In early 2017, a number of experts made the following prediction: “Azerbaijan will lose its position as a center of economic power in the South Caucasus.”
Six months later, this prediction continues to come true.
Georgia’s economy is growing steadily and the country is experiencing positive economic dynamics.
Without having natural resources that bring currency in large volume, Georgia can surpass Azerbaijan in terms of GDP at the end of this year or at the beginning of 2018.
According to the “Global Economic Prospects” (GEPs) made by the World Bank (WB) states that economic growth of Georgia will be the greatest among the countries of the South Caucasus region in the years 2017-2019.
At the same time, according to the reports published by “Business Georgia”, for the first half of 2017 Azerbaijan has invested in Georgia $224,2 million, that amounts to 36.6 percent of the total foreign direct investment in neighboring economy.
Despite the fact that Azerbaijan remains the top foreign investor of Georgia, the volume of Azerbaijan’s investments is decreased by 20.3 percent from previous year.
It is clear that the investors are not ready now to allocate huge funds for the development of Georgia, in particular its sectors of transport and communication, energy, hotels and restaurants, real estate building.
If we consider the whole period of Azerbaijan and Georgia cooperation, Baku has invested more than $3.6 billion.
Georgian investments in Azerbaijan have amounted to $80 million. Without exaggeration, you see how huge the difference is.
Nevertheless, after the 6th tripartite meeting of the Foreign Ministers of Azerbaijan, Georgia and Turkey in Baku, the Minister of Foreign Affairs of Georgia Mikheil Janelidze continues to claim about the need of these countries to provide support and make infrastructure investments in each other.
Of course, Tbilisi is not interested in the Baku’s decline in investment that can impede huge growth of Georgia’s GDP.
I can say with great confidence that Georgia’s current economic indicators are of particular importance now, when Georgian President Giorgi Margvelashvili needs to convince the European Union and the North Atlantic Alliance in wealth, economic stability and independence of Georgia from other countries. This is aimed at his country being accepted as a member of EU and NATO.
The expansion of trade-economic cooperation with Georgia is definitely beneficial also for Azerbaijan, but while contributing to the growth of the neighboring economy, the investors should first consider the projects that can strengthen the non-oil sector of Azerbaijan and the country’s economy.
It’s the same story with the government that needs to keep in mind the value of protectionism and long term interests of its homeland when signing any agreements.
Enjoy the article?
Did you find this article informative? Please consider contributing to Eurasia Review, as we are truly independent and do not receive financial support from any institution, corporation or organization.