Georgia in the Spotlight at the Tbilisi Silk Road Forum
Georgia’s role as a key trading hub between Asia and Europe will be highlighted when 2,000 delegates from 60 countries convene in October for the Tbilisi Silk Road Forum.
The Tbilisi Silk Road Forum, an influential biennial conference in Georgia, returns on October 26–27 for the first time since 2019, with the mission of improving and fortifying Eurasian supply chains. With the rallying cry “Connecting Today, Resilient Tomorrow,” the two-day forum will bring together prime ministers, senior policy makers, business executives, thought leaders and investors to shape the future of East-West trade.
The forum will highlight Georgia’s position as a trade hub between Asia and Europe, and its liberal foreign trade policy and network of free-trade agreements that offer preferential access to markets comprising 2.3 billion consumers, including the EU, China, Turkey, EFTA, CIS, Ukraine, the UK, Hong Kong and China.
On the first day of the summit, a Trade4Future panel will explore the role of open-trade policies, digital trade, sustainability in global supply chains and the emergence of the Middle Corridor as a viable East-West trade route.
Speakers at the Tbilisi Silk Road Forum will include national leaders from the region and beyond, along with government ministers and senior figures from international organizations, financial institutions and businesses.
In a pre-event message to delegates, Georgia’s Prime Minister Irakli Garibashvili reflected on the importance of the forum’s theme of ensuring robust “economic, political, social and cultural connectedness” across the region. “Global challenges in a fast-paced, changing environment require consolidated efforts of global leaders with a clear vision for creating a sustainable and resilient future.
Georgia, with its geo-strategic location, has always played a pivotal role in the development of the Silk Road, providing alternative safe routes from one continent to another. In light of current geopolitical developments, Georgia’s historic role as a regional actor and a connector of the East with the West has become even more important,” he said.
The expansion of the Middle Corridor
The forum will pay particular attention to the growing significance of the Middle Corridor, which crosses the Caspian Sea and passes through Georgia and the Caucasus region, offering a quicker trade route than the Northern Corridor through Russia. In 2022, a surge in trade through the Middle Corridor resulted in a 150% increase in cargo and a 33% rise in container traffic.
The forum’s opening panel event will examine the “New Architecture” of the Silk Road and the “Increasing Role of the Middle Corridor.” Introduced by the Prime Minister of Georgia, Irakli Garibashvili, this discussion will include contributions from Nikol Pashinyan, Prime Minister of Armenia, Ali Asadov, Prime Minister of the Republic of Azerbaijan, Dritan Abazović, Prime Minister of Montenegro, and Roberta Casali, Vice President for Finance and Risk Management at the ADB.
A discussion session, “The Middle Corridor in the Spotlight,” will feature a high-ranking panel of transport ministers and heads of international organizations.
Georgia has invested heavily in its transport infrastructure as it positions itself as a global gateway and the beating heart of the Middle Corridor. Ports along its Black Sea coast are being deepened, expanded and equipped with state-of-the-art technology. The construction of the 430-kilometer East-West Highway is on track. The Baku-Tbilisi-Kars railway that connects Turkey to the Caspian Sea is also a major component of the Middle Corridor.
Georgian Railway made record profits in 2022 and is set to increase its freight capacity from 27 million metric tons to 48 million metric tons by 2024. In 2022, international freight volumes in Georgia grew 19% to 27 million metric tons.
Infrastructure development is not limited to land transport. The Government of Georgia is in the process of selecting a private partner to co-invest in the Anaklia Deep Sea Port project, the country’s first deep-sea port. Equipped with the latest technology, it will be able to handle Panamax container vessels and provide 600,000 TEUs of annual capacity in its $600 million initial phase. The project has huge socioeconomic implications as it will increase the attractiveness of the transport corridor and generate thousands of new jobs and create favorable conditions for developing manufacturing and value added services with the proximity to the port. Georgia’s government has established a state-owned company to oversee the project, and it intends to commence marine works in 2024.
Measuring the FDI effect
The forum’s second day will be devoted to its Investment Forum, so that delegates can network and establish partnerships for regional and international investment projects. Besides highlighting the B2B commercial opportunities, the panel discussion “Boost Investments by Policy-Driven Decisions,” will examine investment-related topics, including Georgia’s own success in achieving record levels of FDI; Policy decisions that boost investments in economies.
Bloomberg’s proprietary data shows that Georgia’s strategic location and its capacity as a regional trading hub are key factors attracting investors who are looking to invest in the country. According to Bloomberg’s latest Foreign Direct Investor Outlook study, 54% of investors planning to invest in Georgia during the next one to three years cited “Development of local supply chains/logistics” as a key incentive. Investors into Georgia are also over-indexed, compared to global averages, in their intention to “Expand into new territories” (57%) and to establish a “regional headquarters” (12%).
During the second quarter of 2023, Georgia’s FDI increased by 29.9% to $505.7 million, its best Q2 performance in the last 15 years. Investments from January through June 2023 increased by 10.9% year-over-year and were up by 90% over pre-pandemic levels. The largest foreign investment came from the Netherlands, Turkey, the UK and the US.
Connectivity is key
The Georgian capital is fast becoming a tech hub within Eurasia, attracting talent from across the region. Digital connectivity is a key topic of the Tbilisi Silk Road Forum, which includes a session, “Fintech: Building on the Momentum,” that will highlight the intersection of business and technology on the new Silk Road.
Georgia's unique geographic position has made the development of submarine digital connectivity between the EU and Asia — along with the establishment of high-capacity data centers in Georgia to meet growing demand for digital services — a strategic priority for its government. The country is keen to position itself as a leading destination for a regional digital hub, providing the ideal environment to foster meaningful connectivity.
Bloomberg pinpoints “Technological and Innovation Capabilities” as Georgia’s foremost FDI driver. Investors interested in Georgia identify “IT/Computer Technology” and “Electronics/Smart Electronics” among the sectors they will most likely invest in. It cites “Digital Economy Agreements” with Georgia’s government as one of the biggest opportunities for doing business in the country; Georgia offers an extensive package of tax exemptions for foreign tech companies.
Brimming with energy and culture
Speakers from the public and private sectors will contribute to “Energy Diversification—A Way Towards Energy Security,” the forum’s key session on the future prospects of the energy sector. The panel event will explore topics including clean energy technologies and the development of the Black Sea Submarine Cable project, which has assumed heightened significance in light of the increasing importance of the diversification of energy sources.
By establishing the large submarine electricity cable project, Georgia is emerging as an important logistical player in preparing for future energy supply crises. The cable will extend for 1,195 kilometers (743 miles) from the Georgian port of Anaklia to Konstanta, Romania. The first stage involves a 1.5 GW high-voltage cable, which forms part of the EU’s Global Gateway initiative that will connect the electricity systems of the Caucasus region and continental Europe. Bloomberg research found that 27% of investors looking to invest in Georgia in the next one to three years are looking at the country’s renewable and alternative energy sector.
The Euro-Asian Oil Transport Corridor (EAOTC) project will create a new route for oil transportation from the Caspian region to consumers in Europe, enhancing the energy security of participating states and of the European Union.
In addition to exploring the cultural attractions of Georgia’s capital, delegates at the forum will have opportunities to learn about sustainable initiatives in the tourism sector. A panel discussion, “Tourism Beyond Borders: Navigating the Changes,” will include topics such as:
- The new reality of tourism — preferences and consumer behavior that are shaping the industry.
Innovation and digitalization in tourism — improving travel experiences and promoting sustainable tourism.
Partnerships for tourism development.
Investment opportunities and financing tools for tourism.
A new dawn for aviation — recovery and sustainability.
Georgia is experiencing a surge in arrivals of international travelers, up 109% year over year in the first quarter of 2023, which is helping fuel a construction boom in cities including Tbilisi and the Black Sea port city of Batumi.
These developments in transport, energy, ICT, fintech and tourism are creating new structures of connectivity along Georgia’s Silk Road. Together they can deliver what Prime Minister Garibashvili describes as “a resilient tomorrow for our future generations.”
