Georgia’s economy will expand 6 percent to 7 percent this year, driven by investments including a $5 billion seaport and infrastructure development, Prime Minister Irakli Garibashvili said.
“We believe that it is an absolutely realistic expectation,” Garibashvili, 31, said in an interview yesterday in Davos, Switzerland. “Georgia lacked long-term capital, this is why we will start a new sovereign wealth fund in February and are planning new infrastructure projects.”
The government is seeking to lure investors to a state fund, Garibashvili said. Potential backers at the World Economic Forum are “motivated” to invest in the Black Sea country, he said. The premier met with companies including Lazard Ltd. (LAZ), Lafarge SA (LG), Blackstone Group LP (BX), Jumeirah Group LLC, Tata Group and OAO Lukoil (LKOH), according to his press office.
Georgia, home to energy links between Europe and the Caspian Sea that ship oil and gas westward to bypass Russia, is struggling with stuttering economic growth and waning foreign investment. The pace of expansion was 1.4 percent from a year earlier in the third quarter, the slowest since 2009.
Moody’s Investors Service rates the country’s debt at Ba3, three steps below investment grade and on par with Bangladesh and Portugal.
The government wants to build a $5 billion deep-sea port as part of a plan to turn the country into a transport hub, Garibashvili said. Georgia also set up a $6 billion state-run fund, which includes a $1 billion contribution from former Prime Minister Bidzina Ivanishvili, for investments in energy, manufacturing, tourism, logistics and agriculture.
Garibashvili is the handpicked successor of Ivanishvili, who has a fortune of $5.6 billion according to the Bloomberg Billionaires Index. The tycoon relinquished the position in November after his Georgian Dream party conquered both the premiership and presidency within a year.
Garibashvili, who has a degree in political science from Sorbonne University in Paris and masters in international relations from Tbilisi State University, served as interior minister in Ivanishvili’s cabinet after working at the billionaire’s charity foundation.
Their relationship sparked claims from ex-President Mikheil Saakashvili’s party that Ivanishvili is retaining control over the country. Garibashvili last week told reporters in Tbilisi, the Georgian capital, that he “proudly” takes advice from his mentor.
Ivanishvili made his fortune in Russia, which routed Georgia in a five-day war over two breakaway provinces in 2008. The billionaire pledged to improve ties between the countries when he rose to the premiership in 2012. Russia has since lifted trade restrictions including on wine and mineral water imports from the former Soviet republic.
Russia maintains military bases in Abkhazia and South Ossetia after recognizing the breakaway Georgian regions as independent states following the war.
“We did our best to normalize relations with Russia since we came to power, Garibashvili said. ‘‘Exports tripled after the market was opened. We welcome this, but honestly, we face a number of difficulties and provocations along the’’ border.
To contact the editor responsible for this story: Balazs Penz at email@example.com