Chairman of ICC Addresses PM, Members of Investors Council with Letter

"The International Chamber of Commerce in Georgia (ICC) will not attend tomorrow's meeting of the Investors Council," reads the letter of Fady Asly, Chairman of the International Chamber of Commerce, sent to the Prime Minister of Georgia, the Secretary General of the Investors Council and members of the Investors Council.

“Dear Prime Minister and honorable members of the Investors Council,

"Since its inception in 2002, the International Chamber of Commerce in Georgia has been vocal and candid in its communication with the authorities, the business community and Georgian society at large; we never shied away from speaking about the problems that the country was facing, and have always voiced our recommendations to improve both the business and investment climates in Georgia," reads the letter.

"The ICC has been very committed to the activities of the Investors Council since its creation; we have regularly expressed our concerns regarding various counterproductive policies adopted or followed by government; the minutes of the Council are full of our remarks, advice, warnings and recommendations, not to mention the dozens of letters that we sent out to various government officials over the years, requesting them to review several detrimental laws and regulations that seriously undermined the economy.

"Had the government followed our recommendations from day one, our national currency would not have devalued, Foreign Direct Investments would not have plummeted to a level lower than that of 2006, and nominal GDP per capita in dollar value this year would not have been lower than that of the year 2012, all of which means that the country and its people are poorer today than they were seven years ago.

"We will open here a small parenthesis and mention that GDP per capita for smaller economies like Georgia, mainly dependent on foreign trade, should always be measured using nominal figures and not PPP figures, as some 'experts' from government wrongfully do, thus distorting facts and misleading the public.

"Since 2013, the policy of this government has been to keep foreign investors away, especially those coming from regional countries, either by sending them back at the border, or by refusing to grant them residencies, even short term ones, or by denying them help to solve problems that were artificially created, with the purpose of discouraging them from pursuing their investments.

"In short, this government has totally undermined Georgia’s reputation as an investment friendly country, and the ICC is very well placed to give an opinion in this respect, being the very first stop for new foreign investors exploring the country and the last recourse for those facing problems.

"In addition, since 2013, the government has bankrupted many businesses accused of being close or friendly with the previous administration, the government has also pressured or destroyed many businesses out of personal retaliation or due to political considerations.

"This year and due to the unsolicited government attacks against TBC and the Anaklia founders, all the Georgian companies listed on the London stock exchange have jointly lost hundreds of millions of dollars, and the country's reputation has been completely shattered abroad within the sphere of international investors.

"Prime Minister Gakharia knows very well what we are talking about; we brought such issues and many others to him when he was Business Ombudsman, Secretary of the Economic Council and later on Minister of Economy.

"Meanwhile over seven years the government has issued myriad new rules and regulations that have unnecessarily complicated, burdened and hampered businesses and the business environment, resulting in the loss of our country's competitive advantage as an emerging market.

"Some of those regulations were drafted to comply with the terms of the DCFTA, and they cost our economy hundreds of millions of dollars; our question is the following: What is the use of the DCFTA if foreign investors are not allowed to do business in the country? Imagine buying a very expensive limousine for commercial purposes, but locking it in a garage, not using it commercially and not allowing anyone else to use it either. Technically, this is what is happening with the DCFTA, we are paying a prohibitive price for it, but we are not allowing investors to engage in the country and take advantage of its benefits so that we can develop our economy and offset the economic costs of the legislative compliance burden.

"As a result of this policy of “No Investors Allowed”, Bidzina Ivanishvili has become today the one and only major investor in the country, which prompts us to mention the ongoing talks regarding his decision to purchase from the government the complex of Tskaltubo for his own private business.

"Mr. Ivanishvili is the de facto President, Prime Minister, Speaker of Parliament, Prosecutor General and Chairman of the Supreme Court of Georgia, so no matter how the government will wrap this transaction or sugarcoat it, it will still be a textbook case of flagrant conflict of interest and corruption by any international standard of ethics, good governance and transparency; any official who will endorse or facilitate this transaction will be part of the corruption scheme with all the consequences that this could entail in the future.

"Finally, about a month ago, Prime Minister Gakharia invited the business community at large to meet and discuss the ongoing economic situation.

"The meeting was attended by every single business organization in the country, from the largest one to the smallest one; nevertheless, the presence of the International Chamber of Commerce, which is the largest business organization in the world, was considered unnecessary.”

By Ana Dumbadze 

25 November 2019 16:25