by representatives of international donor organizations, as well as delegates from the private sector and economic experts.

The Economic Conference panel discussions took a look at the model of Georgia’s economic development, balancing state and private sector interests; the competitiveness of Georgia’s economy in the global context, its infrastructural development and role in bolstering competitiveness; and spotlighted the challenges and relations between the Georgia and EU markets- overall, analyzing Georgia’s progress, and reviewing and discussing current challenges and new opportunities in the global context.

“We are not here to discuss just the Georgian government’s achievements,” Georgian Prime Minister Giorgi Gakharia said. “We are more interested in discussing the achievements of Georgian business, because we all understand that the cornerstone and backbone of our economy is free business: strong Georgian business that creates jobs. Creating new jobs is our economy’s systemic challenge. Without balanced relations and policies between the private sector and state interests, it is impossible to achieve any serious results. Given the overarching and global title of our conference, Georgia and the World 2020, we naturally focus on the economy, and I must emphasize that we see our country, Georgia, as an economically robust platform providing larger economies with services”.

The Head of Government, in underlining the significance of the conference, pointed out that it enables every delegate and stakeholder to engage in open discussions on the challenges and achievements of Georgia’s economy.

The Prime Minister spoke about free trade agreements and emphasized that Georgia is the only country to enjoy such agreements with China and the EU respectively, together with all of its neighbors.

“Georgia is committed to signing a number of free trade agreements. Georgia is the only country to enjoy such agreements with China, the EU, and all of its neighbors. We are actively negotiating, and are about to finalize, similar agreements with Israel and India. Consequently, we will have a very strong FTA portfolio. Why? We all understand well that Georgia is a small market and yet we want our country to emerge mainly as a platform and hub for trade and business activities between larger economies, and for investment services. And that is exactly why we are putting together a strong FTA package,” the PM stated.

Gakharia then underscored that the Government of Georgia spares no effort to ensure an exceptional business climate in the country, especially in the area of services.

“In addition, everything related to transport, transit, and logistics is a priority for our economy. And that is exactly why the Government of Georgia, above all else, does everything to put in place an exceptional business environment in all areas, especially in the field of services. Services are the future of our country and economy. We all understand that it takes years, and that services require exceptional competences, but a service-oriented economy is the future of our country.

“That is exactly why conferences of this kind are vitally important for us together: business, the expert community, and the government, to pinpoint the country’s proper role in global and regional contexts.

“The participation of Georgia’s European friends in such discussions can hardly be overestimated. Today, Georgia is a transitional economy, and its key political aspirations lie in Euro-Atlantic integration, while its economic aspirations aim at an open market economy,” PM Gakharia concluded.

In his own opening remarks, Mr. Balcerowicz spoke about the last decades of Georgia’s economy, although he did not confine his words to this country alone. The Polish economist is an expert in helping post-soviet economies flourish and exceed in their regions. He noted the challenges of today’s world economy, and what countries like Georgia can do to avoid the financial fluctuations and to sustain progression.

“Economic development is of crucial importance to transitional economies like Georgia. […] We can confer on two types of power: there is systematic power and crisis. The latter slows down progress. There is a lot of blaming the market when a crisis occurs, although we must remember that it’s like a race, and crises are like crashes, which we can learn from, and which logically slows down the speed of the momentum of progression.

“The systematic powers include employability and productivity, which depends on innovation and reforms in the economy. I think Georgia has achieved a lot, and I’ve been following the progresses of your country. To further speak about institutional fundamentals, an economy must be private, and state ownership is a risk in its own right. Consequently, politicization is very easy and risky, and we must avoid it. Privatization is what we can use to counter the detrimental economic forces. […] Competitiveness is very important to combat monopolies. And the regulations adhering to the EU market, must be pushed to the maximum,” he said.

“The rule of law is of foremost importance, which means that institutions must be independent from politicians. Rule of law is interconnected, and involves not only businesses but individuals,” Mr. Balcerowicz concluded.

The Prime Minister then again stressed the importance of the EU’s support to strengthen connectivity in order to enable businesses to translate political achievements into concrete profits.

“Presently, we enjoy the Deep and Comprehensive Free Trade Agreement with the EU, as well as access to a vast market with the highest standards, and all that in harmony with our political aspirations,” Gakharia stated, adding that Georgia will spare no effort to raising the bar across a variety of areas.

“We are holding extensive discussions on factors conducive to bolstering our economic growth, and, of course, there are structural reforms and institutional empowerment,” the Prime Minister said.

He also accentuated the challenges and the importance of assistance from European partners in overcoming challenges.

“Connectivity is a challenge to overcome, something which we need assistance for first from our European colleagues. Georgia has an ideal legal framework, agreements with the EU, but though it is very close to Europe from the institutional and value-based point of view, Georgia does not have a land border with the EU and so faces physical connectivity issues. Consequently, it is important for us to have support from eminent representatives of various fields of the economy and science, on different EU platforms. Today, Georgia needs EU support firstly to boost connectivity, be it by means of the Black Sea, direct flights, railroads, or other transport, so that we can enable our economy and business to translate our political and institutional rapprochement and achievements into concrete profits,” the Prime Minister stated.

By Beka Alexishvili