Caucasus Business Week #126

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BUSINESS WEEK December 14, 2015 #126

December 14, 2015, Issue 126

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FINANCIAL PYRAMID IN GEORGIA GROWS UNPRECEDENTED INTERNAL DEBTS

Temur Chkonia: State Sector Should Intensify Efforts In Hotel Business Development In Kobuleti

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LIBERTY BANK AND PROCREDIT BANK SEAL AGREEMENT ON COOPERATION Pg. 6

GALT & TAGGART Pg. 6 AND PASHA BANK UNDERWRITE GWP’S GEL 6 MLN BOND ISSUE

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BREAKAWAY ABKHAZIA’S ECONOMY: EPHEMERA OR A PROMISE The secessionist Authorities of Abkhazia have carried out a number of economic reforms for improving the socio-economic situation, but these measures turned out insufficient and local residents remain impoverished. The Russian state budget allocations have somehow livened up the general picture.

In 2005-2013, the so-called assistance from the invader Russian Federation exceeded 17 billion Rubles (500 million USD under the then exchange rate). The financial inflows were particularly evident in 2010-2013 with 11.9 billion Rubles allocated (340 million USD).

According to the statements by the Russian President and the Prime Minister, the 2014-2016 allocations were to reach 3 billion Rubles. Nevertheless, the current geopolitical realities and intentions of preserving the good attitude of residents of the invaded territory of Abkhazia, the Rubles devalu-

ation, have made the Russian Authorities considerably increase the allocations to 6.7 billion Rubles in 2014 and to 10.7 billion Rubles in 2015.

However, local residents and officials say only insignificant part of these allocations reach the destination and this factor aggravates the existing social and economic situation amid the Rubles devaluation. Consequently, the Russian Federation fails to fulfill the pledged investment projects and co-participation component for growing salaries.

It is worth noting a bulk of these funds comes in the form of loans and this step is a reasonable decision by Russia, because the secessionist Abkhazia will come to a blind alley if Russia claims these funds back. As a result, invaded Abkhazia will turn fully dependent on the Russian Federation. The so-called budget of secessionist Abkhazia is mainly replenished through Russian allocations:

3.875 billion Rubles in 2011 (114 million USD), of which 1.935 million Rubles (60 million USD) was an assistance (Georgia’s state budget in 2011 was 3.6 billion USD). In 2015 the secessionist budget marked 11.8 billion Rubles (2/3 of the budget was replenished by Russian allocations). The figure is a considerable growth since 2011. Nevertheless, the Ruble devaluation has made these allocations very modest – 180 million USD (Georgia’s state budget – 4.2 billion USD in 2015).

In regions, the averaged salary in 2014 was about 10 000 Rubles (150 USD) (about 340 USD in Georgia, GeoStat). The base pension is 20 USD, but in specific cases, the following bonuses are available: 100USD for participants in the 1992-93 War; 130 USD to the families of the died in the 1992-93 War; 150 USD for 1,2 3 category invalids, 160 USD for wounded and injured in the 1992-1993 war.

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APG GEORGIA CELEBRATES 2 YEAR ANNIVERSARY OF ITS PRODUCT Pg. 10

WHY DUBAI Pg. 8

NEWSROOM

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MAIN EVENTS

GEORGIA AND CHINA ESTABLISH FREE TRADE DEAL

Georgia’s Foreign Minister: “We fulfilled all visa obligations and more”

eorgia has begun free trade talks with China. The deal will be extremely beneficial for Georgia as it will facilitate increased business and trade turnover between both nations.

The two countries signed a Memorandum of Intent (MoI) in China where Georgia’s Economy Minister Dimitry Kumsishvili is paying an official visit. The MoI signing was significant because it signified the official start of negotiations on a Georgia-China free trade deal.

Both countries seek to end these negotiations as soon as possible so the private sector can benefit from increased business and trade turnover,” said Kumsishvili.

Georgia will be the first country in the region to sign this type of agreement with China.

As of today Georgia has preferential trade regimes with several markets involving 800 million consumers.

After establishing free trade relations with China, Georgia will have access to its consumer market, which boasts over two billion people.

This means the amount of Foreign Direct Investments (FDIs) will increase into Georgia, new jobs will be created and traditional markets will develop better,” said Kumsishvili.

The Minister noted the Georgian delegation had made special accents on Georgian wine and agricultural products. He said Georgian wine would enjoy a “preferential regime” to enter the Chinese market “when the negotiations [on free trade] completes”.

Georgia’s Minister of Foreign Affairs has high expectations of an upcoming Council of Europe (CoE) report because the Ministry has fulfilled all its obligations necessary to gain a visa-free regime. The CoE report, due to be released next week, will reflect the country’s efforts and actions to implement necessary points stated in the Visa Liberalisation Action Plan (VLAP), in order to be granted visa liberalisation with the European Union (EU).

Foreign Minister Giorgi Kvirikashvili said all technical works relating to Georgia’s visa liberalisation had been 100 percent met.

Now Georgia was waiting for the CoE report however Kvirikashvili stressed his “expectations are only positive” as support for Georgia’s EU visa-free regime had been voiced in the capital cities of several European countries.

We have worked hard in this regard, fulfilled all the obligations [outlined] in the VLAP and achieved progress even in areas that had not been demanded,” he said.

Georgia’s Defence Minister meets top US official in Washington Relations between Georgia and the United States (US) were high on the agenda of today’s meeting between Georgia’s Minister of Defence Tinatin Khidasheli and US Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland. The two officials met in Washington earlier today (local time) as part of Khidasheli’s visit to raise international awareness of the successful reforms carried out in Georgia, the country’s Euro-Atlantic ambitions and Russia’s occupying actions on Georgian soil. The meeting concluded the Georgian official’s four-day US trip and focused on Georgia-US bilateral relations. Minister Khidasheli’s meetings also focused on prospects for closer cooperation, regional and global security issues and developing future joint projects in existing and new directions.

We are waiting to launch a range of new initiatives from next year. We have also spoken about security issues and on possible ways to ensure Georgia could be safer from security threats,” Khidasheli said after today’s meeting.

Georgia and Ukraine will get visa free regime in mid-2016 The European Union (EU) is planning to introduce visa free travel with Georgia and Ukraine by mid of 2016, reports German newspaper Die Welt citing an unidentified EU diplomat.

Both countries will get visa free travel by the middle period of 2016,” said the source, adding Ukraine still needed to show improvements, particularly in combatting corruption.

Several days ago Georgia’s Parliament Speaker David Usupashvili said Georgia had completed all its obligations and was now waiting for a “positive report” from the Commission of Europe (CoE) about Georgia’s fulfilment of its Visa Liberalisation Action Plan (VLAP), which is a necessary precondition to allow a country visa free travel with EU member states.

The report has a technical nature and if positive of Georgia, a political solution should be made to grant the country visa liberalisation.

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END OF IMF REVIEW MISSION TO GEORGIA: ECONOMY WILL REACH 3% IN 2016 Georgia’s foreign trade, saying “there are signs that Georgia’s foreign trade is improving: Exports and remittances have bottomed out, while tourist inflows are growing again”.

The IMF noted the total Government revenue should increase this year despite the slowdown. … because tax revenue has performed well and non-tax revenue and grants have been even higher than projected. These higher revenues should allow the Government to keep the fiscal deficit at or only slightly above the three percent of GDP target in the original budget despite higher than projected spending on universal healthcare, subsidies, and the reconstruction works caused by the June floods,” said the statement.

What does IMF recommend?

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he International Monetary Fund (IMF) mission to Georgia has ended, and the organisation has published an optimistic concluding statement that claims Georgia’s economy is stabilising and growing and foreign trade is also improving.

The IMF mission led by Mark Griffiths visited Tbilisi from November 9 to 21 to conduct discussions on the second and third reviews under Georgia’s Stand-By Arrangement (SBA) with IMF. On December 8 Griffiths issued the statement, which explained the reasons behind the devaluation of Georgia’s national currency, predicted how the local economy would grow and offered recommendations for the Georgian Government for next year.

The IMF team explained the Lari depreciation of more than 35 percent against the US dollar over the past year was caused by the resulting shortfall in foreign earnings, combined with the worldwide strengthening of the US dollar.

However, the IMF team saw some positive results of the Lari devaluation saying “this depreciation is helping the economy to adjust to external shocks”. But it has also increased the debt burden of borrowers with dollar loans, weighing on domestic demand, said IMF.

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Meanwhile, the IMF statementsaid the Lari depreciation helped absorb the external shock by reducing imports, preserving the competitiveness of domestic producers and protecting the value of remittances.

IMF forecasts Georgian economy will reach 3% in 2016 The IMF mission believed the Georgian economy appeared to be stabilising, despite the severe shock. It appeared the Georgian economy would exceed the IMF’s projected outlook, said the statement.

Economic Growth has been slightly higher than projected and should reach 2.5 percent in 2015, before strengthening to three percent in 2016. This forecast was subject to downside risks, mainly from further deterioration in trading partner economies. While inflation had picked up, it should end the year only slightly above the National Bank of Georgia’s (NBG) inflation target of five percent,” said the statement.

The IMF mission was also optimistic about

The IMF mission recommended the Georgian Governmethe better monitor health spending in 2016. In line with the Government’s priorities to strengthen social protection and promote growth, the budget increases spending on universal healthcare and pensions. Health spending in 2015 has been much higher than budgeted. The Government needs to monitor this spending closely in 2016, make sure that it introduces efficiency savings, and, if spending overruns persist, have contingency plans ready to keep the deficit to three percent of GDP,” said the statement.

Another recommendation was to “carefully” manage fiscal risks.

Fiscal risks from Government guarantees— including those to backstop power-purchase agreements to encourage hydropower investment—should be managed carefully to safeguard Georgia’s hard-earned fiscal sustainability. It is important to put in place a framework in line with best international practice to monitor, assess, and fully disclose fiscal risks from such guarantees,” read the statement.

At the end of the comments, IMF said its final discussions with the Georgian Government were successful, and the second and third reviews could be completed in early 2016.

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

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INTERVIEW 4 STATE SECTOR SHOULD INTENSIFY EFFORTS IN HOTEL BUSINESS DEVELOPMENT IN KOBULETI caucasus business week

December 14, 2015 #126

The political unrest in the region is radically changing investment and business perspectives of Georgia, especially in its region of Ajara. Businessman Temur Chkonia asserts the Russia-Turkey confrontation will add new breath to the tourism sector development in the Ajara Region. In his interview with the Ajara Business Week (ABW), the businessman unveils details of how to make a use of this opportunity.

Russia-Turkey Confrontation Will Enhance Ajara’s Tourism Potential - Mr. Temur, you own several businesses in the Ajara region. How would you appraise the current condition of your business? What are the relevant problems in Ajara? Do you feel the Ajara Government’s efficient support in your business activities?

- We possess a hotel in Ajara that was the first hotel for the Ajara region in due time. Only Intourist hotel was older and then we opened a fivestar magnificent hotel. At the same time, we own a wonderful restaurant of McDonald’s and plan to unveil the second one too. We have applied to the Ajara Government with this initiative and we are waiting for their decision. If they approve our initiative, we will open another McDonald’s restaurant in Batumi. Regretfully, the Ajara government shows certain bureaucratic barriers, as it frequently happens, and it takes a long period to decide this or that specific issue.

Ajara possesses quite big perspectives for development. The coastline should be just cleaned up and resort cities should be in order every time.

Cities must be clean every time. Our guests should be bored with cleanness and self-discipline in our cities. We are able to reach this goal in case of due organization.

The current developments in the Region have broadened the potential and perspectives for the Ajara Region development.

We witness the deepening confrontation between Russia and Turkey. In this situation, the Ajara Region acquires serious chances to draw Russian tourists.

Currently, we should direct all our resources to attract as many Russian tourists to Georgia as possible.

The city must be clean and in order every time, because tour operators arrive here in winter period to appraise the condition of resorts and sign summer contracts. The current season is for cleaning, bringing order and meeting tour operators. Today we should direct all our resources to this direction. We should invite Russian tour operators as soon as possible, take them in tour around the whole country. We should organize a central headquarters. We like creating staffs. We should attract Russian tourists to Georgia. We

should prove Georgia is a clean, safe and attractive country. We should be carrying out active job to complete the hotel suites booking process in February and March for the coming summer season. Zealous job will enable us to attain this goal.

- How capable is the Ajara Region to become an advanced resort destination, to attract tourists from various countries of the world and offer competition to even Turkey?

What the country should do in this respect?

- To make the Ajara Region an advanced resort zone, to my thought, we should definitely develop two directions. Batumi should become an entertaining center, and Kobuleti and the neighboring territories should become vacation resorts.

You will nowhere in the world find as long beach as in Kobuleti. We should develop and make a use of this beach that is stretched in several tens of kilometers.

For example, they ask which business field to develop.

The government can build hotels in the Ajara resort zone and then sell them to businessmen. This is not a difficult affair; even more so, many businessmen will express intention to buy ready projects, because this is a profitable issue.

Small businessmen will be also able to buy them through taking bank loans.

Commercial banks will easier issue loans, because they abstain from financing startups, while they are less expected to reject ready projects.

In this way, 10-15 hotels will be built around Kobuleti in the resort zone and this will be a picturesque project. The government would spend a certain amount of money and then sell the project at favorable value. These projects would bring benefit to the state, the business sector and the Ajara resort zone.

- What would you suggest the local residents to forget Russia and the Soviet Union?

How should they treat citrus and tea that used

to bring considerable revenues in due time?

What is the solution and way-out?

- The first and the most important thing is that a tourism zone should be arranged in the Ajara Region. On the other hand, let’s remember the times when Ajara and Batumi were rich regions. Batumi was the richest city at the time of Porto Franco. Nobel, Rothschild, Mantashev were interested to make investments here, while the Baku-Batumi oil pipeline was the longest in the world in that time. The most liberal taxation regime used to run in Batumi in that period.

Hotel London used to operate then and Greeks, Portuguese, Russians and various ethnicities populated Batumi. In that period, even Turkey was a poor country, while Batumi was quite rich and influential city. Batumi used to surpass Istanbul in terms of investment inflows. This region was very rich. In that period the dynasties of Rothschild and Nobel were reviving the region, but now I am Chkonia. How can I compare myself to them in developing this region?!…

It will be ridiculous to compare the contemporary investors to ones in the old time. Therefore, the idea that was making Batumi a rich city may be implemented even today. There was a history of richness and now we witness the history of poverty. We should compare these aspects to each other and take bold steps.

Then the Soviet Times came, the Communists, and today many our compatriots feel nostalgia to that period. I would like to say Porto Franco was the best and the Soviet Union was a grot. Why? Because we had closed borders and all sorts of mandarin cold be sold within this space.

Today we have competitive environment and the quality matters. Therefore, Ajara residents face difficulties with sales of low-quality products.

Moreover, in the Soviet times, there was a centralized sales market or Russians used to arrive in Georgia and transport the citrus through their automobiles. That system ruined, automobiles do not cross the border, the country collapsed and the centralized sales market has disappeared. To improve the situation it is necessary that farmers who grow mandarin should not have to sell their crop themselves, but farmers should grow citrus and the second chain should sell the crop.

How can we imagine that an 80 year old farmer who grows mandarin is able to sell his crop in Russia? And in Ajara women constitute the basic workforce and how will they sell mandarin in Russia? Therefore, it is upon the government to organize a sales format, create a sales organization, purchase this mandarin and then sell it.

We had two pasts, the best one in the face of Porto Franco and the ugly Soviet Union. We have ruined one without future and another collapsed itself. Consequently, we should live the current life and respond to the existing challenges.

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BANKING NEWS 6 GALT & TAGGART AND PASHA BANK UNDERWRITE GWP’S GEL 6,000,000 BOND ISSUE caucasus business week

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n December 10th, GWP issued 6,000 bonds with nominal value of GEL 1,000 each. Placement agents and underwriters are PASHA Bank Georgia and Galt & Taggart. The bonds have a 2-year tenor with quarterly coupon payments. Coupons are referenced on National Bank of Georgia refinancing rate and carry a margin of 7.5% over the reference rate. At present the annual interest rate of the bonds is 15%.

“The fact is that for the time being more financial institutions express willingness to invest in our company as the company’s credibility has increased, which is confirmed by Fitch rating assigned to GWP recently”, stated CEO of Georgian Water and Power Mr. Giorgi Tskhadadze.

“Diversification of credit resources is of vital importance for Georgian Water and Power in mid-term and long-term perspective. For GWP it is a second round of bonds emission for the amount of GEL 6 m now, to be placed in full.

The first placement of bonds for GEL 2,6 m was effected in August of current year. New management of GWP is willing to cooperate with various

financial institutions and funds to implement the projects significant for the company’s development”, pointed out CFO of Georgian Water and Power Mr. Mr. Giorgi Vakhtangishvili.

“PASHA Bank enjoys significant experience in securities underwriting in its home market, Azerbaijan, and we plan to apply this expertise in Georgia and actively contribute to the development of the local capital markets. In May PASHA Bank arranged FINCA Bank Georgia’s GEL 20,000,000 bond issue and we are glad to be partnering with GWP and Galt & Taggart this time. We took this opportunity to extend our partnership with GWP, in March, 2015 PASHA Bank issued the term loan facilities to Georgian Water & Power and Rustavi Water Company with the combined principal of GEL 22.5 million,” commented CEO of PASHA Bank Georgia. „We are glad that with the help of Galt & Taggart bond issue of one more Georgian company was accomplished. Galt & Taggart has already contributed to the issue of over GEL 100 mln worth local bonds, supporting the development of local capital markets and creating access to the

financial recourses that are very important to the growth of the companies. Thanks to its team of professionals and the experience Galt & Taggart has become a leading company in Georgia providing investment banking services. I would like

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to thank everyone who worked on this deal and wish success to GWP,” commented the Chairman of Supervisory Board of Galt & Taggart, Archil Gachechiladze.

PASHA BANK PRESENTED SPOTLIGHT MARKETING LIBRARY ANNUAL PASSES TO FORWARD MEMBERS

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n December 6th, Tbilisi Mediathek hosted Forward club meeting where Anano Korkia, Head of PASHA Bank PR and Marketing Department spoke about the specifics of corporate marketing communication planning and execution. After the presentation the club members received annual passes to the Spotlight Marketing Library which also gives

access to Tbilisi Mediathek branches: 76, Chavchavadze Ave., Park Vake or Varketili 3, I M/D. Spotlight Marketing Library is a project initiated by PASHA Bank and brought to life together with Tbilisi Mediathek and Spotlight. Marketing Library aims to create a single comfortable space with the professional literature in Marketing, Branding, PR and other related fields that will be

available for everyone interested in these topics.

The Spotlight Marketing Library is available at Vake branch of Mediathek.

Being founded in 2014 by Marketer.ge, club Forward unites practitioners from marketing field and aims to enhance the knowledge and experience of the club members by organizing seminars and other events regularly.

PASHA Bank frequently works together with Marketer on different projects aimed at improving professional growth prospects of Georgian marketing professionals . One of those projects is the business blog on marketer.ge where Harvard Business Review articles are translated into Georgian and provide the up to date analytical information on international trends, news and contemporary best practices in marketing and related fields. „PASHA Bank operates in Georgia since 2013 and provides corporate and investment banking services to large and medium-sized enterprises. Since its inception the Bankregularly supports educational and professional projects as we believe that the development of the country’s business and economy fundamentally depends on

the professional growth of both the experienced and the young professionals who are or will be involved in taking essential decisions for their companies on a daily basis.

We’d like to thank Marketer for considering us as their partners in planning and executing of such interesting and useful projects.”- said Anano Korkia, Head of PR and Marketing Department at PASHA Bank Georgia.

“Our cooperation with PASHA Bank started in May, 2015 by supporting Spotlight and initiating a beneficial project – Marketing Library that contains professional literature covering different modules: commerce, advertising, marketing and branding.

We can say that this project was truly successful: after only 6 months the Spotlight Library books were read by about 6000 readers. Our next joint project is translating and publishing trending analytical business articles on marketer.ge, that gives opportunity to about 100 000 visitors to read the latest business news from the worldwide. I consider these projects practically beneficial for raising professional knowledge and general awareness, we are very proud to have a such partner,” – said Ako Akhalaia, Founder at Marketer.ge.

LIBERTY BANK AND PROCREDIT BANK SEAL AGREEMENT ON COOPERATION

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iberty Bank and ProCredit Bank have concluded an agreement on cooperation at the ProCredit Bank head office.

Under the agreement, both banks have set the so-called Host to Host communication.

As part of this project, plastic card owners will be able to withdraw cash from Liberty Bank and ProCredit Bank ATMs at preferential rates.

Total number of Liberty Bank and ProCredit Bank ATMs exceeds 500 ones. Consequently, the clients will be able to more conveniently withdraw cash from ATMs. Owners of VISA/Master Card and VISA Business cards of ProCredit Bank will be able to withdraw cash from Liberty Bank ATMs at the ProCredit Bank rates, while Liberty Bank clients will also use PAY/UPI system cards at ProCredit Bank POS terminals, besides VISA/MASTER

Cards. The PAY is the domestic payment system developed by Liberty Bank and over 1.6 million cards are based on this platform.

“I am glad Liberty Bank and ProCredit Bank have set cooperation in favor of our clients. Starting today clients of both banks will be able to withdraw money from a wider chain of ATMs at the same tariff”, ProCredit Bank director Alex Matua said.

“Liberty Bank has already signed the Host to Host agreement with the third bank. As a result, our clients have broader and more favorable opportunity for withdrawing money from ATMs and making payments through cards”, David Ninidze, the Liberty Bank manager for alternative bank channels, noted.

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ECONO-MIX

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HEADLINES

WB Published a review of Georgia’s New Tourism Strategy The World Bank published an extensive review of Georgia’s new tourism strategy. The article on WB’s web-page focuses on Georgia’s tourism potential and a 10-year strategy developed by the government with the help of the World Bank in one year. The international consultants, organizations, individuals, national and local authorities, tour operators, hotel owners and investors were actively involved in the development of the strategy for 2015-2025. The World Bank article says the number of tourists in Georgia in 2009-2013 has soared nearly 300fold, while the average tourist spends about $ 74 a day, which is rather low by international standards.

To improve the rate, a diversified, high-quality tourism product is required.

IMF: National Bank Should Have a Full Operational Independence

FINANCIAL PYRAMID IN GEORGIA GROWS UNPRECEDENTED INTERNAL DEBTS

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eorgia’s internal debts have exceeded 2 billion GEL for the past 6 years.

The so-called historical debts are not included in this statistics. The Government could not calculate and declare these historical debts. The state budget has to spend huge financial resources to serve the liabilities from issuance of state securities. The interest rate ranges from 11% to 14%. The internal indebtedness makes up 2.225 billion GEL as of December 1, 2015, including 1.670 million GEL T-bills and 545 million GEL state bonds for the NBG and open market operations.

As reported, the Finance Ministry issues 12month T-bills, as well as 2-year, 5-year and 10year securities.

The Government plans to issue 937 million GEL T-bills and bonds throughout 2016, of which 200 million GEL represents a net growth in debts, while 737 million GEL will cover the bulk amount of securities. Thus, in 2016 the Finance Ministry will take fewer debts, because internal debts grow in value following increased refinancing rate and inflation.

Fort the past months the T-bond interest rate rose by 3% and exceeded 14%, while the T-bill interest rate reached 11.5% at the last auction.

The T-bill interest rate sees its high since 2010.

Internal debts accrued from issuing securities in 2009 under the pretext of the securities market development, while only commercial banks are let take part in the T-bill auctions. Initially, the Finance Ministry used to issue 100 million GEL t-bills. Starting 2013, the issuance volume extremely increased and exceeded several billions of GEL. The government was increasing the internal debt by 600-600 million GEL, while the remaining amount was to serve the old debts.

The internal debts have increased to the alarming point and the Government cannot keep referring to the securities market development purposes any more, specialists assert. In reality, the Government uses the T-bill instrument to replenish budget deficit.

“We should be surprised the Government needs other sources to serve the liabilities and this factor was reflected on taking internal debts and stimulating the inflation.

We witness the outcomes of erroneous economic policy”, the New Economic School - Georgia”President Paata Sheshelidze noted.

The growth in internal debts by issuing state securities is a financial pyramid, economic expert Vazha Kapanadze noted.

“This is a financial pyramid in its classical meaning and the state sector is a major player in this game and this process will never stop. Taking debts should meet the payment balance and macroeconomic parameters. It is inadmissible to issue state securities endlessly. This is an evident pyramid. They apply a part of this amount to pay the old debts and use another part to finance certain liabilities and this process is repeated. In the end, the internal debts grow

endlessly. By the way, other countries also apply this policy”, Vazha Kapanadze noted.

The designation of taking such volume of debts is unclear, when the balance on the treasury account is huge and state offices cannot use them.

Moreover, for the first time, the volume of T-bonds has exceeded the volume of T-bills.

Namely, the National Bank has sold 420 496 million GEL T-bonds and 379 million GEL T-bills.

In whole the state has sold 799 496 million GEL state securities in 2015, while the planned issuance exceeded one billion GEL and the Finance Ministry cut the amount to prevent pressure on the national currency exchange rate.

Another detail: The Government asserts commercial banks need additional financial resources and this is the motive for increasing the volume of securities. Namely, the Finance Ministry has placed about 300 million GEL mobilized from long-term issuance on deposits of commercial banks. It is worth noting

The Finance Ministry has no information about what kind of credits commercial banks have issued, i.e. whether commercial banks have financed the real sector of the economy or they have issued just consumer loans.

The Finance Ministry started trades in state securities in 1998. The issuance was suspended in 2006, when the average weighed interest rate at the interbank currency exchange made up 19.7 point. In August 2009, the issuance was resumed under the pretext of financial market development. The process was carried out at accelerated paces and the internal debts made up several hundreds of millions of GEL.

The International Monetary Fund (IMF) believes that to preserve financial stability, the National Bank of Georgia (NBG) should have a full operational independence - the IMF’s report says.

“The main task of the central bank is to ensure price stability, which requires a floating exchange rate. In order to perform its functions and ensure financial stability, the bank must have a full operational independence. At present, the Georgian government is awaiting the decision of the Constitutional Court regarding the a law adopted by Parliament stripping the National Bank of its supervisory functions over the banking system. It is important this function to remain independent from political or industry interference, “- the fund’s experts say.

Georgia’s foreign debt increased in November Georgian owns foreign debt of 4,220 billion. The debt volume in Georgian national currency totals to 10,148 billion GEL. Georgia’s foreign debt has been increased by 16,2 million USD at the expense of a debt taken by the government in November. Government’s debt has amounted to 4,200 billion USD by December 1. However, the figure exceeds by 16,56 million comparing to October. However, liabilities of National Bank are reduced and totals to 19,210 million USD instead of 19,556 million, which has been fixed in October.

EBRD allocated 30 mln EUR for acquisition of new buses for Tbilisi Over 150 eco-friendly busses will be in Tbilisi Bus Park in 2016.

European Bank for Reconstruction and Development will allocate 30 million EUR to Tbilisi Municipality.

“We try to work on reduction of pollution and harmful gas emission. From this point of view, two projects should be distinguished in 2016.

Initially, we start renovation of our municipal bus park. Negotiations are already finished with European Bank for Reconstruction and Development (EBRD) and they have allocated 30 million EUR. We plan to purchase CNG gas powered buses, - Davit Narmania, mayor of Tbilisi Municipality has declared. Presentation of “Sustainable Energy Action Plan” (SEAP) will be held at the Municipality on Friday.

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WHY DUBAI AMIR KHWAJA - Director of Evergreen Businessmen Services in Georgia

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rowsing through my news paper and sipping coffee this morning, just like anybody else, living in an amazing, cosmopolitan city like Dubai, I took a glance at the big city through my window, started wondering why Dubai is famous? - For being outrageously out there breaking world records right, left and center, and becoming a global choice for SMEs. Seeing around all the huge skyscrapers, residential and commercial buildings, while some others were still under construction, constantly forging ahead, making it an iconic tourist destination, creating new benchmarks for the world, and an international hub for trade. Let me sum up together the reason why I prefer to work and live in Dubai than anywhere else in the world.

For more then 150 years world expo had fostered Innovations, Education, and international connections, proving again and again for a bigger and brighter future to the world.

In the year 2020 the businessmen and international visitors from all over the world are coming to Dubai to create history at World Expo 2020.

Dubai is located at cross roads of Asia, Middle East and Africa, have a centralized time zone.

One third of the global population is with in 4 hours of flying time and two third are within 8 hours.

The new airport Dubai World central has an ambitious plan to accommodate 200 million people far bigger then the current busiest airport Atlanta 94 million Beijing 83 millions and London 72 millions. This project is expected to complete by close to year 2020, phase one is already in op-

erational. Upon its completion it will be a new beacon for the future of travel world.

Dubai not only opens gates for prosperity, hope, optimization and opportunities, but also happiness and social security for business and family. Becoming one of the most ambitious city in the world it discloses some past facts and figures, which will help you to understand its best practices.

GDP is expected to maintain a solid 5% growth rate, where as keeping inflation tamed at 2.74% Dubai’s economic is not only depended on Oil but its well diversified across 6 major sectors, (1) Whole and retail trade (2) Transportation (3) Real Estate (4) Manufacturing (5) Financial Services and (6) Construction

• Total trade (2013) = $ 357.6 bn • Imports (2013) = $ 217.1 bn • Total. Exports (2013) = $ 140.5 bn Close to $42 billions will be spend in next coming years by government and private sectors, to make World Expo 2020 the most successful even. It’s the best opportunity for any business especially Small and Median Enterprises to display its products and services and be a part of such global event.

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December 14, 2015 #126

ECONOMY

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caucasus business week

ECONOMY IN BREAKAWAY ABKHAZIA: DEVELOPMENT OR STANDSTILL Main Macroeconomic Parameters and Social Environment The secessionist Authorities of Abkhazia have carried out a number of economic reforms for improving the socio-economic situation, but these measures turned out insufficient and local residents remain impoverished.

The Russian state budget allocations have somehow livened up the general picture.

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n 2005-2013, the so-called assistance from the invader Russian Federation exceeded 17 billion Rubles (500 million USD under the then exchange rate). The financial inflows were particularly evident in 2010-2013 with 11.9 billion Rubles allocated (340 million USD).

According to the statements by the Russian President and the Prime Minister, the 2014-2016 allocations were to reach 3 billion Rubles. Nevertheless, the current geopolitical realities and intentions of preserving the good attitude of residents of the invaded territory of Abkhazia, the Rubles devaluation, have made the Russian Authorities considerably increase the allocations to 6.7 billion Rubles in 2014 and to 10.7 billion Rubles in 2015.

However, local residents and officials say only insignificant part of these allocations reach the destination and this factor aggravates the existing social and economic situation amid the Rubles devaluation. Consequently, the Russian Federation fails to fulfill the pledged investment projects and co-participation component for growing salaries.

It is worth noting a bulk of these funds comes in the form of loans and this step is a reasonable decision by Russia, because the secessionist Abkhazia will come to a blind alley if Russia claims these funds back. As a result, invaded Abkhazia will turn fully dependent on the Russian Federation. The so-called budget of secessionist Abkhazia is mainly replenished through Russian allocations: 3.875 billion Rubles in 2011 (114 million USD), of which 1.935 million Rubles (60 million USD) was an assistance (Georgia’s state budget in 2011 was 3.6 billion USD). In 2015 the secessionist budget marked 11.8 billion Rubles (2/3 of the budget was replenished by Russian allocations). The figure is a considerable growth since 2011. Nevertheless, the Ruble devaluation has made these allocations very modest – 180 million USD (Georgia’s state budget – 4.2 billion USD in 2015).

In regions, the averaged salary in 2014 was about 10 000 Rubles (150 USD) (about 340 USD in Georgia, GeoStat). The base pension is 20 USD, but in specific cases, the following bonuses are available: 100USD for participants in the 1992-93 War; 130 USD to the families of the died in the 1992-93 War; 150 USD for 1,2 3 category invalids, 160 USD for wounded and injured in the 1992-1993 war. Moreover, a major part of the residents, excluding ethnic Georgians hold Russian passports (about 30 000 persons), and they receive 150 USD a month on average.

In the region with 250 000 residents, only 142 000 persons are able-bodied of which only 40 000 persons are employed, including 26 000 ones in the state sector. In other words, the unemployment level makes up about 70%!

The submitted macroeconomic factors prove that the economy of secessionist Abkhazia is in catastrophic condition. The Ruble devaluation has further aggravated the situation.

Tourism – Engine of Economy in Secessionist Abkhazia Tourism is locomotive of the economy of Abkhazia, local experts stress. According to the Russian and secessionist media agencies, millions of tourists visit the region every year. Namely, 3.3 million tourists arrived in the region in 2013, about 4 millions in 2014. These figures, if real, are very impressive for such a small territory. For information, according to the Georgian tourism department, 4.4 million visitors arrived in Georgia in 2013, 5.5 million in 2014 (experts cast doubt on these figures).

In reality, amid the deeper collapse in other sectors, tourism genuinely performs as an engine in the economy of secessionist Abkhazia. Nevertheless, tourism contains a number of minuses: seasonal character, affect of political unrest, lowincome Russian tourists and misbalance of high prices and so on.

In Addition, the Crimea annexation by the Russian Federation may thwart tourism seasons in the coming years in Abkhazia. Crimea is tourism-oriented Region and the Russian Authorities will try to charge Crimea potential jointly with Abkhazia. These efforts will drive the redistribution of tourist inflows between these two regions, experts assert.

Main Signs of Foreign Trade The past years have recorded an expansion in the foreign trade balance in secessionist Abkhazia, basically, at the expense of imports, in both percent and absolute indicators. According to the so-called customs office of secessionist Abkhazia, the 2014 trade turnover marked about 20 billion Rubles (nearly 550 million USD), up 1.5 billion Rubles (up 9.6%) year on year, including: Exports – 2.9 billion Rubles (6.1% grow year on year); Imports – 17 billion Rubles (10.2% growth year on year).

The foreign trade turnover constituted 919 million Rubles in 2001. The figure since then increased 20 times. However, the exports-imports correlation in the trade turnover points to the consumer-style economy: in 2014 the imports surpasses the exports 6 times.

Deeper exploration shows that the export in secessionist Abkhazia mainly relies on agro industrial complex (88%), the ratio of the pro-

cessing sector is insignificant (12%). Wine and vodka business constitutes 3/5 of the exports that are made of cheap Moldovan and Russian wine materials.

Citrus records 22% ratio in total export. Fishing is third with 5% ratio and sand, coal and scrap iron exports constitute 3-3% in total exports.

Nevertheless, these resources are exhaustive and in the coming years the ratio of these items are expected to decline, even more so large-scale construction works in Sochi were finished after the 2014 Olympic Games and the demand for construction materials has fallen to minimum.

As to imports, it is diversified and consists of the following goods: food products (19%), fuel and lubricants (16%), building materials (16%), transport (11%), machineries (9%) and so on.

According to the official report of the ruling regime in secessionist Abkhazia, main trade partners are: Russia (62%) and Turkey (14%). The region has arranged land (automobile and railway) and seaborne routes, while only seaborne transport connects the Region with Turkey. As to exports markets, the ratio of Russia accounts for 85% and Turkey – 15%. These figures, indeed, do not reflect the reality amid corruption and excessive ratio of shadow economy, but they give approximate picture.

The Gali District as Economic Hub The submitted statistics does not include the trade relations through the river Enguri with the main focus on the Gali District and its residents.

British International Alerts has developed the due report. Both Georgian and Abkhaz specialists have taken part in the report development and therefore, this work is of special importance.

According to the so-called Abkhaz President’s decree of 2007, all economic relations with Georgia are considered illegal (in terms of security), all trade goods delivered from the remaining part of the Republic of Georgia are considered as smuggled goods.

At the same time, nor official Tbilisi has set evident legal frames for similar relations: on the one hand, goods transportation from the remaining part of the Republic of Georgia to the invaded territory of Abkhazia is considered a domestic turnover, on the other hand, the 2008 law on Invaded Regionsa considers all trade activities in Abkhazia as illegal (however there are certain exceptions too).

Experts note that the trans-Enguri trade turnover is carried out through one official (the main bridge over the river Enguri) and three unofficial routes, namely: 1. The Enguri Bridge – goods turnover 80% and people turnover 75%

2. The so-called upper zone – nearly 5% of total turnover of residents and goods; 3. The so-called lower zone – goods turnover 15% and residents’ turnover 20%.

Trans-Enguri Trade and Origin of Goods The Trans-Enguri trade with focus on the city of Gali implies a trade in both Georgia-produced and Georgia-imported goods. Namely, the places of origin of products are as follows: 1. Food products. Potato – Georgia (Akhaltsikhe, Tsalka, Akhalkalaki), Turkey; Carrot – Armenia; Cucumber – Georgia (Kutaisi, Tskaltubo, Marneuli); Greenery – Georgia (Samtredia, Kutaisi); beef, frozen – Brazil; pork, frozen – Argentina and so on.

2. Equipment, furniture and other nonfood products are mainly bought in wholesale markets (Tbilisi, Kutaisi and Zugdidi) and specialized stores for equipment. It is also worth noting about 80% of the goods that are transported to the Gali district from the Zugdidi District are delivered to the Gagra and Sokhumi markets and only 20% remains in the Gali District.

The existing restrictions aggravate the being of the Gali district residents of Georgian ethnicity, who have no other source of income (the Gali district residents’ dependence on agriculture sector is 97%, 2% on industry and 1% on tourism), besides 45 GEL assistance allocated by the Georgian Government.

Conclusion Despite the heavy social situation, the economic situation in secessionist Abkhazia has advanced for the last decade. At the same time, the dependence on the Russian Federation grows.

The high-level corruption, criminal circles and inexperience in management have generated the existing heavy reality.

Since the end of 2014, amid the 100% devaluation of the Russian Ruble and 35% depreciation of the Georgian GEL, the economic indicators expressed in USD point to the real progress in the GEorian Economy and this is a good precondition for negotiations with the Abkhaz party.

The Trans-Enguri economic relations include much potential and it may fully replace the Turkish and Russian trade influence in the Region.

VAKHTANG CHARAIA Director for TSU Analysis and Prognosis Center

EVENTS 10 APG GEORGIA CELEBRATES 2 YEAR ANNIVERSARY OF ITS PRODUCT - APG IET FOR TRAVEL AGENCIES IN GEORGIA caucasus business week

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PG GEORGIA celebrates 2 year anniversary of its product- APG IET for Travel Agencies in Georgia this year.

An event to mark the 2nd anniversary of its product- APG IET was held in club El Centro located on Chardin Street in Tbilisi, on December 8.

APG IET Executive Product Director, Mrs. Ophelie Cherdrong from head office visited Tbilisi to attend the event personally, make presentation and thank Georgian Travel Agencies.

Around 100 travel agencies were invited to participate in this event.

APG continues to innovate and developed APG IET program which allows many airlines to maintain interline agreements with key players and also reach untapped markets where the airline is not participating in the BSP. APG IET is an interline e-ticketing platform developed in partnership with Heli Air Monaco (airline code: YO).

“Interlining” is an agreement between airlines to handle passengers travelling on a multi-airline itinerary. Airlines that participate in the APG IET program are able to be ticketed and interlined in 83 BSPs around the world and ARC in the United States. Why use APG IET?

- Access to over 90 airlines which participate in the program can be ticketed on YO - Ability to ticket YO with any GDS - Ticket airlines that may not display in your GDS (Member or not member of your local BSP) - All major Credit Cards & UATP are accepted (according to your market) APG Georgia was established in 2012 in Tbilisi Georgia. Company is being managed by Ms. Iako Khomeriki, with Almost 8 years experience in the airline industry, having been involved in various roles in the sector and gaining extensive experience of aviation in this emerging market.

December 14, 2015 #126

APG Georgia represents:Heli Air Monaco, AtlasGlobal Cargo, Philippine Airlines, Qatar Airways Cargo, British Airways World Cargo. APG Georgia, underABSC program offers its services to online and offline Airlines. Among them:Korean Air, Cathay Pacific, Royal Air Maroc, Arkia Israeli Airlines, Dniproavia, Yanair. APG Georgia intends to enlarge Airline Industry in Georgia by offering to Market various innovative products distributed by APG in the Network.

APG is the leading network for airline commercial and distribution services.APG Network collectively serves almost 390 airlines worldwide. The organization was established in 1991 to meet the demands for airline representation with Sales and Marketing services worldwide.

Through innovation and technology, APG Network has expanded to become a key partner and a powerful platform in the travel distribution system, offering outsourced services in passenger sales and marketing, reservations, finance and accounting, fare filing and consulting. With over 1500 experts worldwide, dedicated to the Airline service, APG Network is “The World’s Leading Network for Airline Services”, with 112 offices in 176 countries on 6 continents.

APG has the most extensive network worldwide and across all continents. Over 20 years experience in the field of Airline Industry and an integrated capital of EUR2,000,000 responsible for over EUR2.3 billion of airline revenue.

APG provides a wide range of distribution products: AACP, ACTP, CCS, TCH, GET, GSSA, ABCS, IET . Allowing airlines to minimize administrative cost by working with one partner who can provide linked up distribution solutions.

APG is also a preferred partner of ARC in the US, now overseeing ARC services for a large number of offline airlines.

GEORGIA GAMING CONGRESS 2016

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n February 25, Tbilisi will host an international gaming forum Georgia Gaming Congress The representatives of business, government and expert community will discuss the prospects of gambling for the year 2016 and learn about the latest products from software and equipment developers http://g3congress.ge/en/ .

Georgia Gaming Congress has managed to establish itself as the biggest event for the representatives of the gambling industry in Georgia.

The organizer Smile-Expo Company has taken the best from the Gaming Congress 2015 and invited even more speakers, government officials and foreign guests. We have much to discuss, because 2015 is memorable due to a number of large transactions, and the next year promises to be no less interesting.

What is the Forum for?

Georgia is known for its experience of reforms and liberalization of business; it is one of the world leaders in the development of the gaming sector. Offline and online gambling in the country quickly takes up and develops the latest trends: from operation with Bitcoin to fantasy sports.

The search for new strategies, understanding the needs of new audiences, development of software and specific legislation regulating new areas of gaming - all these issues require clarification and discussion. To do this, the industry professionals will meet together at Georgia Gaming Congress.

In addition, the participants will familiarize with the newest solutions in the framework of the demo area, as well as communicate with each other at the VIP-party in one of the best restaurants in Tbilisi.

THE FORUM PARTICIPANTS: • owners and managers of online and offline casinos; • legislative representatives; • investors; • experts from around the world; • manufacturers of equipment for land gambling; • developers of software for online casinos and betting terminals; • representatives of related areas (hotel and construction business); • specialized mass media.

THE CONFERENCE TOPICS: • Features of gaming business in Georgia: laws and taxation; • Ways of business development; • New areas of online gaming; • How to find your audience: what are the characteristics of online players?

• Marketing tools to increase profits; • What are the key players from the US and Europe investing in?

Demo area Manufacturers of equipment for casinos and slot machines will present their new products, and software developers will present effective solutions for online business within the framework of the demo area.

VIP party A nice feature of Georgia Gaming Congress will be a networking party in the VIP format held at one of the best restaurants in Tbilisi. Caucasian hospitality and traditional Georgian cuisine will emphasize the informal nature of the meeting. It is a great opportunity to communicate with the speakers of the Congress and specially invited VIP guests over a glass of unsurpassed Georgian wine!

Why is Georgia Gaming Congress so unique?

• In recent years, the gambling business in Georgia has been developing successfully, attracting more foreign investors. A favourable position of Georgia plays an important role.

Indeed, the gambling is either prohibited or restricted in the neighbouring countries.

• Gaming Congress will provide a comprehensive vision of gaming business: Conference + Demo area + informal communication.

• The event will bring together on one platform not only b2b audience, but also representatives of the legislative power regulating the industry.

The organizer of the congress Smile-Expo Company has an extensive experience in conducting forums and conferences in the field of gambling in Georgia and the CIS countries. Having a solid base of contacts, the company invites the most interesting speakers and key market players to its events. Smile-Expo not only provides a platform for events, but also defends the interests of the gambling business in the dialogue with the authorities.

We wait for you on February 25 in Tbilisi.

Please register on the official website: http://g3congress.ge/en/ .

December 14, 2015 #126

HEALTHCARE caucasus business week

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PPP AND HEALTH MINISTRY’S PLANS TO OPEN FOUR NEW CLINICS IN GEORGIA Public-Private Partnership (PPP) law that will allow a future co-ownership and co-management of medical institutions between the state and the private sector is currently being drafted by Georgia’s Ministry of Economy

Four New Clinics Underway in Georgia Deputy Minister of Health, Valeri Kvaratskhelia held a press conference outlining the Ministry’s current and future infrastructural projects. Kvaratskhelia noted that currently four clinics in Dedoplistskaro, Zugdidi, Lentekhi and in Kharagauli are under construction.

Construction of a modern 220-bed multifunctional university clinic will be completed by the end of 2016 in the village Rukhi. Residents of Apkhazia and surrounding villages will have access to this hospital. In addition, classrooms and libraries for medical students and residents will be available. Sports facilities, roads, pools and a hostel for patients and their families will also be built on the hospital’s area.

The new 25-bed hospital will be equipped according to the latest international standards in Dedoplistkaro, with high-quality and comprehensive medical service. As the Deputy Minister, Valeri Kvaratskhelia said, the medical center in Dedoplistskaro will serve residents of Dedoplitskaro, 16 of its surrounding villages, with a total of 32 531 inhabitants. The new medical center will start functioning in spring of 2016.

Construction of a 10-bed fully equipped clinic is scheduled for the fall of 2016 in Lentekhi.

Kharagauli clinic will also be completed in the coming summer.

In addition to ongoing projects, Kvaratskhelia talked about Heal Ministry’s future projects as well. He said that the construction of National Center for Tuberculosis and Lung Diseases for Children’s is planned in Georgia, which is due to be completed by the end of August 2016. A total of 60 million GEL is allocated for implementing these projects.

Ministry’s Tender on Ownership of Three Major Hospitals in Tbilisi Apart from the current and future infrastructural projects, Valeri Kvaratskhelia commented on the Ministry’s recently announced tender on the management of three large state clinics in Tbilisi. According to the Deputy Minister, Republican Hospital, Cancer Center and Children’s Infectious Diseases Hospital, were high-level multi-disciplinary medical institutions, established in cooperation of the state and the private sector.

“Three big institutions - Republican Hospital, Cancer Center and Children’s Infectious Diseases Hospital returned to the state. The competition on the selection of their future owners has already been announced by the Ministry. It will be a socalled “PPP” type of project, which entails a coownership and management of the hospitals by the state and the private sector together.”

“We at the Ministry believe this project is very important for our country at this moment. We think that PPP type of ownership is the best way to go around on managing these hospitals,” Kvaratskhelia said.

“Countries such as UK, Turkey and others have already implemented this

kind of projects, so we can use their experience. These will be multi-functional and high-tech, so-called “Third level clinics”, in which only patients with most severe complications and diseases will be treated,” the Deputy Minister said.

Kvaratskhelia believes that this step is a very important one for the country and represents the best strategy.

According to Valeri Kvaratskhelia, the Ministry of Economy is currently working on drafting the Public-Private Partnership (PPP) law. There have been no such projects in Georgia previously, so there is no adequate law that could accommodate Health Ministry’s tender.

Expending the Medical Personnel for the Tender Hospitals Deputy Health Minister said the Ministry is also planning on expending the medical personnel in these three hospitals.

“Medical staff could not be reduced, on the contrary - the number should be increased.

As you know, due to the lack of resources, only 10 percent of the existing clinics currently operate in Georgia. According to the terms of the tender, the winning company has to train the staff,” Kvaratskhelia said.

In Deputy Health Minister’s words, the state has opened a new simulation center this year, in which the trainings of the future medical personnel of the three tender hospitals — Republican Hospital, Cancer Center and Children’s Infectious Diseases Hospital — will take place.

Each hospital will have approximately 570 beds and the managing company will hire medical personnel necessary to accommodate this number of patients. This process will be the prerogative of the future owner company, which is why the Ministry cannot name how many new personnel will be hired in the tender-participating hospitals.

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WORLD NEWS

December 14, 2015 #126

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ANGELA MERKEL NAMED TIME’S FIRST FEMALE PERSON OF THE YEAR SINCE 1986

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ime magazine has named German chancellor Angela Merkel its Person of the Year, citing her resolve in leading Europe through this summer’s Greek debt crisis, and her encouragement of other countries to open their borders to migrants and refugees, the Guardian reported.

Merkel is only the fourth woman to ever be named Person of the Year, after Time opened up the contest to women in 1936. She is the first to be awarded the title since 1986.

Merkel was described as a political climber, a practitioner of “the politics of baby steps”, either outlasting or outwitting rivals. She was born in eastern Germany behind a Soviet stockade in 1954, and trained as a quantum chemist. After entering politics in her 30s, she rose through the ranks, to be elected chancellor in 2005. This is her 10th year in office. Her style of governance was described by Time as “resolutely dull”.

Nevertheless, this year, one of the most tumultuous in recent European history, has tested the German leader’s mettle, Time editors said.

Armenian ‘Shadowmatic’ is AppStore’s Game of the Year in More than 10 Countries

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rmenian “Shadowmatic” was recognized AppStore’s best game of the year in a number of countries.

Particularly, the game has been announced game of the year in Australia, Brazil, Germany, China, United Kingdom, Hong Kong, India, Japan, South Korea, Taiwan, Mexico, Russia, and France. The game’s co-author Bagrat Dabaghyan, during the interview with “Armenpress”, mentioned how surprised they are to be recognized as AppStore’s game of the year in a number of countries in addition to appearing in the list of best applications of 2015. It obligates them to make the game more exciting for users.

“Shadowmatic” is a mobile application game developed by “Triada Studio”, an Armenian information technology company. “Shadowmatic” was launched on January 15. It is available in 14 languages, including Armenian and now features new additions playing modes, including Arcade Mode and new levels for children.

It is a currently available on the Apple Appstore and Itunes. Earlier this year, the game was awarded an Apple Design Award at the Apple Worldwide Developers Conference in San Francisco and just a couple months prior, sales had increased ten times following the announcement of a special discount by Apple.

Air France to Resume Flights Between Paris and Tehran

Russia to launch own crude benchmark in 2016

ir France will resume flights between Paris and Tehran from April 2016, the company said on Tuesday, the latest sign of improving ties between France and Iran five months after major powers agreed a deal over Iran’s nuclear programme.

The airline said three weekly flights would begin from April. It had suspended direct flights between Paris and Tehran in 2008 for economic reasons.

Air France-KLM will resume flights between Paris and Tehran from April 2016, the company said on Tuesday, the latest sign of improving ties between France and Iran five months after major powers agreed a deal over Iran’s nuclear program.

The airline said three weekly flights would begin from April. It had suspended direct flights between Paris and Tehran in 2008 for economic reasons.

“Air France is showing its ambition to develop itself in a country with dynamic growth and for which the European Union is Iran’s fourth economic partner,” the company said in a statement.

ussia wants to see its domestic oil blends compete with Brent and WTI as primary global crude benchmarks, according to an official from the St. Petersburg International Mercantile Exchange (SPIMEX).

“Our goal is to take a place among the major indicators. Currently, the pricing for most of our oil exports which as well determines our budget, is in the hands of our partners,” SPIMEX advisor Segey Kvartalnov told reporters.

He explains that around 70 percent of the world’s oil contracts are currently based on the Brent benchmark.

At the same time, he said, “the volume of Urals and ESPO Russian oil blends on the international market is twice the total volume of oil supplied from BFOE, Oman and Dubai.”

In June, the head of Russia’s biggest oil firm Rosneft Igor Sechin called for increased efforts to standardize domestic oil blends.

Russian crude from the Urals region and ESPO (crude transported through the ESPO pipeline) is currently trading cheaper than Brent blend due to lack of a transparent pricing mechanism and guarantees of delivery.

To be recognized as a benchmark on the global market, the Russian crude has to meet three requirements. It has to be traded at clear and transparent prices; the deliveries should be guaranteed; the trading volume has to be not less than 10-15 million tons per year, or three million barrels a day.

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Azerbaijan plans building largecapacity ferries

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zerbaijan Caspian Shipping Company” CJSC is negotiating with “Baku Shipyard Factory” for the construction of large-capacity ferries, said Farhad Guliyev, deputy chairman of the Caspian Shipping Company. According to him, currently used ferries can accommodate about 50 cars.

Meanwhile, about 70,000 cars were ferried in 2015.

The largest cargo transportation carried by the Caspian Shipping Company, are sent to the Turkmenbashi port (delivery period of 14-16 hours) and Aktau port (24-26 hours).

“Baku Shipyard Factory” LLC is a joint venture of SOCAR, Azerbaijan Investment Company (AIC) and Singaporean “Keppel Offshore & Marine”, opened by Ilham Aliyev, the President of Azerbaijan in Sept. 2013.

Keppel owns 10 percent of factory’s stakes and is solely responsible for its management and operation. The largest shareholder of the company with a 65 percent stake is SOCAR, as well as AIC, which owns a quarter of factory’s stakes.

The factory is designed for the construction of a wide range of specialized and commercial vessels, including multipurpose offshore ships such as platform supply vessels and tankers and cargo ships. The company also realized the ship repair possibility.

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December 14, 2015 #126

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 Ave., Tbilisi Tel: 225-20-72/73/74/76 embassy.tbilisi@mfa.gov.tr Consulate General in Batumi 9 Ninoshvili Street, Batumi Tel: 422 25 58 00 consulate.batumi@mfa.gov.tr 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.esRomania Embassy

TBILISI GUIDE

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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

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PUBLICITY caucasus business week

December 14, 2015 #126