“It is a lie when we hear that the governor of the National Bank of Georgia is saying that the reason for depreciation of Lari is that tourists are not coming to Georgia,”- says the chair of International Chamber of Commerce (ICC) Georgia, Fady Asly.
Asly Thinks that the real reason behind the sharp decline of Georgian currency is the decrease in foreign direct investments (FDI). Chair of ICC says that the country needs at least $2 billion USD investments annually in order strengthen the lari and have higher income for citizens.
“The government says that the fundamental parameters of economy are great, so there is no reason for Lari to depreciate. But in spite of this, Lari has been depreciating on a regular basis, and it has a simple reason. There is simply not enough supply foreign currency on the market, because there is not enough foreign currency in the banking system. There is more demand on foreign currency than there is supply. This is an issue of supply and demand. If you go to a hotel and the hotel is full, they increase their prices. If the hotel is empty they decrease the prices. It is the same thing with the foreign exchange. The main reason for that is there is no foreign direct investment in the country. It is almost nonexistent.
From what sources the money comes? - it comes from foreign remittances from Georgians who live abroad and send money to their families. Remittances are more or less stable figure. It comes from tourism, it has not been affected. If you look at the pictures of tourism, in June we had 18% increase in the number of tourists. In July we had more tourists than in July of 2018. It is a lie when we hear that the governor of the National Bank of Georgia is saying that the reason for depreciation is that tourists are not coming to Georgia. They are lying to us. The only reason is that there is no foreign direct investment in the country. If we don’t get $2 or $3 billion dollars of FDI we will always have this problem. If we had FDI of $2 billion USD, Lari would have been super stable during all this period.
The policies of the government have discouraged foreign investors from investing in Georgia. No one wants to touch Georgia anymore,” - says Asly.
