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tourists bring smaller revenues per capita compared to Western tourists and the diversification of the country's tourism industry might bring a lot of benefits. Notably, Russia decided on a ban on tourism and not on trade with goods with Georgia. This might be because Georgia does not use Russian natural gas (on the contrary, it helps Russia transfer gas to other countries) and Russia is for Georgia a net exporter of goods (some $430mn in net exports in 2018) that can be easily sourced by Georgia from other countries.
The number of international tourists visiting Georgia moved up by 2.2% y/y to 882,130 in Q1, according to the Georgian National Tourism Administration (GNTA).
The total number of tourists, including Georgians, rose by 5.2% y/y to 1,617,548 in the period.
Georgia markets itself as a “new destination” in international tourism.
With 114.6% more travellers than in 2018, Israel saw the biggest increase in visitors to Georgia followed by China (+59.3%) and Saudi Arabia (+52.8%).
As regards visitors arriving from the European Union, more tourists particularly came from Latvia, Slovakia, the Czech Republic, Poland, Lithuania and Germany.
In January and February this year, tourism, an important part of Georgia’s battle against its current account deficit, brought revenues of $333.7mn to the country, up 4.7% y/y.
9.1.5 Infrastructure and construction sector news
Georgia’s government has agreed with seven out of eight conditions requested by the international financial institutions (IFIs) lined up to extend $400mn financing for the first stage of the Anaklia deep water port project, Anaklia Development Consortium (ADC) CEO Levan Akhvlediani told reporters after a trilateral meeting held on May 21 in Tbilisi.
The rejected condition required the government to cover the risk of insufficient traffic volume at the port, Georgia’s flagship infrastructure project. However, there are alternatives to the requirement not agreed, Akhvlediani said.
"We had effective meetings, practically we reached in principle agreement on seven issues,” he said.
Akhvlediani added: “The lawyers will have to work more in order to draft the documents and ink the details. One of the main issues not agreed on is the mitigation of the turnover risk. An agreement has not yet been reached, but there are alternatives and the European Union could provide help in this regard. We will work on the alternative options and in the nearest future there will be additional discussions, but this does not mean that the government is out of this process and all sides will have some engagement.”
He said that additional negotiations were needed so that the term of financial closure, set for June 15, was met. Additional meeting will be held between the lawyers of the parties within the next 10 days.
Development banks that ADC wants to see commit to the Anaklia port—the European Bank for Reconstruction and Development (EBRD), the US Overseas Private Investment Corporation (OPIC), Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB)—are looking to extend $400mn financing for the first phase of the project.
Their eight outlined demands are:
1. The term for the development of the port shall not be set until the loans set by banks for the first phase of the port are extended and the next phase shall be developed only if necessary—the necessity will be substantiated by
42 GEORGIA Country Report July 2019 www.intellinews.com