AmCham Georgia

1
AmCham Georgia

• War Impact Survey
• August 2008
• Tbilisi, Georgia

2
Were any of your employees called up for military
service?
3

• 17 respondents (57) have said none of their
  employees were called up for military service
• 13 respondents (43 ) have responded positively
  on the question
• Overall number of called up people from AmCham
  membership cant be determined as some did not
  specify the number

4
Were any of your employees casualties of the
fighting or displaced by it?
5

• 25 respondents have said none of their employees
  were displaced.
• 2 casualties have been reported
• Several employees of the companies that have
  branches in Gori were displaced

6
Were any of your physical assets damaged or
destroyed? If so, do you have any preliminary
estimate of monetary damages?
7

• 27 respondents have said their physical assets
  were not destroyed
• Others have said their branches/assets in Gori,
  Senaki and Poti have been damaged
• One company estimated its total damage neared USD
  1 mln

8
Was there any interruption of your ordinary, or
planned, banking transactions?
9

• 19 companies said they encountered interruptions
  of their ordinary/planned banking transactions
• 11 responded negatively to the question
• Some transactions were postponed for a few days
  and some were cancelled
• There were problems with internet banking
• Lending was suspended for one week due to order
  from the FSA

10
Do you have any current or pending business deals
that have been postponed, suspended or cancelled
by the war? For example, orders for goods
produced by your company, an investment to be
made in your company or a loan to it, a corporate
acquisition?
11

• 73 of respondents gave a positive answer to the
  question
• Business deals have been postponed
• Some investment decisions have been deferred
  (purchase/lease of new retail branches
• Blockade of the central highway in Gori and
  detonating the rail line in Kaspi by Russian
  troops affected transit and domestic movements of
  cargo

12

• Transshipment of crude oil products delayed due
  to the damage of the railway line
• Ordered goods were cancelled and big pledge
  investments were stopped
• Planned events and conferences were cancelled
• Some individual, as well as corporate hotel
  bookings were cancelled
• Some companies placed a travel ban for their
  international specialists that were due to arrive
  in Georgia for work.

13

• Start-ups have been deferred
• Some clients were unable to pay invoices
• Transportation/customs clearance problems from/in
  Poti port
• Many business deals were suspended

14
What do you think will be the impact of this on
your business going forward?
15

• Short term grow will slow down and profits might
  be affected
• In the short term the international confidence in
  the country and its creditworthiness and security
  has fallen
• Suspension of import/export via Poti port will
  result in great loss for all transport companies
  operating in the region
• Some will only be able to stand short-term
  drawbacks, unless the situation resolves ASAP, or
  may have to close business

16

• Mainly the impact will depend on how fast things
  go back to normal
• For some the impact will be substantial (depicted
  in apparent declines in revenues, having to cut
  down staff, etc)
• Some organizations (mainly Donors) will have to
  re-adjust their programs
• Many had liquidity and cash flow problems in the
  short term
• Some already committed investors hesitate to
  invest

17
What could AmCham do to assist you in mitigating
that damage?
18

• 22 respondents did not reply
• AmCham should continue its overall activities and
  recover the investor confidence by organizing
  relevant forums, by assisting in PR campaign
  regarding countrys potential
• Promote Georgia to investors and promote the
  return to business as usual as quickly as
  possible
• Vocally support territorial integrity of Georgia
• Help society to recover and contribute to
  reconstruction

19

• AmCham must start open and frank dialogue with
  government and speak more forcefully on behalf of
  members there should be no cash calls, nor
  politically motivated raids
• Help government become truly business friendly
• Evaluate current damage on businesses and share
  this information with members

20
Do you have any immediate needs that AmCham could
help with?
21

• 26 respondent have not replied to the question
• AmCham should issue a declaration indicating that
  due to state of war in Georgia some companies may
  have difficulties in fulfilling some obligations
  to their foreign partners based on objective
  reasons and ask them not to declare fines
• AmCham should reach out to members and
  communicate more actively

22
What suggestions do you have about a role for
AmCham in the countrys recovery?
23

• AmCham should continue its activities and support
  its members more firmly
• Openly show support for Georgias territorial
  integrity
• After the conflict is over, convince the world
  business that Georgia is a good place to invest
• Encourage FDI flow into Georgia
• Offer some policy recommendations to the
  government
• Take part in improving Georgias judicial system
  as well as property rights legislation

24

• Organize/take part in investment Forums promoting
  Georgia
• Stay focus on members and stay out of politics.
  AmCham must be its members ally above all
• Try to get more reliable information about the
  situation in Georgia
• Advise members how to file damage claims
• Make banks decrease interest rates to reasonable
  level
• Stop Russia