Foreign Direct Investment in the South Caucasus

This issue analyzes the possibilities for foreign direct investment (FDI) in the South Caucasus. In Azerbaijan, Gerald Hübner shows that most FDI goes into the energy sector, while underperforming in the rest of the economy, denying the country many of the benefits, such as international know-how, management, and technology skills, that it might otherwise receive. Georgia, according to Maia Edilashvili, is having difficulty returning to the FDI levels that it achieved in 2007 and must make a major effort to restore investor confidence in the wake of the global economic crisis and the 2008 war with Russia. Haroutiun Khachatrian reports that the Armenian economy has been making progress diversifying investment to the food-processing and tourism areas, moving beyond mining, telecoms, and energy.