CHALLENGES OF THE INVESTMENT ENVIRONMENT IN GEORGIA UNDER THE COVID-19 PANDEMIC
Abstract
The investment environment is an essential part of a strategy focused on stimulating economic growth and development for each country. It provides investment, which is especially important for small and low-income economically developing countries. In the last decade, developing countries have made investment regimes as liberal as possible in order to attract foreign investment, create a favorable investment environment, and create an investment climate, as it is seen as a contributing factor to modernization, economic development, income growth, and employment.
Creating a healthy investment climate and encouraging investment has become a priority for the government of both Georgia and any country under the Covid-19 pandemic. It was also quite difficult to make accurate predictions about the economic impact that the global pandemic process and the epidemic picture in the country will eventually have on the economies of countries, including Georgia. The most important part of foreign direct investment in Georgia comes from the USA and European Union. The trend of declining investment has been a significant threat to the Georgian economy in recent years. Today, these risks are even more urgent. Closing borders and halting economic activity by countries is slowing down economic growth.
The Georgian government should be able to attract foreign investment resources to the country, creating a favorable environment for this. The existence of conflict regions has a more negative impact on Georgia's investment climate. For every investor, the prerequisite for investing in a country is protection of property rights, stable political situation, favorable tax regulations, cheap and qualified labor force, stable macroeconomic environment, economic openness of the country, free trade agreements, low level of corruption. The timing of the crisis is unclear at the moment, as well as how the world will be able to deal with it. Georgia-type countries will be significantly dependent on the scale of international assistance they will be able to mobilize in various directions, for which it is vital to define national investment policy and improve the investment environment in the country.
