Georgia

In-depth country-focused analysis on Georgia's economic, political and operational risk environment, complemented by detailed sector insight

Georgia

Our comprehensive assessment of Georgia's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Georgia, as well as the latest industry developments that could impact Georgia's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Georgia before your competitors.

Country Risk

Georgia Country Risk

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Core Views

  • Political tensions in the South Caucasus will remain high over the coming years as increased Russian intervention in Georgia's breakaway territories fuels concerns that Russia will attempt to annex Abkhazia and South Ossetia. Meanwhile, Azerbaijani-Armenian relations will remain strained over the frozen conflict surrounding Nagorno-Karabakh.

  • Armenia's economy will continue to struggle during 2015-2016 primarily due to its trade and remittance flow links with ailing Russia. Beyond this we continue to see little means of diversifying its growth model away from one driven by private consumption underpinned by volatile remittance flows.

  • Georgian real GDP growth will slow over the next two years relative to the 5.5% average growth achieved between 2010 and 2014 due to exposure to Russia's economic crisis, which...

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Georgia Operational Risk Coverage (9)

Georgia Operational Risk

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BMI View: Georgia's operating environment is threatened by the country's potential vulnerability to interstate insecurity in the face of Russian-backed unrest. Investors also face risks associated with the lack of quality tertiary education, low levels of ICT and intellectual property rights, and the high costs and low connectivity of trade and transport networks. However, there are also some benefits to investors who choose to enter Georgia, such as the high level of basic skills in the workforce, including basic literacy rates, the minimal red tape in terms of business start-up and closure, and the ease of trading, which reduces transit times for goods and improves import and export markets. Due to these considerations, Georgia has been given a total score of 52....

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Georgia Crime & Security

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Georgia poses modest security risks to foreign business travellers, expatriates and tourists. For the most part, the main dangers are petty crime, pick-pocketing and theft, rather than violent crimes or terrorism. However, separatist movements in two former Georgian states increase the risk of terrorist activity. In addition, Georgia faces an elevated risk from interstate conflict, having experienced an invasion by Russia as recently as 2008. The lack of defence agreements or security guarantees from other major powers means that Georgia remains at risk from Russian aggression, particularly given Moscow's persistently belligerent foreign policy towards its smaller neighbours. Georgia therefore scores poorly overall in the BMI Crime and Security Risk Index, with a mark of 24.6 out of 100 placing it fourth from bottom out of 31 Emerging Europe countries.

Georgian authorities have been cracking down on corruption...

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Georgia Labour Market

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BMI View: Georgia's labour market presents potential investors with some substantial risks and some equally substantial benefits. The key risks are the small population size, low rate of urbanisation and lack of international migrant stock. These risks are somewhat offset by the high basic skill level of the population, a result of compulsory schooling, and the lack of labour taxes, meaning the cost of labour is significantly reduced. Overall Georgia receives a score of 58.6 out of 100 for Labour Market Risk, putting the country in a healthy fifth place out of 31 countries in Emerging Europe and 45th globally.

The introduction of compulsory primary schooling in Georgia significantly...

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Georgia Logistics

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BMI View: Georgia's transport and utilities infrastructure continues to meet the demands of industry and supply chains, supported by its robust economic growth. Businesses currently benefit from a reliable and inexpensive supply of utilities but this supply is likely to be strained as the country's key industries, agriculture, tourism and small-scale manufacturing grow. In addition, the transport network is able to cater for supply-chain needs and is undergoing investment in order to enable Georgia to attain the role of a major transit point for trade flows between Europe and Asia. Georgia is ranked relatively highly in the Emerging Europe region in the BMI Logistics Risk Index, in 11th...

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Georgia Trade & Investment

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BMI View: Georgia has emerged as the most open and business-friendly economy among former Soviet states thanks to sweeping reforms enacted over the past decade. Drastic changes have been made in all areas of the country's operating environment, resulting in lower trade barriers, few regulatory restrictions on FDI, a reduced fiscal burden on businesses, more efficient bureaucracy, and greater transparency in government. Nevertheless, some barriers to FDI remain, including limited access to financial products, difficulties with resolving commercial disputes, and lingering concerns over corruption. Moreover, investment will be curtailed due to the fractious relationship between Georgia and Russia, which may once more deteriorate to the point of armed conflict. Consequently, the country receives a score of 66.3 out of 100 in the overall BMI Trade...

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