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November 2, 2015 #120

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November 2, 2015, Issue 119

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BE INFORMED, DO BUSINESS

Nana Gurgenidze: AGL is Interested in the Development of the Region Where the Shuakhevi HPP Cascade is Being Built Pg. 6 Sulkhan Khvedelidze: Ferroalloy Production Field has Higher Development and Employment Potential Pg. 4

WHY GENERICS

SECURITY LEADING BANK’S VULNERABLE CHAIN Bank of Georgia Keeps Silent on Theft of Millions of GEL, Bank Shares Keep Depreciating on London Stock Exchange Bank of Georgia has been robbed. According to the bank’s ofﬁcial statement, the criminal case took place on October 24. According to media agencies, felons have stolen 10 million GEL from the bank. Guram Donadze, the former head of the Interior Ministry PR Service, has spread

this information in social networks and media. The felony was committed by Bank of Georgia collectors, Donadze noted. “The collection vehicle was loaded with cash taken from the bank storage. Having left the place, the vehicle disappeared from radars. The head of

Recently the Ministry of Health announced its intentions to introduce generic drugs on the Georgian market. According to the Ministry, this step will regulate the existing prices of drugs in the country. In pharmacology, the original brand drug is an innovative synthesized formula, the creation of which requires at least 10-12 years of research and studying the markets. After their creation, such drugs are protected by copyright. Their owners, as a rule, enjoy a 20-year exclusive right to produce and sell the drug. This often leads to a high price of the drug once it reaches the market. Once the copyright expires, other manufacturers are given a right to also produce this drug. Pg. 10

the collection service shift and his presumable accomplice abandoned the vehicle near Aghmashenebeli Avenue. Traffic police identified the automobile after Bank of Georgia notified the Interior Ministry of disappeared vehicle”, the information spread by Guram Donadze assures. Pg. 9

CONSUMER LOAN REGULATIONS TURNED ADRIFT

GEORGIA-CHINA FREE TRADE BENEFITS

A growth in the consumer loans portfolio – the new challenge before the Authorities that creates problems to the economic development, aggravates social condition, stimulates the imports and consequently, undermines the national currency stability. The consumer loans portfolio exceeds 2.3 billion GEL and this amounts grows on monthly basis. In whole, loans issued to physical bodies exceed 3.3 billion GEL. In the previous years foreign

debts increased and the consumer loans growth in turnover was balancing the volume of GEL and USD, economic experts assert. Starting 2013, the Georgian government started intense payments of foreign liabilities. Therefore, maintaining the existing ﬂow of consumer loans fuels the ﬁnancial exhaustion process in the country. According to economic estimations, if consumer loans are restricted. Pg. 8

The free trade regime introduction between Georgia and China raises questions in several directions: First, will Chinese imports sweep out domestic production? Secondly, what kind of investments will China make in Georgia? And How competitive are Georgian products in the Chinese market and will Georgia’s exports-imports balance with China grow or decline? Let’s answer these questions in the suitable order:

The free trade regime introduction with China will ﬂood the Georgian retail network with Chinese products and domestic production will bear serious losses in terms of sales. Similar assessments are frequently outspoken in our society. Should we expect real threats in this direction? The Chinese production with huge enterprising potential and low ﬁxed expenditures will always defeat Georgian enterprises. Pg. 5

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Pg. 11

Pg. 7

NEWSROOM

2 MAIN EVENTS ECONOMIC GROWTH MARKS 2.7% IN 9 MONTHS

FRANCE BECOMES THE 25TH STATE TO RATIFY GEORGIA’S EU ASSOCIATION AGREEMENT

ccording to preliminary data, real GDP growth rate in September 2015 amounted to 2.2 percentage, in the 3rd quarter of 2015 - 2.5 percent, while in the ﬁrst nine months of 2015 the average real growth totaled 2.7 percent. Data was published by the National Statistics Ofﬁce.

oday the French Senate ratified the Association Agreement (AA) between Georgia and the European Union (EU). The French Parliament is the bicameral legislature of the French Republic, consisting of the Senate and the National Assembly. Prior to the today’s voting the National Assembly approved the AA agreement between Georgia and the EU at its first reading and later the Senate confirmed the document without any amendments. Now a formal part of the process – the French President’s signature – is all that remained of the obligatory processes before ratification of the deal was completed. With this vote France will become the 25th EU country to ratify the Georgia-EU deal. The Georgia-EU Association deal has already been ratified by European Parliament and 24 of 28 EU member states. EU Association deals must be ratified by all 28 EU member countries before they can be fully implemented. Georgia’s AA deal was signed by a country representative and the EU on June 27, 2014 in Brussels.

PRIME MINISTER OF GEORGIA CHAIRS FIRST MEETING OF INVESTORS COUNCIL

he newly established Georgian Investors Council has held its ﬁrst meeting, chaired by Prime Minister Irakli Garibashvili, in Tbilisi. Government ofﬁcials, representatives of local business associations and International Financial Institutions (IFIs) discussed key challenges affecting the business climate in Georgia and how to further support the development of the private sector, according to EBRD.

GEORGIA’S GOV’T STARTS NEGOTIATIONS WITH IRAN ON GAS IMPORTS

he Georgian delegation’s visit in Iran is scheduled for mid-November. During the visit the Iranian gas supply to Georgia will be discussed. Energy Minister Kakha Kaladze said before the start of the Cabinet meeting. “Iran is a very interesting market. You know that today there is a different approach to this country. We should use Iran’s resources. We plan to visit Iran in mid-November, where we’ll hold talks, “- Kaladze said.

GEORGIA DROPPED IN THE WORLD BANK’S EASE OF DOING BUSINESS RANKING

ccording to the World Bank’s Regional Director, this year the methodology for determining the ranking has changed signiﬁcantly that was the cause of the deterioration of the position of Georgia, which in itself, is rather positive in the doing business ranking in which the country occupies 24th place out of 189 possible. In 2014, Georgia was ranked the 15th.

November 2, 2015 #120

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GEORGIA’S ECONOMY IS GROWING AND EXCEEDING THE PROJECTED OUTLOOK OF THE IMF

eorgia’s Gross Domestic Product (GDP) experienced an average real growth of 2.2 percent yearon-year (y/y) in September, said the country’s National Statistics Ofﬁce (Geostat), while IMF expected only two percent growth. Preliminary data revealed the estimated real GDP growth reached 2.5 percent for the third quarter (Q3) of 2015 y/y and 2.7 percent y/y for ﬁrst nine months of 2015. Back in May IMF projected Georgia’s economic outlook as two percent in 2015. The Regional Economic Outlook Update for the Caucasus and Central Asia (CCA), re-

leased on May 19, predicted current growth trends in the CCA region would decline this year as a result of lower commodity prices and the economic slowdown in Russia. Now it is higher than 2.5 percent and it is more than what we have expected,” said IMF Resident Representative in Georgia Azim Sadikov. He said in the coming years Georgia’s economy will grow further and the ﬁgures will be higher than in any other oil importer countries. This is good for the business environment and this is a result of the Association Agreement and all structural reforms,” Sadikov added.

GEORGIA WILL START TRANSITION ON SAVING PENSION SYSTEM FROM 2017

eorgia will start transition on saving pension system from 2017, - Dimitri Kumsishvili, minister of Economy declared, who has been attending regional economic review prepared by International Monetary Fund. Economy minister agrees to IMF’s review, that structural reforms should be carried on and he named pension saving reform, which legislative base and implementation is planned for 2016, while its implementation will start in 2017.

GEORGIA PLANS TO REDUCE EXCISE TAX ON FRUIT-MADE ALCOHOL

he cost of alcoholic drinks made from fruit could become cheaper in Georgia. The Government of Georgia announced this was likely to happen following a reduction in excise tax on alcohol made from fruit from the beginning of 2016. At yesterday’s Government meeting it was announced from January 1, 2016 excise duty for one litre of alcoholic beverages made from fruit, including grapes, would drop from 9.2 GEL to 6 GEL.

GEORGIA HAS FREEDOM ON THE INTERNET, SAYS FREEDOM HOUSE

eorgia is a country with high internet freedom where citizens enjoy low internet censorship, says a United States (US)-based independent watchdog that conducts research and advocacy on democracy, political freedom, and human rights. The annually released Freedom of the Net Report by Freedom House revealed Georgia had liberal freedom on the internet while global trends showed internet censorship had increased.

GEORGIA ELECTED UN HUMAN RIGHTS COUNCIL MEMBER FOR FIRST TIME

eorgia has achieved a historic milestone and been granted a twoyear membership to the United Nations Human Rights Council (UNHRC), making it one of 47 member states responsible for promoting and protecting human rights around the world. Georgia was elected to the two-year membership, which will begin in 2016, at a United Nations General Assembly session on Wednesday. This will be the ﬁrst time Georgia will be represented in the Geneva-based Council. Wednesday’s session was convened to vote on membership for 18 available seats. Georgia was elected after it gained 177 votes for one of the two vacant seats for Eastern Europe. The oth-

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er vacant seat went to Slovenia. UNHRC membership will allow Georgia to more actively participate in reacting to human rights violations around the world as well as take part in various processes at the UN to develop mechanisms of solving these issues. Burundi, Togo, Mongolia and Panama also gained their ﬁrst seats in the UNHRC after this week’s election. The UNHRC was established in 2006 as the United Nations’ arm for human rights issues. It involved 47 elected member states who were responsible for promoting and protecting human rights around the world. The seats on the Council were allocated to regional groups - African States, Latin American

and Caribbean States, Asia-Paciﬁc States, Eastern European States, and Western European and other states. The 18 vacant seats became available to new member states after the states previously occupying the seats vacated them ahead of the new election, per UNHRC rules. The outgoing members were able to stand for re-election with the exception of the United States delegation that had served for two consecutive terms. Georgia’s Foreign Ministry welcomed the election results and said membership to the UNHRC underlined the efforts of the country’s Government to develop a national and international policy of human rights protection.

Editor: Nino Gojiashvili. Mobile phone: 595 050404 Reporters: Nutsa Galumashvili; Lazare Gvimradze; Shiva Parizad. Designer illustrator: Giorgi Magradze. Technical Assistant: Giorgi Kheladze

Source: www.commersant.ge, www.bpi.ge, www.gbc.ge, www.agenda.ge, www.civil.ge

PUBLICITY November 2, 2015 #120

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INTERVIEW 4 FERROALLOY PRODUCTION FIELD HAS HIGHER DEVELOPMENT AND EMPLOYMENT POTENTIAL caucasus business week

November 2, 2015 #120

Georgian launched ferroalloy production and manganese mining in the previous century. This field was contributed by such public figures as Akaki Tsereteli, Niko and Giorgi Nikoladzes. Akaki Tsereteli’s active efforts raised international interest in Georgian manganese. In 1879 large-scale manganese extraction and exports activities started in Georgia. For quick and cheap transportation of manganese from Chiatura, Niko Nikoladze initiated and led the construction of Shorapani-Chiatura railroad. Thanks to his efforts, the first American investor Averill Harriman made the first American investment in Georgia. Giorgi Nikoladze has also contributed to laying a foundation of ferroalloy production in Zestaponi, as well as creating the first enterprise. The 80s are considered a golden age in the field development. The 90s developments have almost completely destructed the field and the industry restoration works started at the beginning of the 21st century. Currently, about 30 ferroalloy products manufacturers operate in Georgia. Several days ago Radisson Hotel hosted a presentation of the Association of Ferroalloy Products Manufacturers and Manganese Miners.

SULKHAN KHVEDELIDZE, a head of the association talks about the purpose of creation of the association and the field’s development perspectives and other interesting issues.

- Several days ago, the Association of Ferroalloy Product Manufacturers and Manganese Miners was founded. How many companies does the association unite? - Currently, the association unites about 20 companies. Five major Georgia-based companies such as Georgian American Alloys, ChiaturManganum Georgia, RusMetal, GTM group and Georgian Manganese are founders of the association. - How was the association foundation idea born? What has actualized the union of these companies and how will the association contribute to the field development? - Only several companies used to operate in the ferroalloy production and manganese mining field for many years. The field development has increased the number of the companies.

Today about 30 companies operate in this field, I believe a joint vision will further promote the field and this need has led us to establishing the association. The foundation of the association will enhance communication with the government and the parliament to discuss the field’s important issues and refine the legislative basis. We also plan to cooperate with the education sector to popularize the field-related trades and professions. I believe jointly with the government, the parliament, international institutions, civil and education sectors we will overcome the existing challenges, develop the field, create new job places, increase the exports volume and grow the Georgian economy. - What is the contribution the ferroalloy production business makes to the Georgian economy and how important is the field development in terms of exports? - Ferroalloy production makes one of the major contributions to the Georgian economy.

The country produces about 300 000 tons of

ferroalloy products every year. The annual exports of ferroalloy products exceeds 700 million GEL. The field is one of the major bodies to draw foreign currency to Georgia. In whole, the field’s total contribution to the economy exceeds 1.1 billion GEL. Currently, the field employs 15 000 persons, but there is also a growth potential. International reports suggest that each employee in our industry creates additional 4.7 job places. - How competitive are Georgian ferroalloy products on the global market and what are the challenges before the field?

USA is one of the good examples of similar support. Under this agreement, Georgian ferroalloy products are exempted from imports tax on the US market. The US Authorities have imposed additional tax to such major manufacturers as India, Australia, African countries and all these circumstances enable Georgian manufacturers to be more competitive and to deeper penetrate the US market, as well as to seek alternative markets too. Competitive capacity on the global market is determined by prices and prices are determined by the prime cost. Reasonable steps will maintain the already

Georgia’s interstate agreement with the USA is one of the good examples of similar support. Under this agreement, Georgian ferroalloy products are exempted from imports tax on the US market. - Naturally, the business is a live process with achievements and challenges. Price downturn continues for many years in the global ferroalloy products market after the demand for iron is declining. Despite this tendency, Georgia is able to make more achievements on the global market and the government should provide efﬁcient support in this respect.

Georgia’s interstate agreement with the

attained niche and enhance our positions on the market. - Who will you cooperate with and are respective negotiations underway? - The association will determine speciﬁc goals and visions to cooperate with the Government and nongovernmental sector. Identiﬁcation of joint goals and compromises will enable us to achieve joint objectives. Moreover, similar associations operate worldwide and we plan to keep close cooperation with them and to take their experience with the aim to establish modern standards in the industry.

On the very ﬁrst day of the association foundation, we received a proposal for cooperation from a Ukrainian similar association. We hope the number of similar offers will further increase. - Employment as a corporate social responsibility – How does the business association handle this direction? - All Georgia-based ferroalloy product manufacturers have already established world standard technologies to care for the health of the employed.

Currently, the field employs about 15 000 persons. The important thing is that factories are situated in regions and local residents in regions are mainly employed, where unemployment problems are sharper compard to the capital city. I reaffirm the field contains higher development potential and this factor implies higher employment potential too. - Not only technologies, but also human resources are necessary for the field development. How popular is this industry in young generation and what are the association’s plans to popularize this sector? - The field popularization is one of the main tasks. The field is being developed and it requires qualified staff to avoid staff deficiency. To this end we plan to cooperate with education institutions and conclude memorandums to foster implementation of special education programs. For example, we can invite the field’s leading specialists to hold workshops and master classes for students. We can also organize probation periods for our students in domestic and foreign manufacturers. The field development naturally creates new job places and successful students will be employed in both domestic and foreign manufacturers.

FREE TRADE

November 2, 2015 #120

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GEORGIA-CHINA FREE TRADE BENEFITS

he free trade regime introduction between Georgia and China raises questions in several directions: First, will Chinese imports sweep out domestic production? Secondly, what kind of investments will China make in Georgia? And How competitive are Georgian products in the Chinese market and will Georgia’s exportsimports balance with China grow or decline? Let’s answer these questions in the suitable order: The free trade regime introduction with China will ﬂood the Georgian retail network with Chinese products and domestic production will bear serious losses in terms of sales. Similar assessments are frequently outspoken in our society. Should we expect real threats in this direction? The Chinese production with huge enterprising potential and low ﬁxed expenditures will always defeat Georgian enterprises, economics expert Emzar Jgerenaia asserts.

This is a signiﬁcant challenge for the Georgian business, because Chinese products are competitive with low prices and ﬁxed expenditures... Therefore, we should determine what problems may be created to our enterprises in terms of competition. Moreover, Chinese products have been already widely represented in the Georgian market. Everything is labeled by MADE in CHINA. Georgian market is open for China, in practice. Therefore, no particular threats should be expected. -Emzar Jgerenaia noted. What sort of investments should Georgia expect? The Chinese party plans to implement largescale projects in several directions. First of all, the construction of a new locomotive building plant in Tbilisi, Anaklia deepwater seaport construction and the Silk Road project implementation. It should be noted, the Hualing free industrial zone is located

on 35.92 hectares in Kutaisi. The Chinese company has arranged the zone as part of the Georgian law on free industrial zone creation. According to the ofﬁcial information, for 5 years Hualing Group has already created wood processing enterprises equipped with modern technologies that successfully operate. The products of these enterprises are exported to the neighboring countries. Prime Minister Irakli Gharibashvili assures the free trade regime with China signiﬁes a huge potential for our country, according to his statement in Beijing.

“The Chinese PM has put forward the initiative for introducing a free trade regime with Georgia. This is a huge potential for our country, our businessmen. This is a 1.600 billion market”. There is no bigger market in the world. This year we have paved the way to the EU 500 million markets. Earlier, we have returned to the Russian market thanks to our pragmatic policy.

“Georgian Wines will Receive Access to the Huge Wine Market” VASIL REVISHVILI a member of the Free Democrats’ economic team. We welcome an establishment of free trade regime with any country; in general, because the opener the country is in terms of trade, the more interesting it is for investors. But the China’s economic might suggests to expect more opportunities than threats from the free trade regime. Our products must be competitive and must make our country competitive in relation to the Chinese products. Stereotypes that China produces low-quality products are outdated. Today Chinese products are traded worldwide and they satisfy high standards. As to Georgian products and our potential in this respect, I would name wine, because along with economic growth Chinese citizens give preference to wines compared to beer and consequently, China is reported to be consuming more wine. Hence, high-quality Georgian wines will receive access to the huge wine market. China produces so many goods that Georgia cannot surprise it by anything, but we can transfer Chinese production to Georgia, the so-called Georgian labeling in the contexct of Geoirgia-EU free trade agreemnent. And this factor will provide Georgia’s economic growth.

The free trade regime with China will increase Georgia’s trade by 9%, while the Chinese imports to Georgia will grow by only 1.7%”. - The Georgian PM noted. Economic expert Emzar Jgerenaia also makes focus on China-Georgia trade relations. His attitude is negative in this respect – „The Georgian export is insignificant and neither 9% nor 90% growth will improve this situation. The country should develop the economy and upgrade the economy to innovative stage. Contemporary economic directions and fields should be strengthened and promoted, despite the free trade regime is introduced or not. The country with destroyed economy and 16 billion economy cannot make benefit from this free trade regime.

„Georgia has nothing to sell, except trash. Georgia’s exports are unimportant, especially the exports to China. It is even

appropriate to count it. Fruits constitute one of the main sources of our exports and neither our relations with China nor EU associate membership nor strategic partnership with the USA will assist similar economy. - Jgerenaia noted. Georgia records extremely negative trade balance with China. According to the JanuarySeptember 2015 report, Georgia’s negative trade balance with China constitutes 360 125 USD. Moreover, China is Georgia’s third major trade partner after Turkey and Azerbaijan. The Time will show whether Georgia’s export strengthens after the country signs a free trade regime agreement with China and customs and tariff duties are removed. However, the government has to do its best to stimulate the domestic entrepreneurship to avoid the experience with Turkey, when only Turkey received beneﬁts from the Georgia-Turkey free trade agreement.

“China is interested in Exporting Products to EU Through Georgia”

“Georgia-China Free Trade Enables Businessmen to use their own Potential”

GIORGI GHAGHANIDZE Tbilisi State University full professor A free trade agreement represents a bilateral interstate agreement on customs-free trade and removing quotation mechanisms. These aspects are main and fundamental sides and we will have free trade, i.e. free access to the Chinese market, and China will have a free access to our market. This decision will integrate both economies and fuel an implementation of other sorts of economic projects too. We can export the products to China that our country produces, i.e. nobody thinks that Georgia will export TV sets to China. The issue is of domestically manufactured products that will easier enter the Chinese market after the free trade regime enactment. First, we should imply wine, alcoholic beverages in general and partly, mineral waters. The Chinese market may be interested only in these products at this stage. Their interest consists in the intention of rapprochement of two economies and this will give certain priorities to the Chinese business. For example, is China interested in the free trade regime with the EU? Who has this regime with the EU? We have this regime. Hence, Chinese investors are interested in this opportunity to organize a certain basis in Georgia and arrange production in Georgia and export their products to the EU market through the GeorgiaEU free trade regime agreement. Naturally, the products must be labeled as MADE IN GEORGIA.

PAATA SHESHELIDZE Economics Expert It is a positive event to set up a free trade regime with any country. The Georgia-EU free trade agreement has enlarged the potential of Georgian exporters. We should expect the same benefits from the Chinese market. The Georgia-China free trade regime will enable this or that category of Georgian businesspersons to find their own niche and make a use of the existing potential in this direction. It is not necessary that we produce some exports goods today. However, tomorrow and the day after tomorrow we can identify what to do and we will do it, but we should have the opportunity and this window must open. In previous years automobiles were Georgia’s major export items, but could anybody imagine automobiles would become Georgia’s first export item? Nobody would say this, but this situation has changed. The situation has changed because Azerbaijan set certain restrictions on imports of automobiles. As a result, Georgia’s export items structure has changed and other products have advanced positions in the rating. Therefore, before we sign a free trade regime agreement with China, the situation may change again and therefore, today it is difficult to name Georgia’s major export item in the Chinese market. We should make focus on acquiring as many opportunities as possible. We have received similar opportunities in the European market and we should work to acquire similar preferences in the USA too. Georgia has unilaterally opened doors to everybody.

INTERVIEW caucasus business week

November 2, 2015 #120

NANA GURGENIDZE: AGL IS INTERESTED IN THE DEVELOPMENT OF THE REGION WHERE THE SHUAKHEVI HPP CASCADE IS BEING BUILT AGL (Adjaristsqali Georgia LLC) is implementing of one of the largest investment projects in Georgia’s infrastructure – the Shuakhevi HPP Cascade”. The size of this investment is 400 million USD. The company’s management is made up of both expatriate and Georgian staff. Nana Gurgenidze is the director of government relations for AGL. Her professional specialty is international law. She obtained her BA in public Administration at the Georgian Institute of Public Affairs and her BA in energy management at New York Institute of Technology in the United States. She has experience working in leading positions in both the public and private sectors, and she has been working in the energy sector for more than 10 years.

- Hello Nana, first of all, I would like to ask you about the importance of the project your company is implementing. What will be the impact of the Shuakhevi HPP Cascade on Georgia and the Georgian energy sector? - First of all, after our hydropower station is operational, Georgia will have a station with an installed capacity of 187 megawatts, which will produce an additional 440 million kilowatt-hours of electricity which, during the winter, will be completely used by the Georgian population. In the summer, when the production of electricity is extensive throughout Georgia, we will export electricity to Turkey and make our contribution to the export potential of Georgia. In addition, our company is interested in the development of the region where the Shuakhevi HPP cascade is being built. We are implementing various social projects which are improving the living conditions of local residents. These projects include infrastructure development projects, including school rehabilitation, in local communities and the support of private small business start-ups. The company consistently cooperates with local residents and local government in order to identify the fields where our involvement will result in real changes to the lives of local residents. I can confidently say that none of the other investors in this field do as much for local people as we do here at Adjaristsqali Georgia LLC, or, as we call it, “AGL.”

Furthermore, it is important to note that approximately 650 Georgian citizens are employed by the project – our modest contribution to the elimination of the country’s unemployment rate. At the same time, we are investing in property and, accordingly, pay property taxes into the accounts of local governments (at this stage this amount equals about 3 million GEL, a ﬁgure will be even higher after the construction is complet-

ed). In doing so, we are supporting the ﬁnancial welfare of the municipalities where our station will be located. In addition, our company is interested in raising the number of skilled professionals in the Georgian energy sector, and we are doing our best to help the country recruit young specialists into the ﬁeld. This year, we selected students from the Technical University of Georgia to work as interns at our company. These students had an opportunity build on their theoretical knowledge by observing the real-world and real-time work that we do here.

As a citizen of this country, I am very proud to represent a company which does so much good in our here because of its high standards of ethics and social responsibility. - Your company is implementing various social projects in highland Adjara. Is this your company’s obligation or its vision? - As I’ve already mentioned, our company is exceptional among investors in Georgia in terms of the good it does for local residents. You would certainly ﬁnd it difﬁcult to name any other private company in Georgia’s energy sector which works so hard and spends so much money implementing different social projects. Accordingly, it has nothing to do with obligations, it’s about our good will and desire to change the living conditions of locals for the better. No one has given us this obligation apart from our founders – the Norwegian company Clean Energy Invest, the Indian power company TATA Power and the International Finance Corporation. All of these organizations feel a very high sense of responsibility towards the countries they operate in. - As director of government relations, to what extent do you feel the support of the Georgian government in the process of implementation of the project? - It’s impossible to implement such a large-

scale hydro energy project without successful cooperation between the government and the private company. Naturally, we feel that the government and especially the economic teams of government ministries have supported us at each stage of the project.. Our main partner is the Ministry of Energy of Georgia. This project managed to overcome many obstacles with the direct effort of this Ministry’s management. In particular, I would like to personally mention the Deputy Ministers of Energy of Georgia, Elia Eloshvili and Irakli Khmaladze, who have been very supportive since the very first stage of the project and whose personal efforts have ensured our success. We have already completed almost 65% of the construction work, and we have not had any setbacks or major delays. We are moving forward full steam! The company also feels a sense of responsibility towards the government and the country as a whole and will try to complete the project in a timely manner and start production of the pure hydro energy which is so important for the country’s future. I would also like to mention the state companies operating in the energy sector: JSC Georgian State Electrosystem, JSC Sakrusenergo, JSC Commercial Operator of Electroenergy System and others. Their close cooperation and dependable support have been essential for our project and our company. Our project is a successful example of private and public partnership in Georgia, and this is crucially significant for the formation of Georgia’s image as reliable country for doing business. - Now, I would like to ask a personal question. Supporting women’s participation in politics and their appointment to decisionmaking positions in business is becoming more and more popular. In your opinion, what does a woman need to achieve success? - I believe that working hard to obtain a proper education and doing your best in your work are fundamental to a woman’s success. There are lots of successful women around me who inspire me, since it is often very difficult to have a suc-

cessful career and a fulﬁlling personal life at the same time, especially when it comes to raising children. That’s why men probably won’t get angry if I say that women require double the effort to compete as equals and achieve success and therefore deserve double the applause. In general, I believe that not only for women, but for everyone, the main key to success is singlemindedness, hard work and, most importantly, consistent optimism. After all, this world stands on the basis of optimism. - Besides you, to what extent are women appointed to high-ranking positions in the energy company where you work as part of the management team? - We are leaders in this area too – women are actively appointed to the management team as well as to different managerial positions. In general, there are a great many successful women in leading positions in the Georgian energy sector. From this point of view, this sector is completely different from other technical ﬁelds in Georgia.

For a long time I have noticed that women are getting more and more interested in technical professions, which makes me very happy. I believe that the long dominant stigma against women in the technical professions will eventually be eliminated in Georgia. Speaking generally, however, improving the level of technical education is very problematic in Georgia, and the promotion of these ﬁelds is probably a key to the future success of the country.

November 2, 2015 #120

CONFERENCE

caucasus business week

EMPLOYMENT EXPERTS DISCUSS JOBS CHALLENGE AT UNDP CONFERENCE IN TBILISI United Nations Development Program’s headquarters in Tbilisi hosted an international conference on Regional Employment in Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. Representatives of the private sector and international organizations such as World Bank, International Labor Organization, and IMF gathered in Georgia’s capital to discuss the challenges that job growth and sustainability in the region faces. The speakers concentrated on the region’s speciﬁcities, the reforms taking place since the 1990’s and their effect on jobs creation in the region. Importance of developing the private sector was stressed as the main engine for creating jobs. Georgia’s PM Irakli Garibashvili gave an opening speech at the Forum, stressing the employment challenge as one of the cornerstones of economic growth for Georgia.

“Full and productive employment for all is one of the new Sustainable Development Goals, which were adopted last month by the member states of the United Nations. Getting people back to work is a complex issue that requires a strong commitment from governments, civil society and communities.”

In my capacity as the Regional Director I work on 6 countries, each of them, very different from one another. Each has a very different legacy from the Soviet time. Some countries are more industrial, like Belorus, others are mainly agricultural – Moldova, Armenia, Georgia. And there is one country whose economy is based very much oil and gas – Azerbaijan. At EBRD, obviously, we recognize the differences between the countries and we set their policies in accordance to the opportunities and the specific needs of the countries. When it comes to employment, what you see is that the less reformed country in terms of economic transformation, is the one with the lowest unemployment rate. This is the case of Belarus, which has the 7080% of its GDP produced by the state. The level of unemployment there is about 1-2%. Probably a bit more today, considering the crisis in Russia, its closest trade partner. But at the same time we see that this is the country with the highest educational skills. It is really one of those countries where there has been a legacy of engineering and academic experience. Belarus also has a very high GDP per capita. Notwithstanding that they have not reformed to a market economy, they have been able to provide very good social network for the population. Now, this may not be sustainable in the longterm, and we see some initiatives coming from the president Lukashenko trying to open the country, and of course we at EBRD welcome this. Other countries like Georgia have the official level of unemployment of 20% that may not totally reflect the gravity of the situation.

AZIM SADIKOV IMF Resident Representative Office in Georgia IMF is committed to increasing economic growth in this region. Our main focus is the financial stability in the world, but we understand very well that there are social factors – unemployment, inequality – which undermine our ultimate objective. The global economy has slowed down this year. The growth has been uneven. Essentially, what we have is advanced economies are recovering, led by the United States, mainly because of the housing market. As a result of fiscal policies, there is some gradual recovery in the Euro area, primarily because of the improvement in the financial sector and also the depreciation of the euro over the last months. In turn, Russia’s economy has contracted this year. The past couple of years have been tough for Russia. This has implications for all the countries of the region, because they have close links to the Russian economy. There are three main themes, or shocks, that are affecting the region. 1) Sharp decline in oil prices 2) Slowdown in Russia 3) Global strengthening of the US dollar

The jobs challenge of course is a very complex problem. It involves growth, it involves having growth that impacts job creation. It involves creating good quality jobs. To understand the jobs challenge we need to understand the context. World Bank put together our regional report “Back to Work.” Results of this report show that to understand the jobs challenge, we have to understand two contextual factors: Speed of Reforms and Demographics. By The Speed of Reforms we mean by what speed has a given country moved from the centrally planned economy to a market economy. The point is that countries go through different stages, or different early speeds in this process. As a result, some countries have done more reforms than others. It is very important to understand this. Based on this, we classify the countries into three groups: the early reformers, the late reforms, and countries that fall somewhere in the middle. The second contextual factor is the Demographics.

RASTISLAV VRBENSKY Manager of the UNDP Regional Hub for Europe and the CIS

lion foreigners crossed the Georgian border, where the population is only 3.7 million. It is one of the very few countries in the world that receives more people than its own population. In such a country I think it is important that there is a policy of speaking foreign language, like English and Russian. Having a full computer literacy along with the language skills is also important for employment. Lack of skilled workers is an issue EBRD found through our annual report. So, on the one hand we have big unemployment and the entrepreneurs saying we cannot find the right people to fill up the positions that are available. Clearly, there is a gap there in training. BRUNO BALVANERA Regional Director at EBRD In the “employed” category we still have people that qualify as “farmers” that are not necessarily farmers in the Indo-European understanding of the word. These are people working their land for subsistence. Therefore, because of this grey zone, I think the problem of unemployment in Georgia is particularly acute. Now, the history of Georgia has also been very different because it is not an industrial economy. It has been the territory that has gorgeous scenery and welcoming people. Georgia is very much the country embodying the concept of hospitality. But the skills of the labor in Georgia may not yet reflect the needs to adapt to the market economy. I think in a country like Georgia that is welcoming more foreign people each year than the population of the country, a foreign language skill is extremely important. This year around 5.5 mil-

At, EBRD we strongly believe that SME’s and the private sector is really the engine of the Economy. Even though what we see as a common characteristic is that the SME portion in a given country’s GDP is well behind that of Europe – we’re talking about 40-50% of the GDP, when in Europe it’s probably 70-80%. This is really the key driver of economy, because small companies tend to be more labor-intensive.

I think in this conference two sides are represented – you have either a majority of countries that are experiencing a rapid aging of the labour force and the other with a lot of young individuals entering labor market. In this regard, Ukraine for instance is expected to lose 20-25% of its work force in near years. On the other hand, the countries that are still experiencing the youth boom are struggling to create jobs for the young people who are entering the market. Based on these two contextual factors, World Bank suggests that countries of this region need to focus on three policies.

OMAR ARIAS World Bank Acting Manager for Europe and Central Asia

1) Sound Macro and Fiscal Framework 2) Enabling the Private Sector for Job Creation 3) Preparing Workers to Take Up New Jobs

REGULATIONS

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November 2, 2015 #120

CONSUMER LOAN REGULATIONS TURNED ADRIFT imported products, making currency operations, not to crediting the economy” - Mikheil Dundua said. It is worth noting, according to the INterPressNews media agency, the NBG President Giorgi Kadagidze noted in 2014 that the main challenge consisted in the growing nonbank ﬁnance sector.

growth in the consumer loans portfolio – the new challenge before the Authorities that creates problems to the economic development, aggravates social condition, stimulates the imports and consequently, undermines the national currency stability. The consumer loans portfolio exceeds 2.3 billion GEL and this amounts grows on monthly basis. In whole, loans issued to physical bodies exceed 3.3 billion GEL. In the previous years foreign debts increased and the consumer loans growth in turnover was balancing the volume of GEL and USD, economic experts assert. Starting 2013, the Georgian government started intense payments of foreign liabilities. Therefore, maintaining the existing flow of consumer loans fuels the financial exhaustion process in the country. According to economic estimations, if consumer loans are restricted, commercial banks will have to draw business projects and invest money in real sector of the economy. Economic expert Shota Gulbani says similar tendencies will not bring favorable results to either the state economy or the consumers. “Only commercial banks and financial institutions that issue consumer loans make a fortune. The problem is the consumer loans are mainly spent on essentials or paying off other financial liabilities, and this process make consumers sink deeper in debts. Consumers do not launch business activities through these loans, they do not make products and consequently, they do not contribute to the economic growth. This

factor aggravates the heavy social situation”, Shota Gulbani said and added our citizens buy imported products through bank loans and directly stimulate maintaining imports at a high level permanently.

“Naturally, the more products are imported from abroad, the more currency will outflow from Georgia, that is, the importsexports balance will worsen and this factor will affect the GEL rate too. I believe the Authorities should interfere in this situation and regulate the finance sector through efficient legislative regulations. In this respect I hope the recently established financial supervision agency will launch operation in the near future and this body should make focus on resolvig similar problematic issues”. Economic expert MIKHEIL DUNDUA also confirms that an excessive volume of consumer loans in the credit structure is a real problem. A growth in refinancing loans portfolio is a genuinely problematic issue, he said. Commercial banks use the money taken from the National Bank of Georgia (NBG) for issuing consumer loans and this money does not go the real sector

of the economy, Mikheil Dundua noted. “The sum that is supplied to commercial banks in the form of a refinancing loan does not go for economic stimulation. This money is used for issuing consumer loans and this scheme further finances a purchase of imports products and finally, this tendency is reflected on the currency operations. Naturally, this factor affects the GEL exchange rate and spoils the national currency. It would be expedient that the NBG launch macroprudent management and restrict crediting the fields that are not related to the economic development. The NBG should also fulfill the IMF recommendations”, Mikheil Dundua said and added: “The IMF has stressed that in 2014 one third of retail loan payers were spending over a half of their incomes on serving the loans and this process was to be restricted and regulated”.

“The last year Kadagidze stressed that consumer laons were a heavy burden on the economy and our population. The National Bank insures a large-sale crediting of commercial banks through issuing reﬁnancing loans, while the purpose of loans are not determined and no macro prudent policy has been formed. Therefore, we have the reality when money goes to purchaisng

“The nonbank ﬁnance sector is quickly growing. To put simply, the issue is of fast installment payment schemes, unregistered credit unions and so on. The industry of pawn-shops accounts for over 0.5 billion, various services of quick istallmet payment schemes exceed 100 million and so on. Therefore, if we take into account so huge volume along with very highinterest rate loans and ordinary bank credits, we will see that the debt burden on our population is very heavy and this factor may become a serious challenge for the whole economy” - Kadagidze noted. The problem and unethical policy is outlined in the fact commercial banks offer new loans to this category of our citizens for covering the old loans, Kadagidze added. “As a rule, the problem resolution is of temporary, not fundamental character. We will provide adequate reaction to similar cases. At the same time, there is another factor and I would like to ask the consumers and warn and urge them to read not only agreements very well, but show maximum caution in using such products as installment payment schemes, credit cards, payment of loans”, Kadagidze noted. The reality is following: the problem Kadagidze has emphasized is deepening, but the NBG has not provided adequate reaction to it. The Finance Ministry also proves the relevance of the problem, but nor the government has taken any steps in this direction. Hence, the ﬁnance sector seems to be turned adrift.

Bank Sector’s Opinion

OTAR NADARAIA NBG Vice President

ASMUS ROTNE ProCredit Bank director general

DAVID TSAAVA Basisbank director general

SHOTA CHKOIDZE Halyk Bank deputy director general

„The choice of a distinct person, in this case, a consumer, makes sense. If the consumers decide to buy a product through an installment payment scheme and to pay later, they should have such an opportunity. At the same time, the crediting market’s current conditions should be also taken into account. Activity has declined, while liquidity is high. Consequently, commercial banks issue credits for business projects without problems. The bank sector is able to fully satisfy the demand of both private and corporate clients. Adequately to the demand, commercial banks issue credits for a purchase of furniture and enterprising equipment without sectoral restrictions”.

“There are a few sectors in Georgia that produce export products (wine, mineral waters, filbert) and commercial banks actively finance these products. The country has real potential and this list should increase, but only commercial banks show such a desire and the reality is different. Loan products are issued due to the demand, including consumer loans. Borrowers’ risks are maximally insured in the loan-issuing process, in line with supervisory norms. The supervision mechanism satisfies the highest standards in Georgia and the country demonstrates special practice and experience in the Region in this respect”.

“I see no problem in crediting physical bodies. The bank makes focus on consumers. Hence, the supply is adequate to the demand. If the client needs an installment payment scheme, the bank offers a corresponding bank product. At the same time, I would not say the only consumer loans are in demand. The business crediting also grows, including the micro loans portfolio. The growing demand is reported in all segments with various correlations due to sectors”.

“Retail lending plays an important role in the development of economy of the country, whilst the care must be taken to ensure the appropriate lending standards are employed and borrowers’ solvency taken into account in a way borrowers being able to face their ﬁnancial commitments. It is obvious that proper retail lending has not to be limited as in turn it develops business sector further. Mortgage and consumer loans in Halyk Bank Georgia are granted using balanced conservative approaches, thus making the portfolio of the bank the one of high quality.”

November 2, 2015 #120

BANK

caucasus business week

SECURITY LEADING BANK’S VULNERABLE CHAIN

Bank of Georgia Keeps Silent on Theft of Millions of GEL, Bank Shares Keep Depreciating on London Stock Exchange The information spread by media agencies has further mystiﬁed the situation. The INFO9 news agency reports the money has been already withdrawn from Georgia through the Larsi customs checkpoint, but this process would be impossible without support of the customs checkpoint’s staff if recall that 10 million GEL is over 100 kilogram in weight and it would be difﬁcult to hide the sizes of this consignment. However, according to the second variant the sum remains in Georgia, but law enforcers have not announced an intense search regime, nor called on the society to notify a police station about presumable whereabouts of the suspects.

ank of Georgia has been robbed. According to the bank’s official statement, the criminal case took place on October 24. According to media agencies, felons have stolen 10 million GEL from the bank. Guram Donadze, the former head of the Interior Ministry PR Service, has spread this information in social networks and media. The felony was committed by Bank of Georgia collectors, Donadze noted. “The collection vehicle was loaded with cash taken from the bank storage. Having left the place, the vehicle disappeared from radars. The head of the collection service shift and his presumable accomplice abandoned the vehicle near Aghmashenebeli Avenue. Traffic police identified the automobile after Bank of Georgia notified the Interior Ministry of disappeared vehicle”, the information spread by Guram Donadze assures. It is worth noting Bank of Georgia has confirmed the fact of theft, but the statement raised

more questions in the society. “Concerning the media information we would like to declare that the 24th of October 2015 has recorded the fact after which legal proceedings were instituted on charge of theft. Bank of Georgia had fully insured the losses inﬂicted by this felony. Bank of Georgia continues operation in an ordinary regime and the mentioned fact has not caused any frustration. The bank continues close cooperation with the investigating bodies and for sake of the investigation we would abstain from unveiling further details”, the special statement of Bank of Georgia reads. This is a major and mysterious theft in the history of independent Georgia. Despite the huge amount of the stolen sum, law enforcement bodies have released no statement on the issue, while similar criminal cases should be widely covered in media along with outlining a presumable circle of felons to alleviate arresting the criminals. A week has passed since the fact and the silence goes on.

The bank-employed collectors seemingly stole the sum and they managed to conceal themselves. This signiﬁes the felons have been identiﬁed. The question rises why a security police automobile was not accompanying the collection vehicle loaded with such an amount of money. As a rule, the security police automobiles accompany Bank of Georgia collection vehicles in the city to ensure their security. Bank of Georgia is trying to carefully conceal the historical theft, but the fact is since October 24 Bank of Georgia shares are depreciating at the London Stock Exchange every day, while the price of the shares was rising through October. Starting October 24 the price is declining every day. For the last 4 days, the price of Bank of Georgia shares has fallen by 6%.

Commercial banks should provide higher level of transparency compared to other private companies, because the activity of a credit institution largely depends on public conﬁdence. If the bank is not creditworthy, nobody will either save deposits or take loans there. Consequently, wrapping this historical theft into mysterious curtain will reap only negative results against the bank and the BOG shares depreciation at LSE proves this consideration. Surprisingly, Bank of Georgia does not realize this factor.

It is interesting that the bank keeps silent for these days concerning the amount of the lost sum, because Bank of Georgia has neither approved nor dismissed the information on 10 million GEL stolen. It is worth noting that in 2014 the Global Finance international edition named Bank of Georgia as the most secured bank in the country. The Global Finance has identiﬁed the safest banks due to long-term credit ratings of Moody’s, Standard & Poor and Fitch Ratings, as well as due to total assets of commercial banks. It is important that the companies should have clear opinion on how strong and stable their partner banks are, the Global Finance editor said. Bank of Georgia may be the safest bank in Georgia in terms of credit rating and total assets, but it is clear the bank is vulnerable is terms of security. Even more so, for the last years Bank of Georgia has suffered from many robberies and thefts. Thus, Georgia’s strongest and largest commercial bank turned our vulnerable in terms of security services.

HEALTHCARE

November 2, 2015 #120

WHY GENERICS caucasus business week

On Georgia’s Pharmaceutical Market, 70% are Generic drugs VALERI KVARATSKHELIA Deputy Minister of Healthcare Pharmaceutical companies did bring Generic drugs before, and will bring in future as well, If we had only original and brandy medicines on our market, prices would be much more expensive, some countries banned original drugs and oriented on Generic drugs by doing so they decreased the expenses. Generics have their positive sides, with cost. that’s why bringing new ones is not an issue. We need to expand its spectrum. Today on Georgia’s pharmaceutical market 70% are Generic and only 30% are band drugs. Generics cost 20-30 percent cheaper than the original drugs. The state should not interfere in the business and adhere this principle, however, many of the more of developed countries made the decision before us that if state buys drugs, they have to be Generic. Consequently, the quality control of drugs should be at a high level, which is exactly this type of drug quality control. Therefore, in the near future the laboratory of quality control of drugs will start functioning in the country.”

Generics Function the Same Way as Brand Drugs Do Recently the Ministry of Health announced its intentions to introduce generic drugs on the Georgian market. According to the Ministry, this step will regulate the existing prices of drugs in the country. In pharmacology, the original brand drug is an innovative synthesized formula, the creation of which requires at least 10-12 years of research and studying the markets. After their creation, such drugs are protected by copyright. Their owners, as a rule, enjoy a 20year exclusive right to produce and sell the drug. This often leads to a high price of the drug once it reaches the market. Once the copyright expires, other manufacturers are given a right to also produce this drug.

Creation of generics no longer requires expensive studies to be conducted. After the biological equivalence to the reference drug is proven, second, third, etc., generations of generics can be created. Attaining this level of advancement would be a revolutionary step for the Georgian pharmacology.

How Well is Society Informed About Generics?

Affordable Pricing Is Driving the Generic Drug Market By regulation, a generic drug must contain the same active ingredients as the original formulation. The active ingredient is any compound that has a medicinal property that makes a drug work—to treat, cure, or prevent any disease. “Bioequivalent” means that the active ingredient works in the same way and in the same amount of time as the branded drug. Also, generics should have the same label as the branded drug. The label includes drug information like intended use, adverse reactions, major safety risks, general warnings, recommended dosages, and routes of administration. This assures consumers that the medicines are proven to be safe and effective. However, in some medications—like anti-epileptic drugs and blood thinners—generic drugs might not be as effective as branded, or patented, drugs.

We Import Generic Drugs from US and EU DAVID KILADZE Founder of GPC Generics are created for decreasing medical costs in pharmaceutical sector. Expending Generic spectrum means that affordability on many drugs will increase. When our company has started introducing Generic drugs, we applied such as US and EU markets that have strict quality control over drugs. We implement import from those markets, however drugs undergo series of control in Dutch laboratory. We have set out monitoring and tracking system with our American partners, where we are obliged to inform each tablet movement in our pharmacy network. If these systems work properly, then the quality of drug control will be high.

“Given Georgia’s social conditions, our patients often demand lower cost drugs because they can not afford the brand medicine. When we offer generic drugs to our patients as an optimal way-out, we often have to convince them that the generics are as effective as the brand medicines and are not harmful. This is because the Georgian pharmacological market is not developed enough to have a wide variety of generics. People are not familiar with such drugs, hence they feel uneasy about them,” Doctor Tinatin Gigauri told CBW. Generics range from low, average to high quality, depending on the producing country, production process and the appropriate certiﬁcation. Increasing demand on generics in Georgia is believed to make the existing pharma companies decrease prices on their brand medicines.

Do You Know What Generic Drug is? Analytic center “Caucasus Ranking” has conducted a survey, aimed at analyzing the level of how society is informed about Generic drugs. Georgia’s 400 citizens were chosen for this survey, from which 83% had never heard about Generics and only 28% informed citizens were purchasing these medicines. “Together with telephone survey in Tbilisi, quantitative studies are conducted in Batumi and Kutaisi for pharmaceutical market. It is clear that consumers cannot distinguish the brand and generic drugs and are not interested in the production place of drugs and their patent date. However, more than 2/3 of Georgia’s pharmaceutical sector comes from the generic drugs, “- Giorgi Kapanadze, Director of Caucasus Ranking noted.

BANKING NEWS

November 2, 2015 #120

caucasus business week

FINCA BANK GEORGIA IMPLEMENTS PERSONAL BANKING SERVICE

INCA Bank Georgia has opened it’s ﬁrst personal banking branch at Chavchavadze ave. 52. Service center was opened by CEO of FINCA bank, Vusal Verdiyev and deputy mayor Irakli Lekvinadze with chairman of Tbilisi city assembly Giorgi Alibegashvili. According to Vusal Verdiyev, personal banking service center offers it’s customers full personal banking services. He noted that opening of this branch is a very signiﬁcant step forward.

“The opening of the personal banking branch represents an important step for FINCA Bank Georgia as it sustains and expands the services we provide for our clients while staying true to the FINCA mission. The deposits we offer are used for ﬁnancing micro and small enterprises, helping small entrepreneurs to increase incomes and create jobs.”

Customers of FINCA bank personal banking line will have personal bankers and will join more than 80 000 bank clients throughout the whole country. At the same time, the bank presents a completely new, innovative service — a library where customers will enjoy a pleasant environment. As a driving force for ﬁnancial inclusion in the country, FINCA Bank Georgia, JSC has over 17 years of experience in the country and has contributed to the development of small businesses and improvement of many lives. FINCA Bank Georgia encourages development of savings culture, as savings contribute to the creation of a stable social and economic environment for future generations.

PASHA BANK - THE SPONSOR OF THE MASTER CLASS BY TIME LORD

ASHA Bank sponsored a long-awaited master class on time management, which was held on October 31st at Hotels and Preference Tbilisi. The attendees were given the opportunity to learn about the time management methodologies by a well-known writer and business consultant David Allen, also known as Time Lord. This is one of the several important projects that PASHA Bank has sponsored during its three years of operation in Georgia - being a ﬁnancial institution that offers corporate and investment banking services to large and medium enterprises, PASHA Bank acknowledges the responsibility to contribute to the professional and organizational development in the country, thus it has been sponsoring various business-related conferences and seminars since its inception. David Allen is mostly known for his bestseller “Getting Things Done” that sold 2 million cop-

ies and brought its author worldwide recognition. David Allen possesses his own time management tool – GTD, which he gladly shared with Georgian professionals. Representatives of different sectors attended the master class and got acquainted with the up-to-date principles of time management. ‘Consultancy company Prospect aims to bring successful and top-rated speakers to Georgia. Inviting David Allen to hold a master class in Tbilisi serves this very purpose and has raised positive feedback and interest among Georgian professionals from the day of the announcement of this event. I am certain that this master class provided specific knowledge and techniques for managing tasks without stress, which practically means being more productive too. We strongly believe that all the expectations of the attendees were totally met,’ commented the organizer, Guga Kobakhidze. “We believe that the development of the

country’s business and economy signiﬁcantly depends on the professional growth of the experienced people who are involved in taking important decisions for their companies on daily basis, as well as the young professionals who are just beginning to contribute to various business sectors. Master class by Time Lord should deﬁnitely be useful and interesting to all attendees and we are more than happy to support this event.” – says Anano Korkia, Head of PR and Marketing Department at PASHA Bank Georgia. Among the latest PASHA Bank sponsorships are the following events that aim at the professional and organizational growth: - Business Café – A mutual project of PASHA Bank and Insource - Spotlight 2015 – Country’s main marketing event - Seminar “A New Management Paradigm for a New Age of Managers” and “4D Branding”.

THE READERS OF “BANKS AND FINANCE” CONSIDER THAT TBC BANK PROVIDES THE BEST INTERNET BANKING SERVICE

ccording to the newspaper “Banks and Finance” , TBC bank provides the best internet banking service. A survey was conducted on the web site of the newspaper –www.bfm.ge. 42% of the surveyed consider that TBC bank provides the best internet banking service among the commercial banks operating in Georgia. According to the results of the survey, “Bank of Georgia” takes the second place, its internet banking service was described as the “best” by 30% of the surveyed. The survey involved 15 banks operating in

Georgia and providing internet banking system. “ProCredit Bank” appeared among the three top banks providing the best internet banking service – 9% . According to the survey the positions among the banks providing internet banking service were distributed as follows: “Liberty Bank”-5%, “VTB Bank –Georgia -3%, “ Kor Standard Bank” – 2%, “Cartu Bank” -1%, “Azerbaijan International Bank –Georgia -1%, “Basisbank” -1%, “Capital bank” 1%, “Pasha Bank –Georgia” -1%, “Progress bank” -1%, “Bank Republic “-1%, “Silk Road Bank” -1%, “Halyk Bank –Georgia”-1%.

PUBLICITY caucasus business week

November 2, 2015 #120

GVARAMIA IS PROVOKING HIS DETENTION

ustavi 2 TV company director general Nika Gvaramia has spread misinformation as if the Interior Ministry had mobilized special detachments attack the Rustavi 2 TV company building. Gvaramia has spread this misinformation to mislead the public opinion and escalate tensions, the Georgian Interior Ministry’s special statement reads. “We stress again that the Interior Ministry is to defend the public peace and security. We urge all interested parties and persons to abstain from spreading ungrounded and unveriﬁed information”, the Interior Ministry statement reads. Neither the existing Authorities nor magistrate Urtmelidze seek and adhere to legal grounds, Nika Gvaramia answered the question about what legal grounds would authorize a special detachment to enter the TV company. Moreover, Nika Gvaramia asserts that his team will use all instruments and measures not to let enforcement bodies enter the company. Rustavi 2 serves public interests and justice, he said and added that he would apply all constitutionally guaranteed rights to protect the freedom of citizens. Gvaramia also urged citizens who appreciate not Rustavi 2, but the freedom of speech and free future of this country, to defend Rustavi 2 TV company, a main and only independent media channel in Georgia. Despite this statement, Gvaramia was announcing a trial completion at all sittings, but, as a lawyer he knows very well that the trial is not expected to end today, because the parties have not ﬁnished speeches as provided by the procedural norms. Therefore, lawyers and experts say that Nika Gvaramia deliberately tenses the situation and he is trying to escalate the process in the interests of the United National Movement (UNM). Lawyer Irma Chkadua has told the FOR. Ge news agency that Gvaramia’s statements are not related to freedom of speech, because Gvaramia himself misses the constitutional

space when he asserts without substantiation that a special detachment plans to attack the TV company. “Gvaramia has gone out of the constitutional space and his statement is a part of soap operas that he is accustomed to show us such as the socalled Spies Case, Modeled Chronicle and so on. We also remember the statement made by Gvaramia when the special detachment dispersed Imedi TV company in 2007. Nobody rushes into Rustavi 2, but Gvaramia strives for similar scenario through his statements and activities. Gvaramia and his team are expected to stage various provocations to draw the attention of the international community”, Irma Chkadua noted. Nika Gvaramia’s statement and behavior signify he plans to inspire provocations, she added. Expert Soso Tsiskarishvili noted the hysterical background that accompanies the trial is a result of well-planned strategy. The more hysterical the situation is, the more content the inspirers of this turmoil will be. “They did not expect the video footage would appear again. Therefore, the planner of this hysteria and provocation is trying to deepen this hysteria. Our citizens do not trust these manipulations over freedom of speech. It is interesting what these journalists have to say during the last three months that they could not say? If these manipulations were true, Rustavi 3, Rustavi 4 and Rustavi 5 TV companies would have been already established”, Soso Tsiskarishvili said. The Rustavi 2 director general’s tricks are not convincing and I believe Gvaramia has missed the legal space, Soso Tsiskarishvili added. “We remember November 7, 2007, when this Mr. and his Authorities accused reporter Natia Mikiashvili of almost the whole coup d’état. As a result, Imedi TV company was dispersed. Naturally, Gvaramia does not want to seem as a spoiled balloon and he is trying to give more heroic appearance to this failed game”, Soso Tsiskarishvili told the FOR.ge.

WORLD NEWS

November 2, 2015 #120

caucasus business week

CHINA ENDS ONE-CHILD POLICY WITH ALL COUPLES ALLOWED TWO CHILDREN

n China, couples are allowed to have two children instead of only one child, as the Communist Party aims to double the country’s GDP per capita by 2020, Chinese news agency Xinhua reports. Xinhua news agency announced the end of the policy in a communique issued by the ruling Communist Party after a four-day meeting of China’s leaders. China’s one-child policy was introduced in the late 1970s as Beijing sought to stem a rapidly growing population, and ofﬁcials still claim it has been a major factor behind the country’s growing prosperity. Chinese experts expect the country’s working population — estimated by the government to be roughly 915 million at the end of 2014 — to drop by around 40 million by 2030. By 2050, 30 per cent of Chinese will be age 60 or over, the United Nations estimates, versus 20 per cent worldwide and 10 per cent in China in the year 2000. The policy had in the past been sometimes brutally enforced by ofﬁcials keen to meet Government quotes on birth control.

BP Chooses Subsea Work Contractor in Azerbaijan

ritish Wood Group service company has been chosen as a contractor of BP for rendering engineering services for the subsea infrastructure of BP in the Gulf of Mexico, on the Continental Shelf of Great Britain and Norway and offshore oil and gas fields of Azerbaijan, the company said Oct. 29. The five-year contract envisages Wood Group Kenny’s work on the operating system, software and engineering support, as well as the underwater project management. “The contract will enter into force upon signature,” the statement said. “The work in Azerbaijan will be controlled by the company’s Baku office.” Wood Group is the British oil and gas service company headquartered in Aberdeen. The company’s revenues amounted to $6.57 billion in 2014.

Another Turkey Boom Unlikely Even If New Government Ends Turmoil

hile Turkey’s parliamentary elections on Sunday may yet put an end to the recent political turmoil, these charts suggest that a new government will be unable to restore the country’s economic heyday. Though many of Turkey’s recent economic woes have been blamed on political uncertainties, the reality is that the economy has been slowing for some time. It grew an average of more than 6 percent a year during the first half of the AK Party’s 12 years in government, but that slowed to about 3 percent in the second half. What’s more, the domestic consumption that drove the last economic rebound after the global financial crisis of 2009 is unlikely to be repeated. Unemployment has risen, and Turks are heading to the polls with consumer confidence at its lowest level in more than six years. The government has failed to reach its growth target every year since 2012, and the International Monetary Fund predicts 2.9 percent growth next year and 3.5 percent by 2020. That would put Turkey’s ambition to be a $2 trillion economy by 2023 all but out of reach.

Construction of Armenia-Georgia Transmission Line Continues

orks on the construction of power transmission line between Armenia and Georgia that are funded by KfW bank, continued successfully. This was stated during the meeting of Armenian Energy Minister Yervand Zakharyan, the EU delegation to Armenia headed by Ambassador Piotr Switalski , members of KfW delegation Sandra Lutz and Enrico Spiller. The Minister thanked KfW Bank for assistance in implementing programs in Armenia’s energy sector. It was noted that construction of power transmission line between Armenia and Georgia continues successfully. The Minister stressed importance of the program in terms of regional energy integration. The sides discussed a number of issues relating to the implementation of the program.

Iran to Appoint First Female Ambassador

ran will appoint its first female ambassador abroad since the Islamic Revolution in 1979, the semi-official Fars and Mehr news agencies said late on Monday, citing unspecified reports, Marzieh Afkham, the incumbent spokeswoman for the foreign ministry, will leave Tehran next month to serve as ambassador to Malaysia, Xinhua news agency quoted the report as saying. The post would go to Foreign Ministry spokeswoman Marzieh Afkham, one of Iran’s most high-profile female public figures, the second female ambassador in the history of Iran and the first since the 1979 Islamic Revolution. The only other female ambassador was Mehrangiz Dolatshahi, who served in Denmark in the 1970s. A strong defender of human and women’s rights — two areas in which Iran is frequently criticized as having antiquated policies — Afkham has broken Iran’s gender barrier before, having become a spokeswoman for the country’s foreign minister in 2013. At the time, Iran scholar Farideh Farhi noted what a groundbreaking move it was to appoint Afkham to such a lofty, visible position. “This is an extremely bold move by Foreign Minister [Mohammad Javad] Zarif to appoint a woman to such high-ranking and politically visible post,” Farhi told CNN.

PUBLICITY caucasus business week

November 2, 2015 #120

Embassy United States of America Embassy 11 Balanchivadze St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 53-23-34 E-mail: tbilisivisa@state.gov; askconsultbilisi@state.gov United Kingdom of Great Britain and Northern Ireland Embassy 51 Krtsanisi Str., Tbilisi, Tel: 227-47-47 E-mail: british.embassy.tbilisi@fco.gov.uk Republic of France Embassy 49, Krtsanisi Str. Tbilisi, Tel: 272 14 90 E-mail: ambafrance@access.sanet.ge Web-site: www.ambafrance-ge.org Federal Republic of Germany Embassy 20 Telavi St. Tbilisi Tel: 44 73 00, Fax: 44 73 64 Italian RepublicEmbassy 3a Chitadze St, Tbilisi, Tel: 299-64-18, 292-14-62, 292-18-54 E-mail: embassy.tbilisi@esteri.it Republic of Estonia Embassy 4 Likhauri St., Tbilisi, Tel: 236-51-40 E-mail: tbilisisaatkond@mfa.ee Republic of Lithuania Embassy 25 Tengiz Abuladze St, Tbilisi Tel: 291-29-33 E-mail: amb.ge@urm.lt Republic of Latvia Embassy 16 Akhmeta Str., Avlabari, 0144 Tbilisi. E-mail: embassy.georgia@mfa.gov.lv Greece Republic Embassy 37. Tabidze St. Tbilisi Tel: 91 49 70, 91 49 71, 91 49 72 Czech RepublicEmbassy 37 Chavchavadze St. Tbilisi ;Tel: 291-67-40/41/42 E-mail: czechembassy@gol.ge Web-sait: www.mzv.cz Japan Embassy 7 Krtsanisi St. Tbilisi Tel: +995 32 2 75 21 11, Fax: +995 32 2 75 21 20 Kingdom of Sweden Embassy 15 Kipshidze St. Tbilisi Tel: +995 32 2 55 03 20 , Fax: +995 32 2 22 48 90 Kingdom of the Netherlands Embassy 20 Telavi St. Tbilisi Tel: 27 62 00, Fax: 27 62 32 People’s Republic of China Embassy 52 Barnov St. Tbilisi Tel: 225-22-86, 225-21-75, 225-26-70 E-mail: zhangling@access.sanet.ge Republic of Bulgaria Embassy 15 Gorgasali Exit, 0105 Tbilisi, Georgia Tel: +995 32 291 01 94; +995 32 291 01 95 Fax: +99 532 291 02 70 Republic of Hungary Embassy 83 Lvovi Street, Tbilisi Tel: 39 90 08; E-mail: hunembtbs@gmail.com State of Israel Embassy 61 Agmashenebeli Ave. Tbilisi Tel: 95 17 09, 94 27 05 Embassy of Swiss Confederation’s Russian Federation Interests Section Embassy 51 Chavchavadze Av., Tbilisi Tel: 291-26-45, 291-24-06, 225-28-03 E-mail: RussianEmbassy@Caucasus.net Ukraine Embassy 75, Oniashvili St., Tbilisi Tel: 231-11-61, 231-12-02, 231-14-54 E-mail: ukraina_pu@wanex.net; emb_ge@mfa.gov.ua Consular Agency: 71, Melikishvili St., Batumi Tel: (8-88-222) 3-16-00/ 3-14-78 Republic of Turkey Embassy 35 Chavchavadze Av., Tbilisi Tel: 225-20-72/73/74/76 E-mail: turkemb.tbilisi@mfa.gov.tr Address: 8, M. Abashidze str. Batumi, Georgia; tel: (8-88-222) 7 47 90 Republic of Azerbaijan Embassy Kipshidze II-bl . N1., Tbilisi Tel: 225-26-39, 225-35-26/27/28 E-mail: tbilisi@mission.mfa.gov.az Address: Dumbadze str. 14, Batumi Tel: 222-7-67-00 Fax: 222-7-34-43 Republic of Armenia Embassy 4 Tetelashvili St. Tbilisi Tel: 95-94-43, 95-17-23, 95-44-08 E-mail: armemb@caucasus.net Web: www.armenianembassy.ge Consulate General, Batumi Address: Batumi, Gogebashvili str. 32, Apt. 16 Kingdom of Spain Embassy Rustaveli Ave. 24, I ﬂoor, Tbilisi Tel: 230-54-64 E-mail: emb.tiﬂis@maec.es Romania Embassy

TBILISI GUIDE

caucasus business week

7 Kushitashvili St., Tbilisi Tel: 38-53-10; 25-00-98/97 E-mail: ambasada@caucasus.net Republic of Poland Embassy 19 Brothers Zubalashvili St., Tbilisi Tel: 292-03-98 Email:tbilisi.amb.sekretariat@msz.gov.pl Web-site: www.tbilisi.polemb.net Republic of Iraq Embassy Kobuleti str. 16, Tbilisi Tel: 291 35 96; 229 07 93 E-mail: iraqiageoemb@yahoo.com Federative Republic of Brazil Embassy Chanturia street 6/2, Tbilisi Tel.: +995-32-293-2419 Fax.: +995-32-293-2416 Islamic Republic of Iran Embassy 80, I.Chavchavadze St. Tbilisi, Tel: 291-36-56, 291-36-58, 291-36-59, 291-36-60; Fax: 291-36-28 E-mail: iranemb@geo.net.ge United Nations Ofﬁce Address: 9 Eristavi St. Tbilisi Tel: 225-11-26/28, 225-11-29/31 Fax: 225-02-71/72 E-mail: registry.geo@undp.org Web-site: www.undp.org International Monetary Fund Ofﬁce Address : 4 Freedom Sq., GMT Plaza, Tbilisi Tel: 292-04-32/33/34 E-mail: kdanelia@imf.org Web-site: www.imf.ge Asian Development Bank Georgian Resident Mission Address: 1, G. Tabidze Street

Freedom Square 0114 Tbilisi, Georgia Tel: +995 32 225 06 19 E-mail: adbgrm@adb.org; Web-site: www.adb.org World Bank Office Address : 5a Chavchavadze Av., lane-I, Tbilisi, Georgia ; Tel: 291-30-96, 291-26-89/59 Web-site: www.worldbank.org.ge Regional Office of European Bank for Reconstruction and Development Address: 6 Marjanishvili St. Tbilisi Tel: 244 74 00, 292 05 13, 292 05 14 Web-site: www.ebrd.com Representation of the Council of Europe in Georgia Address : 26 Br. Kakabadze, Tbilisi Tel: 995 32 291 38 70/71/72/73 Fax: 995 32 291 38 74 Web-site: www.coe.ge Embassy of the Slovak Republic Address: Chancery: 85 Irakli Abashidze St. Tbilisi, 0162 Georgia Consular Office: 38 Nino Chkheidze St. Tbilisi, 0102 Georgia Phone: 2 222 4437, 2 296 1913 e-mail: emb.tbilisi@mzv.sk

Hotels in Georgia TBILISI MARRIOTT Tbilisi , 13 Rustaveli Ave. Tel: 77 92 00, www.marriott.com COURTYARD MARRIOTT Tbilisi , 4 Freedom Sq. Tel: 77 91 00 www.marriott.com RADISSON BLU HOTEL, TBILISI Rose Revolution Square 1 0108, Tbilisi Tel: +995 32 402200 radissonblu.com/hotel-tbilisi RADISSON BLU HOTEL, BATUMI Ninoshvili Str. 1, 6000 Bat’umi, Georgia Tel: 8 422255555 http://radissonblu.com/hotel-batumi SHERATON METECHI PALACE Tbilisi , 20 Telavi St. Tel: 77 20 20, www.starwoodhotels.com SHERATON BATUMI 28 Rustaveli Street • Batumi Tel: (995)(422) 229000 www.sheratonbatumi.com HOLIDAY INN TBILISI Business hotel Addr: 1, 26 May Square Tel: +995 32 230 00 99 E-mail: info@hi-tbilisi.com Website: http://www.hi-tbilisi.com BETSY’S HOTEL With Marvellous Tbilisi Views Addr: 32/34 Makashvili St. Tbilisi Tel: +995 32 293 14 04; +995 32 292 39 96 Fax: +995 32 99 93 11 E-mail: info@betsyshotel.com Website: http://www.betsyshotel.com

Restaurants CORNER HOUSE Tbilisi, I. Chavchavadze ave. 10, Tel: 0322 47 00 49; Email: contact@cornerhouse.ge RESTAURANT BARAKONI Restaurant with healthy food. Georgian-European Cuisine Agmashenebeli Alley 13th Phone: 555 77 33 77 www.barakoni.com CHARDIN 12 Tbilisi , 12 Chardin St. , Tel: 92 32 38 CAFE 78 Best of the East and the West Lado Asatiani 33, SOLOLAKI 032 2305785; 574736290 BREAD HOUSE Tbilisi , 7 Gorgasali St. , Tel: 30 30 30 BUFETTI - ITALIAN RESTAURANT Tbilisi , 31 I. Abashidze St. , Tel: 22 49 61 DZVELI SAKHLI Tbilisi , 3 Right embankment , Tel: 92 34 97, 36 53 65, Fax: 98 27 81 IN THE SHADOW OF METEKHI Tbilisi , 29a Tsamebuli Ave. , Tel: 77 93 83, Fax: 77 93 83 SAKURA - JAPANESE RESTAURANT Tbilisi , 29 I. Abashidze St. , Tel: 29 31 08, Fax: 29 31 08 SIANGAN - CHINESE RESTAURANT Tbilisi , 41 Peking St , Tel: 37 96 88 VERA STEAK HOUSE Tbilisi , 37a Kostava St , Tel: 98 37 67 BELLE DE JOUR 29 I. Abashidze str, Tbilisi; Tel: (+995 32) 230 30 30 VONG 31 I. Abashidze str, Tbilisi Tel: (+995 32) 230 30 30 BRASSERIE L’EXPRESS 14 Chardin str, Tbilisi Tel: (+995 32) 230 30 30 TWO SIDE PARTY CLUB 7 Bambis Rigi, Tbilisi Tel: (+995 32) 230 30 30

Cinemas AKHMETELI Tbilisi. “Akhmeteli” Subway Station Tel: 58 66 69 AMIRANI Tbilisi. 36 Kostava St. Tel: 99 99 55, RUSTAVELI Tbilisi. 5 Rustaveli Ave. Tel: 92 03 57, 92 02 85, SAKARTVELO Tbilisi. 2/9 Guramishvili Ave. Tel: 8 322308080,

SH. RUSTAVELI STATE THEATRE Tbilisi. 17 Rustaveli Ave. Tel: 93 65 83, Fax: 99 63 73 TBILISI STATE MARIONETTE THEATRE Tbilisi. 26 Shavteli St. Tel: 98 65 89, Fax: 98 65 89 Z. PALIASHVILI TBILISI STATE THEATRE OF OPERA AND BALLET Tbilisi. 25 Rustaveli Ave. Tel: 98 32 49, Fax: 98 32 50

Galleries ART GALLERY LINE Tbilisi. 44 Leselidze St. BAIA GALLERY Tbilisi. 10 Chardin St. Tel: 75 45 10 GALLERY Tbilisi. 12 Erekle II St. Tel: 93 12 89

Real Estate International Real Estate Company (IREC) Tbilisi. 9 P. Aslanidi St. Tel: +995 32 238 058 Mob: 599 95 76 71 Email: Info@irec.ge www.irec.ge

GSS Car rental offers a convenient service for those who are interested in renting car in Georgia. Rental ﬂeet mainly consist of Japanese made SUV’s, the company has various models of cars including sedans and minivans which are in good technical condition. Contact information: Email: info@gsservices.ge. Address: Shalva Dadiani 10

Akhvledianis Khevi N13, Tbilisi, GE. +995322958377; +995599265432

Theatres A. GRIBOEDOV RUSSIAN STATE DRAMA THEATRE Tbilisi. 2 Rustaveli Ave. Tel: 93 58 11, Fax: 93 31 15 INDEPENDENT THEATRE Tbilisi. 2 Rustaveli Ave. Tel: 98 58 21, Fax: 93 31 15 K. MARJANISHVILI STATE ACADEMIC THEATRE Tbilisi. 8 Marjanishvili St. Tel: 95 35 82, Fax: 95 40 01 M. TUMANISHVILI CINEMA ACTORS THEATRE Tbilisi. 164 Agmashenebeli Ave. Tel: 35 31 52, 34 28 99, Fax: 35 01 94 METEKHI – THEATRE OF GEORGIAN NATIONAL BALLET Tbilisi. 69 Balanchivadze St. Tel: (99) 20 22 10 MUSIC AND DRAMATIC STATE THEATRE Tbilisi. 182 Agmashenebeli Ave. Tel: 34 80 90, Fax: 34 80 90 NABADI - GEORGIAN FOLKLORE THEATRE Tbilisi. 19 Rustaveli Ave. Tel: 98 99 91 S. AKHMETELI STATE DRAMATIC THEATRE Tbilisi. 8 I. Vekua St. Tel: 62 59 73

THE BEST GEORGIAN HONEY OF CHESTNUTS,ACACIA AND LIME FLOWERS FROM THE VERY HART OF ADJARA MATCHAKHELA GORGE IN THE NETWORK OF GOODWILL, NIKORA AND SMART

PUBLICITY caucasus business week

November 2, 2015 #120