Batumi is the second-largest city in Georgia, the gateway to the East, with a population of 170,000. It is an ancient and mature city serving as a bridge between Asia and Europe. It lies on the eastern coast of the Black Sea and is part of the Adjara region in the southwestern part of the country. The city contains the largest port in Georgia and is the capital of the Adjara administrative region situated on the border with Turkey. Adjara is known for its classical and historical architecture. Batumi is historically characterized as a turning point city located in the Black Sea region of the country due to the region having access to the port’s 330 days of usage. The same reasons have facilitated the city in administering trade relations. A new railway station was established in Batumi as part of a railway project. Additionally, the Batumi International Airport provides the potential to connect Batumi to different destinations all over the world. The railroad system is also essential because it connects Turkey’s cities.
Economic Overview of Batumi
Batumi has an enchanting atmosphere and well-established guidelines for further sustainable development following its function as a center for education, cultural diversity, and economy. With impressive recent growth and existing changes, Batumi facilitates the establishment of investment projects, creating income opportunities for the local population and promoting inclusive growth. The favorable investment environment of Batumi was achieved due to the solid investment climate, advancing infrastructure, high responsiveness of local government in providing exceptional support to investors, and smooth cooperation with the private sector, promoting the harmonization of community interests with private investments. The increasing attractiveness of the agglomeration of Batumi is reflected in the fact that almost the entire seemingly useful land is developed, with a significant number of towers present. The role of Batumi in the political, economic, social, and cultural life of Adjara is significant and extremely important, and further strengthening Batumi as the major service and trade center of the region is essential for the entire development of Adjara. Thus, the development directions of Batumi can be summarized in the idea that this paper is designed to provide a comprehensive analysis of the real and future possibilities for the development of the Batumi economy. The City of Batumi has a strong desire to foster the development of the Green City that provides social sustainability, livability, innovative economy, and sustainable development by boosting the potential of local forces and creating international partnerships.
Key Industries and Sectors
The city center, with its high density of historic structures influenced by many different cultures, is ideally suited for the development of cultural tourism. A significant part of Batumi’s attractions, such as narrow alleys, religious, entertainment, and handcraft institutions, galleries, and houses with typical local characteristics, are located in the Central Historic District. Batumi offers a significant array of other outstanding architectural and archaeological heritage sites in the wider region that can be marketed to cultural tourists. Such a procedure demarcates various sites of the city, points to the activities that can take place there in the near future, and reflects on the necessary investment costs.
Key Sectors for Investment in Batumi
The Black Sea coasts of Georgia are extremely beautiful. However, the most picturesque and distinct are the subtropical and Tremonti zones. The international airport of Batumi is open for international flights, and it should be noted that significant improvement of road infrastructure between Batumi, Tbilisi, and the Turkish border is planned to be realized. So, Batumi and its entire surroundings are an excellent place for leisure at any time of the year. There are several fiscal privileges and stimulations in this region, including freedom from income tax for the population during the next 13 years for individuals and five years for legal entities.
The government of Georgia avails itself of interest in the projects in the sphere of tourism, agriculture, processing industry, and real estate. Municipal authorities of Batumi indicate particular interest in the projects, which should expand the remaining infrastructure and increase the capitalization of real estate. They also stimulate the investment projects with the same means, as well as fiscal privileges, allocation of land for construction, and other significant preferences. The key sectors for investment in Batumi are tourism, agriculture, and processing industry.
Impact of Batumi’s Economy on Georgia
The Adjara Autonomous Republic is an important part of Georgia’s economy. The economy of Adjara is linked with the economy of Georgia by very strong and integral relations. This fact is one of the reasons that strengthen the region as a unified economic area of Georgia. According to GDP, the Autonomous Republic of Adjara is in 4th place after Tbilisi, Kakheti, and Imereti. The city is situated in the southwestern part of Georgia on the Black Sea coast and borders Turkey. Despite some geographical limitations, Batumi has been an actual crossing point on the continental Great Silk Road, and the present situation gives it a strong advantage for the future development of the region.
Economic Growth and Diversification
The accelerated economic growth in Georgia during the last six years, the significant improvement in social indicators, and the elimination of the post-Soviet economy and resistance are some of the well-known and well-documented features of Georgia. Increased economic activity earned international recognition for Georgia from different rating agencies. Stimulated growth in 2004, following in 2003, is one of the highest rates not only in Georgia’s comparative context but also globally. Meantime, the challenges that the Georgian economy faces are complicated. The economy is still fragile, vulnerable, and concentrated in a number of sectors. Their growth primarily comes from external factors, including attracting foreign investments, remittances, and, to some extent, capital inflows.
Net inflow of direct foreign capital to Georgia was the highest of all the former Transcaucasian republics; it increased significantly between 1995 and 2003. Foreign direct investment in Georgia has increased substantially from 2003 to 2006. Large-scale, primarily FDI, inflows to the financial sector, where employment and growth of FDI inflow rates were significantly more than in 2004 to 2005, respectively, make up the majority of investment concentration to GDP.