2011-10-14 17:13
Georgia looks to Korea for hi-tech development model
By Kwaak Je-yup When a country is small, it should look outside for sources of growth. Georgia, a small country in the Caucasus region between Central Asia and Europe, is certainly doing that, trying to attract money from around the world, in the form of foreign direct investment. “When you don’t have natural resources, you need to learn how to create a hub,” said Vera Kobalia, the 30-year-old Georgian minister of economy and sustainable development. “Korea’s industries developed into making electronics and high-tech goods,” she said. “This is something we want to implement in the future.” Kobalia explained that her government’s ambition to become the heart of the region is undeterred by the lack of tradable commodities like oil and gas. She also claimed that this deficiency compels her country to develop and draw inspiration from Korea, which has risen from abject poverty in a few decades. Kobalia has flown to the other end of Asia to look for investment and partnerships and has met with, among others, KOGAS, Kolon, and SK representing her country as a place of high potential and numerous opportunities for companies. “The business environment is easy, clean and cheap.” Georgia has made respectable advances in its energy industry and leveraged its key asset, its geographical location, in exporting it. President Mikheil Saakashvili made this the utmost priority after his election in the 2003 Rose Revolution and has continued since his re-election in 2008. Once a country with frequent outages, Georgia now exports about one billion kilowatt-hours per year. “Many companies come in, connect to the grid and sell abroad,” said Kobalia. The Georgian Ministry of Energy figures say its capacity runs at only 18 percent of its full potential. The most recent United Nations Development Programme (UNDP) study says Georgia has over 26,000 rivers and a potential for producing 15,000 megawatts of hydroelectricity. In April, the UNDP led the German government-owned development bank KfW to launch a 5 million euro Georgia Renewable Energy Fund for the development of small hydropower plants. The fund provides low interest loans for developers of small hydro projects in the country. The main customer is Turkey, which has been suffering from a shortage of electricity and looking at nuclear options too, notably from Japan, France, Canada and Korea. But future targets lie southward to Syria and Iraq and even further westward to Eastern Europe. Korea is by no means a first-time partner of Georgia, as the state-run Korea Electric Power (KEPCO) and SK Construction and Engineering once participated in a consortium with Turkish company Nuroli Construction and Trading for a $1 billion hydropower plant contract. However, the memorandum of understanding, signed in 2009, led nowhere. According to a KEPCO spokesman, the Georgian government pulled out during the talks, without specifying what the point of contention was. The average growth rate for Georgia between 2004 and 2007 was 10.5 percent and last year 6.5 percent, Kobalia said. The omission of the years 2008 to 2009 stems from the war against Russia, which broke out over Abkhazia and South Ossetia, two border regions Georgia claims as its own. |
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