Maplecroft launches slate of new country reports highlighting investment risks and labour standards in Bahrain, Georgia, Latvia and Lithuania16/03/2011
GeorgiaMaplecroft’s in-depth Country Risk Report on Georgia offers high-level analysis and maps of conflict, political violence, the environment and climate change.
Both Georgia and Russia contribute to increased tensions in the breakaway regions of South Ossetia and Abkhazia. Increased Russian economic and military support for the territories puts pressure on Georgia to reinforce its territorial integrity and claim the regions as part of its sovereign jurisdiction. Georgia, meanwhile, espouses nationalism that hinders mediation towards a settlement.
The situation may deter long-term investment in Georgia’s economy, which has been increasingly reliant on foreign investment in recent years. According to the National Bank of Georgia, FDI inflows fell by around 46% from US$1.56bn in 2008 to US$764m in 2009, which contributed to economic contraction of 3.9% in 2009. Although FDI recovered during 2010 it remains below pre-crisis levels, indicating that investors remain cautious. Although Georgia enacted significant business environment reforms in past years, to attract more FDI and boost exports, a combination of competitiveness, macro-economic and political stability are necessary.
In addition to the potential for escalation to renewed violence, human security issues relating to conduct of the security forces and the welfare of displaced persons continue to present a concern for business, especially in the autonomous regions.
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