Business owners in Georgia are optimistic about the possibility of EU accession, but they worry the government is mishandling the process.
In the land where recycling hasn't taken off, Greenpack, a sustainable packaging manufacturer, made a splash. Established in Georgia a decade ago, this trailblazing business rose from humble beginnings to supplying one of the largest grocery chains in the Caucasus region.
However, with regional demand peaking, officials at Greenpack are gazing westward. "New customers in Georgia are hard to come by," said Salome Kareli, the business development manager, in an interview at the warehouse. Europe seems like a promising territory, but exporting to neighboring Azerbaijan and Armenia hasn't quite scratched the itch for output they envision.
So, they're broadening their horizons. Greenpack has been attending trade shows in Europe and sending samples to potential customers there. Last December, when the European Union gave Georgia the green light to pursue membership, it felt like a sign that they were on the right track.
Greenpack fits the profile of a small-to-medium-sized Georgian business poised to benefit greatly from Georgia's potential accession to the EU. There's excitement brewing in the country as the prospects of increasing Georgia's presence in the far-reaching European market capture imaginations. On the other hand, several are wary that the Georgian Dream government, with the controversial draft law on foreign agents reintroduced on April 3, may be undermining the country's EU aspirations and their hopes for export expansion.
Amid the whirr of machines in Greenpack's Tbilisi warehouse, production manager Archil Abramia raised his voice to be heard. "The open European market holds great potential for our production," he said, standing near a spool of woven bags destined for Azerbaijan. "In the EU, our standards will be elevated."
With Europe in their sights, Greenpack is already strategizing on how to compete. Last year, they moved operations into a larger facility and obtained an international certificate of quality assurance for three years. Greenpack isn't alone in adapting to the changing landscape; economy-wide shifts are underway.
Once hesitant, companies in Georgia are now pivoting from traditional trade partners like Russia. Western sanctions and the uncertainties of conducting business in a war-torn country have dampened trade prospects with Russia. In consequence, there's a growing sense that Georgia can attract significant European investment and become a reliable supplier of goods.
Economic Minister Levan Davitashvili expressed optimism during a December 18 speech, stating, "We are not here to merely benefit from the EU; we aspire to contribute to its success."
Looking at the success stories of countries like Hungary, Poland, and Bulgaria—all of which are EU members—many in Georgia's business community are painting a bright future for their country's economy if it can secure EU membership. Akaki Saghirashvili, deputy CEO of the Business Association of Georgia, describes a imagined EU-affiliated Georgian economy as one built upon a resilient foundation. "Joining the EU offers a promising ground for businesses to flourish," he said, "but competition is fierce, and businesses must brace themselves."
It's not just Georgian businesses that stand to gain. The road to membership may create jobs by transforming Georgia into a production and export hub due to lower overhead costs than in other European countries.
For people like Soso Nibladze, manager of the Tbilisi Free Zone, these factors can make Georgia stand out in the European market. His facility caters to mostly regional companies manufacturing and exporting goods outside of the country, but "our horizon extends beyond the region," he shared in an interview with Eurasianet. "We've witnessed the benefits countries gained while pursuing EU candidacy."
Many Georgians view EU membership as a matter of economic life-or-death. The country has grappled with a decades-long population drain often attributed to the lack of economic opportunities available at home. In a 2022 survey, Georgians identified economic development as the biggest challenge facing their country, with the majority agreeing that the main benefit of joining the EU would be strengthening the economy.
Akaki Saghirashvili, when asked if joining the EU could reverse the emigration trend, suggested that the problem lies with wages, which are often higher abroad. "If we can fill the gaps in our economy," he said, "I believe people will stay or at least those thinking about leaving may choose to stay."
While EU membership might seem tantalizingly close for many, it remains a distant dreaming. Georgian membership is by no means guaranteed, in large part due to government policy decisions. As elections approach in October, the Georgian Dream party is alienating Western partners with rhetoric seemingly out of step with EU values. The reintroduction of a draft law labeling organizations receiving more than 20% of funding from abroad as foreign agents has triggered protests across the country.
European officials have questioned Georgia's readiness for EU membership should the law pass. In a statement on April 16, President of the European Council Charles Michel wrote, "The draft Law on Transparency of Foreign Influence is not consistent with Georgia's EU aspiration and its accession trajectory and will only drive Georgia further away from the EU, not closer."
The Georgian Dream party, with enough support to likely remain in power, may inadvertently be working against its own EU aspirations. "Despite anti-European rhetoric from various sources, the desire to join the EU persists," said Davit Keshelava, head of macroeconomic policy research at the International School of Economics in Tbilisi.
EU candidacy has opened doors, allowing small Georgian businesses and European investors opportunities within the country. However, there's still a long road ahead, starting with a laundry list of institutional reforms that are likely to be sidelined in the lead-up to the elections. "We keep pushing difficult changes to the future, but at some point, we must face them," Keshelava said. "Otherwise, we risk losing our path to membership."
Greenpack is exploring the European market as a means to expand its business, seeing it as a promising territory for growth. With potential EU membership, the standards of Greenpack's production might be elevated, offering an opportunity for increased competitiveness in the open market.
