Georgia-Israel: Economic Perspectives and Cooperation Mechanisms

Georgia-Israel: Economic Perspectives and Cooperation Mechanisms
05 April 2016

Georgia-Israel: Economic Perspectives and Cooperation Mechanisms

Israel is one of the exemplar countries in the world, where Georgian officials could find many interesting practices to implement in Georgia.

Israel has been fighting against terrorism since its very foundation. Despite continuous state of war, the country has developed one of the strongest economies worldwide.

Despite tight relations between Georgia and Israel, over the past years Israeli exports to Georgia is decreasing and Israeli businessmen show less interest in the Georgian investment environment. There is much room for improving the Georgian exports too.

The latest statistics proves that Israel is not recorded in Georgia’s ten top exports markets. Moreover, exports have considerably shrunk in 2015 compared to 2014.

According to Geostat, the national statistics service of Georgia, in 2003 Georgia’s exports to Israel constituted 957.400 USD. The figure marked 1.45 million USD in 2004, 1.01 million USD in 2005, 2.3 million USD in 2006, 13.7 million USD in 2007, 2.4 million USD in 2008, 1.6 million USD in 2009, 4.2 million USD in 2010, 3.1 million USD in 2011, 36.1 million USD in 2012, 2.4million USD in 2013, 4.5 million USD in 2014 and 5.6 million USD in 2015.

EXPORT

As to Israeli’s exports to Georgia, the figure made up 1.75 million USD in 2003, 4.9 million USD in 2004, 9.6 million USD in 2005, 22.3 million USD in 2006, 37.8 million USD in 2007, 41.5 million USD in 2008, 69.9 million USD in 2009, 14.5 million USD in 2010, 28.6 million USD in 2011, 31.6 million USD in 2012, 31.3million USD in 2013, 41.8 million USD in 2014 and 22.5 million USD in 2015.

What factors precondition a slowdown in Israeli imports to Georgia, in particular, over the last period? How interesting do Israeli businessmen find Georgia for making investments? In general, what are the perspectives for enhancement of economic relations between Georgia and Israel?

Israeli Ambassador to Georgia Yuval Fuchs assures that there are no obstacles and barriers in bilateral trading. However, the Israeli ambassador has recognized the statistical indicators leave a great deal to be desired.

IMPORT

Two conclusions can be made in this situation. The GEL depreciation and regional development tendencies is the first. The coming election period could be considered the second factors that resulted in exports contraction from Israel, Mr. Yuval Fuchs noted.

Regretfully, Georgia’s exports to Israel are also insignificant. As a result, the Israeli ambassador thinks that Georgia should increase exports to Israel and the conclusion of a free trade agreement with Israel would be one of the promoting factors. Georgia should make focus on stability and growth of figures, Mr. Yuval Fuchs said.

„Small and medium business constitute a major part of the Israeli economy. Therefore, we should have realistic expectations. We want to see Georgian investments in Israel. We want to see Georgian stakeholders in the Israeli Hi-Tech sector, where almost all countries make investments. Regretfully, Georgia is not represented in this field”, Mr. Yuval Fuchs said.

Our countries should develop economic cooperation, Itsik Moshe, head of the Georgia-Israel Chamber of Business, noted. Successful economic cooperation depends on many factors and the reality may be different from our desires, he said. Several years ago Israeli investments in Georgia were genuinely growing, but the global financial crisis has affected this tendency too. Currently this direction is declining, but the situation is not hopeless and we should perform huge job, Mr. Itsik Moshe noted.

“Thanks to hyperactive efforts of the Georgia-Israel Chamber of Business, almost all subjective factors were neutralized that could frustrate enhancement of economic cooperation”, Mr. Itsik Moshe said.

Over the past years Israeli investments have nearly zeroed in Eastern Europe and now Georgia, thanks to its attractive investment environment, has the chance to draw Israeli investments. In 2015 the Georgia-Israel Chamber of Business launched a campaign – Return to Eastern Europe to Start in Tbilisi. Thanks to this campaign Georgia has received several major investments from Israel in the tourism and hotels segments. These investments will build three hotels in 2016 and they will launch operation in 2017, Mr. Itsik Moshe said.

Along with Israeli investments, Georgia should share the Israeli experience in startups and Hi-Tech development to boost economic ties with Israel. Georgia has enough resources in this respect.

“This year several Georgian and Georgian-Israeli startups were created with support of the business chamber. A US hi-tech company staffed by Israeli specialists has entered Georgia with our support. This company is ready to assist Georgian startups to pave way in the global market”, Mr. Itsik Moshe said.


Caucasus Business Week