Caucasus Business Week #136 by Caucasian Business Week

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BUSINESS WEEK March 7, 2016 #136

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March 7, 2016, Issue 136

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Economic Growth Slows Down Government Stakes Its All to Boost Economic Growth Pace According to the early report, in January 2016 the real gross domestic product upturn pace marked 0.8% as compared to January 2015, while the 2015 real growth marked 2.8%. As reported, the 2016 forecast growth accounts

for 3%. The year of 2016 started with heavy tendencies in the Georgian economy. In the last year Georgia’s GDP growth made up 2.8% and it was foreseeable that the new year would start with complications. The month

Paintings Becoming Alive

The interview with Tamta Matitaishvili, creator of fun and colorful handmade Pg. 9 pillows

of January recorded an only 0.8% upturn and this is very low indicator. However, the ﬁgure marked 0.3% in January 2015. The last year recorded not only share depreciation of the national currency, but slowdown in eco-

nomic growth. In the last year, the economic growth constituted only 2.8%. Consequently, the economic growth contraction tendency was maintained in 2016 too, but the situation is better than in 2015. Pg. 5

GURAM JALAGHONIA: GEORGIAN AVIATION MARKET TO FOLLOW EUROPEAN REGULATIONS

STRIKE OF MINERS AND QADAGIDZE’S EXIT FEBRUARY ECONOMIC DIGEST

he Georgian aviation market remains attractive for foreign airlines. According to the latest reports, the frequency of direct ﬂights from Georgia to European destinations is growing. In his interview with the CBW Guram Jalaghonia, the head of the civil aviation agency, talks about innovations and the aviation market development Pg. 6 tendencies.

he month of February was not full of favorable economic tendencies. Miners went on strike in Tkibuli, the government plans to cut the budget by 5%. Economic growth in January marked 0.8%. The dollarization coefﬁcient has increased and so on. However, there were positive trends too. For example, miners’ strike brought real results and their salaries will rise Pg. 7 by 5%-10%.

RONNY SOLBERG: THE SHUAKHEVI HPP TEAM CAN OVERCOME ANY Pg. 4 CHALLENGE

Commercial Banks’ Profits Constantly Grow

Pg. 6

2 MAIN EVENTS SOCIAL ISSUES, INFRASTRUCTURAL DEVELOPMENTS IN FOCUS OF GOVERNMENT MEETING

NEWSROOM March 7, 2016 #136

caucasus business week

GOV’T TAKES ACTIONS TO FOSTER ENTREPRENEURIAL SPIRIT IN GEORGIA

mproving the living conditions of some of Georgia’s most vulnerable people was the focus of Government meeting. Speaking to Government ofﬁcials, Georgia’s Prime Minister Giorgi Kvirikashvili introduced his plan to improve the living conditions of people forced from their homes due to environmental instability and those left homeless by internal conﬂict. His plan involved offering more than 200 ecomigrants new homes and land, and gift 145 internally displaced families a new place to live.

KVIRIKASHVILI HAS SUBMITTED A NEW PROGRAM “HOST IN GEROGIA”

he MP has represented details of the project in the future hotel “Intercontinental” (former building of publication). The state should assist companies in hotel construction or expand/reconstruction within the frame of the project. It should also assist companies to gain franchise agreements of hotel management companies.

LAND REGISTRATION IS SIMPLIFIED

inistry of Justice declares, that the department works on simpliﬁcation of registration procedures of real estate and property rights protection. According to Minister of Justice, works on the package are concluded , which will enable the citizens easily to register the land plot.

PARLIAMENT APPROVES NEW MEMBER OF NBG BOARD

he Parliament of Georgia has approved the candidacy of Koba Gvenetadze by 81 votes to elect him as a member of the board of the National Bank of Georgia (NBG). Koba Gvenetadze makes focus on the existing structural organization of bank supervision mechanism and supports the idea of the NBG’s high-level independence. Maintaining the supervision component at the NBG will improve efﬁciency of the monetary policy transmission mechanism; while the structural separation creates risks of moderate inﬂation processes.

NATO SUPPORTS GEORGIA’S INTEGRATION INTO ALLIANCE

eorgia’s relationship with the North Atlantic Treaty Organisation (NATO) and the county’s integration into the Alliance was the focus of an ofﬁcial meeting between Georgian and NATO high ofﬁcials in Belgium, Brussels. Last evening Georgia’s Minister of Foreign Affairs Mikheil Janelidze met NATO Deputy Secretary General Alexander Vershbow and spoke about future prospects of cooperation – something Georgia is eager to take full advantage of.

QVEVRI - ANCIENT GEORGIAN WINE VESSEL DECORATES UN GENEVA OFFICE

vevri, a large, ancient Georgian winemaking vessel has today been placed in the courtyard of the United Nations (UN) Geneva ofﬁce to mark the organisation’s 70th anniversary. As a gift from Georgia, the vessel will permanently remain in the UN ofﬁce courtyard with an accompanying signboard giving viewers information about its history and purpose.

he Government of Georgia is creating a special group to convey the opportunities, problems and ideas of the business society to the Government, to foster entrepreneurial spirit in the country.

This will make your life and activities easier,” Georgia’s Prime Minister Giorgi Kvirikashvili told more than 50 members of the business society at a meeting today.

expanding; new subcomponents are being added to the program. … Now we want to listen to your ideas about what should be done to encourage SMEs in Georgia further,” Kvirikashvili said.

He revealed “a permanent dialogue format will be established with the small and mediumsized businesses” so the Government can be more aware of the opportunities and challenges facing the country’s business society. The head of Georgian Government also talked about the four-point reform plan, which one of the main directions was developing entrepreneurial spirit.

The start-up ﬁnancing fund will begin its activities in the near future. Meanwhile, the ‘Produce in Georgia’ state program is

The PM said the Government would share international best practices to encourage start-ups in Georgia and provide better ﬁnancial support.

GEORGIA-SOCAR GAS DEAL ENDS COUNTRY’S GAS DEFICIT WOES

eorgia will overcome its natural gas supply deficit thanks to a new deal with Azerbaijani’s national oil company SOCAR. From now until 2030 Georgia will receive an additional 500 million m3 of natural gas from SOCAR, bringing the amount it receives from 800 million to 1.3 billion m3 per year. The Georgian side said the extra gas will help the country fill its gas deficit during winter. Three days after announcing the deal, Georgia’s Energy Minister Kakha Kaladze and SOCAR president Rovnag Abdullayev resigned a Memorandum agreed between the countries in December 2011.

We signed an agreement with our strategic partner, which will ensure the supply of gas to Georgia and satisfy the market,” said Kaladze. In addition to the extra gas the Azerbaijani company will decrease the price of gas sold at petrol stations in Georgia. Georgia will also receive natural gas from the Shah-Denis gas ﬁeld and “the country will not face any technical problems regarding receiving gas from Azerbaijan”, read a press release from Georgia’s Energy Ministry. We are glad the negotiations [with SOCAR] ended successfully. Our strategic partnership will deepen further … [and] we are glad SOCAR now has the technical possibility to supply Georgia

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with more gas,” said Georgia’s Prime Minister Giorgi Kvirikashvili after meeting Abdullayev. Since 2012 Georgia has increased its natural gas consumption by almost 40 percent, and this caused the gas supply deﬁcit in the country. To address this issue, the Georgian Government searched for ways for energy diversiﬁcation; one of which involved negotiating with Azerbaijan and Iran to import more natural gas. Once the agreement was reached to increase gas supply from Azerbaijan Georgia’s Energy Minister said there was no need to import natural gas from Iran. The Georgian side launched negotiations with Iran as there were some technical problems regarding the import of natural gas from Azerbaijan. We had a meeting [with the Iranian side]. We talked about the possibility of importing gas from Iran. It is theoretically possible but there is no need for it today,” Kaladze said. At the same time Georgia was also negotiat-

ing with Russian energy giant Gazprom to renew its annual contract of gas exchange. As of today negotiations with Gazprom are not completed and therefore no agreement is signed, however Kaladze offered Gazprom to continue the old contract. The old contract outlined Georgia could receive 10 percent of the gas Russia exported to Armenia via Georgia. However Gazprom offered Georgia to pay for the pipeline use instead of offering gas. Georgia refused this proposal as the natural gas was more important for the country and especially when Georgia faced the gas supply deﬁcit. We have recently sent our last offer to them. We offered them to stay under the old contract. Namely, we want to receive 10 percent raw natural gas,” said Kaladze. It is not known when the next meeting with Gazprom will be held.

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

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

PUBLICITY March 7, 2016 #136

caucasus business week

CEO caucasus business week

Ronny Solberg:

March 7, 2016 #136

The Shuakhevi HPP Team Can Overcome Any Challenge RONNY SOLBERG has been the CEO of Adjaristsqali Georgia LLC (AGL) for the past year. His company is building the Shuakhevi Hydropower Project (HPP) – one of the largest infrastructure investments in Georgia, with a total investment of USD 416 million. Mr. Solberg is from Norway and has worked in the upper management of a variety of companies in the hydropower ﬁeld.

r. Solberg is married with three children. His oldest son is an engineer, and his daughter is studying engineering and planning to work the hydropower sector like her father. His youngest son is a 19 year-old surfing school student in the middle of a decision-making process with respect to his future profession. Unlike his younger son, Mr. Solberg is a motorbike enthusiast (he has twelve) and avid skier. He recently visited Goderdzi Pass and believes that the area has solid development potential as a ski resort. In his free time, he also enjoys brewing beer and hosting friends. In Norway, he lives near Oslo in a house at the edge of a forest, though he does not spend much time at home – his work keeps him abroad most of the time. Mr. Solberg and his wife currently live in Batumi and love being in the city, especially during the off-season. Mr. Solberg enjoys Georgian wine and traveling to different parts of Georgia. This autumn he traveled to Kakheti and was so impressed by Kvareli Lake that he is planning to invite friends to join him there this summer. He is also interested in Georgian fine arts and intends to purchase works from Georgian artists. - How would you describe the team you lead in Georgia? - Our team can overcome any challenge. As you know, the majority of AGL team members are Georgians. When you implement a project in foreign country, it is vitally important to be familiar with the traditions, culture, and environment of the host country – successful communication is not possible otherwise. The first thing I did when I arrived in Georgia was to get to know this country.

Georgia is a fascinating country with a complex culture and extraordinary people, many of whom work with us at AGL. The knowledge, education, experience, and professionalism of these Georgian colleagues has signiﬁcantly contributed to the success of our project. - To what extent are women represented in your company?

I can proudly say that 60% of the employees in our Batumi office and all of the employees in our Tbilisi office are women. They hold managerial positions and are part of our company’s management team. My work is mostly in the energy field, and therefore we are regularly in touch with specialists in Georgia’s energy sector. I have been very impressed by the number of knowledgeable women working in the energy field in Georgia, since men are so often overrepresented in this sector. Personally, I would like to see even more women interested in careers in the energy field. - Mr. Solberg, Georgia is a developing country that is gradually implementing modern methods of management in its private companies. You have many years of experience working in managerial positions. In your opinion, what are some of the first steps that a manger needs to take when starting a job? - First of all, you have to study the needs of the company, but I would also like to highlight

one other important factor which is crucial for any company to achieve success –

It does not matter whether you manage a large company or small one, whether you are a mid-level manager or top manager, your ﬁrst step is to build a team where everyone has the chance to make the most of their abilities. You need to watch and study your team members and enable them to do what they do best. Naturally, this is not a simple process; however, projects cannot be successful without an effective and motivated team. - Many managers still don’t believe that it is important to establish or improve a company’s internal communication channels. How are these being developed in your company? - Communication requires constant improvement and development to keep pace with technological progress. It is very im-

portant to keep employees updated about ongoing processes through internal communication channels. They should never get information about the company’s achievements or challenges through external channels. We use all means of technology at our disposal to achieve this goal. In addition, I believe that face-to-face communication the most effective form of communication, and therefore we often use it. - What advice would you, as a CEO with years of experience, give to Georgian managers? - I believe that a CEO should always feel that a company’s success or failure is their responsibility and never that of an individual employee or team.

Still, it is essential to give employees a sense of responsibility and decision making capacity within the bounds of their abilities and roles. And most importantly, always ﬁnd time to listen to your employees.

ECONO-MIX March 7, 2016 #136

caucasus business week

ECONOMY

MERAB JANIASHVILI Economic Analyst

GEORGIA TO DISCUSS NEW REGULATIONS ON MICROFINANCE INSTITUTIONS

he discussion concerning about the regulations of Microfinance Institutions will be held in March. The Deputy Chairman of the Finance and Budget Committee, Nodar Ebanoidze provided this information to businesspressnews. According to him, the core themes about the microfinancials’ and online credits’ regulations and reporting forms will be discussed. “Today, Microfinance Institutions, basically are free from regulations. It is obvious that they are under control of National Bank of Georgia (NBG), however, besides the registration, there are no other regulations arisen after that.” – notes Ebanoidze. The Deputy Chairman of the Budget and Finance Committee stated in his speech that the discussion process will be held in near future.

INFLATION DROPS TO 0.1 PERCENT IN GEORGIA

I Economic Growth Slows Down Government Stakes Its All to Boost Economic Growth Pace

ccording to the early report, in January 2016 the real gross domestic product upturn pace marked 0.8% as compared to January 2015, while the 2015 real growth marked 2.8%. As reported, the 2016 forecast growth accounts for 3%. The year of 2016 started with heavy tendencies in the Georgian economy. In the last year Georgia’s GDP growth made up 2.8% and it was foreseeable that the new year would start with complications. The month of January recorded an only 0.8% upturn and this is very low indicator. However, the ﬁgure marked 0.3% in January 2015. The last year recorded not only share depreciation of the national currency, but slowdown in economic growth. In the last year, the economic growth constituted only 2.8%. Consequently, the economic growth contraction tendency was maintained in 2016 too, but the situation is better than in 2015. In January 2016 Georgia’s foreign trade turnover (excluding unorganized trade) made up 528 million USD, down 24% compared to January 2015, including the exports marked 122 million USD, down 22% and the imports amounted to 405 million USD, down 25%. Georgia’s negative trade balance made up 283 million USD in January 2016, i.e. 54% in foreign trade turnover, while the ratio accounted for 56% in 2015.

Additional factor pointing to the economic activity slowdown is related to recently-established business companies. A total of 2 725 entities were registered in January 2016, down 17.8% compared to January 2015. At the same time, in January 2016 the turnover of VAT-payer companies rose by 7.2% compared to January 2015. It should be also noted that in January 2015 this indicator marked 2.6% and 8.1% in 2014. These trends prove how heavy situation arose in the Georgian economy in 2015. We should also emphasize that the January 2016 indicators are far better compared to January 2015. At the beginning of 2016 the inﬂation indicator represents one of the main problems in the Georgian economy. In January and February the inﬂation rate made up 5.6%. It should be also noted that the National Bank’s target rate is 5% and the mentioned trends unveil the NBG’s unprofessional money-credit policy.

The economic growth contraction has affected the part of the budget revenues too. In January

and February the budget expenditures extremely exceeded the budget revenues. According to the February 26 report, fulfillment of the state budget revenues part made up only 51% in the first quarter plan, while the expenditures part constituted 58%. In the reporting period, the state budget has collected 1.116 billion GEL and spent 1.380 billion GEL. The difference made up 264 million GEL. The Finance Ministry has explained that in the first quarter the internal debts will not grow and the deficit will be financed from the treasury balance. The treasury balance from January 1 to February 26 has decreased by 265 million GEL to 357 million GEL from 622 million GEL. The state budget is not facing any problems and all three parameters of the budget (revenues, expenditures and balance) satisfy the requirements, according to the January-February indicators. There are no problems with the budget fulfillment and the first quarter plan indicators, the Finance Ministry assures. “As to the fulfillment of the state budget part of tax revenues, according to the JanuaryFebruary early report, tax revenues exceeded the January-February 2015 indicators by 7.1%. The year on year growth in January-February 2015 made up 6.5% compared to the same period of 2014. Consequently, we have higher upturn in the part of tax revenues. In January-February we have collected 58% of the first quarter plan (the figure was 57.1% in the same period of 2015)”, the Finance Ministry noted.

The Finance Ministry refuses that the state budget is facing problems, but Finance Minister Nodar Khaduri has announced 5% budget cuttings in 2016. The Government plans to cut the state budget expenditures by 5% because of the coming taxation system reforms and the economic slowdown in the neighboring countries, Nodar Khaduri said. The budget cutting will concern administrative costs of only Ministries and other state structures, not social allowances and infrastructural projects. Despite uneasy economic and ﬁnancial situation in Georgia, the country expects higher FDI inﬂows in 2016 compared to 2015, the Finance Minister said. The 2016 state budget accounts for 10.145 billion GEL and its 5% contraction will cut the part of expenditures by 400-500 million GEL. It

is very difﬁcult to cut the state budget by about 0.5 billion GEL during the year, but this is not impossible, even more so at the expense of cutting administrative costs.

The Authorities have decided to carry out the taxation system reformation in response to economic challenges. This decision is expected to lower budget revenues, but will additionally stimulate the economy. We mean the initiative that Prime Minister Giorgi Kvirikashvili has recently proposed for abolishing profits tax on reinvested funds. Seeing the economic growth slowdown, the government stakes its all by cutting the budget expenditures by 5% as a result of the mentioned taxation system reformation. The parliament of Georgia has already started discussing the bill that calls for simplifying the tax administration and removing the 15% profits tax on reinvested funds. If the parliament adopts the bill, the amendments will be enacted on July 1. Meanwhile, new Prime Minister Giorgi Kvirikashvili puts forward new initiatives almost every week with the aim to promote the business sector and improve the economic growth indicators. Abolition of profits tax on reinvested funds, decriminalization of economic crime, abolition of a value added tax on the fixed assets, introduction of Host in Georgia component as part of the Produce in Georgia state program, simplification of regulations for tax administration, introduction of the startups financing system for small and medium enterprises, one-window principle for the business sector – this is an incomplete list of all new initiatives that Giorgi Kvirikashvili has proposed for the last 2 months.

At this stage, the economic growth paces are low, but the quantity and importance of announced reforms suggest that the GDP will increase faster in the next months. We will see in the near future whether the planned economic growth pace will sufﬁce for the state budget fulﬁllment. Anyway, we welcome efforts to promote the business sector by cutting administrative costs. The current year will show whether the Government copes with the determined tasks.

n February 2016 the monthly inflation rate in Georgia amounted to 0.1 percent, Geostat reported. The following table shows percentage changes in prices for the commodity groups of the consumer basket as well as the relevant contributions to the overall inflation rate. In February 2016 prices increased for food, beverages, tobacco and communication services, while transport costs dropped, said the National Statistics Office of Georgia, Geostat. Month-on-month the cost of food and nonalcoholic beverages increased 7.5 percent and contributed 0.45 percentage points to the overall index change.

24% MORE INTERNATIONAL VISITORS ARRIVED IN GEORGIA IN FEBRUARY

n February 2016 almost 24% more international visitors arrived in Georgia. Georgian vice Prime Minister, Minister of Economy and Sustainable Development Dimitri Kumsishvili held the brieﬁng concerning about the international visitors arrival in Georgia. According to him, based on the statistics for February 2016, almost 24% more international travelers visited Georgia compared to previous year including the increase of the number of foreign travelers and tourists spending more than 24 hours in Georgia.

GEORGIA MIGHT TO BECOME PARTICIPANT OF MULTIMODAL TRANSPORT CORRIDOR

epresentatives of Azerbaijan, Kazakhstan, Iran, Georgia and Turkmenistan have covered the prospects of development of multimodal transport corridor East-West. Heads of railway and maritime transport of 5 countries took part in the meeting. In particular, they discussed such issues as the reviewing of the existing transport infrastructure of the region, assessment of potential and prospects, marketing and cargo market research, joint activity in the sphere of attraction of transit trafﬁc and the development of joint activities on increase of the transit ﬂow, the use of tariffs and documents, optimization of transport and customs procedures.

GOV’T PLANS TO EXPORT 10 MILLION BOTTLES OF WINE TO THE UNITED STATES AND CHINA

ccording to the government’s long-term plan, Georgian wine sales in the United States and China will reach a total of 10 million bottles. Giorgi Samanishvili, Director of the National Wine Agency, told “Commersant” that Georgia can achieve similar results in China in a relatively short period of 5-7 years. While to achieve the desired results in US , more time and ﬁnances are required.

GEORGIAN AVIATION caucasus business week

March 7, 2016 #136

Georgian Aviation Market to Follow European Regulations The civil aviation agency has not registered an application from Air Berlin, at this stage. - Do you expect any other new airline to appear on the Georgian market?

At this stage, according to the information of the civil aviation agency, two new airlines plan to enter the Georgian aviation market in 2016 The Georgian aviation market remains attractive for foreign airlines. According to the latest reports, the frequency of direct ﬂights from Georgia to European destinations is growing. In his interview with the CBW GURAM JALAGHONIA, the head of the civil aviation agency, talks about innovations and the aviation market development tendencies. - Georgian citizens were genuinely excited by Wizz Air plans for increasing frequency of ﬂights from Georgia to Europe. What factors have raised the airline’s interest in Georgia? Do you think the airline would have expressed the same interest in Georgia if the country had not had perspectives for visa-free relations with Europe?

Visa-free regime with the EU is one of the encouraging factors, indeed. As a rule, airlines show interest in this or that specific country’s aviation market thanks to a combination of several similar factors. In our case, these factors are: favorable geographic location, summer and winter resorts, visa policy, Georgian citizens’ huge interest in European and Asian destinations, valuable aviation infrastructure, liberal policy of air traffic, the aviation legislative framework – bilateral agreements signed about air traffic, mutual understanding memorandums, agreement with Europe on joint airspace, regulations and procedures developed by the civil aviation agency on admitting airlines to the market, SakAeroNavigatsia, the higherlevel air navigation service enterprise and naturally, international standards for flights security and protection of aviation security. The combination of the mentioned aspects with all other components raises the commercial interest in airlines on the Georgian aviation market. - Besides Wizz Air, RYANAIR airline is also expected to launch operation in Georgia. Both low-cost airlines will perform flights from Kutaisi Airport. Do you think this decision will lower passenger turnover at Batumi and Tbilisi International Airports?

The Georgian Airports Union is conducting intense negotiations with Ryanair airline. We should wait for the negotiation results. As to the expected impact of low-cost airlines on passenger turnover at Batumi International Airport, I would like to note that the interest in the Ajara resort zone grows year to year. Consequently, the passenger turnover at Batumi International Airport grows constantly. The following airlines perform regular and charter ﬂights in this direction: Georgian Airways, Turkish Airlines, BELAVIA, YANAIR. At this stage,

According to our information, this year the following airlines plan to perform regular flights to Batumi: Air Arabia, Scat, EL AL Israel Airlines, ARKIA, Dniproavia. TAV Batumi, the Batumi airport operator company, the local self-government and the tourism department plan to draw new airline. We, as the aviation agency, make focus on safe and valuable operation of all international and internal airports in Georgia. In this respect we carry out permanent supervision and monitoring. We also provide professional consultations to all interested parties and provide overall assistance in finding required information, obtaining due licenses and so on. - I remember last year negotiations were underway with Ryanair and Air Berlin. Are the negotiations with Air Berlin successful? - I think the negotiator offices will have valuable information on the process.

Iranian airline Qeshm Air that has already obtained a schedule of flights and EL AL Israeli Airlines will also perform flights starting summer season. - Georgia will resume flights with Iran soon. Were these flights successful several years ago and is the current interest satisfactory? - Over the last years flights are performed in constant regime between Iran and Georgia by both Georgian and Iranian airlines. As to the interest of Iranian airlines in the Georgian aviation market, I would like to note that over the last years this interest really existed and this interest was proved by Ata Airlines that was performing Tehran-Tbilisi flights. It should be noted the interest is huge this year too, as two Iranian Airlines ATA Airlines and Qeshm Air have applied to the civil aviation agency to obtain licenses for performing regular flights. We have already approved a schedule of flights to them and they have already obtained due licenses. - According to the spread information, Airzena plans to launch operation in the Armenian market. Currently, only one Georgian airline Airzena functions on the market. This airline accuses the civil aviation agency and its policy of the problems arisen before it. What steps has the state taken or plans to take to maintain the only Georgian airline? - In compliance with the determined policy in the civil aviation sector, the civil aviation agency is to irreversibly protect international standards, recommended practice, international and bilateral agreements that are applied in the civil aviation sector. All these efforts are to ensure safety of flights and passengers, open market principles, equal rights, strong guarantee of independence of pricing and so on. I would like to tell your audience that initially Georgian Airways considered increased frequency of regular flights to the Russian Federation as a problematic issue, while this decision has brought positive results to the airline and its passenger turnover has increased, finally. As to the second part of your question, naturally, the state tries and will always try to promote the private business as part of the rights and competences determined by the legislation. On the other hand, we should realize that the aviation market players act independently in their own commercial interests and they determine themselves where, when and how to operate. According to our information, Georgian Airways will continue operation in Georgia and will enter the Armenia aviation market too. I would like to wish all the best to our aviation specialists and the whole company. - Last period various information is spread that this or that company plans to increase frequency of flights to Georgia and this is very

good tendency. However, it is interesting what factors have intensified this interest, while we hear that the solvency of our population shrinks, the national currency is depreciating in relation to USD and EUR and Georgian citizens who receive salaries in GEL, have to pay higher price for air tickets. - We have already overviewed the factors that have intensified the interest in Georgia and its aviation market above. The issue of solvency of Georgian citizens is beyond the competencies of the civil aviation agency. Based on the statistical indicators, I can say that the increased passenger turnover does not imply only tourist inflows. This also means passengers that leave from our airports to various directions and destinations. - What about cargo transportation? Is this direction developed?

Currently, only Tbilisi International Airport owns a cargo terminal in Georgia. Consequently, cargo transportation is carried out by only Tbilisi International Airport. The last period has recorded an upturn tendency, while the previous year has recorded a downturn. - Georgia has assumed obligations before the EU as part of the association agreement. What is the current situation in the civil aviation agency in this respect? What steps should the country take to become a member of the European joint airspace? What will be the results from fulfilling these obligations? - The agreement on Joint Airspace signed by Georgia, the EU and EU member countries represents an action document in the civil aviation field. Georgia signed the document in 2010. It should be noted that the EU has offered only Georgia in the South Caucasus Region to sign this agreement thanks to the liberal policy the government has carried out in the civil aviation field. The precondition for enactment of the agreement is created by fulfillment of the assumed obligations, namely, embodiment of regulations and recommendations indicated in the agreement annexes (a total of 81 regulations and instructions) into the Georgian legislation. The civil aviation agency provide tireless job to adjust the Georgian legislation with European regulations and our European partners provide efficient support in this process (EU Twinning Project, EASA, EUROCONTROL ). We have fully established the airplane onboard inspection procedures (EASA, SAFA), under which flight security inspectors of the civil aviation agency carry out inspection of foreign airplanes, notification about aviation incidents onboard, joint EU regulations for delivering information to the interested parties and bodies, regulations for issuing compensations and assisting passengers in the process of ascending the airplane, flight cancellation or long delay, regulations and conditions for protection of rights and assisting disabled bodies and so on. In 2016-201 we will introduce other important European regulations, including insurance standards for airlines, regulations for determination of responsibility of airline for transporting passengers and cargo items (permanent appraisal of financial stability of enterprises) and so on. After we have thoroughly fulfilled the agreement obligations, Georgia will have joint airspace with Europe and higher standards in terms of flights safety, flights supervision, protection of passenger rights, admittance to the aviation market, qualification of aviation specialists, organization of air traffic, security and other directions.

ECONOMIC DIGEST March 7, 2016 #136

caucasus business week

Strike of Miners and Qadagidze’s Exit The month of February was not full of favorable economic tendencies. Miners went on strike in Tkibuli, the government plans to cut the budget by 5%. Economic growth in January marked 0.8%. The dollarization coefficient has increased and so on. However, there were positive trends too. For example, miners’ strike brought real results and their salaries will rise by 5%-10%. Moreover, Prime Minister Giorgi Kvirikashvili has put forward a new initiative that is called Host in Georgia, as part of the Produce in Georgia program. At the end of February, the term of office of Giorgi Kadagidze, the president of the National Bank of Georgia, expired. According to unofficial sources, Giorgi Kadagidze is expected to run for the coming parliamentary elections from the United National Movement party as one of the leading figures in top five candidates.

Prime Minister’s New Initiative – Host in Georgia

n the Last month Prime Minister Giorgi Kvirikashvili proposed a new initiative. As reported, in January the Prime Minister proposed to abolish the proﬁts tax on the reinvested funds, to decriminalize the economic crime and several other initiatives. In this case, Kvirikashvili has put forward a new initiative as part of the Produce in Georgia state program. The new initiative is called as Host in Georgia. The new component enables interested enterprisers to build a new hotel, expand/re-equip the existing infrastructure and to sign a franchising agreement with an international hotel operator and invite a foreign brand to Georgia. The new component covers the whole territory of Georgia, except Tbilisi and Batumi. Consequently, the government will assist the hotel business to take cheap credits. Tourism is considered to be a priority direction in the Georgian economy and the latest statistics proves this consideration. According to the February reports, the inﬂow of foreign tourists who have spent 24 hours and more in Georgia, has increased by 19% compared to February 2015. According to the Economy Ministry statistics, one foreign tourist spends 600 GEL on average in Georgia. In 2014 the tourism sector earned 1.8 billion USD for the Georgian economy, while total value of tourism service exports in January to September 2015 marked 1.5 billion USD. In 2009-2014 the averaged annual growth in tourism exports constituted 27%.

Miners Win

n mid February Tkibuli miners went on strike with demands for higher salaries and better working conditions. The strike lasted 2 weeks and brought real results for miners. SakNakhshiri and miners came to agreement after negotiations. Under the agreement, the company will increase the payroll budget by 5% and miners’ salaries will increase by 5% to 10%. Moreover, the employer is obliged to gradually establish and implement labor safety speciﬁc measures; The Company will also pay halved salaries for the 14-29 striking period, while another half of the missed workdays will be remunerated in the form of a paid leave. At the same time, the employees will not be subjected to administrative liability. It should be noted the ruling Georgian Dream coalition has amended the Labor Code with the aim to improve the working conditions of employees. However, the fact is that miners, diggers and other specialists have to work in unbearable conditions again. The miners’ strike has dictated the Authorities to revise the recently adopted decision. To maintain tax preferences for the Tkibuli miners, the tax code will be amended. The people, who enjoyed tax preferences before 2016, will maintain the preferences in 2016 too. Prime Minister Giorgi Kvirikashvili has already instructed Finance Minister Nodar Khaduri amid the Tkibuli strike. As reported, since 1999 miners with small children were imposed a 10% incomes tax until their salaries will reach 3 000 GEL. After the adoption of the new Highland Law, about 800 persons lost these preferences. These

changes were preconditioned by the fact that the Tkibuli District and its 14 villages previously were registered as highland zones, but, according to the new law on highland regions, starting January 1, 2016 these regions were excluded from the list of highland zones.

Kadagidze’s Term Expires

he term of office of the ex President of the National Bank of Georgia (NBG) Giorgi Kadagidze expired on February 25. He has managed the central bank for 7 years (20092016). This period has recorded both upturn and downturn trends. There are various positions when appraising the performance of Kadagidze. One part talks about only positive sides, another part emphasizes only negative. Giorgi Kadagidze took up the NBG management in February 2009, amid financial crisis in Georgia and the whole world. Before, he had chaired the financial supervision agency for two years. As reported, six years ago the financial supervision agency was an independent structure, separately from the NBG. Before the appointment of Kadagidze, the NBG operated without the president for nearly 2 years and vice President David Amaghlobeli was executing duties of the NBG President. Now Kadagidze is considered one of the leading figures in top five candidates in the National Movement list for parliamentary elections. Therefore, Kadagidze may return to public activities in the near future as an opponent of the new Authorities. At the same time, there is no official confirmation Kadagidze will really run for the parliamentary elections from the National Movement. Meanwhile, the parliament of Georgia has already approved a new member of the NBG board to replace Giorgi Kadagidze. Eight-one MPs voted for Koba Gvenetadze who has worked as a counselor for Galt&Taggart since November 2015, while in 20022015 he worked as a senior economist in Washington, in the Central East and Central Asia Department of the International Monetary Fund (IMF). In 2000-2001 Koba Gvenetadze worked as deputy state minister and in 2000-2001 he was Deputy Finance Minister.

Constitution Court to Rule NBG Fate

he constitutional court is discussing the appeal against the 2015 law on stripping the national bank of financial sector supervision functions. As reported, several political parties have found this decision as unconstitutional and they have appealed to the constitutional court against this law. In February the court finished the process of hearings and the body is expected to pass the decision in the near future. It should be also noted that the government, as one of the defendant party withdrew from the trial process on February 25, when the term of office of Giorgi Kadagidze expired. The opponents have connected the government’s step with the Kadagidze’s exit. The fact is that the government ‘s decision for forming an independent agency for financial sector

supervision was politically-motivated and the decision aimed at stripping Kadagidze of banking sector regulatory mechanisms. However, this factor cannot make the mentioned law unconstitutional, even more so, previously similar agency existed for almost 2 years and Giorgi Kadagidze has chaired that agency. Consequently, if the legislative amendment was not unconstitutional in 2008-09, it could not be illegal today too. The most comical moment in this turmoil is that the authors and supporters of this bill (naturally, not all of them) were objecting to similar changes 7-8 years ago, when the ﬁnancial supervision agency was an independent body, while current plaintiffs and objectors were supporting and initiating these changes 7-8 years ago. As to the ﬁnancial sector regulatory mechanisms, the world practice suggests that both variants are widely applied – central banks with supervisory function and supervisory agencies as independent agencies.

Dollarization Deepens

nresolved issue with the Dollarization coefficient is considered one of the main failures of Giorgi Kadagidze, while he had prioritized the De-dollarization policy. According to the 2016 report, the deposits dollarization coefficient marked 72.3%, up from 64% year on year. The coefficient was 69% in 2010, when Kadagidze announced Larization strategy a priority direction. In January 2016, as compared to December 2015, the portfolio of GEL-denominated deposits at commercial banks shrank by 255 million GEL (-5.5%), while GELdenominated deposits has shrunk by 210 million GEL compared to January 2015. Meanwhile, foreign currency denominated deposits rose by 87 million USD (+2%) compared to December 2015, while the year on year growth marked 658 million USD. In whole, foreign currency denominated deposits portfolio account for 11.4 billion GEL, while the GEL-denominated deposits portfolio made up 4.4 billion GEL.

Government Plans to Cut Budget by 5%

he government plans to cut the budget expenditures by 5% in 2016 because of planned taxation reform and the economic slowdown in the neighboring countries , Georgian Finance Minister Nodar Khaduri noted. Despite complicated economic and ﬁnancial situation, Georgia is expected to draw more foreign direct investments in 2016 compared to 2015. The Government has initiated tax reforms in response to economic difﬁculties. Despite the mentioned reforms will lower budget revenues, the state economy will be stimulated, the Finance Minister said. The budget cutting will concern mainly Ministries and other state structures, not social allowances and infrastructural projects. The parliament of Georgia has already commenced discussing the taxation system reformation bill that

calls for simplifying tax administration and removing 15% profits tax in exchange for profits reinvestment, as well as for abolishing value added tax on fixed assets. Meanwhile, budget revenues are extremely lower compared to expenditures and the 5% budget cuttings are not supposedly caused by only the tax reformation plans. According to the February 26 report, the budget revenues under the quarter plan marked 51%, while expenditures marked 58%. The state budget has received 1.116 billion GEL and spent 1.380 billion GEL, i.e. 264 million GEL more. There are no problems in the budget fulfillment process and this year the revenues exceed the plan, the Finance Minister said. “According to the early report for January-February, the tax revenues have increased by 7.1% compared to January-February of 2015. This year we have considerable upturn in tax revenues. In January-February we have collected 58.2% of the first quarter plan (57.1% in January-February 2015)”, the Finance Minister said. The slowdown in economic growth may also create problems to the budget fulfillment process. According to GeoStat, the national statistics service of Georgia, the Georgian economic growth marked only 0.8% in January 2016, while the 2016 forecast economic growth is 3%. Despite challenges, the forecast 3% growth remains realistic. The country is waiting for investment inflows from HPP projects and Anaklia Seaport, Nodar Khaduri said. “At this stage, we have not received a final report on the 2015 FDI inflows, but the figure exceeds 1 billion USD. We expect more FDI this year”, the Finance Minister said.

Billionaires Go Impoverished

ontrary to the previous years, in 2015 the number of billionaires has decreased worldwide. On March 1 the Forbes published the updated rating of billionaires. This edition has been publishing the rating for 30 years. The ﬁnal rating has embraced 1810 billionaires, down 16 ones compared to 2015 rating. Total capital of the billionaires in the rating accounts for 6.48 trillion USD, down 570 billion USD compared to 2015. The averaged indicator of capital of billionaires marked 3.6 billion USD, down 300 million USD compared to 2015. For the third year, Bill Gates tops the list with 75 billion USD, down 4.9 billion USD compared to 2015. From Georgia the rating mentions only Bidzina Ivanishvili with 4.8 billion USD and 298th place. It should be noted the capital of Ivanishvili has shrunk by 400 million USD compared to 2015 and he has lost 7 positions in the rating. His capital marked 5.2 billion USD in 2015. The Forbes has named the most successful billionaire of 2015 - the Amazon executive director Jeff Bezos, who earned 29.5 billion USD in 2015. Jeff Bezos who ranked 15th among the world’s richest persons has moved to the 5th position at the end of 2015 with 45.2 billion USD capital. The edition has also named the most loser billionaire of 2015 – Mexican businessman Carlos Slim, who ranked second in March 2015 among the world’s richest persons, but he lost 27.1 billion USD and moved back to the 4th position. His capital has shrunk to 50 billion USD from 77.1 billion USD as of 2016. Merab Janiashvili

8 SKI RESORT VISITORS TO ENJOY NEW SERVICES

he Ski Resorts Development Company and TBC Bank have developed a new service for the ski resort visitors. Namely, the companies offer customers to enjoy the function for filling the MultiCard balance. The new MultiCard is a multiple-use card than enables to avoid long queues and cash payments when using ropeway services. The card owners are able to fill the balance on MultiCard at any time from MultiPay terminals and the website www.multi.ski. In the near future, filling the MultiCard balance will be available through TBC Bank’s mobile and internet banking services too. MultiPay terminal has been already installed at the entrance of Gudaura Ropeway in Gudauri. The terminal enables to fill the balance though any skiing cards (one0use and multiple-use) via TBC Bank’s VISA card, including through contactless stickers. In the near future four other MultiPay terminals will be installed in Gudauri. As to MultiCard, its price makes up 4 GEL and it is applicable in Bakuriani and Gudauri. They are sold at ticket offices located at the ropeway stations.

BANKS caucasus business week

March 7, 2016 #136

Commercial Banks’ Profits Constantly Grow

PRICE OF TBC BANK SHARES GROWS AT LONDON STOCK EXCHANGE

he price of TBC Bank shares (TBCB LI) at the London Stock Exchange (LSE) has increased. In the previous week, the TBC Bank shares were traded at 8.75 USD-10.35 USD. The session week closed by 9.04 USD (+0,44% w/w; -10,5% m/m). During the reporting week deals were made on more than 28 000 shares. Averaged daily deals marked 11 000 shares (the monthly dynamics) that shows contraction compared to the corresponding indicators of the previous month.

GALT & TAGGART NAMED AS THE BEST INVESTMENT BANK IN GEORGIA BY GLOBAL

alt & Taggart announced that it has received the Global Finance award. The magazine named Galt & Taggart as the Best Investment Bank in Georgia in 2016. Magazine Global Finance magazine has named its 17th annual World’s Best Investment Banks by country, region and sector. Galt & Taggart is named as the Best Investment Bank in Georgia by Global Finance for the second time in row.

LIBERTY BANK ASSETS GROW BY 5.3%

he Liberty Bank market ratio has shrunk. As of February 1, the Liberty Bank’s market ratio in terms of assets accounts for 6.2% (7% as of 01.02.15 and 7.7% as of 01.02.14). The year on year indicator has increased by only 5.3%. Loans portfolio has declined by 7.5% year on year. Deposits portfolio have dropped by 2% year on year.

VTB BANK ANNOUNCED ABOUT THE GENERAL SPONSORSHIP OF NATIONAL FOOTBALL TEAM

TB Bank has become the general sponsor of National Football Team. Memorandum is already signed between the bank and Georgian Football Federation. According to it, the bank becomes the general sponsor of National Football Team. The signed agreement envisages two-year sponsorship. Besides the ﬁxed amount, the contract provides resultoriented additional sum, which will be deﬁned by the team’s accumulated scores in the World Cup qualifying games through 2016 – 2017.

TURNOVER IS SHARPLY DECLINED AT INTERBANK FOREIGN EXCHANGE MARKET IN JANUARY

ccording to NBG, total trade turnover of USD/GEL (without NBG’s interventions) has made up 29.1 million USD at the market, which is less by 46% comparing to turnover of December and 47.3% - if compared to the same months of the previous year.

n January 2016 commercial banks earned 20.180 million USD net proﬁts. In practice, the GEL depreciation has not clutched commercial banks, as well as microﬁnance organizations. The sector succeeds irreversibly. In the light of the January indicators, the bank sector tendencies have spotlighted the narrowing creditworthiness of the Georgian national currency. The volume of GEL-denominated deposits shrinks, while the volume of USD-denominated deposits grows.

According to the official statistics of the National Bank of Georgia (NBG), in January 2016, as compared to January 2015, the bank sector’s net profits rose by 4.375 million GEL to 20.180 million GEL. Moreover, amid slowdown in noninterest incomes (-76 million GEL), in January 2016, as compared to January 2015, the bank sector’s total revenues declined by 46.8 million GEL. However, we have witnessed this process has not seriously influenced the bank sector’s profitability growth. The same period has recorded considerable upturn in interest incomes to 30 million GEL (192 672 million GEL). Incomes from loans made up 23.418 million GEL. Moreover, commercial banks earn more profits from retail loans compared to corporate loans and the consumer loan component occupies special place in this direction. Namely, in January 2016, as compared to January 2015, incomes from retail loans rose by 13.4 million GEL (102.578 million GEL), while incomes from corporate loans increased by 9.6 million GEL (69 million GEL). Despite slowdown in noninterest incomes, commercial banks constantly grow revenues from commission fees. The year on year growth marked 6 million GEL in this respect.

The bank sector’s own funds constitute 3.5 billion GEL, that is 13.9% of total assets of commercial banks.

In general, in January 2016, as compared to January 2015, commercial bank increased assets by 4.1 billion GEL (25.3 billion GEL). The bank sector’s assets have increased by 0.2 billion GEL compared to December 2015. In January 2016, as compared to January 2015, the crediting portfolio of commercial banks (including loans issued to nonresident entities) rose by 2.494 billion GEL, while the portfolio increased by 176.1 million GEL compared to December 2015 and made up 16.3 billion GEL as of February 1, 2016. In this respect it is interesting to analyze GEL and foreign currency denominated credit portfolios. The GEL denominated loans portfolio has increased by 454 million GEL year on year and by 152 million GEL month on month (5.392 billion GEL), while the foreign currency denominated loans rose by 2 billion GEL year on year and by 305.7 million GEL compared to December 2015.

Hence, the Larization coefficient of total loans marked 34.23%, while the dollarization coefficient constituted 65% as of February 1, 2016. The volume of nonbank deposits placed in the bank sector exceeded 14.5 billion GEL as of February 11, 2016. It is interesting that the volume of GEL-denominated deposits declines. The Deposits’ Larization coefficient made up 28.66% as of January 1, 2016, while the dollarization coefficient equaled 71.34%.

The analysis shows that the portfolio of GEL denominated

deposits has shrunk by 209 million GEL as compared to January 2015, while foreign currency denominated deposits have increased by 3.276 billion GEL. As to the month on month report, the slowdown in GEL denominated deposits intensiﬁes. Namely, the GEL denominated deposits portfolio declined by 255 million GEL as compared to December 2015, while the foreign currency denominated deposits portfolio has recorded an about 0.5 billion GEL upturn month on month. As reported, commercial banks have announced a growth in deposits interest rates for drawing money in the national currency. According to the National bank, similar decisions are of campaign character, because the interest rate on GEL-denominated deposits make up 10.8%, while the interest rate on foreign currency denominated loans equals 3.8%.

The dollarization coefficient in the foreign currency denominated deposits constituted 81.2%, while the EUR ratio made up 16.4%. As to the loans issued to the national economy, as of February 1, 2016 the national economy crediting portfolio marked 6.829 billion GEL, up 151 million GEL compared to the same period of 2015, while the figure sharply dropped compared to December 2015. The month on month contraction in the national economy crediting portfolio made up 408 million GEL, as a result of declination in the industry sector crediting volume. In January 2016, as compared to December 2015, the industry sector crediting volume shrank by 427 million GEL. All other sectors (agriculture, development, commerce, financial mediation) have recorded an upturn in crediting volume. Finally, as of February 1, 2016 the Georgian bank sector registers 19 commercial banks, including 17 ones with foreign capital in their authorized capitals and one – a branch of foreign commercial bank.

START-UP March 7, 2016 #136

caucasus business week

Paintings Becoming Alive The interview with Tamta Matitaishvili, creator of fun and colorful handmade pillows

- Could you let us know brieﬂy about your activities? - I am Tamta Matitaishvili, creating exclusive handmade pillows. - Please, tell us how did you get started in your handmade business? - One year ago my friend needed a gift for a colleague when he asked me to make a pillow representing Pepi. I had never made any type of pillows before, but I anyway agreed the proposal and the ﬁnal outcome was really awesome and cute. This fact stimulated me to start business according to the orders. - How long have you been in this business? - This February I have just celebrated the 1st year anniversary. - How is the public’s interest towards your production? - I am even surprised that public’s interest is quite big. Before I was thinking this would not be a business but just a hobby I would have done in my spare time. However, I have so many orders that it has become my main activity. In addition, it takes so much time that I even do not have any free time anymore.

- Which is your main target segment? - I am creating the pillows based on the orders. I am trying to make children and old people happy. Thus, I do not have one speciﬁc target segment, and it is for any age. - I see you mainly have orders but do you create pillows just using your inspiration? - Yes, mainly I work on orders. As I mentioned before, I do not have much spare time. However there are a lot of festivals I am participating in, where I need to present all my inspirations. - Is this your main activity or is there anything else you do? - It is so pleasant for me the process of making pillows that I even can’t think about any kind of job anymore. - How do you think, is this segment developed in our country and how you are going to be unique and different in this sphere? - I would say that there are competitors in this ﬁeld; however, my main strength is that there are no limitations set for my customers. Each work is unique and individual. There is no chance to have exactly typical pillow to any other person. - Where and how is it possible to buy your creations? - The customer is able to contact me through facebook web page https://www.facebook.com/ tamtapillows/ , or they are also able to visit me at the saloon “Phenix Jeans” Kandelaki Street number 14. Herewith, I am already cooperating with the shop Flat, existing at Mitskevichi Street number 6 where my pillows are sold. - How is the price determined? - The size, complexity and materials used determine the price of each pillow. - What are your future plans?

- I am planning to participate in several festivals in this year. In addition, currently I am having negotiations with online shops. - From your point of view do you consider you have great perspectives in this ﬁeld in Georgia? - I consider that there is a possibility to go forward in this segment, but due to its essence handmade items’ business is limited in the volume; thus, it can never be more than the threshold. - Finally, what is your main objective you would like to achieve in these activities in future? - I have a big desire to have my personal shop and to have a possibility every day to see satisﬁed customers there.

10 BUSINESS IRAN TO EXPORT TRACTOR ASSEMBLY LINE IN GEORGIA

GEORGIA-IRAN March 7, 2016 #136

caucasus business week

Diagram 1. Georgia-Iran Trade (2011-2015) (millions of USD)

ranian Heavy Industry Co., “Iranian Tractor Industrial Group“, which is one of the largest in the country, has a plan to enter on Georgian market. However, the first steps should take from Georgian side, announced Arash Moazenzadeh, who is an expert in international relations issues. As he noted with Georgian Journalists, Iranian Tractor competes with Turkish, Russian and Belorussian tractors. Thus, Georgian business and Georgian government should definitely take into account this fact. “We would like to enter on Georgian market, however, the first steps should take Georgia. There were even no communication about this idea yet.

NEW BRAND TO APPEAR ON GEORGIAN MEAT PRODUCTS MARKET

n the Georgian meat products market new brand has appeared. Ltd, “Sogur” started to produce “Madiani Gourmet” few weeks ago. Mainly production is sold in the regions. “Madiani Gourmet” currently owns a single store in Tbilisi. According to the store owner, they are engaged in both wholesale trade and retail trade. “We are a new brand and we try to successfully establish ourselves on the market; despite high competition, our main strengths are quality and correspondence of price”, -says Alexander Tbelishvili with “businesscontact“.

VAKHTANG CHARAIA TSU Analysis and Prognosis Center

Diagram 2. Georgian Imports from Iran (2011-2015( Thousands of USD)

TASHIR PIZZA RUSSIAN NETWORK OF PIZZERIA TO ENTER GEORGIA

ashir Pizza, the Russian brand of pizzerias, plans to launch operation in Georgia. The network will open its first facility at the East Point complex on March 5. The company plans to unveil 30 pizzerias in Georgia in the future, including 15 ones in Tbilisi and 15 ones in other cities of Georgia. Currently, the company owns 270 pizzerias in Russia and 23 ones in Armenia. The company unveiled the first pizzeria in Kaluga in 1999. The Russian network opened the first pizzeria in Armenia in 2004.

Diagram 3. Georgian Exports to Iran (2011-2015) (Thousands of USD)

HOTEL INTERCONTINENTAL TO OPEN IN GEORGIA

pening of hotel InterContinental is planned late 2016 or early 2017, – representative of Adjara Group Hospitability has declared about it. According to him, repair works are being carried and also design details are to be agreed with the hotel management operator, however 8-9 months are necessary for ﬁnishing the project after the agreement. He declares, that $6-7 million is mastered from the investment sum, which is a credit of Bank of Georgia, while they should take additional loan from European Bank for Reconstruction and Development (EBRD) at the next stage.

SOPLIDAN NAMED AS THE BEST STARTUP OF 2015

oplidan was named as The Best Startup of 2015 at the survey. The company was established in 2015. The main objective of the company is to provide the population of Tbilisi with healthy foods. The customer is able to order any desired product without leaving the house. The product is branded and each product has a sticker indicating the date and name.

BAIA’S WINE MAY ENTER BRITISH MARKET

2-year-old Georgian lady winemaker’s wine named Baia’s Wine might be sold in England. As Baia Abuladze, the young entrepreneur and winemaker told Georgian Journal, one of the famous companies involved in exporting wines to England, Australia and 40 more countries, became interested in her brand. Baia was attending the Food Technology Conference in England that was a joint event of British Embassy and Georgian Farmers Association.

Georgia-Iran Economic Cooperation

Diagram 4. Georgia’s exports and re-exports to Iran (millions of USD).

he Georgia-Iran economic cooperation was actualized after the international community removed sanctions from Iran. We offer you the structure of the Georgia-Iran trade relations for the past 5 years, according to the UN report (See Chart 1). Despite the long history of Georgia-Iran economic relations and cooperation, the trading relations intensified between these countries for only the last years. The trading volume exceeded 100 million USD in 2012, for the first time. Regretfully, this growth is mainly preconditioned by upturn in Iranian imports to Georgia, not Georgian exports to Iran. In 2013 the Georgia-Iran trade relations reached its peak, according to the official statistics, and constituted 177 million USD. In 2014 and 2015 the trade relations decreased and equaled to 151 million USD and 128 million USD, respectively, mainly because of decreased imports from Iran to Georgia. Despite a growth in imports of Iranian products in USD, the assortment of the products is very scanty and the accent is made only on 5 main imports items. Moreover, total value of these five items imports for the past 5 years constitutes about 2/3 of total imports (see Diagram 2). Namely, over the last years the five top import items from Iran to Georgia remain unchanged, in practice and this list consists of: 1. Mineral fuel, oil, distilled products; 2. Stoneware; 3. Plastics and plastic products; 4. Glass and glassware; 5. Various agriculture products (see Chart N1). The list shows that the main part of the turnover is less related to modern technologies and innovations. As to Georgia’s exports to Iran, regretfully, this direction is also scanty and the structure of leading products is confined with only several items. If we does not mentioned the 2013 indicators (47 million USD), the Georgian exports stably grows to Iran and the figure reached 36 million USD in 2015 (see Diagram 3). The Georgian exports consist of the following items: 1. Vehicles; 2. Wood and wood materials; 3. Electric appliances and so on. Over the last 3 years Georgia’s vehicle exports to Iran reached about 30 million USD, 2% of Georgia’s total vehicle exports. Over the last year, re-exports made up a considerable ratio in Georgia’s exports to Iran, while this direction was unimportant before 2013. (see Diagram 4) Georgia’s re-exports to Iran consists of the following items: 1. Vehicles; 2. Inorganic chemicals, precious metals mixture, isotopic; 3. Pharmaceutical products; 4. Optical appliances; 5. Various chemicals and so on. The above-mentioned indicators clarify that the Georgia-Iran trade relations are not diversified and strong. Moreover, these relations do not embrace technological components. However, the new realities outline very interesting perspectives in the Georgian-Iran economic cooperation, in terms of diversification of supply of hydrocarbon resources and inauguration of the joint transit corridors. However, the political aspects of these directions are also interesting and they should be discussed independently.

11 GEORGIA MARKS WORLD RARE DISEASE DAY HEALTHCARE

March 7, 2016 #136

caucasus business week

eorgia marks the World Nongovernmental organizations have named theidiopathic pulmonary fibrosis (IPF) as the 2016 priority direction among other rare diseases. In relation to this day, a news conference was held at Radisson BLU Iveria hotel. The meeting was held by support of the Georgian Foundation of Genetic and Rare Disease, the Union of IPF Patients and GEPRA, the PR and marketing communications company. The information campaign that started on October 15, 2015, the day of foundation of the IPF Patients Union, aims at increasing public awareness about rare diseases, including idiopathic pulmonary fibrosis (IPF), to timely detect the disease and then to proper manage it, to provide IPF patients with anti-fibrotic therapy. It is important that the campaign is led and managed by IPF patient Elene Samkharadze. Media agencies, state structures, companies, organizations and ordinary citizens have also joined the information campaign of Breathe with Hope, as part of the world week of idiopathic pulmonary fibrosis (IPF). The following participants have delivered a speech at the news conference: Oleg Kvlividze – the Georgian Foundation of Genetic and Rare Diseases Ana Bokolishvili – the Georgian Foundation of Genetic and Rare Diseases Elene Samkharadze – the Union of IPF Patients Tinatin Samkurashvili – GEPRA, PR and marketing communications company. Representatives of the parliament’s health committee, associations of rare diseases of Georgia and respirators, doctor-pulmonologists, patients, reporters and other guests also attended the meeting.

„Despite a patient may die in 2-5 years after the diagnosis, our society has almost no information about this disease. Regretfully, we have aggravated

results. More than a half part of the cases cannot be diagnosed, while another half cannot receive timely treatment because of ﬁnancial shortage”, GEPRA

consultant Tinatin Samkurashvili noted. The idiopathic pulmonary ﬁbrosis (IPF) is one of the heaviest forms of disease and its diagnosis was impossible for many years in not only Georgia, but all over the world. In rare cases this disease is diagnosed at the early stage. About 50% of the cases cannot be diagnosed, while in another 50% cases diagnosis is delayed.

WHAT HURTS? – MORE THAN 16 000 CITIZENS TAKE PART IN SOCIAL SURVEY

ore than 16 000 citizens of Georgia have taken part in the ﬁrst stage of thesocial survey “What Hurts?” This is a joint project of the Georgian Health Ministry and Global Alliance consulting company. The campaign started on January 25 to inquire citizens at regional healthcare centers and this stage has ﬁnished. The campaign is to help the Health Ministry precisely determine the medical needs in the society. The project aims to precisely determine the expectations and needs of the Georgian population and to expand communication with the society, Georgian Health Minis-

ter David Sergeenko said. This is not only a survey about problems. This is a public evaluation about where they see gaps, what they like, who they worry about. Based on these results, we will sort and resolve all problems”, David Sergeenko noted. “The survey results will enable us to make our visions and approaches more realistic for improving the sector and to develop more realistic plans for the Ministry for resolving the existing challenges”, Global Alliance President Jean-Elie Malkin noted. The social initiative “What DO You Worry About” still continues on the website www.1505.

ge . The survey results will be summarized at the end of March and an ofﬁcial report will be introduced to the Georgian society. Global Alliance, an international consulting group led by Bernard Couchner, the former Foreign Minister and triple Health Minister of France, is providing consultations to the Georgian Health Ministry for the system improvement. The prepared projects call for reorganizing the primary health system, increasing the cost-efﬁciency, upgrading medical service and access to medications, integrating with the European healthcare norms and legislation and establishing European

standards of management. AT this stage, the document is being translated into Georgian. To this end the Government has extended the agreement with Global Alliance up to May 1, 2016.

PPP - BEST WAY TO MEET THE ENORMOUS CHALLENGES FACING THE HEALTH SECTOR IN THE 21ST CENTURY!

ccess to affordable, quality healthcare is a key driver of economic growth and development. However, persistent epidemics, a rising incidence of non-communicable disease, increasing cost and complexity of diagnosis and treatment, along with growing global demand for more and improved healthcare come together to create a complicated and costly challenge. As these needs and expectations grow for more and better health care services, most countries face serious resource constraints. The public sector is often constrained by lack of: funding; access to innovation and technology; and efﬁcient and experienced healthcare management. PPP

enable the delivery of efﬁcient, cost-effective and measurable public services within modern facilities whilst minimising the ﬁnancial risk. Publicprivate partnerships (PPPs) can help expand key health services and improve quality, hospital design, management and maintenance complementing the traditional public-sector approach with various forms of private-sector participation. PPP model in Georgia– step forward for hospital sector! Excellent and speedy progress has been made to date, by Georgia’s state-owned shareholding company - the Partnership Fund (PF) and AlphaMedic** and the project is well developed at this stage, including a viable and competitive funding solution.

AlphaMedic is delighted to have been selected as the Preferred Developer for this exciting landmark project. Further, Project Heads of Terms were successfully agreed in January this year between Partnership Fund and Alphamedic. This was a signiﬁcant milestone reached by both parties in the development of a new and innovative type of investment in Georgian healthcare. Georgian clinics are about (in a relative term) to get a lot closer to European standards. Three major hospitals are to get a complete overhaul as part of an ambitious reformative project, which, among other things, promises to reduce the cost of medicines by 30 percent. The hospitals in question are the Central Republican Hospital, the Tbilisi Oncology Center and the Khliani Children’s Infectious Disease Hospital. The representatives of AlphaMedic Consortium said the company was ready to invest 250 million GEL to rehabilitate the three hospitals. According Minister’s statement, the total cost of the project was expected to reach about 0.5 billion GEL, which the agreement stated would be jointly covered by the tender-winning company and the PF. In order to maintain the excellent progress achieved to date, the following milestone is next to be met within the project programme: Signing of Partnership Fund – AlphaMedic Shareholder Agreement

BENEFITS OF PPP IN HEALTHCARE SECTOR: • •

• • • •

Improved operation and efficiency by adopting private sector technology and innovation Facilitating the development of new/refurbished primary, secondary and tertiary health facility infrastructure; Increasing quality by delivering services to contractually defined standards; Expanding access to scarce clinical skills by employing and training staff Increasing the quality of care by ensuring regular maintenance and technology upgrades Long term value-for-money (VFM) created through appropriate risk sharing throughout the whole life of the project. PPP (Public Private Partnership) is the general term for partnerships which involve everything from operating facilities and providing services on behalf of the public, to flexible methods of financing these services.

OTHER SIDE OF BUSINESS March 7, 2016 #136

caucasus business week

ITSIK MOSHE

I HAVE ACHIEVED ALL GOALS I HAD DEFINED President of the Georgia-Israel Business Chamber I AM A SPECIALIST OF HI-TECH ENGINEERING by profession and I also hold a BA degree in education science. I HAVE GRADUATED FROM the Tel Aviv University faculties of engineering and education. In my early youth period I was actively involved in the public life of Israel. I am the first representative of Israel in the Soviet Union and the first representative of international organizations in Georgia. At the end of 1990s, after the diplomatic/representative activities, I changed my profile and founded the first bi-national business chamber (Georgia-Israel) in Georgia. I EASILY FOUND A JOB PLACE. I was employed at the first interview. I STARTED WORKING in the period of my college studies as a loader at the filter manufacturing plant, during vacation periods. I started my first official and serious job at Tadiran, the international company of electro communications.

NATURALLY, I WAS CONTENT WITH MY FIRST SALARY THAT MADE UP 320 USD. Anyway, even the 1/10 amount of this sum would make me happy. I was very pleased to realize that I was a ﬁnancially independent person and I had started contributing to the family budget. I PERFORM THE MOST USEFUL JOB AT DAWN, from 05:00 to 08:00 period. I GO TO MY JOB PLACE AT 9 O’CLOCK every morning. Initially, I discuss the agenda jointly with the company administration and manager, as well as mail and tasks that I usually send to my employees before 08:00.

MOST OF ALL I AM AFRAID of the moment when the so-called internal voice and the soul of charity disappears, when the money becomes a goal in itself, not the mean for attaining other goals.

WE ARE ABLE IN GEORGIA to fully express ourselves in the business sector or various projects. Regretfully, businessmen lack for similar opportunities in more developed European countries.

I HAVE FREQUENTLY THOUGHT OF WHAT I WOULD DO AND OF WHAT I HAVE FAILED TO DO. I guess, maybe, I am a boring person, because till now I have achieved all goals I had deﬁned ever.

I LOVE TRAVELLING as part of my ofﬁcial visits. Maybe, I am a boring person in this respect too. I cannot receive pleasure from only trips and relaxation without business activities.

EVERYTHING SHOULD BE DONE for career success that does not violate the moral frames.

I LIKE COMMUNICATING WITH JOURNALISTS, when they come well-prepared and well-organized. TIRAMISU is my favorite dish.

I WOULD NEVER WORK IN THE RETAIL TRADE, because I prefer to create than to manipulate with the creature and start purchasesales activities. THE MOST IMPORTANT THING in the life is to make beneﬁt to your homeland. This is my priority.

I WOULD SUGGEST GEORGIAN BUSINESSMEN to pick up business culture and terminology of Israeli colleagues and analyze that investors and tourists represent friends of the country and they perform a special role at this stage of the development of Georgia.

I DO NOT HAVE ANY FAVORITE DIRECTION IN SPORT, because I am not addicted to sport, because my job is my sport (brainwork in this case).

Georgian Company Clean World Joins UN Global Compact unprecedented network to acquire new contacts in almost all industries, sectors and business companies in 161 countries worldwide. The events organized as part of the global compact will enable us to exchange corporate social responsibility information with other members of the network.

his is the world’s major corporative sustainability initiative that promotes creating sustainable and inclusive global economy for people, society and mar-

ket.

The initiative is based on 10 principles and 4 main directions: human rights, labor rights, environmental protection and counter-corruption policy. The mentioned 10 principles represent a base standard for corporate social responsibility. Consequently it is important that Georgia establish these strategies in everyday operations.

The Clean World has joined this

And we assume the responsibility to integrate the ten principles determined by the compact into the operating strategy and everyday operations. Corporate social responsibility is a mainstream of our company. In the country that suffers from unemployment our company employs 1500 persons. The management tries to choose persons who genuinely need a job place, including IDPs. The company pays special regard to this category.

We also employ students of vocational schools that initially are to pass a probation period. We teach, train and take them in administration.

Based on our appellation, it is an important direction to care for environment. We cooperate

with environmental organizations and in the future we plan to implement considerable projects jointly with them. Therefore, it was of crucial importance to join the UN Global Compact. The Clean World is also a member of CSR club that is a joint project of CIDA and GEPRA. I think the foundation of this club is very interesting for all member companies, because this is a certain rostrum to introduce information about corporate social responsibility directions in your organizations. We stay open to such cooperation”, Khatia Alpaidze, head of the Company PR and marketing Department, noted.

PUBLICITY March 7, 2016 #136

caucasus business week

PUBLICITY caucasus business week

GEORGIAN RAILWAY URGES YOU TO CROSS THE RAILWAY TRACK IN ONLY SPECIALLY ALLOTED ZONES AND TAKE CARE OF YOUR LIFE! Crossing the railway track in the unpermitted places violates article 106 of the Georgian Code of Administrative Offences and this lawbreaking results in due sanctions.

March 7, 2016 #136

TBILISI GUIDE March 7, 2016 #136

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

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

March 7, 2016 #136