meed-logo

line1 line2 line3
SIGN IN / REGISTER

What happens in Georgia matters to the Gulf

28 May 2024

 

Register for MEED's guest programme 

The ongoing demonstration of tens of thousands of ordinary Georgians against the reintroduction of a so-called “foreign influence” bill is an emerging source of uncertainty for investors at home and abroad, including in the Arab Gulf States.

Backed by the governing Georgian Dream party, the controversial legislation requires media and non-governmental organisations receiving more than 20% funding from abroad to register as an organisation “pursuing the interests of a foreign power”.

Critics have branded the bill the “Russian law”, warning that similar legislation has been used there to quieten free speech and crack down on dissent.

After being passed by Georgia’s unicameral parliament, President Salome Zurabishvili refused to sign the bill into law, despite her opposition being likely to be overruled by Georgian Dream. Following its forced passage, protestors gathered outside Georgia’s parliament building and clashed with police.

A further intensification of protests and violence cannot be ruled out in a country with a rich history of political instability. It would therefore be wise for the GCC states to pay close attention to what might happen next.

Gulf exposure

The GCC has an active interest in maintaining a wary eye on Georgia due to the exponential growth of the region’s economic interests in the Caucasian country in recent years, particularly in its tourism sector.

Statistics suggest that by the end of 2022, the country welcomed almost 210,000 tourists from Gulf states, 15 times more than a decade ago. With a 60% increase in visitors between 2019 and 2022, Saudi Arabia arguably provides the most intriguing rise.

Irrespective of where they come from, many GCC tourists enjoy visiting Georgia for its acceptance of Halal and other Islamic practices, its temperate summer climate and increasing opportunities to indulge in winter sports at its mountain resorts.

Presently, the UAE leads the GCC’s investment into Georgia’s tourist economy. Tourism is also one of the focus areas of the UAE-Georgia Comprehensive Economic Partnership Agreement (CEPA) signed between the two countries in October 2023.

The agreement not only reinforces the UAE’s status as Georgia’s sixth largest investor, but also seeks to double non-oil trade from $481m to $1.5bn in five years. Beyond tourism, target sectors include agriculture, renewables and technology.

The UAE’s foothold in Georgia’s infrastructure is also growing following AD Ports Group’s recent acquisition of a 60% stake in Tbilisi’s dry port. This inland terminal is situated along the Middle Corridor, a trade lane linking manufacturing hubs in Asia with consumer markets in Eastern Europe.

Other significant players in Georgia’s infrastructural development include China, which recently completed a 9,000-metre-long tunnel along the country’s Kvesheti-Kobi road. Improved infrastructure is also integral to Georgia’s currently imperiled candidacy for membership of the EU.

Business conditions

Economists will tell you that the ideal conditions for economic development include infrastructure investment, open trade and investment regimes and political stability.

There can be no denying that Georgia’s steady economic growth in recent years has benefitted from having all three pillars in place, even if political stability is perceived by some to have come at the cost of bona fide democracy.

Conversely, expert-level knowledge is not required to make the connection between political unrest and faltering economic conditions, particularly in key sectors such as tourism.

While Tbilisi remains the main focus of protests and international coverage, opponents of the “foreign influence” bill have made their presence felt in other parts of Georgia, including Batumi, the country’s third city and Black Sea resort.

This places Georgia’s two leading tourist destinations and associated logistics – most notably Shota Rustaveli Tbilisi International airport – on the frontline of both current and future instability. The same can also be said of many GCC investments and business interests in Georgia’s tourist sector.

Next month’s Eid Al Adha will provide valuable insights into how Georgia’s political turmoil is starting to influence choices made by GCC residents and impacting regional economic objectives. Islam’s second major holiday is regularly accompanied by a getaway from the region to cooler climes.

With a two-hour flying time and regular flights from Doha, Dubai and Riyadh, among others, Georgia represented a convenient, relatively safe and value-for-money tourist destination. That is until the country’s latest round of political protests and volatility.

Unlike tourists, those GCC companies and investors with a long-term stake in Georgia’s economy and infrastructure have little option but to watch how political events unfold.

Some worst-case scenarios could prove unpalatable: real estate in tourist locations underutilised during peak seasons; logistics hubs losing business as manufacturers divert to safer trading routes; missed opportunities to bolster regional food security through the export of cheaper agricultural products.

The GCC, and especially the UAE, is by no means the only regional grouping or country that is keeping an eye on Georgia’s uncertain political situation. With growing interest in developing the Middle Corridor and Black Sea port of Anaklia, China particularly stands to benefit from the country’s return to stability.

The same is also true of the US and EU, both concerned about Russia’s rising influence over a country that was once part of the Soviet Union

Accordingly, the GCC has options regarding who it can work with to persuade Georgia to collectively do more to resolve its political crisis.

The challenge facing the group is making the most politically astute and economically expedient choice of partner(s) at the appropriate time in Georgia’s unfolding political drama.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11821175/main.gif

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Oman opens bids for 1GW battery storage advisory role

    4 June 2026

    Oman’s Authority for Public Services Regulation (APSR) has opened technical bids for a consultancy contract supporting a planned 1,000MW/four-hour battery energy storage system (bess) project.

    The tender seeks independent regulatory, technical and commercial validation services for the scheme. The project is planned with a rated capacity of 1,000MW and a storage duration of four hours, equivalent to 4,000 megawatt-hours (MWh) of energy storage.

    According to a tender board notice, technical bids were opened on 25 May.

    Thirteen companies submitted proposals including:

    • Afry Management Consulting (Sweden)
    • CESI Middle East (Italy)
    • DNV Dubai Branch (Norway)
    • Engineering Systems Group (Kuwait)
    • ILF Consulting Engineers (Austria)
    • Innovision Engineering Consultancy (UAE) 
    • Mott MacDonald (UK)
    • Sargent & Lundy Abu Dhabi (US)
    • Surbana Consultants Dubai Branch (Singapore)
    • Tractebel Engineering Consultancy (Belgium)
    • TUV Rheinland (Germany)
    • Universal Consulting Engineering (Egypt)
    • WSP International (Canada)

    As previously reported, APSR issued the request for proposals in April as part of wider plans to increase the share of renewable energy in the sultanate.

    The sultanate’s first utility-scale solar photovoltaic (PV) plant integrated with battery energy storage (Ibri 3) entered construction at the beginning of the year, comprising a 500MW solar PV plant and a 100MWh bess system.

    Last month, state offtaker Nama Power & Water Procurement Company signed a power-purchase agreement with local firm O-Green for Oman’s first round-the-clock renewable energy project.

    The company is also seeking consultants to provide separate environmental, social and governance and legal advisory services.

    Renewable energy is expected to increase from 4% of the generation mix in 2024 to 30% by 2030, driving the push for more utility-scale storage projects.

    Over roughly the same period, demand is forecast to double, reaching 10 terawatt-hours by 2031.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17106014/main.jpg
    Mark Dowdall
  • Building around the strait

    4 June 2026

    Commentary
    Colin Foreman
    Editor

    The closure of the Strait of Hormuz has turned a lingering, and previously unlikely, threat into reality in 2026. The shutdown of the maritime chokepoint, which is about 33 kilometres wide at its narrowest point, has plunged the global economy into crisis, with fuel prices spiking and fears of energy shortages growing. While diplomatic efforts are under way to resolve the disruption, the GCC’s geographic Achilles heel remains.

    The closure has also highlighted the importance of alternative logistics and energy corridors. Saudi Arabia’s East-West pipeline has enabled the export of 7 million barrels a day of oil from the Gulf coast across the kingdom to the Red Sea, while the UAE has rapidly scaled up operations at Fujairah and directed Adnoc to accelerate development of its 520km West-East pipeline.

    Others have had fewer options. Geographically constrained states such as Kuwait recorded zero crude exports in April, reflecting their near-total dependence on shipping oil through the Strait of Hormuz.

    For the projects market, the crisis is already having, and will continue to have, a significant impact. Ongoing projects are struggling with disrupted supply chains and resulting cost escalation, while future spending is likely to be diverted towards schemes that improve the GCC’s access to markets outside the Gulf.

    For the projects market, the crisis is already having, and will continue to have, a significant impact

    For oil and gas exports, proposed pipeline routes would run south from Kuwait through Saudi Arabia and the UAE and into Oman, enabling shipments from expanded ports on the Arabian Sea. For goods entering the region, the GCC railway scheme has taken a step forward, with procurement starting in May.

    These projects will cost tens of billions of dollars and will take years to complete, which means the events of 2026 will shape the region’s infrastructure priorities for the coming decade.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here

     

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17105852/main.gif
    Colin Foreman
  • Fitch cuts global airport outlook on Iran war

    4 June 2026

    Fitch Ratings has revised its global airport sector outlook to ‘deteriorating’ from ‘neutral’, warning that disruption linked to the Iran conflict is creating a more challenging operating environment for airports and airlines and clouding traffic visibility into 2026.

    In a note issued on 3 June, Fitch said the conflict has increased uncertainty over “regional airspace availability, airline operations and travel demand”, with implications for route stability and the quality of traffic flows. While most airport operators’ traffic and earnings have remained broadly stable so far this year, the ratings agency expects a softer macro backdrop, a less favourable passenger mix and weaker non-aeronautical revenues to increase sector risks over the next 12 to 18 months.

    The revised outlook is particularly relevant for the Gulf, where major airports have built business models centred on international connectivity, long-haul flying and transfer traffic. Fitch said the disruption is particularly affecting airports with exposure to transfer passengers and internationally connected airline networks — categories that include the region’s largest hubs.

    Hub exposure

    Although the agency did not name Gulf airports specifically, its analysis implies that hubs reliant on long-haul corridors and complex network connectivity are more exposed to “rerouting risk, changing airline capacity decisions and weaker visibility on international demand”. For Gulf operators, that risk is compounded by the potential for further airspace restrictions and ongoing uncertainty around the availability of key flight paths linking Asia, Europe and parts of Africa.

    At the same time, the agency noted that some “Asia-Pacific airports have benefited from the redistribution of transit and long-haul traffic” away from disrupted Gulf hubs. Any sustained diversion of connecting passengers would be material for Gulf airports because duty-free, retail and food and beverage spending is typically stronger among international transfer travellers than point-to-point passengers.

    Fitch’s change of outlook also reflects a broader slowdown in the sector’s growth trajectory. Global passenger growth was strong in 2025 and early 2026, but the pace has started to cool from the post-pandemic recovery period. Fitch pointed to the International Air Transport Association’s latest projection of “4.9% passenger traffic growth in 2026”, a deceleration versus 2025, with early-2026 monthly data showing the slowdown already under way.

    Fitch also warned that non-aviation revenues could come under pressure, particularly where passenger mix shifts away from high-spending travellers. The agency expects a “low single-digit decline in nominal retail revenue for European airport operators” this year, highlighting how quickly discretionary spend can soften when operating conditions turn more volatile.

    Fuel availability and pricing is another risk. Fitch said there is rising uncertainty about jet fuel availability, especially in Europe due to disruption to Middle East supply, potentially increasing airline costs and encouraging capacity reductions. The agency expects fuel reserves to cover the summer months in Europe, even if the Strait of Hormuz remains effectively closed, but warned that winter operations could be more challenging if disruption persists.

    Higher airfares and fuel surcharges could also weigh on near-term demand, Fitch added — a headwind for Gulf airports that have benefited in recent years from strong leisure demand and the restoration of long-haul travel.

    Fitch expects airport performance to become more uneven, with point-to-point leisure airports typically better positioned than large hubs reliant on transfer traffic and international corridors. The ratings agency cited European examples, contrasting airports such as Barcelona or Venice with Heathrow and the Paris airports.

    The same dynamic could play out in the Middle East: airports with a large share of local origin-and-destination demand may be relatively insulated compared with major connecting hubs whose business models depend on stable long-haul routings and predictable network planning by global airlines.

    The risks for the Gulf’s aviation sector were highlighted again on 3 June when Iranian drones struck Terminal 1 at Kuwait International airport, causing significant structural damage. The incident was the third major drone strike on the hub in recent months. On 1 April, a drone strike hit fuel tanks managed by Kuwait Aviation Fuelling Company, sparking massive fires. On March 28, another multi-drone raid severely damaged the airport’s primary radar systems.

    Other airports in the region have been damaged since the conflict began, including Dubai International airport, Zayed International airport in Abu Dhabi and Hamad International airport in Doha.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17105933/main.jpg
    Colin Foreman
  • Iran conflict curbs migrant labour flows to Gulf

    4 June 2026

    The International Labour Organisation (ILO) has flagged early signs that the conflict involving Iran is affecting the Gulf’s labour market. Speaking to CNBC, the ILO’s acting deputy chief, Sher Verick, said departures of migrant workers from sending countries have fallen sharply this year.

    “We don’t yet have numbers about those leaving the Gulf, but what we have are numbers that show that the departures of migrant workers from sending countries are significantly down,” Verick said. “For example, in the Philippines, the departures year on year are down by 78%.”

    Verick said disruptions in the Middle East are preventing workers from travelling to take up jobs and earn income, with knock-on effects for remittances that support household consumption, education and healthcare in sending countries. He added that the ILO would be watching for data on return flows from the Gulf back to Asian sending markets.

    Job risks

    The ILO has also assessed the share of jobs most exposed to conflict-related disruption. “Globally, we see around 15% of employment in that high exposure category, but this is much higher in the Middle East, at over 50%, and in Asia Pacific at around 22% of employment,” Verick told CNBC.

    Sectors most affected include transport, given reliance on fuel and other energy sources, and manufacturing due to supply chain exposure. Tourism-linked activities are also vulnerable, while agriculture is affected by disruption to fertiliser supply and pricing.

    A report by Fitch in early June said the conflict is placing several sectors across the GCC under severe operational and financial strain. Industries including aviation, hospitality, chemicals and residential real estate development face heightened vulnerabilities.

    Airlines are grappling with route disruption and higher fuel costs, while the hospitality sector has seen weaker occupancy amid security concerns and travel disruption. Regional chemical producers face higher feedstock prices, and residential real estate developers risk slower investment, which could dampen employment in construction – a sector that relies heavily on migrant labour.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17105894/main.gif
    Colin Foreman
  • Read the June 2026 MEED Business Review

    4 June 2026

    Download / Subscribe / 14-day trial access

    For decades, the Strait of Hormuz has served as a critical artery of the global energy system. Despite being only 33 kilometres wide at its narrowest point, this strategic maritime passage has traditionally handled around one-sixth of global oil consumption and nearly one-third of worldwide liquefied natural gas trade.

    Following Iran’s effective closure of the strait in 2026, Gulf states have been compelled to rapidly identify and develop alternative transport corridors. This effort extends beyond safeguarding oil exports from the region to ensuring the continued flow of food, consumer products and industrial supplies that underpin the Gulf’s economies. Read more here. 

    June’s market focus is on Iraq, which is entering mid-2026 with the largest project pipeline in its post-2003 history, encompassing more than $420bn in planned and ongoing investments. However, the country faces an exports collapse that could challenge its ability to deliver this ambitious programme.

    This edition also includes our Top 100 report – an annual ranking published by MEED that identifies the 100 largest publicly listed companies in the Middle East and North Africa based on their market capitalisation.

    In the latest issue, we explore why the UAE’s Opec departure fulfils multiple ends; investigate why insurers will only cover a fraction of war damage to oil and gas facilities; analyse Saudi Arabia’s real estate ownership reforms; and examine the first trade deal between the GCC and a G7 nation.

    We hope our valued subscribers enjoy the June 2026 issue of MEED Business Review. 

     

    Must-read sections in the June 2026 issue of MEED Business Review include:

    > AGENDA: Gulf races to reroute trade

    > EXPORT ROUTES: Regional war boosts oil and gas pipeline project activity

    > CURRENT AFFAIRS: UAE’s Opec departure fulfils multiple ends

    INDUSTRY REPORT:
    MEED Top 100
    > Middle East stocks recover unevenly

    > OIL & GAS: Insurers will only cover a fraction of war damage to oil and gas facilities

    > LEADERSHIP: Building the infrastructure that makes net zero possible

    > LEGAL: Saudi Arabia’s foreign property ownership milestone 

    > TRADE TALKS: UK-GCC trade deal talks conclude

    > IRAQ MARKET FOCUS: 
    > COMMENT: Iraq’s reform window narrows
    > GOVERNMENT: Al-Zaidi takes Iraq’s premiership under US shadow
    > BANKING: Financial challenge tests Iraq’s resolve
    > ECONOMY: Iraq enters era of resilience, reform and rising risks 
    > OIL & GAS:     Iraqi oil and gas sector in crisis
    > POWER & WATER: Focus shifts to delivery of Iraq utilities expansion
    > CONSTRUCTION: Momentum builds in Iraq’s post-war construction sector

    > MEED COMMENTS: 
    >     Institutional capital sees past conflict risk
    > Gulf conflict fails to slow Dubai’s projects push
    > Oman steps up hydrogen plans
    > Bidders assess partnership strategy for utilities projects

    > GULF PROJECTS INDEX: Gulf Projects Index resumes growth trajectory

    > APRIL 2026 CONTRACTS: Middle East contract awards

    > ECONOMIC DATA: Data drives regional projects

    > OPINION: Hoping for a long, cool summer

    > BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17088038/main.gif
    MEED Editorial