The American Pioneers

Maka Ghaniashvili

The USA-Georgia Business Summit in Tbilisi

Americans are trying hardly to return those investors in Georgia who have disappeared from the country after the war. The fact, that Georgia’s export has decreased and the investment boom nearly stopped after the August war is not a secret any more. The decision of donors to allocate 4.5 billion dollars for Georgia is also very important, but the most important in Georgia is the business climate, to save the financial- construction sector and rehabilitate the infrastructure.
Mr. Sullivan has visited Georgia with the businessmen and mainly has spoken about allocation of money for several companies. GMCS group is the partner of the Americans anyway and rules the Courtyard and Tbilisi Marriot; it also leads the construction of business center in front of the Parliament, in the place of former House of Painters that was destroyed in 1992 during the Civil War, also it puts in motion the SANET.
This also touches the construction of the Park Hyatt. These are the projects that have anyway been closely connected to the OPIC – the USA’s State Investment Fund. They are trying with the help of liquid funds to help the TBC Bank and The Bank of Georgia and this is very good.
But specifically, besides it’s’ scheme, which investments, implemented by OPIC, have been discussed on the last Georgian-American business forum? Below we will discuss them specifically. On October 25-28 Tbilisi was visited by a delegation of America’s Deputy Minister of Economy, headed by John Sullivan. During the reconstruction process, he visited Georgian-American business companies and hosted business forum, on which the representatives of the American companies were given the information about the existing trade and investment possibilities in Georgia. Among delegation members were: Robert Mosbacher- the President and Chief Executive of Private Investment Corporation, Larry Wopter – the Director of the America’s Trade and Development Agency, Jack McDougal- the second Deputy Minister on Economic Issues and Paul Dick- the second Deputy Minister on European Issues. The delegation was also accompanied by the leaders of 18 American Companies.
On business summit, that has been arranged in the framework of the visit, seven new (or the old renewed) projects of Private International Investment Corporation have been officially announced, that totally foresees the allocation of 176 million dollars for Georgia. As the President of the OP IC Mr. Mosbacher declared: “With the help of these projects will happen the flow of capital in the young and growing democracy’s Banking, Construction and Industrial Sectors. Today we are in Georgia to confirm the United States’ continuous support of Georgia’s economic development. We clearly understand how heavily it cost the country to open the markets and give the citizens a possibility to become the members of the global economy.”
As for OPIC itself- it was founded in 1971, as an agency of the American government, that helps the America’s private sector to implement an effective investments in the developing countries. In connection with these investments, with the way of the risk insurance OPIC helps to lead the USA’s foreign policy. Insurance from the political risks and the finance implemented by the OPIC helps the America’s very enterprise to make investment in more than 150 newly emerged markets and developing countries through the world scale. During 35 year-old history OPIC supported 177 billion dollar investments, that helped the developing countries to receive the state income of 13 billion dollars and create more than 200 000 working places. With the help of the OPIC projects 71 billion dollars have been produced in the export sphere of the USA and 271 000 working places were created in the USA.
The new project of OPIC in Georgia covers 4 sectors- financial, construction, tourism and industry. In the ceremony held on the business forum Mosbacher signed agreements connected with the several projects. The Prime Minister of Georgia Lado Gurgenidze and the USA’s Deputy Economic Secretary John Sullivan attended the ceremony. Below are given the short summary of those projects that the OPIC is going to support:
· OPIC will assign 40 million USD to the TBC Bank. With the help of this the bank will have the possibility to increase the delivery of Mortgage Loans for house building. This sum of money will mainly be used on low and middle income mortgage loans.
· The Bank of Georgia will also receive 40 million USD for the Mortgage Loans. This will happen along with the World Business Capital, which is the minor business’s creditor in the USA.
· OPIC will assign 30 million USD to finance the project of “Park Hyatt Tbilisi” hotel and dwelling house construction. The project is leaded by the Hyatt International.
· OPIC will totally assign 60 million USD to GMT group. GMT group will share this money on three projects. The first- 40 million USD to construct the multifunctional unit in the center of Tbilisi, in the opposite side of the Parliament, where the offices, apartments, retail shops, hotel lux numbers, auto parking and open exhibition space. The second 10 million will be allocated to finance the reconstruction of the three-storied historical building of the Holy Mountain (Mtatsminda). The new multifunctional business complex will be constructed with the rooms for meetings, conferences or other kinds of events; also it will have the following units: restaurant, banquet hall, entertaining center and retail shop. The third project for which the OPEC will allocate 10 million USD for the GMT group is to finance the milk products and juice enterprise.
· And finally, OPIC will assign 6.3 million USD as a direct loan to the joint-stock company “SB Iberia”, to construct a multi flat building in Tbilisi for middle income families. The project is implemented by the “JSC Iberia Immovable Property” and the “Georgia JSC Bank”. The sponsor from the American side is LTD Firebird Avrora Advosors.