New roads and rail means faster cargo. Image courtesy of Investor.ge
Okay, so logistics isn’t exactly the sexiest industry to talk about. Georgian officials and local market-watchers like to talk about tourism, wine and Caucasus gold, because, well, they’re a lot more exciting.
But, one of the major areas of development in the Georgian economy is logistics services, and if the region can continue to move in the right direction, this could become one of the most profitable — and exciting — sectors of the economy.
For more, I took a look at all of this in a piece for the December-January issue of Investor.ge.
Georgian Finance Minister Kakha Baindurashvili signed a new customs and trade agreement with Turkey in October, in a sign of growing ties between the two countries and progress in developing Georgia as a transit and logistics hub.
The new agreement should streamline the customs procedures at the nations’ borders, consolidating it to a single-form process, with customs declarations only needing to be made at the country of exit. Baindurashvili said that the new process, which is similar to the arrangement on the French-Swiss border, should halve the crossing time and could boost transit by as much as 60 percent.
Mean and lean transit
Baindurashvili said the government is looking to emulate countries such as Denmark, whose small size and key location have allowed it to make logistical services one of the most developed sectors of its economy. The agreement with Turkey also finalizes the opening of a third border crossing at the town of Kartsakhi, which, unlike the border post near Akhaltsikhe, could be open year-round and would connect to the Kars highway allowing for more direct trade with Syria and Iraq.
Negotiations over this agreement began in 2008, and are a part Georgia’s efforts to develop logistics services in the country and establish Georgia as a hub in the region – efforts that include the development of the Poti free trade zone, tax incentives for warehousing construction and the renovation of Georgia’s road, rail and air transit infrastructure.
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