Rising trade across the Caspian Sea is strengthening Georgia’s role as a logistics hub and could help the country develop higher-value industries, according to the Asian Development Bank (ADB).
The ADB said Georgia is at an important turning point after a decade of strong economic growth driven by trade openness, investment and its strategic location between Asia and Europe.
The bank said the country now needs a more diversified, higher-value economy that can better withstand regional shocks and meet increasingly stringent environmental standards.
It identified comprehensive special economic zones based on circular economy principles as one way to modernise Georgia’s industrial base, attract green investment and strengthen its position in regional and global value chains.
Georgia’s location on the Trans-Caspian International Transport Route, also known as the Middle Corridor, has become increasingly important as companies diversify supply chains linking East and Central Asia with Europe.
The ADB said Georgia’s challenge is to convert growing transit flows into domestic production and services, rather than primarily transporting goods produced elsewhere.
According to the bank, the country’s existing free industrial zones have yet to deliver that transformation because of weak links with local suppliers, limited skills and knowledge networks, and infrastructure gaps in transport, power, water and digital connectivity.
The ADB said comprehensive special economic zones would combine manufacturing, logistics, services, research and residential areas within a single planned ecosystem, creating stronger links between sectors and providing a more predictable environment for investors.
The bank suggested Tbilisi could focus on green logistics, business services and digital platforms, while Kutaisi could specialise in circular manufacturing supported by renewable energy and research capacity. Poti, it said, could become a centre for recycling, resource recovery and circular logistics linked to maritime trade.
The ADB said Georgia would need coordinated policymaking, targeted investment and an appropriate legal and institutional framework to establish such zones, alongside feasibility studies assessing market demand, infrastructure requirements and environmental risks.
The bank concluded that circular economy-based special economic zones could help Georgia align industrial development with sustainability and regional connectivity, strengthening its position in the global economy as international trade routes continue to evolve.
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U.S. President Donald Trump said negotiations to reopen the Strait of Hormuz are progressing and suggested an agreement with Iran could be reached “soon”.
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