Investment environment challenges and foreign direct investments in Georgia

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Ivane Javakhishvili Tbilisi State University Press
One of the indicators of Georgia’s involvement level in the world economic integration process (especially in relation to the European Union) is the utilization of foreign investment. This indicator, in its turn, reflects the current results of the transformation of the national economy and tendencies of the integration processes. Foreign investments influence on the conditions of the existing competition in the country. Therefore, the state should has the strategy of investments application. It should be forecasted in advance how investments will affect the national economy, macroeconomic proportions and the stability of the country in overall. Foreign direct investments are very important for each developing country in the modern, globalized world. Georgia cannot be an exception in this regard. If we want to defeat poverty and integrate with economically advanced regions of the world or the European Union, we need external resources, especially when the internal (local) savings are very low, as in the case of Georgia. Foreign Direct investments imply not only the accessibility of the foreign capital for the economy, but it induces trust in foreign investors towards the Georgian economy. It also means the formation of relevant infrastructure and the fit legal and institutional environment, because no one invests in the country with lack of money repatriation and the profit-making possibilities. Favorable location of Georgia, as one of the optimal destinations for connecting the world markets, supports investment inflows. However, Georgia should not position itself only with the transport-transit function. It is necessary to attract foreign investment in the processing industry branches, and quicker than with the existing pace. Along with foreign direct investments, it is also important to attract portfolio investments that can be facilitated through the development of the secondary market of securities.
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Investment environment; Foreign direct investments; Investment activity
III International Scientific Conference: "Challenges of Globalization in Economics and Business", Tbilisi, 2018, pp. 482-488