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BUSINESS WEEK March 21, 2016 #138

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March 21, 2016, Issue 138

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Zurab Garakanidze: Georgia is Capable for Making Great Geopolitical Breakthrough in Gas Transit Issues

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FEEL THE FUTURE WITH 450% YIELD CREDIT The express loan by Bank of Georgia is one of the most expensive credit products in the Georgian reality. It is worth noting that the Express Credit is advertized as an interest-free loan, but the service commission fees raise the annual effective interest rate to several hundreds of percent. Pg. 6

LARI

WHICH COUNTRIES SEND THE MOST MONEY TRANSFERS TO GEORGIA?

Gains Value

The GEL exchange rate has been extremely strengthening for the past two weeks. From February 26 to March 18 the GEL exchange rate against USD has strengthened by 0.17 GEL. According to the ofﬁcial exchange rate of the National Bank of Georgia (NBG), the GEL exchange rate against USD stood at 2.48 point at the end of February, while the rate has strengthened to 2.31 point as of March 18. Meanwhile, currency exchange booths trade at far lower rates: USD1=2.25-2.21 GEL Currency exchange booths, as a rule, follow the expectations around the exchange rate. Consequently, currency exchange booths seem to be ex-

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FOREIGN DIRECT INVESTMENTS Foreign Direct Investments (FDI) has acquired a vital importance for both developed and developing markets in the contemporary globalizing world. According to the preliminary report by

Geostat, the national statistics service of Georgia, the country drew 1.35 billion USD FDI in 2015, down 23% compared to the 2014 ﬁnal indicators. Pg. 7

pecting further growth in the GEL exchange rate. We remind our readers that the GEL exchange rate saw its historical bottom in late January and early February after it dropped to the 2.49 point against USD. It should be noted that the recent days have demonstrated high-rate upturn and on March 16 the rate strengthened by 0.06 GEL on the same day, while on March 17 the NBG bought 5 million USD to prevent higher growth. Despite the NBG intervention, the GEL exchange rate rose by 0.03 points anyway. The NBG has bought foreign currency for the ﬁrst time since August 2014.

GLOBAL DOWN SYNDROME DAY: A Chance to Celebrate Beautiful Lives

There are many factors to affect the GEL exchange rate, but, to put simply, the GEL correlation to USD determines the national currency tendencies in the state economy. For example, if the foreign currency inﬂows grow without changes in GEL volume in turnover, the demand for GEL grows and the exchange rate strengthens. What are the grounds for strengthening GEL? We should discuss several factors to this end, including reﬁnancing loans, money transfers, external trade and employment of currency reserves. In 2016 the NBG carried out currency auction interventions only three times in the amount of 2020 million USD, in only January. Pg. 5

DAVID GOGICHAISHVILI: I GAVE UP BANK CAREER BECAUSE OF COMPRESSED TIME Pg. 10

Mobile Terminal Foreign Direct from TBC Bank Investments

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With the support of TBC Business, the most innovative and convenient payement system is now available for businesses in Georgia. Mobile Terminal is a small device, and by using the latest technologies makes it possible to accept payments in any location with all types of plastic cards, including contactless cards. Pg. 3

FDI has acquired a vital importance for both developed and developing markets in the contemporary globalizing world. According to the preliminary report by Geostat, the national statistics service of Georgia, the country drew 1.35 billion USD FDI in 2015, down 23% compared to the 2014 ﬁnal indicators. Pg. 9

NEWSROOM

GEORGIA PLANS TO INDEX PENSIONS TO COUNTRY INFLATION

BANK OF AMERICA’S MERRIL LYNCH STUDYING ECONOMIC ENVIRONMENT OF GEORGIA

overing the basic needs of the retired persons in terms the inﬂation will require indexation, and new accumulation component will be added, – the Government will review the report on conducted work and the action plan of reform of pension system. The Prime Minister said that this is the most important reform, which is being implemented in coordination with the Ministry of Economy, involves all relevant agencies, including the international ﬁnancial institutions.

MAIN EVENTS DAVID SAGANELIDZE TRIES TO ATTRACT INVESTMENTS FROM HONG KONG

avit Saganelidze, executive director of “Partnership Fund” tries to attract investments from Hong Kong. He will hold business meetings in Hong Kong. Ofﬁcial meeting is already held with Greg So, head of Hong Kong Economic and Trade Department. The sides have considered improvement of economic activity between Georgia and Hong Kong and attraction of investments from Hong Kong to Georgia.

The MP Hosted Mohed Altrad eorgia welcomes French investments, – Georgian Prime Minister has declared to Mohed Altrad, founder of French company “Altrad Group” and owner of French rugby elite team “Montpellier”. World Entrepreneur of 2015 visits Georgia. The sides have considered investment environment in the country at the meeting with the Premier. It should be noted, that businessman is interested in Georgia, country’s culture and history. Mohed Altrad will read the lecture to the students on the spirit of entrepreneurship.

inance Minister Nodar Khaduri held a meeting with a representative of Bank of America Merrill Lynch. According to Ministry of Finance, Bank of America wants to study closely Georgia’s macroeconomic parameters, state budget’s performance indexes, as well as investment projects carried out with the support of foreign investors. Bank of America’s visiting group was updated on projects the Georgian government is carrying out to stimulate the country’s economy.

GEORGIA REMOVES BARRIERS FOR PRIVATE LAND REGISTRATION

eorgia is removing the barriers facing private owners who want to ofﬁcially register their land. Today the Government of Georgia approved a draft law that outlined new rules for land registration for private owners. The draft law was arranged by the Minister of Justice of Georgia following consultations with industry insiders.The Ministry of Justice explained the Government wanted all privately owned land to be registered.

“Reform implies better regulation of the existing pension system, in terms of the provision of basic

needs of the retired persons by adjusting the pensions to the inﬂation rates and introducing new savings component, which will be included in next year’s third quarter. Before that we will elaborate a detailed plan covering legislative and institutional changes.

We are making sure, at Government level, that we facilitate this business-to-business interaction between the United States and Georgia,” he said in the interview.

JOHN KERRY WILL COME TO TBILISI IN JUNE

eorgia’s favourable investment climate, it growing economy and recently implemented reforms are making it easier for foreign investors to do business in Georgia, says the country’s Foreign Minister Mikheil Janelidze. The plethora of business beneﬁts now available in Georgia, and particularly the Georgian

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Head of the Government stressed that the new system does not mean the abolition of the basic system. Prime Minister also noted that basic pension scheme and accumulation system will operate in parallel, and the indexation of the pensions will occur in line with the inﬂation.

lic policy blog from the Atlantic Council. The blog seeks to provide expert analysis to readers all over the world about the most pressing issues facing the transatlantic community. Janelidze said the recent decision to award a US ﬁrm with the $2.5 billion contract to build and develop the Deep Sea Anaklia Port could encourage other US companies to invest in Georgia.

group of young Georgian inventors triumphed at a prestigious international tech start-up event with their novel device that enables users to feel objects they touch in a virtual environment. The annual Jacobs Start-up Competition in Bremen, Germany, selected the Georgian team as the top winners of this year’s event.

Namely, savings system will be co-ﬁnanced by employee, the employer and the state, thus creating certain degree of social security for future pensioners,” – Prime Minister noted.

GEORGIA SEEKS TO ATTRACT US BUSINESSES

GEORGIAN STUDENTS CLAIM TOP PRIZE AT PRESTIGIOUS INTERNATIONAL TECH EVENT

nited States (US) Secretary of State John Kerry will visit Tbilisi in June to show “the depth” of support the US has for Georgia. “It’s my intention to try to get to Georgia somewhere in June or perhaps shortly thereafter, but we are trying to make plans to get there because Georgia is an important friend of the United States and we want to make clear to Georgians the depth of our support for their struggle for full independence and for the full territorial and sovereign respect of its borders,” Kerry said.

March 21, 2016 #138

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Government’s decision to award a multi-billion dollar contract to a United States (US)-based company as well as a new economic development plan, are enhancing Georgia-US relations and attracting more US ﬁrms to Georgia. In Washington D.C. yesterday during his ofﬁcial US visit Foreign Minister Janelidze spoke to a journalist from the New Atlanticist, a pub-

The Minister, who completed his ﬁve-day American business trip today, also spoke about Georgia’s reform agenda, international recognition of Georgian reforms and gas and energy related topics in the interview. He added Georgia’s Prime Minister Giorgi Kvirikashvili will visit the US in the coming months to attend a series of events Janelidze described as an “investment roadshow”.

Editor: Nutsa Galumashvili. Mobile phone: 595 380382 Reporters: 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 21, 2016 #138

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MOBILE TERMINAL FROM TBC BANK With the support of TBC Business, the most innovative and convenient payement system is now available for businesses in Georgia. Mobile Terminal is a small device, and by using the latest technologies makes it possible to accept payments in any location with all types of plastic cards, including contactless cards. Mobile terminal is an innovative product

based on digital technology. It is ideal for different types of business: HORECA, beauty salons, markets, shops in trade centers, taxis, courier services, car washes, trade stands and any other type of business. The advantages of the product: • Payment is faster than via traditional POS terminals. The payment receipt can be received

by an SMS or via email. • The device is small, making it easier and more convenient to carry and install. • The mobile terminal has an online reporting system. The company can create a history of transactions through a web-portal and receive sales statistics, account reports and etc. • TBC Bank will give mobile card readers to

the companies free of charge. In future, several new functions will be added to TBC Bank’s mobile terminal. TBC Bank launched this innovative payment service together with its strategic partner Visa International. TBC Bank is implementing this innovative service together with international company GoSwiff.

4 ECONOMY THE HIGHEST-PAID FIELDS IN GEORGIA

he average monthly salary is the highest in the financial sector and the lowest in the education field throughout Georgia. Generally, in the fourth quarter of last year, the average monthly wage of a person who is employed in the financial sector amounted 1548 GEL while it was 541 GEL in the field of education.

CARGO TURNOVER IS DECLINED BY 37% TO GEORGIAN PORTS

INTERVIEW

Georgia is Capable for Making Great Geopolitical Breakthrough in Gas Transit Issues

The agreement that we have concluded with SOCAR to receive additional 200 million cubic meter gas is the continuation of the policy that the Georgian Energy Ministry has carried out so far. It is also very important that we have maintained the 10% gas volume from Russian gas transit through the North-South main gas pipeline. At the same time, the Russian party has declared as if it had made an exception for Georgia to pay in kind for supplied natural gas. This information is not true. Similar practice exists, for example, the gas supply from Second Gas Corridor from North Africa to Europe, namely, from Algeria-Tunis to Italy. Algeria applies the payment-in-kind mechanism in relation to Tunis. The analogical payment regulations are applied in the Algeria-Morocco-Spain direction.

eorgia starts construction of another big port, but cargo turnover is declined in Georgian Ports. Georgian Sea Ports and Terminals have merely processed cargo of 1,2 million t in January of this year, which is less by 0,7 million comparing to January of 2015. Container number is reduced by 42% and the rate totals to 22 469 TEUs.

MANUFACTURING COST RISE IN GEORGIA

n February 2016 the Producer Price Index (PPI) for Industrial Products increased 1.1 percent over January 2016. The index rose 3.9 percent compared to February 2015 and 25.5 percent over the 2010 average. In February producer prices registered a 1.0 percent increase for manufacturing, producing an upward effect of 0.82 percentage points on the overall monthly index change.

“Thus similar practice is applied worldwide and we strive for continuation of similar relations with SOCAR, because Shah-Deniz 2 project will commence in 2018 with 16 billion cubic meter of natural gas, of which 6 billion cubic meters will remain in Turkey and the remaining ratio will be directed to the European direction. The gas pipeline will cross the territory of Georgia too and we will be able to receive a certain volume of natural gas free of charge or at preferential rates. Experts assert that Georgia may receive about 1 billion cubic meters of natural gas and this will be a vital importance fact for economic growth and GDP upturn. In his interview with the bfm ZURAB GARAKANIDZE, expert in energy issues, overviews this and other interesting issues.

IN FEBRUARY THE MINIMUM LIVING WAGE REDUCED

ccording to the minimum food basket, the men needed 163.2 GEL for existence in the month of February – Geostat stated. Although this indicator is less than the month of Janury by 1 GEL, but more than the indicator in 2015 by 3.2 GEL. Based on the calculations of Geostat, the average family minimum living wage amounted 273.7 GEL.

TURKEY INCREASED TRANSIT SHIPMENTS VIA GEORGIAAZERBAIJAN

he Coordinating Council on Transit Freight of Azerbaijan declared about the increase of transit shipments. According to the department, 1500 Turkish trucks have used Azerbaijan’s territory through January - February. The rate is increased 7 times y-o-y ( 2 months of 2015 – 200 trucks). According to ABC.AZ, Azerbaijan side names expenditure reduction by 40% as a reason.

PRODUCER PRICE INDEX IS INCREASED

ccording to “Sakstat”, the index is increased by 1,1% in February, 2016 comparing to January, 2016. The growth totals to 3.9% y-o-y, the increase is 25,5% comparing to 2010. Prices are increased by 1% on the processing industry in February comparing to January, namely, subsections of metallurgical industry and metal manufacturing (5,2 %) and food staff (0,6%). Price growth has been ﬁxed on mining industry (4,9%) and electricity, air and water production and distribution (0,8%) sections. Price change on the following sections had an impact on the formation of 12-month period: electricity, air and water production, distribution: prices are increased by 19,4%.

AUCTION OF 160 MILLION IS ANNOUNCED ON INTRODUCTION OF 4G SERVICE

ommunication Commission has announced 9-lot auction on radio frequency spectrum licenses and enactment of broadband services, including 4G service. Auctions on the license of radio frequency usage have been announced on the following frequencies 800/900/1800/2100. Auction winner company/companies will be able to use the resource within 15-year term.

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- Oil prices have considerably declined in the last period, but international experts expect the prices to rise starting 2017. Consequently, how beneficial conditions has Georgia received from SOCAR and Gazprom in the long-term period? - Starting from the Bloomberg ending with the World Bank (WB), all of them speak out the same consideration, because gas tariffs are calculated from oil tariffs formula and therefore, natural gas prices will also increase. Therefore, the payment in kind for gas is of crucial importance. At the same time, it is worth noting one important event, namely, the world gas market will be created. From the USA to Europe the first liquefied gas was transited by tankers and Poland was the first country to receive this liquefied gas. Moreover, sixteen European seaports are ready to receive the mentioned liquefied gas. This is a historic event.

Experts assert that 5070 tankers can supply the same volume of natural gas to Europe as Russia would supply to Europe through the Northern Stream 2 gas pipeline. Therefore, the USA can act as a serious competitor in relation to Russia. Amid similar competition, Russia will face difficulties with maintaining the monopoly on the European market. - According to the statement by the Energy Minister, SOCAR has reduced social gas supply to Georgia, but no specific figures were mentioned. Consequently, this unclearness generates speculation hazards. If we take into account that the Authorities continues subsidizing the social gas tariff amid the depreciated

GEL exchange rate, do you think the SOCAR decision is of symbolic character, even more so the parliamentary elections are coming? - Politicians apply similar methods, as a rule, but today the price of SOCAR gas per 1000 cubic meters ranges from 110-130 USD. The Russian gas price is the same, in practice. This tariff is very proﬁtable for us if we take into account the Azerbaijani gas volumes. We should not ignore the fact that one of the main preconditions for Georgia’s integration into the European energy commonwealth is a removal of this differentiation. This signiﬁes the gas trans-boundary trade should be the same as in relation to the remaining part of Europe. Consequently, these preferences may be subjected to cancellation, but there is another side too – the ratio of hydro resources in electricity generation makes up 85% and only 15% is generated by steam power plants. Therefore, electricity tariff reduction is absolutely realistic. - The fact a major part of natural gas is supplied by Shah-Deniz Consortium is appraised as much breakthrough by Georgian citizens. What is your opinion on this mechanism of gas reception and what preconditions have ensured Georgia’s success? - The issue is of the gas that should be received from the South Caucasus gas pipeline that is owned by several parties.

Consequently, based on negotiations, reception of a certain part of the natural gas volume is a successful step, even more so, if the payment in kind mechanism is maintained in relation to the Russian party.

Additional factor is expected to raise prices at the end of the year. I find absolutely acceptable to keep negotiations with the Russian Federation for commercial interests to receive additional volumes of natural gas, even more so politicians and experts forget that SOCAR maintains 100% state monopoly like Gazprom. - Azerbaijan maintains monopolistic condition on the market, because SOCAR dominates in the Consortium. Can we consider this source to be the opportunity for diversification of the supply? - The current situation cannot be called as a diversified situation, because all textbooks of energy security suggest that at least three sources are required to ensure energy security of the country.

Therefore, the TransCaucasus Project inauguration with the EU support is of crucial importance for us. The construction works are expected to start in the near future by consent of the negotiating parties. Moreover, for some reasons, our experts avoid mentioning the Iranian source. This country is a major mining country worldwide and it strives for penetrating the European market through the territory of the Caucasus. There is much probability that because of complicated relations with Turkey, Iran may offer cooperation to Georgia for employing the Black Sea seaports. These relations create best solutions for Georgia in the current situation. This is a real hub. If Georgia becomes a hub for the North-South and East-West transit directions, this will be much geopolitical breakthrough.

ECONO-MIX March 21, 2016 #138

Lari Gains Value MERAB JANIASHVILI Economic Analyst

urrency exchange booths, as a rule, follow the expectations around the exchange rate. Consequently, currency exchange booths seem to be expecting further growth in the GEL exchange rate. We remind our readers that the GEL exchange rate saw its historical bottom in late January and early February after it dropped to the 2.49 point against USD. It should be noted that the recent days have demonstrated high-rate upturn and on March 16 the rate strengthened by 0.06 GEL on the same day, while on March 17 the NBG bought 5 million USD to prevent higher growth. Despite the NBG intervention, the GEL exchange rate rose by 0.03 points anyway.

The NBG has bought foreign currency for the first time since August 2014. There are many factors to affect the GEL exchange rate, but, to put simply, the GEL correlation to USD determines the national currency tendencies in the state economy. For example, if the foreign currency inflows grow without changes in GEL volume in turnover, the demand for GEL grows and the exchange rate strengthens. What are the grounds for strengthening GEL? We should discuss several factors to this end, including refinancing loans, money transfers, external trade and employment of currency reserves. In 2016 the NBG carried out currency auction interventions only three times in the amount of 20-20 million USD, in only January. Since then the NBG has not applied currency intervention leverage. Consequently, it is incorrect to assert the Georgian national currency is strengthening as a result of the NBG interventions. In 2016 the volume of refinancing loans slightly declined as compared to 2015 and their growth in value was one of the reasons for this slowdown. At the beginning of 2015 the refinancing loan interest rate was 4% and currently the rate has increased to 8%. In 2015 the amount of refinancing loans for each issuance ranged from 1 to 1.3 billion GEL. In 2016 the issued loans have not recorded 1 billion GEL and this year refinancing credits remain within 800-900 million GEL. As to the money mass in the country that makes significant influence on the GEL exchange rate formation. Regretfully, the February indica-

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IMPORT-EXPORT IN JANUARY-FEBRUARY 2016, GEORGIA’S FOREIGN TRADE TURNOVER DECREASED BY 2%

ccording to the National Statistic Ofﬁce of Georgia, in January-February 2016 Georgia’s foreign trade turnover amounted to $ 1, 4 billion which is 2% less than in the same period of 2015. Exports account for 281 million (13% less), import - 1, 1 billion (1% more than in the same period of 2015). The negative trade balance in the period amounted to $ 852 million that is 60% of the total trade turnover.

GEORGIAN SHEEP EXPORTED TO QATAR AND SAUDI ARABIA

n 2016, 11 800 sheep were exported from Georgia to Qatar and Saudi Arabia. The exported goods totally amounted about one million dollar. “In order to ensure animal health, the National Food Agency keeps monitoring and carries out also vaccination of animals for variety of diseases. This signiﬁcantly contributes the safety and increase export potential”, – said Mikhail Sokhadze, Deputy Head of the National Food Agency, Georgia.

tors about money mass aggregates are not attainable yet. As to external trade, the exports have declined and imports have increased. According to preliminary report, in January-February 2016 Georgia’s foreign trade turnover (without unorganized trade) made up 1 413 million USD, down 2% compared to the same period of 2015, including exports marked 281 million USD (down 13%) and the imports made up 1133 million USD (up 1% year on year). The negative trade balance marked 852 million USD in January-February 2016, that is, 60% in foreign trade turnover. The current year’s negative balance exceeds the same periods of 2014 (694 million USD) and 2015 (794 million USD). This signifies currency outflows have exceeded currency inflows. At the same time, according to preliminary indicators, in 2015 Georgia attracted 1.3 billion USD foreign direct investments, down 23% compared to the 2014 final report. FDI inflows were insignificant in January-February 2016 too. The reporting period has recorded a slowdown in money transfers too. In February 2016 money transfers to Georgia marked 79.9 million USD, i.e. about 198.3 million GEL, down 2.6% (-2.1 million USD) compared to February 2015. The state budget has recorded deficit in January, February and March. Therefore, we should not expect any essential changes in the fiscal policy in the 2016 first quarter.

Only the tourism sector demonstrates positive tendencies in the Georgian economy. The month of February has registered a 19% upturn in tourist inﬂows. Economic experts name various reasons to substantiate the GEL exchange rate strengthening, but all of them agree that the national currency upturn is related to positive expectations. Anyway, there are exceptional considerations too asserting that VAT payers have to transfer taxes to the state budget as of March 15 and this factor has preconditioned the GEL exchange rate strengthening. This part of our society was naming seasonal reasons to substantiate the GEL exchange rate depreciation in February 2016 and they asserted the seasonal factors would be improved in summer 2016. We would like to explain to them that in Georgia springtime comes every year, even the 15th of March comes every year, but this

period does not always record an upturn in GEL rate, neither VAT payment has brought extreme growth in the national currency exchange rate. Based on the current indicators in the Georgian economy, there is no ground to talk about any essential advancements.

The recent months have recorded slowdown tendencies in a major part of the indicators that could precondition growth in the GEL exchange rate. In January-February 2016 the GEL exchange rate depreciated to the historical bottom because of panic situation in the market after both the NBG and the Government had demonstrated inadequate attitude towards the national currency. Today almost all parties recognize this reality. The NBG had openly announced that it would not apply currency interventions to stabilize the GEL exchange rate and this position was intensifying negative expectations on the currency market. Giorgi Kadagidze who has led the NBG to stagnation period has completed his term of ofﬁce on the NBG president’s position. The next day the GEL exchange rate started rising. And the current results have outlined Kadagidze’s erroneous policy, because the Georgian national currency is strengthening at high paces. Neither upturn nor depreciation can bring positive results to the state economy. Only stable rate creates one of the main preconditions for developing business in the country. Therefore, the NBG holds the leverage to directly interfere in the currency rate formation and use currency reserves stabilize it amid extreme volatility. The NBG former President Giorgi Kadagidze let GEL see its historical bottom as a result of his indifference. Today developments clearly show that there were no grounds for GEL depreciation to 2.49 point and the devaluation was the result of panic expectations. Today the GEL is aspiring to the balance point that we could have in case of adequate money-credit policy. Let’s wait to see the point that the GEL rest on after Kadagidze has quitted to care for it.

GEORGIA’S EXPORTS AMOUNTS TO $281M IN JANUARYFEBRUARY 2016

eorgia’s foreign trade turnover in January-February 2016 declined by 2% compared to the same period of 2015 and totaled 1.413 billion USD. The exports in total trade turnover marked 281 million USD, the imports amounted to 1.133 billion USD. In the reporting period, the exports declined by 13% and the imports rose by 1%. The negative trade balance in January-February 2016 marked 852 million USD and its ratio amounted to 60% in the foreign trade turnover.

GEORGIAN SOCKS GETS READY FOR EXPORTING

he production of “Georgian Socks” can be exported. As the company’s founder Kakha Janezashvili announces, the company entered the market 4 years ago.The company uses only Italian equipments in the production process. Accroding to him, initially, only few of dozen stockings were produced, whereas nowadays 80 varieties of 20 thousand pairs are produced. The head of the “Georgian Socks” says that recently, new line of “colored socks” was released. As the researches showed, the main reason of this new line existence was the demand increase towards colorful production.

GEORGIAN BARRELS TO EXPORT TO EUROPE

ermany, Turkey and Kazakhstan are interested in producing Georgian wine barrels. Vasil Kalandadze, the director of the joint stock company “Professional Wine Products” points out that the negotiations are going on and as soon as the quality certiﬁcate is received, the process will enter the active phase. According to Kalandadze, the export price of Georgian barrels will be 100-150 euros less compared to European one. SOCAR REVEALS GAS EXPORT VOLUMES

zerbaijan’s state oil company SOCAR exported about 320 million cubic meters of gas to Georgia since the beginning of 2016, a source in SOCAR told Trend. “In average, nearly 5.3 million cubic meters of gas per day has been exported to Georgia since the beginning of the year, which is almost 50 percent more than in 2015,” said the source. Over 70 million cubic meters of gas has been exported to Iran since the beginning of 2016 with a daily volume of 1.2 million cubic meters of gas, according to the source.

6 BANKING NEWS KOBA GVENETADZE IS A NEW PRESIDENT OF NATIONAL BANK OF GEORGIA

resident of Georgia appointed Koba Gvenetadze as the governor of the NBG. Yesterday the board of National Bank of Georgia made decision to nominate Koba Gvenetadze as the governor of the NBG. According to the board’s decision, Koba Gvenetadze’s candidacy was presented to the President of Georgia to be appointed as the governor of the NBG. On March 2nd , the Parliament of Georgia unanimously approved Koba Gvenetadze, nominated by the President of Georgia, as the member of the board of the National Bank of Georgia.

GEORGIA’S SOVEREIGN BONDS RISE IN VALUE

he yield on Georgia’s sovereign bonds at the London Stock Exchange (LSE) marked 5.4% (L/w – 5.7%) in the reporting period from March 7 to March 12. GEORGE bonds rose in price to 106.4 USD (L/w –USD 105.2). Neighboring countries are also reported to have increased their bonds in value. Namely, sovereign Eurobonds of Russia and Azerbaijan have increased in price: Azerbaijan – $94.1 with 5.7% yield (L/w – $91.5; 6.1%); Russia – $105.1 /3,7% (L/w – $103.9/ 4%).

ZOLOTAIA KORONA RANKS FIRST AMONG QUICK MONEY PAYMENT SYSTEMS

olotaia Korona ranks ﬁrst among quick money payment systems in terms of money transfer volume. Zolotaia Korona transferred 7.145 million USD from Georgia in February 2016 (5.024 million USD in February 2015/ 34%). The operator has carried out 15.7 million USD transfers in February 2015, up 7.5% year on year.

COMMERCIAL BANKS ISSUE 1.161 BILLION GEL LOANS IN AJARA REGION

n 2015 commercial banks issued 1.161 billion GEL loans in the Ajara Region, including 71% long-term loans, the Ajara Finance and Economy Ministry says. According to the statistics, the 2015 crediting volume in the Ajara Region has increased year on year. A bulk of the issued loans is denominated in foreign currencies, the report of the Finance and Economy Ministry of Ajara, reads. As of December 31, 2015 commercial banks have drawn 779.719 million GEL deposits with 63% of foreign currency denominated deposits in total portfolio. Money transfers from abroad marked 163.079 million GEL, while money transfers from Georgia constituted 73.399 million GEL.

FITCH AFFIRMED STABLE OUTLOOKS TO THE GEORGIAN BANKS

eorgian banks’ sizeable capital buffers are sufﬁcient to absorb moderate deterioration in asset quality following the depreciation of the lari and slower economic growth, - Fitch Rating has declared in the report. This view is reﬂected in the overall Stable Outlooks on the Georgian banks’ ratings. The banks reviewed in the peer report are Bank of Georgia (BB-/ Stable/bb-), TBC Bank (BB-/Stable/bb-), Liberty Bank (B/Stable/b), ProCredit Bank (BB/Stable/ bb-), Cartu Bank (B+/Stable/b+), Basisbank (B/ Stable/b) and Halyk Bank Georgia (BB-/Stable).

GALT & TAGGART RECEIVED AWARDS FROM GLOBAL BANKING & FINANCE REVIEW

alt & Taggart announced about the awards receive. Galt & Taggart was named the Best Investment Bank, the Best Investment Brokerage, and the Best Corporate Advisory in Georgia in 2016. “Galt & Taggart is committed to providing its clients the best-in-class corporate advisory services for local as well as international transactions.

BANKING caucasus business week

Feel the Future

March 21, 2016 #138

With 450% Yield Credit Bank of Georgia with One of the Most Expensive Express Loans on the Market

he express loan by Bank of Georgia is one of the most expensive credit products in the Georgian reality. It is worth noting that the Express Credit is advertized as an interest-free loan, but the service commission fees raise the annual effective interest rate to several hundreds of percent. We remind our readers that the annual effective interest rate is an interest rate that is calculated on the ground of all expenditures that are required to serve a credit, as well as the time for taking these costs. The available amount of Express Loan is 150700 GEL. The maturity period is one year. If a borrower fails paying off the loan for a year, he/she must pay off the whole amount at once at the end of the maturity period. The maturity period cannot be extended. At the same time, Bank of Georgia advertizes the product as an interest-free bank credit, while the borrower has to pay double commission fee a month. For example, we should discuss the case with a 700 GEL credit. The commission fee for taking this amount of Express Loan makes up 19 GEL, while the borrower has to pay a 35 GEL commission fee every fortnight and this sum is not deducted from the principal sum.

Under the Express Loan conditions, the borrower has to pay 450% interest rate for

one-month Express Loan. It is interesting that several online credit organizations issue credits with 450% interest rate. In 2011 the President of the National Bank of Georgia (NBG) issued a decree on Regulations for Providing Customers with Required Information on Banking Services. Under the mentioned regulations that came into force on June 1, 2011, commercial banks are obliged to provide the customers with all necessary information on the loan-taking process and explain the risks that may arise from unpaid credits.

Moreover, commercial banks are obliged to update clients on the loan’s annual effective interest rate that includes all the costs for the loan services.

Though, these regulations refer to any consumer credits, including overdrafts and credit cards, when the credit’s total amount exceeds 300 (three thousand) GEL and is under 50 000 (fifty thousand) GEL. Commercial banks frequently use this legislative defect in their own interests and they issue loans less than 300 GEL under very expensive interest rates and the Express Loan a proof to this consideration. The last period has actualized the issue of imposing state regulations over online credit companies. The Georgian society’s attitude to this business is very negative because of high interest rates and enslaving conditions. Various surveys prove that Georgian citizens demand for forbidding and restricting the online credit organizations. High interest rates of commercial banks seem to be shadowed by expensive credit products of online credit organizations. In reality commercial banks have not cheapened their bank products. The Georgian banking sector is regulated by the National Bank of Georgia (NBG), but it is difficult to say commercial banks offer better conditions as compared to online credit organizations. It is worth analyzing how properly these organizations are regulated or how online credits should be regulated in the future to reap efficient results for customers. bfm.ge

UPGRADED LARI BANKNOTES WIN BEST REGIONAL BANKNOTE AWARD OF 2016

ccording to a press release, on 1 February 2016 the National Bank of Georgia introduced revised 20, 50 and 100-lari notes. The revised 5- and 10-lari notes have not yet been issued, but is still expected in 2016. Designed by Bacha Malazonia, the notes have revised designs/colors/dimensions and security features enhanced with assistance from De La Rue (England), Giesecke & Devrient (Germany), and Oberthur Fiduciare (France), although the bank has not disclosed which firm actually printed the notes. Former National Bank President Giorgi Kadagidze stated, “This is the first major update of lari banknote designs in 20 years”. The National Bank is replacing faded and damaged banknotes with newer ones. The Bank had to refill reserves. It came at a good time because the process would require additional financial resources.” On 15 March 2016, in Bucharest at the HSP Europe ™ conference, organized award ceremony Georgian upgraded Lari banknotes series (20, 50 and 100 lari banknotes) won international award among European and CIS countries, and it was nominated as “the Best Regional Banknote of the year 2016”. In this year, at the nomination “Best Regional Banknote of the year 2016”, there were presented following banknotes:

• • • • • • • • •

UPGRADED 20 EURO – EUROPEAN CENTRAL BANK SWEISH KRONA NEW SERIES – SWEDISH NATIONAL BANK UPGRADED 20 000 FORINT – HUNGARIAN NATIONAL BANK UPGRADED 200 SHEKEL – BANK OF ISRAEL 20 000 TENGE – NATIONAL BANK OF KAZAKHSTAN 500 HRYVNIA – NATIONAL BANK OF UKRAINE 100 JUBILEE RUBLE BANKNOTE – CENTRAL BANK OF RUSSIA BANKNOTES SERIES – NATIONAL BANK OF REPUBLIC OF BELARUS UPGRADED LARI BANKNOTES SERIES OF 20, 50 AND 100 LARI – NATIONAL BANK OF GEORGIA

By the way, also the National Bank of Kazakhstan was awarded as it issued a new banknote 20 000 tenge. Organization HSP Europe ™ organizes this ceremony every year. Thus, last year, HSP Europe ™ conference, which was held in Budapest, Hungary, in 2015 Polish zloty was named as the best regional banknote.

STARTUP March 21, 2016 #138

caucasus business week

Taxation System and Absence of Ecosystem Frustrate Startup Business Development GIORGI CHEISHVILI Reporter

IT field and Startup business representatives assert that taxes should be reduced and ecosystem (infrastructure, education, access to financial resources and so on) should be arranged to prevent outflow of successful projects and professionals from Georgia, as well as to draw foreign startups. In the beginning was the word – in 1975 the Forbes magazine used the word of STARTUP to denote a growing company. In 1976 the Business Week published an article on “an incubator of startup companies, especially in the quickly growing high-tech field”. What is a startup and why is it interesting? There are several interpretations for this term on Investopedia (the world’s one of the advanced online sources for financial terms) that reads: “A startup is a company that is in the first stage of its operations. These companies are often initially bank rolled by their entrepreneurial founders as they attempt to capitalize on developing a product or service for which they believe there is a demand. Due to limited revenue or high costs, most of these small scale operations are not sustainable in the long term without additional funding from venture capitalists”. The age of a startup company is also a disputable issue. How old should be company to name it a startup company? GeoLab principal Sandro Asatiani noted that startups are mainly associated with new-technology companies – new companies that have not arranged even a business model. There is no standard definition for a startup company. Some experts assert that a startup company may be of 3-5 years old, but if you seek a business model for 5 years, this signifies the startup has failed, Sandro Asatiani said. The GeoLab principal has also overviewed necessary factors for creating a startup company and explained a certain structure for financial sources:

A university/vocational school that prepares a person for startup efforts is one of the main components. Moreover, Angel Investor – a person who gives the first financial support to the startup; Accelerator – an environment that helps us in accelerating efforts; Venture Investment (with high risks) – a new small enterprise, in which a considerable part of ordinary shares goes to investors’ ownership. Based on these sources of financing, if the startup justifies or the Exit transaction is carried out, i.e. the company is sold for expensive price (hundreds of million), or if a startup is transformed into a valuable company, it will not be considered a startup anymore and the people, who have invested money in this company, will start receiving profits from this company. A business incubator is a constituent part of the startup’s ecosystem and this activity is mainly carried out by the state. The business incubators provide financial assistance, consultations and other services to startups. There are also crowdsourcing platforms, where a person can find required financial resources for implementing a startup”, Sandro Asatiani said. The government’s decision to prioritize innovative technologies has stimulated the founders of Association of Technological Startups of Georgia. The association was founded about two months ago with the aim to make their voice hearable to the Authorities in the decision-mak-

ing process, because the one thing is what the Authorities see, while another issue is what the private business discerns. David Sichinava, a representative of the Association of Technological Startups of Georgia pointed out that the field of information technologies embrace its own peculiarity. The products developed in this sector are not confined by frontiers. Consequently, if Georgia does not introduce tax preferences, it is very easy to relocate successful projects to an offshore zone. “Our objective is not to go abroad. We want to create the ecosystem in Georgia. A person with interesting startup idea should have determined the whole action plan – where to make a prototype, where to get the first financial support and so on. Regretfully, this horizon has not been clarified in our country.

Even if one has a wonderful idea today, there is no guarantee that his/her product will ﬁnally reach the Silicon Valley. At this stage the Authorities should set tax preferences as soon as possible. Today we are losing resources. If somebody is successful, they immediately leave for foreign countries”, David Sichinava noted. Georgia has not developed the ecosystem. Therefore, if any foreign company decides to invest in the Georgian startup, they will request the Georgian startup to get incorporated in some developed countries, for example, in the USA. Irakli Qashibadze, head of the agency of innovations and technologies of Georgia, refers to one of the Georgian startups, that finally was incorporated in the USA and at this stage this company trades in secondhand automobiles by online system. The businessman has employed 200 persons in Georgia as part of this project. Members of the Georgian Association of Technological Startups assert that Georgia has the chance to become a regional hub for IT innovations if the country carries out due reforms in the IT sector. This message should be delivered to developed countries, while the country ranks 24th in the Doing Business report among 189 countries and 6th in terms of business establishment simplicity. The ecosystem development requires combined efforts and a chain of decisions should be taken to reap real results. It is necessary to promote local small business. It will be wonderful if various companies enter the market – this will bring both business and knowledge and contacts with the external world. It is also necessary to set tax preferences for big multinational companies to enable some giant companies like Facebook or Amazon to set up their regional head-ofﬁces in Georgia.

Regretfully, foreign citizens have no information even about the location of Georgia. If the Authorities prioritize this direction, we should send a message to the foreign countries – If you are interested in making investments in IT field, we will support you with due platform and environment. It is very simple for IT business to cross the border – members of small companies will take their laptops, cross the border and the company will be in Georgia”. The association member Zaza Sichinava explains that Georgia should be detected on the global IT map. He refers to the example of Estonia and points out that Estonia has developed an ecosystem that enables foreign Angel Investors and venture foundations to make investments in Estonia, where good ideas are generated. “In the IT world Georgia is a less-known country. We have not developed the necessary indicators that investors need. If we develop a infrastructure with businessman-oriented taxation system and the opportunity of drawing financial resources, our country may become a regional hub – Russian, Ukrainian or other citizens may arrive in Georgia to do their startups. If we take first steps in the Region to develop this ecosystem, it will be possible to attract think-tanks and professionals to Georgia and we will not let domestically incorporated companies leave for foreign countries”, Zaza Sichinava said. Another member of the association David Eliashvili noted that the loan-issuing model does not justify in this field because of high risks and even the business sector avoids financing startups because of the same reasons. Therefore, it is impossible to draw foreign investments. “The issue of financing startups for the Georgian business will remain a difficult issue unless investments have drawn from abroad. We should establish the traditions that dominate the developed countries. For comparison, an interested body plans to invest 10 million USD in implementing 10 projects and only one project may bring real profits, conditionally – 100 million. How many companies with similar financial potential exists in Georgia to take similar risks?”, David Eliashvili noted. Ilia Ghlonti, director of Ihub Tbilisi, the center for development of innovations and entrepreneurship, said that a new generation of IT specialists should be grown up, foreign capital should be drawn and an ecosystem should be developed to promote the startup business sector in Georgia. The GeoLab principal also thinks that the education and growing up new IT specialists are of

crucial importance: “We do not know where a talented person will be born, maybe in Zestaponi a young man lives with the potential of Zuckerberg. Without due environment, where he/she would receive due education in a due infrastructure, we will not receive real results and benefits”. Irakli Qashibadze, chairman of the agency of innovations and technologies of Georgia, assures that Georgia has huge potential for developing a knowledge-based economy. The government provides financial support to the science, increases efficiency of commercialization of IT projects and is ready to foster beginner enterprisers – the agency of innovations, the agency for entrepreneurship development are the mechanisms that promotes startups and provides required infrastructure for their development.

We have already adopted a virtual zone law that exempts exports-oriented companies, which operate from Georgia and develop IT products, from certain taxes. At this stage, we are developing a law on innovations. It is wonderful to reduce taxes and adapt the taxation system to this field, but we should also take into account that in Israel, for example, companies moved to the country through growing the number of qualified specialists”, Irakli Qashibadze noted. Irakli Qashibadze has also commented on TechnoPark Georgia: The Authorities puts major investments in arranging the infrastructure to increase the number of IT specialists, the process of training specialists is underway – 120 specialists were trained, another 120 specialists are being trained at this stage. Georgia has already unveiled 7 laboratories. The Education Ministry plans open 12 vocational schools, in addition, in the country, jointly with the agency of innovations and technologies. The process will be continued – modern laboratories should be constructed in all cities and Georgia will become a hub-country, one of the leading countries worldwide. „At this stage, the works for arrangement due infrastructure has moved to active phase. Along with PR, it is important what kind of environment can we offer to foreign companies. Our environment has attracted many Ukrainian and Russian startups. At the same time, we should not rule out that Facebook may buy a startup from Georgia, as well as the team that implements the chosen project. One may leave, others will arrive here, but the main thing is that Georgia will start shining on the global map of IT sector. The agency is successfully developing a network of mentors. Heads of various companies, high-ranking officials are united in the network and they act as small investors in various projects. This network will promote involvement of businessmen in Angel Investment schemes that is of vital importance in the ecosystem formation process”, Irakli Qashibadze noted. EUGEORGIA.INFO

8 COMPANY NEWS BAVARIA ENTERS THE GEORGIAN MARKET

he legendary beer brand “Bavaria” enters the Georgian Market. Soon it will be possible for local fans to taste this brand here in Georgia, as it will be produced and bottled in this area. The ofﬁcial representative of Bavarian Brewing Company will be “Zedazeni”.

BEELINE WILL HAVE TO PAY CAUCASUS’ DEBT OF 75 MILLION INSTANTLY

ommunication Commission cannot delay acquisition of Caucasus Online’s asset by Beeline (LLC Mobitel). As of the legislation, the Regulatory must take all necessary documentation from the sides and study it within 3 weeks term. Participants of the deal note, that the ﬁnal term is April 5. However, the issue should be solved at the session scheduled by March 25.

MAGTICOM IS GROWING TARIFFS WITH G-MOBILE AND ROAMING PARTNERS

agtiCom is growing tariffs with G-mobile and roaming partners. Cost of 1 minute will be increased by 24 tetri in the network of G-mobile (599 XX XX XX) from March 15. While from March 17 with roaming partners (Azercell, Bakcell, Azerfon Vodafone, Orange …), whereas cost of sms – from 6 tetri to 24 tetri. Tariff of 24 tetri is already valid for operators with the highest trafﬁc.

AZERBAIJAN AIRLINES LAUNCHES LOW-COST AZALJET SERVICE IN TBILISI

zerbaijan Airlines starting 28MAR16 is launching its new low-cost brand AZALJet, which will be operating under J28000-8999 flight number range. The 1news Azerbaijan news agency reports that Azaljet, a low-cost subsidiary of Azal airline, will launch flights on March 28. The airline has already published the service tariffs, under which the price of a single flight will start from 49 EUR, while the return ticket prices will starts from 98 EUR.

MUSHROOM PRODUCER “TETRI KUDI” TO COMPLETE NEW FACTORY’S CONSTRUCTION IN A FEW MONTHS

eorgian mushroom producer “Tetri kudi” will complete the new factory’s construction in a few months. In the words of Vano Ioseliani, Director of the company, after completion of the construction, the company will be able to produce raw materials in place and will no longer be dependent on imports.

CONSTRUCTION OF “BABYLON TOWER” IN BATUMI SUSPENDED AGAIN

onstruction of the 47-storey “Babylon Tower” in Batumi has halted again. According to our information, the project can be sold. TAM GEO company involved in the “Babylon Tower” construction refrains from commenting the situation. The company has appealed to the government of Adjara to extend the deadlines of the construction.

PHARMACEUTICAL CHAIN GPC IS SOLD

eorgian Healthcare Group” (GHG) buys 100% stake in GPC. The value of the deal is 14 million USD. 85.7% of this cash consideration will be paid upon the signing of a deﬁnitive sale and purchase agreement, and the remaining 14.3% will be paid on the ﬁrst anniversary of the closing (expected to be April or May 2017).

INFOGRAPHICS caucasus business week

Which Countries Send the Most Money Transfers to Georgia? Organization: JumpStart Georgia; Reporter: Mariam Gamkharashvili (JumpStart Georgia) Designer: Irakli Chumburidze (JumpStart Georgia); Data Source:The National Bank of Georgia

March 21, 2016 #138

In the ﬁrst half of 2015, 53% of electronic remittances in Georgia were sent from Russia and Greece, however, the recent ﬁnancial crisis in those countries have affected the size of the remittances. Comparing January-June of 2014 and 2015, the total amount of money transferred by electronic wire systems (Western Union, Money Gram, Anelik, Unistream, etc.) from Russia decreased by 41% and Greece dropped by 19%. This infographic shows which countries transfer the most money to Georgia and how the total amount has changed over the last few years.

INVESTING March 21, 2016 #138

caucasus business week

Foreign Direct Investments

PORTA BATUMI TOWER WILL BE OPENED IN SUMMER

VAKHTANG CHARAIA TSU Analysis and Prognosis Center

INVESTMENTS IN POWER SECTOR DECLINE – INVESTMENT INFLOWS SHRINK 23% IN 2015

oreign Direct Investments (FDI) has acquired a vital importance for both developed and developing markets in the contemporary globalizing world. According to the preliminary report by Geostat, the national statistics service of Georgia, the country drew 1.35 billion USD FDI in 2015, down 23% compared to the 2014 final indicators. Since the announcement of independence, Georgia has drawn more than 14.6 billion USD FDI. It should be noted, a bulk of FDI inflows is directed to the capital city of Tbilisi (75% over the past 5 years), while the Ajara Region preserves constant second position (see Chart 1). The Georgian and international experience proves that a set of various indicators affects the inflow of major and long-term foreign direct investments. Georgia’s negative factors are as follows: small consumer market; low-qualified workforce (despite a high-rate literacy and nationwide aspirations for higher education degrees in our society); two conflict zones; permanent political instability and many other factors. Nevertheless, the country embraces positive aspects too such as: continuous improvement of the legislative basis; low taxes; conclusion of the EU association agreement; convenient geographic location and so on. Georgia is listed among attractive countries for drawing foreign direct investments. Though, at this stage, foreign investors are mainly interested in cheap workforce and taking roots on the domestic market and their contribution to development of the high-technology and export-oriented fields is unimportant. It is interesting that the most favorable sectors for FDI inflows are power sector; transports and communications; finance sector; real estate and development markets; processing industry. The ratio of these sectors in total FDI inflows accounts for 80%, according to the 2015 preliminary report. Investors are less interested in other sectors. For example: despite the Georgian government has announced the agriculture sector as a priority direction, investments in this field are unimportant and the sector’s ratio in total FDI inflows is less 2% over the past 5 years (see Chart 2). According to Geostat, today the ratio of exports by organizations with Georgia-foreign capital exceeds 50% in total exports. This signifies foreign investments make much contribution to formation of Georgian exports. However, these activities are carried out at the expense of exploitation of low-technology sectors. To raise the Georgian economy to an essentially new level and to improve its exports from the structural and absolute points of view, we should be oriented on the directions such as modern technologies, but these directions cannot be developed without injecting considerable resources in the education sector (vocational and technological centers, high and higher education). If the country manages to develop high-level technologies, we will ensure long-term development preconditions. Over the past 5 years the European Union

INVESTMENT

ulti-functional hotel-residential complex “Porta Batumi Tower” will be opened in Summer of this year in Batumi. Georgian Prime Minister has visited the construction process. Investment of $70 million ﬂowed in Georgia for implementation of the project. “Porta Tower” is a world-class project with its design and construction, which is constructed in line of the highest international standards.

I was recorded as the most active region from where Georgia could draw major foreign direct investments. However, according to the 2015 preliminary report, the EU has been replaced by a group of the CIS countries (see Diagram 1) that reflects a sharp upturn of FDI inflows from Azerbaijan (from 341 to 543 million USD), while FDI inflows have nearly halved from Russia (from 82 to 49 million USD). At the same time, a bulk of FDI inflows from Azerbaijan is related to transport and communications projects of regional importance that serve expansion of Georgia’s transit potential. (See Diagram 1) Based on a detailed analysis, under the

UN standards, we can conclude that over the past 5 years (2011-2014) FDI contributors were making focus on employing the domestic market resources (80%). Efficiency-oriented investments ranks second with 17% ratio and resource-oriented investments rank third with 3% ratio. In the light of the past 20-year dynamics, these indicators prove that foreign investors do not consider Georgia to be a market of cheap resources any more, but we see diversification of motivations and their increased inclination to efficiency-oriented fields. In whole, these tendencies point to growing development of the domestic market and progress.

Chart 1. FDI Inﬂows due to Regions (Thousands of USD)

n 2015 Georgia drew 1.351 billion USD foreign direct investments (FDI), up 6% compared to the 2014 preliminary report and down 23% compared to the 2014 speciﬁed indicators, Geostat, the national statistics service of Georgia, reports. The country attracted 1.758 billion USD investments in 2014. The major investment in 2015 was made by BP, while Azerbaijan was recorded as a major investor country with 40% ratio in total FDI inﬂows in 2015, Geostat says.

THE SOLAR POWER PLANT TO BE BUILT IN GARDABANI

here are negotiations going on for the project of Solar Power plant construction in Gardabani. In general, as solar power becomes a bigger and bigger part of the overall energy landscape, engineers around the world are busy working out how to build plants that are large and efﬁcient enough to keep up with demand. Davit Shariqadze, who is the head of the Energy Department at Ministry of Energy of Georgia, announced to”businesscontact“, that the technical project which was presented by one of the investor was positively estimated. Thus, right now negotiations are going on between the parties.

GINO WELLNESS GROUP TO INVEST IN BAKURIANI WELLNESS CENTER CONSTRUCTION

LC Gino Wellness Group plans to invest 4.2 million GEL in constructing a wellness center in Bakuriani. To this end LEPL National Agency of State Property of the Ministry of Economy and Sustainable Development of Georgia has transmitted a 76 308 square meter nonagricultural land plot to the investor for 500 000 GEL under a direct sales mechanism. Source: Geostat

Chart 2. Foreign Direct Investments due to Fields (millions of USD)

Source: Geostat

Diagram 1. FFID inﬂows due to regions (millions of USD)

AZERBAIJAN TOPS LIST OF GEORGIA’S LARGEST INVESTORS

zerbaijan invested 40 percent of the total investments made in the economy of Georgia in 2015, the National Statistics Ofﬁce of Georgia reports. Last year, Azerbaijan invested $542 million (58.9 percent growth) in Georgia and became the largest investor in the country. The other major investors in the country are the UK ($198 million), the Netherlands ($111 million) as well as Luxembourg ($87 million) and Turkey ($77 million). In 2015, the total volume of the investments made in the country hit $ 1.35 billion. The main areas of investment are transport and communications ($594 million), the ﬁnancial sector ($191 million), construction ($ 129 million), industry ($91 million), the energy sector ($90 million), and others.

CHINESE MAJOR CORPORATION TO MAKE INVESTMENTS IN GEORGIA

Source: Geostat

n official delegation of Chinese engineering corporation CMEC (China Machinery Engineering Corporation) has finished its visit to Georgia. During the 3-day visit, the Chinese delegation has seen sights in the country and attended internal concert of Erisioni folk music and song state academic ensemble. The Chinese official delegation led by San Bei, head of the secretariat of the Chinese ruling party’s committee board, was hosted by the Partnership Fund executive director.

OTHER SIDE OF BUSINESS March 21, 2016 #138

caucasus business week

DAVID GOGICHAISHVILI

I GAVE UP BANK CAREER BECAUSE OF COMPRESSED TIME Interview with general manager of Night Show Studio

I GRADUATED HIGHER SCHOOLS IN BOTH GEORGIA AND ABROAD. For example, I hold three BA diplomas in banks and ﬁnances, journalism and the English Language and Literature. Moreover, I have ﬁnished MA degree studies at the Ohio University media management school in the USA, and MA degree studies in business administration. This program was hosted by 5 universities in the Netherlands, the USA, Mexico, Brazil and China. I FOUND MY FIRST JOB PLACE AT KRTSANISI COMMERCIAL BANK. I was a third-year student at Tbilisi State University. Irakli Kovzanadze was my teacher. Later, this bank merged with United Georgian Bank. MY WORKING CAREER STARTED WITH PROBATION PERIODS. After a while, I was employed as a full-timed worker, but this job did not last long, because I was simultaneously working at FM 105 radio station and I had to give up the bank career because of compressed time.

I WAS CONTENT WITH THE FIRST SALARY. I used to earn 70 Soviet Rubles at the bank and 30 Soviet Rubles at the radio station. Today everybody works somewhere, but in that period the situation was different. Therefore, I used to invite my friends to Khinkali and I could do favor to my friends. I WAS CONCENTRATED ON MEDIA MANAGEMENT. I was always interested in this field. This is obvious occurrence; the heart leads you to somewhere. However, I was interested in media management only. I think any knowledge in any field is applicable. For example, when Steve Jobs addressed Stanford University graduates, he unveiled the theory of connecting dots. Namely, he was studying cryptography when he was excluded from the college. Then he was taking part in developing Apple scripts. In this theory he was saying that he had received knowledge through connecting these dots. For me, FM 105 radio station was the gateway to this field. Naturally, we had television programs like Team of the Funny and Inventive, but I was always interested in media management.

MEDIA BUSINESS EXISTS IN GEORGIA, because media outlets operate in print media, online media, TV companies and online radios, but certain media editions obey to business laws.

IF THERE IS ANY FIELD, where I would never work – I have not thought of this. In practice, people can follow their aspirations in any ﬁeld.

THE IDEA OF CREATING A HUMORISTIC TEAM AROSE, when we had FM 105 radio station and when we were taking part in Clubs of Funny and Inventive. We realized we could do something good in this field. Our interest in this arose naturally and we decided to take efforts in this field. Our heart has led us to this field.

READING BOOK IS A PART OF THE INTIMATE LIFE like all other things. You communicate with a book through your inner world. Therefore, I would not dare to give advices about reading this or that book. I can give similar advices to my friends as I know their speciﬁc needs and I think my advice would assist them in something. Who am I to advise young people which book to read?

I LIKE MANY PROJECTS IN THE GEORGIAN TELEVISION SPACE, including our projects and others.

I LOVE TRAVELLING. For example, I have lived in the USA and I think the USA is my second homeland.

I DO NOT VISIT MY JOB PLACE IN THE SAME TIME EVERY DAY. Everything depends on the time of my meeting with someone. My job is like one of screenwriter, who is to come and leave in certain period. This signiﬁes my job is not conﬁned with the same working hours.

FOOTBALL is my favorite sport. NATIONAL FOOTBALL TEAM of Brazil is my favorite team.

State Universities Development Through PPP Model

ccess to affordable and high quality education is a key to economic growth and development of country. Growing global demand for improved educational services like bettering of universities infrastructure and increased quality control of education create a complicated and costly challenge for the government. In this regards PPP is an internationally recognized model. It is necessary to separate PPP model from privatization. PPP model implies the distribution of rights between state and business sectors in the strategic spheres which can’t be financed by government – this includes public Universities. PPP is one possible life-cycle oriented approach for the procurement of university buildings to attain economic benefit. Moreover, there are number of benefits of PPP model in Higher education: University infrastructure development ( Dorms, Campuses, University hospitals, Labs, schools) beneficial reforms in management; Better quality control of the educational process; Directing funds to the university based research; Making expensive foreign study programs in western countries, more affordable and available for local students; Increasing number of scholarships; Increasing salaries for the university staff; Invited lectures from different countries.

There are number of cases worldwide where governments, in case of lack fundings, use PPP model for the development of public universities.

ELENE NIZHARADZE PPP communication specialist The case of Kenyata University is one of the interesting examples: With a student population of over 70,000 against a public dorm capacity. Kenyatta University, which is one of the biggest public schools in Kenya has been facing an accommodation crisis. In May 2015 The University initiated PPP project with New York-based private equity ﬁrm “Integras” to build more Dorms for the campus. As a result, the American company funded the project with US$ 11 million and built new housing facilities with a capacity of 10,000 beds. The initiative is one in a series under a public-private partnership framework approved by Kenya’s Cabinet through which the government is expecting over US$25 billion in private funds to be invested over the coming decade. In 2001 Washington University school of Medicine used PPP model for building new University hospital and labs. WU partnered with a private company Vulcan.inc and begun construction which lasted for 6 years and cost $US 15 million. PPP Model is not only beneﬁcial for developing the infrastructure and education quality control in public universities, but also the presence of a private company will lower risks of instability like of which Tbilisi State University is facing today. Transferring Public University management to a private company may help to avoid the type of anxiety that presently takes place in TSU. The Government must monitor the PPP process closely and provide a guarantee that Private sector will prioritize the interest of public.

CSR March 21, 2016 #138

caucasus business week

Humanity Foundation Transmits 78 000 USD Oncologic Drugs to Hematology Center Patients

ecently- established Humanity Foundation has carried out its first charity campaign and transmitted a humanitarian aid of Newbortez medications worth 78 000USD to M. Zodelava Hematology Center. Sesili Gogiberidze, the Humanity foundation director, noted that the Foundation was established for popularizing the idea of humanity, mutual assistance and sympathy and philanthropy. “Jointly with friends we decided to set up a foundation, because we believe the humanity impulses that prevail in our society should be kindled in our complicated time to make these impulses into one big goodness. Humanity foundation is a noncommercial organization and our objective is to promote each member of our society to maximally expose and unveil this positive human nature and reflect it in specific affairs and transform it in goodness in relation to specific people.

We will try to involve the whole society in this undertaking of kindness and humanity. Humanity and goodness are genuinely inspiring and encouraging aspects and we pretend to make our contribution to this process.

We have ambitious plans and goals. We will cooperate with everybody who gives priority to the idea of humanity. We live in humanist society and I believe our undertaking will have much support.

I am very glad that our foundation has carried out such important and successful campaign. I express my deep gratitude to Humanity Georgia pharmaceutical company for such carefulness and attention to our undertaking, because this company has allotted large-scale humanitarian resources from its own reserves. The oncologic preparations that Humanity Georgia has transmitted our foundation will achieve the addressees and I believe these medications will considerably alleviate their conditions of our patients in terms of healthcare recovery and material resources. I would like to express hopes that in the near future many other supporters and assistants will support Humanity Foundation and we will make many good things thanks to joint efforts”, Sesili Gogiberidze told the news conference. Transmission of these humanitarian preparations to patients through this humanitarian channel will be serious alleviation and support for patients, Nino Sharashenidze, a representative of M. Zodelava Hematology Center, said. “I would like to express my deep gratitude to organizers of this campaign. Every similar step strengthens the hope in patients and their families that they will not be lefty face to face with their problems. Similar support and creating positive psychological background to the patients is very important in the recovery process. These very important medications that we have received under the humanitarian campaign will be handed over to the patients under prescriptions through PharmaDepot pharmacy that is located in the building of our clinic. I would like to thank the PharmaDepot administration that they have assumed the responsibility for valuably storage and issuance of these medications”, Nino Sharashenidze said.

Corporate social responsibility and, in general, the idea of humanity is a priority direction and even our company appellation reﬂects this aspiration, Humanity Georgia pharmaceutical company director general Andrii Kuzma said. „I would like to wish much success to Humanity foundation and personally Mrs. Sesili Gogiberidze in this timely and necessary undertaking. I am glad that we have the opportunity to take part in this kind campaign. I personally guarantee to support Humanity Foundation every time in all activities”. Andrey Kuzma said.

GLOBAL DOWN SYNDROME DAY: A CHANCE TO CELEBRATE BEAUTIFUL LIVES

nga Loladze wishes she could go back and talk to the sad and devastated woman she was when she feared her unborn child had Down Syndrome. Six years later, she can’t even imagine feeling that way. At the ﬁrst glimpse of her newborn, Georgian woman knew her daughter had Down syndrome but those sorrowful, scared feelings faded when she gazed upon her Nino. “If I could go back to myself then, I really wish I could just say: ‘it’s going to be OK. You don’t know what the beauty of your life is about to become. But trust me it’s going to be beautiful,” Loladze said.

“Seven years ago I thought I was the most unlucky mother on earth but now I think God gifted me with you and made me your mom, she writes in her letter. That beauty and the belief that Down Syndrome is something to be celebrated in the community is the message Loladze will be trying to spread Monday (March 21) during World Down Syndrome Day, a day ofﬁcially introduced by the United Nations since 2012. It’s also Rock Your Socks day, a chance to wear some colorful or mismatched socks to show your support for people with Down Syndrome and raise awareness about inclusion and respect for people who have the genetic condition.

“For me, it’s very important that people realize that kids with Down Syndrome are just children and Down Syndrome doesn’t deﬁne who they are.” International Down Syndrome Day aims at raising awareness that kids with Down Syndrome are more like other kids than they are different: 1. People with Down Syndrome are worthy and should be included in all aspects of life. “They do grow and they do get driver’s licenses and they get jobs and have relationships. They might get married. They go to college.” 2. It’s a myth that people with Down Syndrome are always happy. They have feelings like anyone else and can be embarrassed, sad and hurt. 3. They live satisfying lives and even more so in some respects, “They kind of don’t sweat the small stuff and they seem like they love with their whole heart and they feel with all their emotions. It’s just such a beautiful way to live.” 4. Behind any child with special needs or an intellectual disability are parents who have worked tirelessly to make sure their son or daughter reaches their full potential.

EVENT caucasus business week

Irakli Kovzanadze Presented His New Work to the Public

rofessor Irakli Kovzanadze presented his new monograph to the public – “The lessons of the global economic crisis and new development model formation”. The above-mentioned book is a continuation of the author’s series of monographs, which describe the nature of economic crises, their prevention and overcoming mechanisms. The work is dedicated to the economic crisis of 2007-2009, which practically affected every country in the world. According to Irakli Kovzanadze, the monograph analyzes research of various economic schools of thought, historical and modern experience of overcoming crises and current tendencies of global economic development.

“The book describes macroeconomic, structural and institutional factors of

these crises” – said Irakli Kovzanadze. Based of practical works, the author describes his views regarding overcoming crises and crafting ways of sustainable economic development. The development and challenges to the Georgian economy and its banking sector are addressed separately. Anti-crisis measurement, their effectiveness and adequacy, applied by various countries are also separately described in the work. The concrete examples of various countries’ efforts, their results and evaluations, are reported in the monograph. The form and structure of the work is fundamentally a monograph and is designed for Master’s and Doctoral level students of Economics and Business, as well as for those institutes and persons who have the mandate to develop and manage economic (geopolitical, macroeconomic, ﬁnancial, monetary, credit and ﬁscal) policies.

About the Author IRAKLI KOVZANADZE – Doctor of Economic Sciences; Professor; Head of the Finance and Banking Department at Tbilisi State University. Along with scientiﬁc work, he actively works in the banking industry. Irakli Kovzanadze is a career banker and possesses more than 23 years of banking experience. During the 2012-2015 period, he was the Chief Executive Ofﬁcer of JSC Partnership Fund.

March 21, 2016 #138

TECHNOLOGIES

Visa Official March 21, 2016 #138

caucasus business week

WORLD NEWS SOUTHERN GAS CORRIDOR – ONE OF THE BIGGEST CONSTRUCTION PROJECTS OF OUR TIMES

Georgia is the Leader Country in the Region to Implement Innovative Technologies Visa International a global leader in payments said Georgia is the leader country in region to implement innovative payment technologies. The speakers Mandy Lamb, Group Country Manager for CIS & SouthEast Europe, Andrei Aleikin, Senior Director, Emerging products & innovations for CIS & South-East Europe and Hector Rodriguez, VicePresident, Risk for the Central and Eastern Europe, Middle East and Africa (CEMEA) region spoke at a special press conference for the local media outlets.

he speakers briefed journalists on the latest global trends in the payments industry, shared details on the multiple layers of security Visa uses to prevent fraud, along with sharing insights on how Visa is addressing market opportunities. The Visa representatives summarized the successful performance of the company in Georgia highlighting that in terms of cards penetration and readiness to accept innovations, Georgia is one of the leading countries in the region. For example, in 2015 Georgia was the ﬁrst country to launch Host Card Emulation in the region.

Georgia also led is issuing Visa payWave and contactless micro tag stickers in the South Caucasus, with 28% of all face to face Visa transactions in Georgia made on Visa payWave cards in September 2015. Visa has already invested and is planning to further invest in the industry development in Georgia for the coming years, launching innovative products, providing secure and reliable payments for its customers and deepening the established partnerships with leading Georgian banks, government and law enforcement agencies. As Mandy Lamb, Group Country Manager, CIS&SEE commented:

“Visa’s business is focused on growing electronic payment and displacing cash in the system. With Georgia being one of the most progressive and innovative country’s in the region, and a ﬂagship market for Visa

he Southern Gas Corridor project, aiming at supply of the Caspian gas to Europe, is one of the biggest construction projects of our time, Vice-President of the European Commission for Energy Union Maros Sefcovic said at the at the High-level Conference “EU energy cooperation with the Eastern Neighbourhood and Central Asia” in Brussels. The speech of Maros Sefcovic is published on the Eujropean Commission’s official website. “Very important area where I expect we make significant progress this year is the Southern Gas Corridor. This pipeline chain of 3,500 km whose value USD 45 Billion is one of the biggest construction projects of our times”, Sefcovic said. “With this, Europe will start receiving Caspian gas in 2020,” he added. Sefcovic also said that the EU’s eastern neighbourhood and Central Asia play a central role in the Energy Union, which is one of the EU’s most strategic projects and top priorities. Today the Southern Gas Corridor is among the European Commission’s priority energy projects, which aims at the diversification of the EU gas supply sources and routes. The project envisages transportation of 10 billion cubic meters of Azerbaijani gas from the Caspian Sea to Europe through Georgia and Turkey.

TURKEY NAMES 2016 ‘AFRICA YEAR’ IN TRADE

PayWave and contactless payments, we believe that we are very much on track to achieving this goal.” ANDREI ALEIKIN, Senior Director, Emerging products & innovations CIS&SEE has mentioned: “The world is rapidly becoming more connected, millions of devices will be connected to the internet, and the ability to pay or be paid will be at the heart of many everyday devices and services. Visa is offering the payments ecosystem – ﬁnancial institutions, their technology partners and vendors – the tools and services that help develop new deliver secure, fast and reliable payments services across diverse commerce experiences.” This is why we opened up our network through Visa Developer, an open platform for developers, offering API interfaces for direct access to new Visa services. . In doing so, we aim to accelerate the migration to new digital commerce experiences and support of consumers who increasingly rely on connected devices to shop, pay and get paid. HECTOR RODRIGUEZ, Regional Risk Ofﬁcer, CEMEA:

With the speed of payment innovations in the world and in

Georgia particularly, our role as one of the world’s leading payments network is to make sure every time a Visa cardholder enters their card details online or dips, swipes, or taps their Visa card at the point-of-sale, they know they are accessing the most secure way to pay. “Visa employs multiple layers of security that work together to help us manage fraud. From anti-counterfeit features, to network-based fraud detection, to data security standards to help keep sensitive information secure, Visa is committed to leading the industry toward a more secure, trusted payment system. And, to ensure consumers feel they feel conﬁdent in using their Visa card, we are working with Georgian issuers to strengthen consumer protection in the market by introducing rules that will provide Visa cardholders peace of mind whenever and wherever they use their Visa cards.”

urkish Economy Minister Mustafa Elitaş has said 2016 has been named “Africa Year” in a bid to diversify Turkey’s export markets, as the country’s neighboring regions face deep economic problems amid the oil plunge and escalating security issues. “We have defined 2016 as ‘Africa Year.’ We have developed significant initiatives and plans to boost our exports and construction activities into mainly Central Africa and Sub-Saharan Africa. We will also focus on two other key markets: China and India. The Americas will also be other priority markets for us in the upcoming period,” he said on March 18. Elitaş noted that Turkey’s share in the world trade was around 9.4 per mil, yet the government’s plan was to increase this rate to 1 percent in the medium-term. The country needed to find new markets, as economic woes in the neighboring region have negatively affected Turkey’s trade, he added. Elitaş said the automotive, textile and construction sectors will especially play a key role in increasing Turkey’s exports across the globe.

EU CALLS UPON UN COUNTRIES TO IMPOSE SANCTIONS AGAINST RUSSIA

n the second anniversary of Russia’s annexation of Crimea from Ukraine, the European Union has once again condemned Moscow’s actions and called upon the countries of the United Nations to join in sanctions against Russia. The EU will continue to adhere to the full implementation of its nonrecognition policy, including through restrictive measures,” the statement published Friday on the Russian-language website of EU’s European External Action Service said. “The EU again calls upon the states-members of the United Nations to consider similar non-recognition measures in line with the UN General Assembly Resolution 68 / 262,” the statement said. The statement added that following annexation, the human rights situation in Crimea has deteriorated to a serious degree. The EU expressed particular concern over the persecution of the Crimean Tatars. In addition, the EU has demanded that Russia release Ukrainian citizens Oleg Sentsov and Alexander Kolchenko, who have been “detained and convicted in violation of international law.” Ukrainian ﬁlmmaker Sentsov and his associate Kolchenko were detained in Crimea on terrorism charges and convicted for 20 and 10 years respectively by the Russian military court in August 2015. Sentsov and Kolchenko denied the charges.

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 21, 2016 #138

TBILISI GUIDE March 21, 2016 #138

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 21, 2016 #138