Georgia : A blueprint for success in the UAE’s diversification drive
Exploring the economic growth and investment opportunities in the fastest-growing country in Eurasia
Nestled in the heart of the Caucasus region, just a mere threehour flight from the United Arab Emirates lies the alluring and opulent land of Georgia: An amalgamation of plains, mountains, and sea. The country has carved out a reputation as a gracious host to international visitors. However, Georgia is more than just a destination for leisure seekers. Recently, it has emerged as a beacon of economic growth and development, outpacing the regional average GDP growth rate. With a rich cultural heritage and a strategic location at the crossroads of Europe and Asia, this former Soviet republic has captured the attention of investors and analysts alike. Since gaining independence in 1991, Georgia has undergone a remarkable transformation, transitioning from a centralized, planned economy to a dynamic, market-oriented one. The country has made significant strides, bolstered by a pro-business government and a commitment to reform.
Today, Georgia boasts a diverse and thriving economy driven by industries such as transportation and storage, energy, construction and real estate, manufacturing, and telecommunications. Georgia’s Deputy Prime Minister and Minister of Economy and Sustainable Development, Levan Davitashvili, cites these sectors as key drivers of the country’s economic growth, highlighting their contributions to its overall economic stability.
Due to the geopolitical tension between Russia and Ukraine changing trade routes, the middle corridor has become a vital trade flow route between Asia and Europe. Georgia is well-positioned to take advantage of this trend.
According to Levan Davitashvili, the country has shown exceptional resilience in the face of the recent external economic shocks. Despite these challenges, “Georgia has achieved double-digit economic growth for the second consecutive year. Additionally, the country reached a record-high export of over $5.6 billion in 2022. FDI inflows also attained new heights last year. We had $2 billion in foreign direct investments, amongst which 48% came from Europe”. The current government of Georgia is committed to preserving these positive trends and ensuring macroeconomic stability. The minister emphasizes, “We need to keep these macroeconomic figures stable, so we reduced the budget deficit and had fiscal consolidation bring it down to below 3% of GDP. The public debt to GDP ratio was lowered to under 40%. The country’s successful track record in achieving the targets the International Monetary Fund programs set has instilled stronger confidence from foreign investors”.
Georgia and the UAE signed a comprehensive economic partnership agreement (CEPA) in Tbilisi on the 17th of March, 2023, paving the way for a strengthened economic relationship to boost investment, trade, and tourism between both countries. This agreement is a significant milestone in the solid diplomatic ties the UAE and Georgia share. The minister of state for foreign trade of the UAE - Dr Al Zeyoudi - reports that “The UAE-Georgia CEPA holds vast potential. In 2022, bilateral non-oil trade reached $468m, an upswing of 110% in 2021 and fully 63% of Georgia’s trade with the Arab world”. Investors and business leaders from the UAE are showing a keen interest in the most attractive sectors for investment in Georgia, including real estate, energy, agriculture and logistics, for example. Now is the time for them to consider new opportunities this dynamic and rapidly developing country offers. Georgia’s tourism industry is also a significant draw for investors from the UAE.
As Georgia continues to build on its economic successes and navigate the challenges ahead, it is clear that this small but mighty country has much to offer the world, particularly the UAE.