When merchants travelled across the ancient Silk Road, they were taking part in the world’s first commercial efforts to bridge East and West. Up until then, trade was confined to local regions. Indeed, the Chinese and Roman empires ruled nearly the whole of the known-world and knew little about each other. The Silk Road changed all that, introducing people to new goods, foods and cultures. My nation of Georgia sat at the heart of that network and does so once again, as a connective hub between East and West.
Located in the Caucasus Mountains, Georgia has historically played an important part in human history, with scientists tracing some of Europe’s earliest ancestors to the country. For thousands of years, it was the key connection between the Far East and Europe, allowing these different, old-world societies to engage in each other’s culture. Due to that history, being a connector is in Georgia’s DNA.
Since the end of the Cold War and with the advance of telecommunication technology, East and West have never been closer. American goods are sold on Chinese streets, Chinese banks invest in European projects and trade levels between the world’s two hemispheres has never been higher. This has generated many exciting commercial opportunities for those ‘gateway’ nations between the two and is a key part of the economic success story that is modern Georgia.
Georgia has benefited significantly from its position in the world. Enjoying deep trade connections to both Europe and the Far East, with the EU accounting for 29% of Georgian trade and 10% of the country’s exports making their way to China. In return, recent statistics suggest China’s investment in the Caucasus has increased by 14%, while EU Foreign Direct Investment in Georgia is worth nearly €2 billion a year.
In recent years, Georgia has successfully developed strong relationships with the West. As an Associate Member of the European Union, Georgia began a development five years ago that marked the start of a new chapter in Georgia’s place in the world. The EU agreement is arguably the strongest evidence of Georgia as a truly global nation, bringing together people, companies and cultures from across Europe.
As a result, businesses are moving to Georgia in greater numbers than ever before. In the final quarter of 2018, foreign direct investment into the country increased by nearly $200 million, a big sum for a country with a population of nearly four million. To those of us invested in Georgia’s economic future, this comes as no great surprise, given the country’s sixth-place ranking in the World Bank’s ‘Ease of Doing Business Index’ 2019.
Georgia’s economy has been a top performer in recent years. GDP grew at an annual average of 4.5% over the past decade; it was a robust 5% last year, and 5.5% the year before. The IMF expects an expansion of just under 5% in 2019. This puts Georgia considerably above other CIS countries, some European states, and indeed all the world’s developed economies.
A concerted effort to grow the private sector, upgrade infrastructure and build friendships across the world has established Georgia’s position as a key hub on the modern-day Silk Road. For a country with as unstable a recent past as ours, this is a massive achievement, which reflects an entrepreneurial spirit that enabled the ancient Silk Road to grow in the first place.
Georgia is also a major transit and logistics hub for the region. Already, almost two-thirds of cargo in the country is transit, with logistics contributing to 10% of GDP, supporting thousands of jobs and businesses. This was the industry that led to my company, Silk Road Group, to becoming one of Georgia’s largest employers.
Indeed, connectivity has always been at the heart of what we do as a company. Using our position as one of Georgia’s largest private businesses, we have always been focused on improving the transportation, telecoms and energy infrastructure vital to ensuring economic growth. This has helped turn the country into a regional hub, setting it up for modern day business success.
A modern-day Silk Road is encouraging the free flow of capital, goods, services, ideas and culture, aided by the latest technology. I am convinced that a golden era of trade and commerce between East and West is already well underway. A modern Silk Road will see Georgia, which blends the distinct cultures of Europe and Asia, continue to thrive.