Q. What lessons have you learnt from your success as a businessman that you can apply to your role as prime minister?
A. Nowadays, I have no time to be a businessman. The business experience I am bringing in is the creation of three investment funds that will support business in Georgia.
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Q. What are these three funds and how will they work?
A. Three funds, three targets: a sovereign fund to support foreign investors, an investment fund to bolster local businesses and a youth fund to sustain young Georgians. The sovereign fund will be $2bn. The idea is that foreign investors will come to Georgia and will be greeted by the fund and be co-partners.
As I have learnt, when local capital meets foreign capital, the business sector can only flourish. I met JPMorgan’s top executives to discuss their participation. The private investment fund is an idea I have had for a long time, it will be $3bn to $4bn [in size] and I will invest my own capital in it. The third fund will be smaller and it aims to support young scientists and researchers and limit the brain drain phenomenon.
Q. You stated that you will use your own capital, at least for one of the funds. This can pose questions about corporate governance and potential conflict of interests between your two roles.
A. My capital and that of other businessmen will help to set up the fund, but no public official will be involved in its management – telling businessmen what to do – which is what used to happen. No one will see whose capital has been put in. The board will be independent and transparent in its decision making, and absolutely business oriented. We need to build up trust. The experience of the past, when the government would control the business sector through monopoly, is gone. This is not going to happen again.
Q. The sovereign fund seems to be designed along the same lines of the partnership fund that the previous administration created in 2011. What will happen to the partnership fund?
A. The sovereign fund will build upon the partnership fund. We want to make it clear and transparent as the partnership fund failed to communicate its vision and aims to investors. We will make sure that foreign investors understand the terms of reference and of participation, including their contribution to the overall cost of investment which we set between 25% and 75% of the overall cost of the investment.
Q. You founded Cartu Bank and your family still owns a stake in the institution. Is there any conflict of interest there?
A. Cartu Bank remains the only business my family is involved with and the bank paid for its association with me. [In November 2011, a month after Mr Ivanishvili announced his decision to enter politics, the previous government approved legislative amendments that gave the tax authorities priority over the secured claims of financial institutions. Cartu lost assets worth $114.6m which it had acquired as security. The regulations were in force until April 2012].
It is unacceptable that government should infringe on and violate businesses and their property rights. It is impossible to work in such an environment, and that was the case under the previous government. As soon as I stepped into politics, they attacked the bank.
Q. So, will you sell the stake in Cartu?
A. The status quo will not change. My family’s participation is not that visible and the bank is not a major player in the Georgian banking sector. It is definitely not the leading bank today.
Q. The International Monetary Fund set the outlook for economic growth in 2013 at 6%, but the government said that that figure is conservative.
A. We will see considerable growth later this year. I expect growth to really take off from 2014, as we are laying the foundation for significant investment. It takes time, since the economy needs to build up momentum. In terms of sectors, agriculture is certainly a priority as it employs the majority of the workforce but its contribution to the gross domestic product is minimal [9% according to GeoStat, the national statistics agency].
Q. There is general optimism about exports increasing in 2013 given talks with Russia and the re-opening of the Russian market. Is this a realistic expectation?
A. Totally realistic. Our delegation visited Russia at the beginning of February 2013 and a Russian delegation visited Georgia soon afterwards. We are approaching the finishing line as far as the first set of agreements is concerned; it is basically a done deal. We are working on getting Georgian products back to a wider market. In addition, Russian capital is also coming to Georgia.
Q. Do you foresee an opening at the political level or do you remain cautious in this regard?
A. I believe business has a great influence on politics. The next step will be ensuring Georgia’s territorial integrity, and moving towards a friendly relationship with Russia. That takes time, it will not happen in one day. But creating business opportunities, and opening the borders so that people can travel to each country will help the process. Of course, that is not enough. We are quite cautious in the words we say. Using the wrong rhetoric, as [president Mikheil] Saakashvili did, led to the closure of the borders with Russia before the war [in 2008].
Q. How would you reassure investors that your political cohabitation with president Mikheil Saakashvili will not affect investment in the country?
A. There is a problem of cohabitation, but we are ensuring the re-establishment of justice in the country. The opposition calls it selective justice, and, to a certain extent, also international partners use the same definition. This is not the case. Re-establishing justice, and building up trust in the judicial system, is an important step and we will continue towards that. I believe the business elite understands well what is going on and will not be put off by political rhetoric. In a month or so, the dust will settle.
