Effects of the crisis on Dubai and Georgia free zone projects

Although the Dubai real-estate and development market suffer from the financial crisis, and unemployment is rising, a 20 Billion USD refinancing takes care that the ongoing development projects can be continue. And the economy is still growing, not in a straight recession. Dubai, will be probably among the first countries to benefit when the worldwide recession is finally over.

Ongoing talks with Vato Lejava, chief advisor of the Georgian Prime Minister, are positive and productive. There is understanding for the need to change the Free Industrial Zones Law to accommodate services, in addition to physical goods. Subsequent talks with deputy ministers of Finance and Economy and Members of Parliament showed strong support for a Tbilisi iCity Free Zone concept. "We should have done that already many years ago!" was one remark.

In Georgia, the effects of the financial crisis can be felt. Many construction projects are frozen as banks have frozen assets or curbed hard currency loans. The interest on a EUR loan to a developer -for example- can be up to 30% annually. Crazy! Especially, when compared to the 5-6% that is paid in Western-Europe for a bank loan, and the ECB rate which is now down to 1.5%.

Government officials mention that they expect that the Rakia Group will very soon get a Free Zone license for the Poti harbour. That would indeed be a great step forwards for Georgia.