One of the main factors, which cause the process of economic and political destabilization, is global terrorism, which became the world's important phenomenon. Analysis of the situation in conflicting regions worldwide clarifies that at the modern stage it is very complicated to reach this. Paper argues that despite the current global financial crises and Russian –Georgia War in 2008 Georgia remains attractive place for investments because of successfully implemented institutional reforms.Įconomic stability and peace are the important determinants of socioeconomic development in the modern world.
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Paper emphasizes the following reasons why Georgia remains the attractive country for foreign investors: adequate institutional reforms and free market oriented economic policy, attractive macroeconomic environment, competitive trade regulations, liberal tax code, aggressive privatization policy, modernized business licensing system, adequate technical regulation system, strategic geographic location, competitive and dynamic banking sector, a country of ancient culture and traditions, milestones in Georgia's transformation to a market economy, diverse investments sectors. Paper overviews the reasons of making investments in Georgia, main tendencies of FDI to Georgia. Paper gives a clear picture of Georgian economy and fields where foreign direct investments are made to illustrate how institutional reforms can create attractive business environment and support to economic growth. But these actions are based on important institutional changes. That is why the main priority is to attract foreign investments. From this point of view the possibilities from local funds in transitional countries, particularly in Georgia, are small. The only way to overcome unemployment and poverty is significant economic growth that can be achieved b the implementation of institutional reforms and increase of investment activity.
Paper encompasses a wide range and informative materials to demonstrate that for the improvement of the economic and social state of transitional countries institutional reforms has great importance because successful institutional reforms encourage investment flow.