ISET

The recent resetting of Georgian-Iranian bilateral relations was in the focus of a seminar organized by ISET and the Austrian Institute for Caucasus Studies as part of the Vienna Forum for the Modernization of the Black Sea Region. Held on Tuesday, March 22nd, the seminar covered both historical and current – political and economic – aspects of cooperation between the two countries. The expert panel included Professor Hans-Georg Heinrich, Austrian Institute for Caucasus Studies; Prof. George Sanikidze, Director of the Institute of Oriental Studies at Ilia State University; Iva Khokhlov, Ernst & Young-Georgia; and ISET President Eric Livny, who also moderated the discussion.
Speakers focused on the opportunities related to Georgia’s reopening towards Iran’s investment and tourism. Georgia can offer Iran several important advantages: easier access to the EU market and infrastructure connecting Iran to the Black Sea region: sea ports, rail and road, pipelines and fiber optic. Georgia should certainly expect a sharp increase in the number of Iranian tourists following the lifting of the visa requirement for Iranian visitors. Whether or not this would be followed by foreign direct investment from Iran will depend on the quality of Georgia’s business environment, its openness to qualified Iranian labor, and access to agricultural land.

The Investor Council (IC), coordinated by the EBRD, has been established in 2015 to provide a dialog platform between Georgia’s major business associations and government. Co-chaired by Georgia’s PM Giorgi Kvirikashvili and EBRD Director for the South Caucasus, Belarus and Moldova, Bruno Balvanera, IC’s February 17 meeting focused on three key issues:

- mechanisms for (sufficiently early) public disclosure and discussion of draft legislation;

- improvements in the tax administration system (e.g. the possibility to limit the Georgian Revenue Service’s ability to freeze business assets and accounts) and the impending introduction of the so-called Estonian model of corporate taxation;

- steps to increase the attractiveness of investing in Georgia (e.g. creating an effective system for investor after-care).

On July 13, a Memorandum of Understanding was signed between the ISET Policy Institute and JSC BIA. The BIA is a subsidiary company of Alliance Group Holding, which manages the largest continuously updated business information database. This aggregates information from more than 23,000 the most active companies registered in Georgia. It supplies the local companies and international business information companies, credit rating agencies, with all relevant business information (www.bcat.ge).
The document was signed by Eric Livny, President of the ISET Policy Institute, and Aieti Kukava, CEO JSC BIA. The Memorandum envisages planning and implementation of joint projects and research activities.

On October 8, ISET hosted Andreja Marusic, the World Bank’s Global Lead for Business Environment. Ms. Marusic delivered a presentation “Doing Business and Beyond”. The presentation covered a general overview and current international practices in business environment reforms as well as the important systemic issues of moving from ad-hoc business environment reforms (such as the Doing Business indicators centric reforms) to a more sustainable approach, including a focus on predictability, transparency, public consultation and Regulatory Impact Assessment.

In the begging of her presentation Andreja Marusic listed “traditional” business environment reform ideas and pointed out some new areas to focus on like: risk based regulations and implementation gap, sectorial and sub-national regulatory reforms etc. She also showed the main changes in Doing Business Report and explained that the new system compares countries to the best practice (New Zealand).

Date: June 9th, 3 p.m.

Location: ISET, 16 Zandukeli Street, Tbilisi, Georgia

 

After being steadily optimistic for most of 2014 and in the first quarter of 2015, Georgia’s business confidence dropped by 24.5 points to an all-time low level of 3.6 on a scale of [-100; 100] points. The survey, which included 168 firms, suggests that business confidence declined on all measures, across all sectors, and for all firm sizes. Moreover, it is reflected in business perceptions concerning both current performance and expectations concerning the future.

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