Sunday, December 19, 2010

Week 13-20 Dec.: €conomy/IT & Stormy weather

In November Synopsys, Armenia’s leading software company, was prised by the USA Embassy “for its promotion of U.S. and foreign investment by showcasing Armenia as a potential IT hub, its collaboration with universities on IT training programs […].” Armenia, a landlocked country with limited sources of economic wealth, especially mineral, land, business enterprise (capital, equipment, strong internal market), but a good potential of human resource, could have sound ambitions concerning IT development.

Oscar Wilde once said that “Ambition is the last refuge of failure.” Perhaps. But for the Caucasus as a whole, IT is a huge support and expedient to exit from more than a problem. Georgian government seems to sense it at least to some extent. On the 15th the Georgian Parliament passed with its third and final reading a law on IT Zones in Georgia. The start-up project to turn Georgia into a IT hub is dated back to June, and now, from 1st January 2011, companies operating in Georgia on computer software production, development, design and support, will be exempted from export tax and their profit from exporting services outside Georgia will not be taxed. Exemption will be applied as well to value added tax on exported products and services.

Virtual zones, floating in less virtuous ones? Again, perhaps.
It may be stated that economic transition is taking even more time than political one. For many citizens of South Caucasus the level of life of the Soviet time cannot be regarded as antiquities of the last century, but as a good term of confrontation to their style of life still now. Sometimes even as a standard yet to be re-achieved.

Old problems to be tackled with both old and new solutions.
So, while some places go on with their well rooted economic vocation, some other could adventure through innovative paths.

The first group seems to include Adjara, or Azerbaijan. The former is more and more influenced by the expanding bubble of Turkish economy, being a part of Caucasus which had always a strong connection with Istanbul, however it was called in the past. Turkish Ughersan company is interested a free economic zone in Adjara where the Government has been negotiating with investors on the creation of a free economic zone in Khelvachauri region. Under the agreement, the zone will be constructed in two years.

Azerbaijan keeps its role – first and foremost – of oil exporter, although more and more consistently with the “new world”. According to “SOCAR and China’s Zhen Rong Company have conducted negotiations on bilateral cooperation and signed a memorandum of agreement on export of Azerbaijani oil to China […]. Besides, SOCARs delegation and Thailand’s PTT Company met during the visit to Thailand. […] the sides have signed memorandum on joint utilization of floating oil tank belonging to PTT, near Singapore. This project will increase the productivity of Azerbaijani oil export.”

The second group may collect not only those who cannot rely on a long term and well established connection with a neighbour country with growing economy or on natural resources, but all those that are interested in a new gateways.

And, back to IT, it’s worthy to remember that a gateway in computing means: “hardware and software that connect incompatible networks, allowing information to be passed from one to another”.

Nothing else more needed in the South Caucasus.

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