Sustainable Development as a Benchmark

The Georgian Chamber of Commerce and Industry is the nation’s largest business association. The chamber is committed to advancing the economic growth of the country by fostering a supportive environment for businesses in Georgia. By offering customized services and implementing the targeted projects, the Chamber strives to safeguard and enhance the interests of the private sector.

The organization’s objective is to establish a robust management framework that promotes efficiency while upholding transparency and accountability through internal regulations as well as ensuring the sustainability by diversifying the income sources.

The Georgian Chamber of Commerce and Industry envisions that, with the passage of time and at a certain stage of development, the principles of sustainable development will emerge as the primary focus for businesses. According to their evaluation, the private sector exhibits a strong inclination and readiness to adopt sustainable practices but faces specific challenges in this pursuit. This juncture is particularly crucial for local enterprises, particularly small and medium-sized businesses, as it signifies a phase of introducing innovations and undergoing structural transformation.

Magda Bolotashvili, the Deputy General Director of the Georgian Chamber of Commerce and Industry, articulates the organization’s perspective on sustainability.

The Georgian Chamber of Commerce and Industry is the country’s largest business association. What services and projects do you offer to the private sector?

The Georgian Chamber of Commerce and Industry tailors all its services and projects to address the unique needs and challenges of businesses. Regular communication with entrepreneurs in both Tbilisi and in all regions of Georgia informs continuous updates to the Chamber’s offerings. The chamber provides a range of statutory and advisory services, such as issuing certificates of origin and confirming force majeure circumstances — an especially pertinent service during the pandemic.

Among the most sought-after service, is the facilitation of business partnerships. Annually, we organize numerous business forums, both within Georgia and internationally, providing Georgian entrepreneurs with a platform for bilateral business meetings. These forums serve as avenues for entrepreneurs to attract investments and establish valuable business connections. In general, the Chambers of Commerce create an international network, therefore, we can support Georgian entrepreneurs on a global scale in information retrieval, exporting, importing, and various other facets. Additionally, we provide entrepreneurs with the option to engage in international arbitration through the Chamber, offering a prompt and transparent dispute resolution process, in case conflicts arise.

To enhance the business acumen of entrepreneurs, we regularly conduct the training sessions covering crucial topics such as legislative updates, encompassing labor and tax legislation, alternative dispute resolution mechanisms, e-commerce, and more. For instance, since the onset of the pandemic, over 1000 companies have undergone the training sessions focused on the digitization of business processes.

The Chamber has consistently supported professional education in recent years through various services. To foster the vocational education promotion, numerous events were organized in different regions, providing participants with the information on the existing programs and employment opportunities. The Chamber actively trains the company employees involved in the educational process, conducting practical training in the work environments. Additionally, the Chamber actively engages in the planning and implementation of qualifying exams, encompassing the commission member training and the development of evaluation tools/examination tickets.

Furthermore, the Chamber maintains the ongoing collaborations with prominent donor organizations and embassies, including the US Embassy and the Embassy of Czech Republic, the European Union, the UN Women, the Center for International Private Entrepreneurship (CIPE), the German Society for International Cooperation, the Stuttgart Chamber, and the United States Agency for International Development (USAID). All these projects and services are meticulously tailored to meet the specific needs of businesses. Within the scope of these projects, we provide both informational and technical support, and in some cases, the financial assistance to the companies registered in Georgia.

What are the strengths and weaknesses of the investment environment in Georgia?

On the downside, the existence of occupied territories introduces a sense of instability among the investors, rendering the country perceived as a high-risk. Another significant challenge is the shortage of qualified workforce, impacting various sectors and directly linked to the vocational education. However, noteworthy progress has been made in recent years, particularly through the establishment of a partnership between the state and the private sector in the planning, implementation, and supervision of professional education. The collaboration between the Ministry of Education and Science of Georgia and the Chamber of Commerce led to the creation of the Skills Agency Georgia, a pivotal step in steering the reform effectively.

Conversely, Georgia boasts several strengths in its investment environment. Its strategic location and free trade agreements provide access to a substantial market of 2.3 billion consumers. The ease of doing business is evident in international rankings, with Georgia securing the 7th position in the World Bank’s 2020 report on the global ranking of ease of doing business. Notably, processes such as property registration and obtaining various permits are streamlined. The country also maintains a straightforward and service-oriented customs policy and border procedures, contributing to the reduced export time and costs.

Furthermore, according to the World Bank, we have one of the lowest tax burdens – 9.9%, thus we take the honorable third place in the world. We also have a competitively compensated workforce.

The above conditions make Georgia quite attractive for the potential investors.

What are the activities you implement in cooperation with the Investors Council to support to the female entrepreneurs?

Women’s economic empowerment is one of the strategic directions of the Chamber, and together with the Investors Council, we are actively working to promote women entrepreneurs in Georgia.

We are currently engaged in a collaborative initiative with the Investors Council focused on certifying the women entrepreneurs and businesses owned by women. The Georgian Chamber of Commerce and Industry is positioned to formalize the certification process for the “woman entrepreneur” and “women-owned entrepreneurial society” through the legislative measures, issuing corresponding certificates. Thus, the women entrepreneurs will be able to acquire the certificates and get the tangible benefits in the future. Our strategic partner, UN Women, plays an active role in this endeavor. This certification practice, established in the leading developed countries, is anticipated to positively influence the gender equality in Georgia, directly impacting the country’s economic development. The economic activity of women is closely tied to the growth of GDP in the country. Unfortunately, various financial and social barriers hinder the full participation of women business owners and entrepreneurs in economic activities. These barriers primarily stem from limited time resources, restricted access to financial, human, and social capital, and mobility constraints. The Georgia-EU Association Agreement underscores the commitment to enhancing gender equality and ensuring the equal treatment for women and men in social, political, and economic spheres. To address existing discriminatory practices and economically empower women, it is imperative to implement the specific measures that promote women’s entrepreneurship. Institutionalizing the certification process for the “women entrepreneurs” and “women-owned entrepreneurial society” is a crucial step in this direction.

Certification of women’s businesses is a gender equality tool that:
Supports women’s economic empowerment.
Helps to reveal the existing social, economic, and cultural barriers.
Facilities the data collection on women-led businesses across the country.

In order to improve the business environment, how important is the multisectoral cooperation between the government, financial institutions, development organizations and the civil sector?

Such collaboration is not only important but also a necessary prerequisite for enhancing the business environment. As a mediator between the state and business, the Chamber actively engages with all sectors.

Collaborating across multiple sectors ensures a comprehensive understanding of business needs and challenges. It is crucial that the government maintains an open line of communication with the business community in this regard. Civil society and business development organizations, authorized to advocate for specific sectors or clusters, play a significant role. Within the Chamber, various sectoral committees address the challenges and recommendations, ensuring a responsive approach. Similar dynamics apply to other platforms where government and business openly discuss the opportunities and the challenges.

What is the level of readiness of the private sector to implement the sustainable practices and what challenges do they face in this regard?

In 2016, Georgia was among the first twenty-two countries to submit a voluntary national review aimed at achieving the Sustainable Development Goals (SDGs). Notably, these SDGs stand as a national priority for Georgia.

While the private sector expresses a desire and willingness to adopt sustainable practices, various challenges, often financial or circumstantial, impede their ability to prioritize sustainability. This is inherent in the balancing act businesses face between adhering to the principles geared towards everyday well-being and addressing the evolving challenges. The recent global pandemic, for instance, posed a substantial hurdle, redirecting resources toward the immediate needs and temporarily hindering the development for many businesses. Every success-driven company aspires to integrate innovation and structural transformation, but limitations in financial and human resources often pose obstacles. While this may be a more manageable task for the developed countries, it presents a significant challenge for the businesses in Georgia, particularly small and medium enterprises. It is anticipated that, with time and at a certain stage of development, the principles of sustainable development will naturally evolve into the primary focus for businesses.

What should the state do in order to increase the level of awareness of the private sector in the regions, and what does the Chamber do in this direction?

A well-informed business is a successful business. To accurately grasp the needs of businesses, both in sectoral and regional contexts, direct communication with them is crucial. Through our regional offices, we maintain daily contact with the entrepreneurs, offering vital business information and gaining insights into their current needs and challenges.

Our noteworthy initiative, “Open Dialogue with Business,” involves annual field meetings in various regions of Georgia. These gatherings draw the participation of the representatives from local and central government, diverse structures, and donor organizations. Within this open dialogue framework, we present new projects, initiatives, and programs to entrepreneurs. A significant aspect of these meetings is the discussion, where businesses openly share not only the opportunities but also the challenges. Importantly, well-founded opinions from the business community receive due attention, ensuring a thoughtful response, and donor organizations gain firsthand information for planning future projects.

What are the future plans of the Chamber of Commerce and Industry in terms of sustainable development?

2024 promises to be dynamic year with a host of activities and new projects on the horizon. We are set to launch three pivotal projects encompassing regional development, women’s economic empowerment, and business digitization. Expanding our efforts at the regional level, we aim to intensify activities, including the promotion of local products, to further bolster our standing in the international arena. This year has already seen notable achievements, with Giorgi Pertaia, the President of the Chamber, being elected to the Board of Directors of both the European Chamber and the Federation of World Chambers. Anticipated practical results from these appointments are expected to manifest in 2024.

Sustainable development remains a top priority, and we will continue to actively engage in vocational education reform. Our goal is to enhance accessibility and popularity of quality education, ultimately fostering a better working environment and contributing to economic growth. In the realm of business digitalization, we are exploring the promotion of cutting-edge technologies, including artificial intelligence.

On the global stage, our collaboration with the partners within the European Chamber and the World Federation of Chambers focuses on the critical issues such as the green economy and renewable energy.