ECONOMIC POLICY OF ATTRACTING FOREIGN DIRECT INVESTMENT TO GEORGIA IN THE POST-PANDEMIC PERIOD
Abstract
The Coronavirus Pandemic has caused unprecedented turmoil in the global economy. This was especially reflected in the attraction of foreign direct investment into the country. The role of foreign direct investment (FDI) is important for the development of entrepreneurship in Georgia. This is an important factor in economic growth. Today there are not many large corporations and companies in Georgia, the income from which could be reinvested in the economy. Therefore, Georgia's dependence on foreign capital is very high. However, attention is drawn to the negative consequences associated with the activities of foreign investors.
The article presents the economic policy of attracting foreign direct investment to Georgia in the post-crisis period. It is noted that most of the investments made in Georgia in 2019-2020 are in the construction sector. Investments are less focused on supporting sectors such as agriculture and manufacturing, for which Georgia has a raw material base and agricultural traditions. It is also noted that the volume of investments in comparison with the regions in the capital is quite large. This trend has been observed for almost the entire past 10 years. Foreign capital is still concentrated in large administrative cities. State activation is necessary, because in addition to these cities, other regions are also becoming attractive to investors. An important factor remains the problem of qualified personnel, which puts on the agenda the need for a rapid modernization of the education sector and the legal framework. The state should take more effective steps to create an attractive investment environment. However, it should be noted that work in this direction is underway and continues.
In the post-pandemic period, the main direction of stimulating the inflow of foreign investment is the establishment of various benefits. This is used by both foreign and local investors. Benefits include fiscal, financial and other benefits. However, it should be noted that the decision of a foreign investor to invest in a country depends on a number of factors, and different types of incentives are not an important factor. Political and economic stability, existing legislation in the country, infrastructure, proper functioning of financial institutions, labor force qualifications, etc. are critical. These criteria determine the political and economic ratings of all countries of the world, which are of great importance for foreign investors when making investments.
The study identified factors that promote and hinder the attraction of foreign direct investment.
The development of investment projects should be based on national interests, as well as on natural, historical, ethnocultural and economic characteristics and needs of the regions. To do this, it is necessary to develop regional mechanisms for stimulating investment using tax and budget preferential levers.
Key words: Foreign direct investment, Economic Policy of attracting foreign direct investment, Post-pandemic period, Investment projects.
