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Georgia hopes 'pop-up' city will become economic hub

By Diana Magnay, CNN
June 13, 2012 -- Updated 0539 GMT (1339 HKT)
STORY HIGHLIGHTS
  • Plans to build city for 500,000 on marshland in Georgia
  • Called Lazika, government wants it to be economic hub for the region
  • Country's economic climate remains difficult with 16% unemployment
  • City proposed to be special economic zone and operate under UK law

Editor's note: CNN's Eye On series is visiting Georgia. Read and watch reports from the country online and on TV until June 24.

(CNN) -- In the marshland just south of the seaside-resort of Anaklia in Western Georgia, the air is often filled with birdsong and the croak of tiny frogs. But added to nature's chorus is the sound of construction, something difficult to escape along Georgia's Black Sea Coast.

Anaklia is still being built and the marshlands are being drained to make way for new five-star hotels. A new railway and airport are planned as the government aims to bring back the tourists who used to come to Anaklia during Soviet times.

But there are bigger plans than that. Georgia's president Mikheil Saakashvili wants to build a whole new city called Lazika. The promotional video for it presents an impression of futuristic skyscrapers, golf courses and high-end luxury for the entrepreneurs who will make this city their home.

Lazika will be a new port on Georgia's Black Sea coast and a special economic zone where businesses can operate under UK law. Rather than attract businesses to established cities the government feels it's easier to start from scratch.

We don't have international investors right now who are saying we'll give you cash but we do have international interest.
Iva Davitaia, Lazika city project

"If we want to be exceptional and if we want to create this hub economy, a place for the rest of the world to come and invest in Georgia, then we have to be creative," says Vera Kobalia, Georgia's 28-year-old economy minister. "And Lazika is being very creative."

And all this in five years, according to Iva Davitaia who admits that there are currently no international investors in the project "but we do have international interest."

Many local residents are enthusiastic as Lazika would mean jobs for a community that struggles to make a living through agriculture. But just 20 kilometers (12 miles) south is Poti, Georgia's main port that others believe should be revived before a new city is built.

Currently the area is sparsely populated and Georgia has a population of around 4.5 million, begging the question 'Where will the 500,000 future Lazika residents come from?'

President Saakashvili is a man who operates at breakneck speed and is quick to defend Lazika.

"We are looking for a new destination not for the sake of spending lots of money like some other governments have done just to show off," he says.

"We only look at it as a way to generate more income, more goods, more services."

Saakashvili it seems is a man who thrives on projects and it's easy to imagine some falling by the wayside, although the country has been transformed since he came to power in 2003.

The Black Sea resort of Batumi has turned from a warlord's paradise into a bustling tourist town where Donald Trump is the latest to invest and the country's parliament building has been moved from its traditional home in the capital Tbilisi to a futuristic new government building in Kutaisi

Yet behind the construction boom Georgia's economic fundamentals remain difficult. Unemployment hovers at 16% and poverty is still widespread. Projects like Lazika sound wonderful but it may have to be seen to be believed.

CNN's Eye On series often carries sponsorship originating from the countries we profile. However CNN retains full editorial control over all of its reports

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