BUSINESS

Georgia Courts Mideast Investors

Bloomberg

Temo Bardzimashvili / Bloomberg Saakashvili speaking in an interview Saturday. He recently visited Kuwait.

TBILISI, Georgia — Georgian President Mikheil Saakashvili is turning to the Middle East to revive foreign investment, which has all but evaporated as the county struggles to recover from a war with Russia and the global slump.

Saakashvili visited the United Arab Emirates several times this year, netting as much as $1 billion “within the next two to three years,” he said in an interview Saturday. He returned recently from Kuwait and goes next to Qatar.

Rakeen, a developer owned by the Gulf emirate of Ras al-Khaimah, will begin “in a few months” to build “the biggest airport in the Caucasus” at the Black Sea port of Poti, which it acquired in December, Saakashvili said. “That will be a major hub for the region. Consider also that it’s midway between most of the Gulf destinations and Europe.”

Georgia’s $12.8 billion economy suffered about $1 billion in damage when Russia routed its army in the August 2008 war over South Ossetia. Growth may resume this quarter, though 2009 foreign investment will not exceed $1 billion, compared with $2 billion initially forecast by the government, Finance Minister Kakha Baindurashvili said Oct. 6.

The International Monetary Fund said in May that Georgia’s economic performance this year largely depended on donor money. The government forecasts a contraction of 1.5 percent for gross domestic product in 2009 and 2 percent growth in 2010.

The country won pledges of $4.55 billion in international aid in the wake of the conflict, including a two-year $1 billion offer by the United States.

Saakashvili said the government’s 2010 growth forecast was conservative, and that the economy might grow as much as 6 percent when his Economic Liberty Act, which includes caps on budget deficits and state spending and debt, takes effect. Foreign investment may also rise as a result, he said.

The president said he planned to turn Georgia into a center for financial services and commerce, similar to Dubai and Singapore, along with tourism and energy transit.

In addition to the development at Poti, Saakashvili said the government was seeking investors to develop a port at Anaklia, “the deepest natural port” in the Black Sea area, which would provide “the shortest way from China to most European destinations.”

A delegation of Iranian investors arrived in Tbilisi on Friday to pursue about $300 million of possible projects in infrastructure, tourism and banking, Economic Development Ministry spokeswoman Nino Daraseli said by telephone.

Sophie Mamardashvili, a Tbilisi-based Rakeen spokeswoman, said the company was completing plans for the Poti airport and “the project will go ahead in the near future.”

Rakeen paid $65 million for 49 percent of the Poti port after previously winning a government tender to develop the port and acquiring a 51 percent stake.

Saakashvili opened the country’s first special economic zone at Poti in April 2008.

The company also has two development projects in Tbilisi, including a 72,800-square-meter residential and office complex on the outskirts of Tbilisi, according to its web site.

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