EU almost invisible at major Silk Road forum in Georgia

The Prime Minister of Georgia Giorgi Gakharia opens the forum. [Government of Georgia]

No high-level EU official was to be found at the opening of a two-day Silk Road Forum in Tbilisi, Georgia, on Tuesday (22 October), which was attended by 2,000 delegates from some 60 countries, including several EU member states.

Across numerous panels, the host country was praised its reforms and for hosting such a major event. However, the EU was rarely mentioned, except for its TEN-T Trans-European network for Eastern Partnership countries, under which €13 billion has been earmarked for building a total of 4800 kilometres of road and rail, 6 ports, and 11 logistics centres in the six beneficiary countries (Georgia, Azerbaijan, Armenia, Ukraine, Moldova and Belarus).

The Commission was represented by the director of DG Near Lawrence Merdith, and a minister from Bulgaria and officials from Hungary, the EBRD and the EIB were also among the speakers. In contrast, regional representatives were of a considerable higher standing – Uzbekistan and Armenia sent a deputy Prime Minister, Turkey a minister, and China and Azerbaijan sent a very strong delegation comprising of high-level businessmen and politicians.

Russia was not represented, as Tbilisi doesn’t have diplomatic relations with Moscow following the 2008 war in which its powerful neighbour occupied the Georgian territories of South Ossetia and Abkhazia. In fact, the conference focused largely on the “shortest” route from China to Europe, which goes through Georgia, bypassing Russia.

The Prime Minister of Georgia Giorgi Gakharia said that his country was one of the first that followed-up on the initiative of Chinese President Xi Jinping on the One-Belt-One-Road (first announced during Xi’s visit in Kazakhstan in 2013). He recalled that Georgia secured an memorandum of understanding in 2015 with China on the initiative which in his words bolstered Chinese-Georgia relations, and was upheld by the FTA concluded between the two countries.

A web of FTAs

Gakharia said that Georgia pursued one of the most liberal trade policies, by levying 0% import duties on 80% of imported commodities. He argued that investors in Georgia would find preferential access to a market of 2.3 billion of potential customers, thanks to the web of FTAs concluded by the country. These include China, the EU (the DCFTA concluded in 2014 and which entered in force in 2016), the Community of Independent States (CIS), Turkey and Ukraine. In addition, he said that negotiations were ongoing for concluding FTAs with India and Israel.

The Prime Minister said that Georgia is a member of TRACECA (the international transport programme involving the European Union and 14 member States of the Eastern European, Caucasian and Central Asian region) since its establishment in 1993, and in 2016 the country acceded CAREC, the Central Asia Regional Economic Cooperation Program, established in 1997 by the Asian Development Bank to encourage economic cooperation among countries in the Central Asian region.

Being the shortest route from Asia to Europe, Georgia is engaged in the development of the TEN-T Trans-European network for the Eastern Partnership countries, Gakharia said, adding that his country was also playing its part as the energy corridor, linking the region to Europe, namely the Southern Gas Corridor, which will bring Azeri gas to the EU via the territory of Georgia and Turkey.

World famous economist Nouriel Roubini, who was a keynote speaker, spoke in pessimistic terms about the world economy. Three years ago there was global expansion, while today there is a trend of de-globalisation or “Balkanisation” of the global economy, he said, with reference to the growing protectionism and trade wars originating in the US, but also with Brexit, whether hard or soft. In addition, he mentioned geopolitical risks such as the tensions between Iran and Saudi Arabia and the US, as risks the world community should try to avoid.

The star economist made reference to the successes of China, but also Georgia, due in his words to an openness towards globalization, to trade, investment and private sector development. He called Georgia a “top reformer” having achieved a growth of 5% with a potential to do more.

China praises the reforms

The representative of China, Li Hui, Government Special Envoy in Euroasia Region, said Georgia’s geographical position guaranteed the country’s important role in the One Belt – One Road initiative. He praised Georgia’s reforms and said many Chinese companies were successfully operating there. He also said that the route through Georgia was the shortest one. Ili argued that it was very important the countries along One Belt – One Road would in a harmonious and synchronised manner conduct the economic and development strategies to simultaneously carry out large-scale connectivity projects. China will call on Chinese companies to come to Georgia and invest, he said, obtaining applause.

New infrastructure

Eighteen infrastructure projects worth $3.4 billion USD will be carried out to boost Georgia’s transit potential, said the Infrastructure Minister Maia Tskitishvili. She noted the importance of the construction of the East-West Highway in the country, as well as other projects, such as modernising railways, expanding Black Sea ports and building the Anaklia Deep Sea Port at the Black Sea.

The Deputy Prime Minister of Uzbekistan Elyor Ganiev pointed out the strategic importance of Georgia for his country, saying that the closest port for his landlocked country is Georgia’s Poti, on the Black Sea. He also said that his country was interested to learn from Georgia’s experience with infrastructure projects and their management.

Bulgarian transport minister Rossen Jelyazkov outlined the importance of doubling the capacity of a ferry link between Georgia and Bulgaria. “Time is money”, he said, arguing that ferry transport helped significantly reduce the time of transport of goods from Georgia to the EU.

Umerto de Pretto, Secretary-General of the International Road Transport Organisation (IRU), argued in favour of harmonising procedures for reducing waiting time at borders. He said that research showed 57% of the travel time of goods is lost at the borders, and that 38% of costs were due to illicit payments, or “bakshsish”, because of an environment conducive to corruption, with people asking “how do we get across”.

[Edited by Samuel Stolton]

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