War dents Turkish investments in Georgia

The 2008 war between Russia and Georgia dealt a serious blow to Turkish investments in the country, but steps are being taken to re-establish business and mend the social damage created by the conflict.

“The war has changed everything. Capital likes safe hands. International investors, including the Turks, are no longer coming to the war-torn country,” Osman Nuri Öztürk, secretary-general of the Georgian-Turkish Businessmen’s Association in Tbilisi, told the Hürriyet Daily News & Economic Review in an interview.

Öztürk said Turkish businessmen in Georgia, who number more than 500, operated mostly in the services, distribution, marketing, transportation and construction industries.

The greatest harm was done in the construction sector, where a downward trend was followed by the global financial crisis, he said.

Big posters advertising a number of unfinished projects can be seen on the main streets of the capital city, Tbilisi. Öztürk said the projects were left incomplete due to the war, adding that today the Georgian state has adopted a policy of providing financial assistance in order to complete the unfinished construction projects.

Turkey’s Nurol Construction undertook the building of the Georgian Defense Ministry and completed it this year. The Sheraton Hotel, constructed by the same Turkish firm, will be inaugurated in Batumi in 2010.

“However, the Turkish company [Nurol] does not have any more projects in Georgia,” said Öztürk. “Another Turkish company, Tekfen, which was the largest subcontractor of British Petroleum, had to close its office in Georgia.” 

Turkish aid for war victims:

Prefabricated houses were built following the war to replace bombed houses in Gori, in the border region close to South Ossetia. Construction of most of the houses was undertaken by Turkish companies, Öztürk said.

Turkish Labor Minister Faruk Çelik attended a Nov. 8 ceremony near Gori to deliver the keys for 100 prefabricated houses constructed with financial assistance from the Turkish International Development Agency, or TİKA. Georgian President Mikhail Saakashvili made a surprise visit to the ceremony.

Despite the obstacles to international investments triggered by the war, energy appears to be the most promising sector in Georgia, a transit country located at the juncture of major gas and oil pipelines.

“A number of international dam tenders will be announced soon by the Georgian government and many Turkish companies will be applying,” said Öztürk.

Last year's war was ignited by a large-scale Georgian attack against South Ossetia in Aug. 7.

Russia reacted immediately by deploying combat troops in South Ossetia and launching bombing

raids into Georgian territory.On Aug. 9, Russian and Abkhazian forces opened a second front by

attacking the Kodori Gorge. After five days of fighting, Georgian forces were ejected from South

Ossetia and Abkhazia. On Aug 26, Russia recognized the independence of South Ossetia and

Abkhazia.