Caucasus Business Week #146

BUSINESS WEEK

DISTRIBUTED FREE OF CHARGE

caucasus1

May 23, 2016 #146

May 23, 2016, Issue 146 - www.cbw.ge

economy

Tourism

business

Leicester City Effect New Term in Georgia

Egypt Travel Deals to Georgian Tourists

Hilton Batumi Warms up for Summer Season

Pg. 5

Pg. 9

Pg. 4

Lari Strengthens again

Poti Seaport Small Shipping Companies May Disappear From The Market

Pg.7

The national currency of Georgia is strengthening at high paces.

Starting March 2016 LARI started revaluation in relation to USD. Our society has seen the national currency affixed even at 2.49 point against USD, after the 18-month history of depreciation ended in hitting the historical bottom of 2.49 point. Starting March 2016 the National bank of Georgia (NBG) has been actively interfering in the currency market, buying USD and trying to prevent quick appreciation of LARI, but the fact is the exchange rate is rising.

Over the past 2 months, the NBG has purchased 195 million USD through currency auctions.

What are preconditions for the national currency appreciation?

Even the NBG finds it difficult to answer this question, while some economic experts (with rich fantasies) provide bold ideas.

For example, for a certain period, they were naming the deficient spending. The 2016 state budget is planned by 3% deficit and this is a norm. The budget is spent under the plan and nothing special has changed in the fiscal policy.

Pg. 6

Medication Prices will Increase Inevitably without Legislative Amendments The Association of Young Finan-

ciers and Businessmen (AYFB), jointly with the Healthcare Platform nongovernmental organization, has published the April report for the Panaskerteli Index.

The report shows that in April the Panaskerteli Index decreased slightly by 0.3 points to 11.7 point.

In whole, prices declined on 16 medications and increased on 5 ones. Prices remain unchanged on other drugs.

The AYFB launched examination of drug tariffs in November 2015. Since then, price downturn tendency strengthens month to month. It is interesting what factors are driving this tendency and what are the future prognosis around the pharmaceutical market. Soso Tsiskarishvili, president of the Club for Independent Experts, assures that appearance of a new competitor company on the market has triggered price reduction on the pharmaceutical Pg. 11 market.

2 GOVERNMENT

NEWSROOM Georgia presents its business-friendly market in Berlin “Georgia is a small country but it is attractive for international investments – its market is open and its economy is liberal”. Using these words Georgia’s Economy Minister spoke about the country’s potential.

nvestors pledge $120m to upgrade cement plant in Georgia A German multinational building materials company plans to upgrade its existing cement and concrete facilities in Georgia, spending $120 million USD to do so.

ECONOMY

Georgia Receives $94.8m From 12 Donor Countries Money transfers have increased in the month of April too. The country has recorded 94.8 million USD inflows from abroad (03/16 – USD $90.7; 02/16 USD $79.9; 01/16 – USD $66.6). As to year on year correlation, a 4% y/y growth was registered for the first time.

World Bank Helps Georgia To Develop Tourism Infrastructure WB will allocate Georgia $9 million for the restoration of urban, municipal and tourist infrastructure in Imereti region in order to promote cultural and historical monuments as well as attract tourists.

BANKING

Fitch Ratings Upgrades Liberty Bank’s Longterm Foreign Currency IDR Rating from B to B+ Fitch Ratings upgraded Liberty Bank’s Long-term Foreign Currency IDR from B to B+, affirming B rating on Short-term foreign currency IDR with Stable outlook.

TBC Bank’s Retail Portfolio Marked 2.359 billion GEL as of May 1 As of May 1 TBC Bank’s retail portfolio made up 2.359 billion GEL (2.144 billion GEL as of May 1, 2015). The bank’s market ratio accounts for 30%.

BUSINESS

Georgian Wool to be Exported to Italy and Sweden The first animal product that will be exported from Georgia to EU market will be wool.

Thus Georgia will be added to the list of the countries from which it is possible to bring in the raw wool in EU.

9 million USD to be Invested for the Hotel Construction In Batumi 9 million USD investment will be made for the construction of the Hotel that will be located in the Alley of Heroes. There will be 104 rooms placed in the multifunctional complex in Batumi.

COMPANY

Wines of Teliani Valley Have Been Awarded With Silver and Bronze Prizes at IWC The wines have been awarded with silver and bronze prizes at the wine content International Wine Challenge (IWC) 2016.

Kvirikashvili: “Georgia is one of Europe’s key transit partners”

G

eorgia’s Prime Minister Giorgi Kvirikashvili has spoken at a special ceremony marking the beginning of construction of the Trans Adriatic Pipeline (TAP), which will bring gas from western Turkey to Greece, Albania and across the Adriatic to Italy.

This afternoon at the special event, attended by top European and American delegations, Kvirikashvili said Georgia, as a transit country, supported Europe’s energy diversification and stressed the country was a reliable partner for major foreign players.

Across this route the TAP will merge with other existing and planned pipelines that will make energy resources available [and allow] Caspian Sea region gas supplies to be transported to central and west Europe,” Kvirikashvili said.

In his speech the Georgian high official stressed the importance of the Southern Gas Corridor project, which included the TAP and other similar pipelines.

We are proud Georgia is a partner state of the Southern Gas Corridor project and an inseparable part of the project,” Kvirikashvili said.

He said, in the framework of

the project, through close cooperation between Georgia, Azerbaijan and Turkey and with the support of western partners, about 30,000 jobs were created in the countries involved in the Southern Gas Corridor project.

Kvirikashvili highlighted Georgia “unconditionally” supported the expansion of the Southern Gas Corridor and said his country was ready to participate in all meetings and gatherings as this expansion went ahead.

The TAP is a part of the Southern Gas Corridor project.

The Southern Gas Corridor is one of the most complex gas value chains ever developed in the world, said the pipeline’s operator British Petroleum (BP).

Stretching over 3,500km, crossing seven countries and involving more than a dozen major energy companies, the Southern Gas Corridor is comprised of several separate energy projects representing a total investment of about $45 billion.

The project involves: The Shah Deniz 2 development (Azerbaijan), drilling wells and producing gas offshore in the Caspian Sea; Expansion of the natural gas

processing plant at the Sangachal Terminal on the Caspian Sea coast in Azerbaijan; Three pipeline projects; - The South Caucasus Pipeline (SCP measuring 690 km) – Azerbaijan, Georgia; - The Trans Anatolian Pipeline (TANAP-1,900km )– Turkey; - The Trans Adriatic Pipeline (TAP-870km) – Greece, Albania, Italy; Georgia is a strategic partner of the Southern Gas Corridor project.

Efforts to increase the transit capabilities of the Southern Gas Corridor have already launched and the cost of this project was about $2billion.

The project utilized services and goods worth about $400 million in Georgia, out of the $2billion total cost, said Georgia’s Ministry of Energy on its website.

Once complete the expanded South Caucasus Pipeline will be able to transit 16 billion cubic meters of gas instead of the current 6 billion cubic metres.

The expanded pipeline was set to begin transporting the increased gas amount in 2019. From 2020, in exchange for transit, Georgia will receive about one billion cubic metres of gas annually.

Georgia-China deal supports bilateral tourism

G

eorgia and China are taking several steps closer to deepen economic ties and benefit from bilateral tourism. The two countries signed a Memorandum of Understanding (MoU) yesterday in China to implement a range of tourism projects that encourages tourists to travel to the partner nation.

In recent years Georgia and China have been actively developing an economic relationship, which is evident with projects that are being implemented in Georgia with the support of the Chinese Government.

The MoU we signed also proves [both sides’] readiness to implement new initiatives,” said Georgia’s Deputy Economy Minister Ketevan Bochorishvili after she signed the MoU on behalf of Georgia.

As well as signing the deal, Bochorishvili was in China to attend the tourism conference First World Conference on Tourism for Development, which was held on May 19 in Beijing, China.

BUSINESS WEEK caucasus

The Editorial Board Follows Press Freedom Principles Publisher: LLC Caucasian Business Week - CBW Address: Aleksidze Street 12 Director: Levan Beglarishvili WWW.CBW.GE

May 23, 2016 #146

Mobile phone: +995 591 013936 Email: caucasianbusiness@gmail.com

At the conference Bochorishvili delivered a speech, where she talked about how enhanced tourism can help alleviate poverty.

The Deputy Minister also met the head of the Chinese Tourism Administration, with whom she outlined future cooperation plans.

Meanwhile, as Bochorishvili worked to deepen tourism ties with China, another Georgian official was in Spain to also enhance bilateral tourism. Giorgi Chogovadze, head of the Georgian National Tourism Administration and revealed Georgia’s touristic potential at the Executive Council meeting of the World Tourism Organisation in Spain.

About 300 representatives from more than 50 countries attended the session. Chogovadze spoke to guests about Georgia’s unique wine traditions and of the country’s preparations regarding hosting the international wine tourism conference, which is set to take place Georgia’s wine-making region Kakheti on September 7-9, 2016.

www.cbw.ge <<

FoodandWine: How to Get In On the Georgian Wine Revival

<<

Georgia Ranks 41st Worldwide in terms of Wine

<<

Consumption Shuakhevi HPP is Unique Project Meeting All International Standards

<<

Germany to use Georgian Corridor for Asian Cargo Transportation

<<

Georgia Keeps 6th Position in Safety Ranking Index List

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

May 23, 2016 #146

3

4

INTERVIEW

May 23, 2016 #146

Hilton Batumi Warms up for Summer Season - How opening of Hilton hotel in Georgia impacted on the local market?

room sales operates. Another world leading Hilton initiative in action.

- Hilton joining the local market, in the first year, had a positive impact on the market in Batumi. With our travel partners we secured a flight into Batumi from Tel Aviv up to the end of December. This was a first for Batumi & we are looking to encourage other carriers from other destinations to come to Batumi year round. The destination cannot survive if we only attract the same numbers of guests as the year before or only for a limited summer season.

- In order to become more successful on Georgian market, what activities do you plan to implement?

- Hilton Batumi has been operating for a year already, did it met all the expectations? How do you asses the performance of the hotel?

It’s been a year since world’s leading luxurious brand Hilton opened its first hotel in Georgian seaside town Batumi, however it has established itself as one of the accessible and trendiest hotels in Georgia.

Soon hotel plans to expand its activities through the whole country and region. CBW has contacted Stuart Nelson General Director of Hilton Batumi.

- Early indications are very encouraging for the business and we surpassed our initial projections. It will take a year or two to have a full picture of the demand over the year but we are performing well in this market. The market has to diversify and we hope to encourage more travellers to Batumi and the hotel.

- Despite the fact that Hilton is one of the leading brands in the world, its pricing policy in Georgia is lower than other brands, is this your marketing campaign or Hilton tries to balance prices on the market?

We have more rooms to sell than other hotels in Batumi. We have not placed our pricing below everyone else’s prices; we have used pricing to attract new markets through our experience in the field. We yield rates every day within all our markets to attract more customers.

Simple economic theories on supply and demand have been used for centuries to determine pricing. The ancient Silk roads were one of the early trading examples.

“Stop Clicking Around” is a Hilton globally launched campaign that encourages all guests to book on line for the very best rates, outperforming other established .com companies. We offer our lowest rates on line. We also offer apps to help with this process so you are always in control of your reservations and pricing is fully transparent.

This campaign has delivered some amazing results, totally changing the way the world business of Hotel

- We start with all our restaurant pricing matches pricing in the City, year round. All our prices include tax and service, so we offer the very best value in all our restaurants and bars.

We look to source all foods locally, so are seeking Georgians farmers to grow crops for us. We have developed partners in producing Honey so we have bee hives on one of our roofs, producing fantastic Georgian honey for our guests. We want to bring success to Georgian businesses. It’s not an easy thing to do but it’s becoming better.

We also have to say, Daily flights to Tbilisi is our focus. We must encourage all parties concerned to sort out this crippling infrastructure issues. The lack of internal flights is strangling the city’s accessibility to guests flying to and from Tbilisi.

So we are lobbying Government to attract an airline that the market will trust and deliver consistency.

They must yield the seats on each flight to offer affordable prices. The same principles hotels learned to use for their bedrooms is the model used to sell airline seats.

- Hilton Batumi also unites luxurious residential complex, could you tell us more about this?

- The owners are selling apartments in the block next door to the hotel.

There is no direct involvement for Hilton in this project. We are informed that sales are going well.

- Do you plan to expand your business activities in other towns of Georgia?

We have a Hilton Garden Inn, currently under construction in Tbilisi and in the last month there was a contract signed to build a Hilton in Tbilisi, on the sight of the old Ministry of Agriculture. This year there has also been a Hilton Double Tree opened in Yerevan, so along with Baku and all the 15 properties opening soon in Turkey, Hilton is really growing in the country and region.

- What do you expect for this year’s summer season?

- We see early demand from the Russian market, following the tragedies in Egypt and the tensions with Turkey. We still have a long way to go to match places like Sochi as far as the number of flights but we are seeing growth from Russia. The Iranian market has also seen the visa free policy’s benefit them as do markets from China & Israel.

Our focus is on a year round market, as the summer one is established.

5

ECONOMY

May 23, 2016 #146

LEICESTER CITY EFFECT New Term in Georgian Economics Mikheil Dundua, Economist

T

he World Bank (WB) has published a report of the final expertise from the world’s 17 leading analytical centers. Georgia has recorded four historical highs in the report.

The WB publishes the Worldwide Governance Indicators (WGI) on annual basis to assess the quality of governance in more than 200 countries and territories: 1. Control of Corruption; 2. Rule of Law; 3) Regulatory Quality; 4) Governance Effectiveness.

According to all these aggregates, Georgia has achieved historical success under the ruling of the New Authorities. This signifies the country has showed the best results.

Control of Corruption

Georgia advanced to the 52nd position since 2014 and currently the country surpasses the EU member countries such as Spain, Poland, Italy, Greece, Romania, Bulgaria, Hungary, Latvia, Lithuania, Slovakia and Slovenia.

Rule of Law In the rating of Rule of Law, Georgia ranks 75th since 2014 (64.42%). The country occupied the 126th position in 2006 (40.19%) and 104th and 97th positions in 2011 and 2012 respectively (51.64% and 54.50%).

Georgia is a regional leader country is terms of rule of law and is ahead of two EU countries such as Romania (63.5%) and Bulgaria (55.8%).

Regulatory Quality

Currently Georgia ranks 52nd worldwide in terms of Control of Corruption. This indicator was so unsatisfactory under the previous Authorities that our country ranked 88th in 2006 (57.56%) and descended to the 92nd position in 2011 (56.87%).

After the power change in 2012, the situation started recovering (76th position with 64.11%).

Georgia ranks 44th in terms of Regulatory Quality since 2014 (79.33% is the historical maximum). In 2011-2012 Georgia ranked 56th (73.93%) and 58th (72.73%, respectively.

Starting 2014 Georgia surpasses the EU countries such as Slovakia, Slovenia, Italy, Romania, Bulgaria, Greece, Croatia.

»

There are two words in the English Language proving all dream may come true. These words are Leicester City

»

Giorgi Kvirikashvili Georgian PM

The Lester City is a lowbudget football team in England that has reached a surprising success in the league

Government Effectiveness In the global rating of Government Effectiveness, Georgia ranks 60th (71.63% is the best result ever) since 2014. In 20112012 the country occupied 66th (69.19%) and 64th (69.86%) positions, respectively.

Starting 2014 Georgia is a regional leader country in the rating of Government Effectiveness and surpasses the EU countries such as Italy, Greece, Romania and Bulgaria.

The Source World Bank. govindicators.org WGI Data Sources: 1. Asian Development Bank CPIA 2. Business Enterprise Environment Survey (World Bank) 3. European Bank for Reconstruction & Development Transition Report 4. Bertelsmann Transformation Index 5. Economist Intelligence Unit 6. Freedom House 7. Transparency International Global Corruption Barometer Survey

8. World Economic Forum Global Competitiveness Survey 9. Global Integrity 10. Gallup World Poll 11. Heritage Foundation Index of Economic Freedom 12. CIRI Human Rights Database 13. IFAD Rural Sector Performance Assessments 14. Institutional Profiles Database 15. World Bank Country Policy and Institutional Assessments 16. World Justice Project 17. IHS Global Insight Country Risk Rating“.

The Leicester City in the context of the Georgian economy was, for the first time, mentioned by the Prime Minister. “There are no unachievable goals. There are two words in the English Language proving all dream may come true. These words are Leicester City”, Georgian Prime Minister Giorgi Kvirikashvili said at his meeting with analysts at the Chatham House in London. „I see Georgia as an important center that ensues the energy safety of Europe. I see a flourished trade, transport and logistics regional center. Someone may perceive these as unattainable dreams, but there are two words in the English language

proving dreams may come true.

There words are Leicester City. I believe Georgia can rely on support of the United Kingdom and all other European partners in enforcing these dreams”, the Prime Minister said.

The Lester City is a low-budget football team in England that has reached a surprising success in the league.

We also remind you that economic experts have introduced the term of the Kvirikashvili Effect. For the first time, this term was mentioned in the ISET report, under which the business sector’s positive expectations are related to the Kvirikashvili’s Effect.

The team that was considered one of the outsiders at the beginning of the season has obtained the title of a champion for the first time in its 132 history.

According to the Bloomberg, Leicester is a certain lesson for investors to take more risks and act more reasonably.

6

KOBA GVENETADZE

’

CURRENCY

May 23, 2016 #146

There is a Preliminary Condition of GEL Strengthening at the Market

’

President of President of National Bank of Georgia National Bank links GEL strengthening to the natural of Georgia factors and makes a note to the preliminary conditions.

Koba Gvenetadze talked about it with TV-company Maestro. The chief banker of the country made a focus on the improvement of current account deficit and positive expectations. According to him, current account deficit is improved by 300 million USD, import decline is continued, while export reduction pace is diminished. Moreover, expectations directly reflects on currency exchange, which is now improved.

Koba Gvenetadze notes afresh, that floating exchange rate is the most optimal for a country with such open and small economy, which absorbs positive as well as negative shocks in order to ensure development of sustainable economic for a long term period.

Lari Strengthens again MERAB JANIASHVILI Economic Analyst

T

MEETING ROOM – A Cycle of Business Conferences by PASHA Bank PASHA Bank is launching a new project, cycle of business conferences – MEETING ROOM. The project aims to bring together participants from various industries providing a platform for sharing ideas and best practices as it relates to raising the capital for various projects in respective industries.

The first business conference of MEETING ROOM will be hosted by PASHA Bank in Radisson Blu Iveria Hotel on May 25th with the topic being “Hotel Development in Georgia – The Best Practices”.

The conference is supported by Georgian National Tourism Administration and Colliers International.

It will cover the following topics: Overview of the Hospitality Field, Trends and Expectations by Georgian National Tourism Administration, International Operator Identification and Contracting for Hotel Management, The Requirements for Financing Hotel Projects and the Available Tools.

The presentations will be delivered by following speakers: - George Chogovadze, Head of Georgian National Tourism Administration - Mark Finney, Head of Hotels & Resorts Consulting at Colliers International - Goga Japaridze, CCO, Member of the Board of Directors at PASHA Bank - Goga Kapanadze, CEO at Axis - Tamuna Guledani, Sales and Marketing Manager at Sheraton Metechi Palace The meeting will be moderated by George Sharashidze, Publisher & General Manager at Newspaper Georgia Today.

“I’m happy to introduce our new project - MEETING ROOM. In the scope of this project, PASHA Bank will be organizing and hosting a cycle of conferences focused on various industries. Since 2013 we have been serving a wide range of business sectors in Georgia and hospitality is one of them. PASHA Bank intends to contribute to the development of this business, as we clearly see its advantages to the economy of Georgia. Our vision is to actively participate in the growth and development of the Georgian and regional economy through the funding of value accretive projects,” – said Shahin Mammadov, CEO and Chairman of the Board of Directors at PASHA Bank Georgia. „It is of major importance to get private sector involved in development of hospitality business in our country as each month the number of visitors to Georgia grows intensely and lots of new hotels appear. The mutually beneficial cooperation with business sector is the main reason why National Tourism Administration supports MEETING ROOM. It should be noted that within January-April about 1 596 916 tourists visited Georgia and the growth compared to the same period of last year is more than 15.4%. In 20162017 more than 80 hotels are planned to be built in Georgia.” – said Mr. George Chogovadze, Head of Georgian National Tourism Administration.

he national currency of Georgia is strengthening at high paces. Starting March 2016 LARI started revaluation in relation to USD. Our society has seen the national currency affixed even at 2.49 point against USD, after the 18-month history of depreciation ended in hitting the historical bottom of 2.49 point. Starting March 2016 the National bank of Georgia (NBG) has been actively interfering in the currency market, buying USD and trying to prevent quick appreciation of LARI, but the fact is the exchange rate is rising. Over the past 2 months, the NBG has purchased 195 million USD through currency auctions.

What are preconditions for the national currency appreciation?

Even the NBG finds it difficult to answer this question, while some economic experts (with rich fantasies) provide bold ideas.

For example, for a certain period, they were naming the deficient spending. The 2016 state budget is planned by 3% deficit and this is a norm. The budget is spent under the plan and nothing special has changed in the fiscal policy.

The more interesting version was related to the 15th of March, when companies pay the profits tax. Somebody would think that the 15th of March had never come to Georgia previously. Some versions relate the LARI revaluation even to the spring commencement and so on.

If we revise several economic indicators, we will see that there is a slight improvement in financial reports of our country. For example, in January-April Georgia’s foreign trade turnover marked 3287 million USD, up 8% as compared to the same period of the previous year; including the exports marked 608 million USD, down 12% year on year and the imports amounted to 2679 million USD, up 14% year on year. Georgia’s negative trade balance marked 2071 million USD in January to April

2016 and accounted for 63% of the foreign trade turnover. It should be noted that medications emerged as major imports item in January to April 2016 and the imports of medications marked 723 million USD, i.e. 27% of total imports. The main ratio is recorded for Hepatitis C program medications that were transmitted to the Georgian party free of charge. Consequently, foreign currency outflow from the country was not recorded.

At the same time, in April 2016 money transfers to Georgia made up 94.8 million USD, i.e. 214.7 million GEL, up 4% (3.7 million USD) compared to the same period of 2015. Money transfers to Georgia were declining for more than one year because of economic difficulties in the Region.

The tourism and revenues from the tourism sector should be also stressed. This is an only field that is growing irreversibly over the past years. In January to March 2016, tourist inflows to Georgia made up 1.134 million, up 14.7% compared to the same period of 2015.

Special regard should be paid to public expectations for the GEL exchange rate changes.

At the beginning of the year, everybody knew the GEL exchange rate was declining and the national bank would not take steps to curb the national currency depreciation. Consequently, everybody knew the exchange rate would worsen. Today we have a different situation. Everybody sees the GEL is strengthening and the NBG actively applies currency auctions instrument for stabilizing the GEL exchange rate. Consequently, the trust and expectations have increased. The Finance Ministry and the NBG president stress these improved expectations. „There are certain preconditions for the GEL exchange rate strengthening. In January to April the commodity exports declined by 12%. The figure is lower compared to previous indicators. The imports contraction continues.

The whole situation suggests that in January to April, as compared to the previous years, excluding Hepatitis C medications, the current account has improved by about 300 million USD. Thus, there are preconditions to strengthen LARI. Expectations in our population are very important. Inflation reduction tendencies also generated positive expectations”, Koba Gvenetadze, President of the National Bank of Georgia, noted. „At the end of the last year and at the beginning of this year we were talking about improving macroeconomic environment and expectations for the GEL exchange rate appreciation. And these forecasts have justified. The environment has changed, including in term of inflows. And the main thing is that we have absolutely proper psychological expectations and GEL is a stable currency”, Finance Minister Nodar Khaduri noted.

Thus, the GEL exchange rate strengthens and the national bank needs to purchase more USD to maintain the exchange rate stability. For example, in March it was sufficient to purchase 5 million USD to curb the extreme surge of the exchange rate, while on May 20 the NBG had to purchase 40 million USD. The main thing is that the Georgian national currency be stable and the business and our citizens be able to plan their future.

www.cbw.ge <<

ROSNO Ex Chairman Levan Vasadze Returns to “SYSTEM”

<<

China-Based CTEC Plans to Construct Hydro Power Plant Gardabani 2

<<

Transportation through New Silk Road will be Cheaper by 30%

7

SHIPPING

May 23, 2016 #146

Poti Seaport Small Shipping Companies May Disappear From The Market In the globalization era, when economic borders between countries turn invisible, in practice, the role of transportation companies acquire vital importance. The economic development of the country largely depends on the transportation sector tendencies, while shipping companies are facing essential problems at this stage. Unsatisfactory infrastructure, monopolistic conditions of several companies – these factors created fundamental problems to transportation companies. They ask the Authorities to carry out efficient changes.

NUTSA GALUMASHVILI

LLC Georgian Trans Expedition – Poti Seaport is a natural monopoly David Davitidze, head of LLC Georgian Trans Expedition company says that the current condition in the business sector shakes the state economy and the field, in general.

Seaborne and land transportation fields are priority directions for Georgia. The Georgian route connects the East with the West. Despite competitors like Russia and Kazakhstan on the Caspian Sea and Iran, on the other hand, Georgia must have appropriate characteristics of turnover capacity and due infrastructure to maintain preferential positions on the market. The issue is of creating logistics storehouses. The existing tariff policy should be also improved in seaport, land transport and railroad directions, Davitidze noted.

The current situation is the following: Georgia started developing logistics storehouse infrastructure 25 years ago, especially in the Poti Seaport, as well as the surrounding logistics centers. The Poti Seaport is very attractive due to its characteristics, but it possesses only a small part of land infrastructure. Consequently, when a ship is unloaded, the Poti Seaport does not have enough territory to store containers. Therefore, 25 years ago the Poti Seaport started arrangement of an appropriate container infrastructure a 5-10km way from the seaport, Davitidze noted.

“The cargo turnover has considerably shrunk. Therefore, the Poti Seaport has decided to arrange its own terminal. They have decided to use their own monopolistic condition in this situation too. They have been trying to load only their own terminal and neutralize all alternatives. They say that this is an inseparable part of the seaport, but the facility is as far from the sea as other terminals”, Davitidze noted.

The Poti Seaport and Georgian Railway are natural monopolies.

They create subsidiaries and organize cargo expeditions.

Therefore, other transportationexpeditor companies

cannot develop on the market and they fail operation, Davitidze noted.

“You can imagine our condition.

The legislation does not ban similar schemes. These subsidiaries are real competitors for us. If this policy continues, neither the seaport economy nor railway, nor aviation will be effective”, David Davitidze noted.

“When the country acquires the status of a transit country, this status is not a property of someone. This is the advantage and privilege of the whole country”, Davitidze said.

It is very difficult for transportation-expedition companies to make investments and create new job places in similar conditions, he added.

“We should be adjusted to the reality and potential that exist in the country. This is logistics business, shipping business. If this field is monopolized by specific companies, the country will bear losses. There are many companies like ours on the market and this is normal, because all cargo turnover should not be controlled by one company”, Davitidze noted and added Georgian Railway occupies almost the same monopolistic position.

Seeking the problems resolution, the company applied to the Competition Agency in 2015. The company won the case, but the Finance Ministry plans to appeal against the decision and the case will be discussed by the Supreme Court, he added.

Geoexspress – Small Shipping Companies may disappear from the market and the Poti Seaport’s monopolistic position is one of the main reasons Freight companies may disappear from the market, Giorgi Tvaliashvili, head of Geoexspress international shipping company, noted and added that cargo transportation has shrunk by about 25-30% on the market. All directions have worsened compared to the previous years, Tvaliashvili noted.

“Georgia is a gateway between Asia and Europe and the cargo from China or other countries were being directed to Baku or Yerevan. Only Georgians were working here and they were serving the cargo consignments.

Now low tariffs have made this business useless for Georgians. Moreover, because of tensed relations between Russia and Turkey, Turkish drivers cannot enter Russia and these vehicles are accumulated in Georgia, Azerbaijan and Iran. These factors have lowered

tariffs. Therefore, this business has become useless for Georgians. There are many vehicles and auto importers cannot find job. Clients with cargoes seek lower tariffs. Our expenditures have increased and revenues have shrunk”, Tvaliashvili noted. Another problem comes from the Poti Seaport, he added. The Poti Seaport is a main monopolist in the sector and all these factors stifle this business, Tvaliashvili noted.

Another problem comes from the Poti Seaport, he added. The Poti Seaport is a main monopolist in the sector and all these factors stifle this business, Tvaliashvili noted. As compared to shipping companies in the neighboring countries, Georgia-based shipping companies are in uncompetitive situation, because the Georgian Authorities set prefer

Eurotrans 2010 –Competition is Fundamental Problem The business always has development perspectives, if the Authorities provide due environment and conditions. If the Authorities do not ensure due conditions and the economy is not strengthened, the shipping sector will not be developed, Zaza Khelkhelauri, head of the Eurotrans 2010 shipping company noted. Today competition is a major problem before all shipping companies, because there is a great number of operator companies, while the cargo turnover is deficient, he said.

The way out from this situation consists in the economic development. There were certain problems at customs checkpoints too, but these problems were resolved in a short period, Khelkhelauri said.

8

INTERVIEW

“Promotion of creating new enterprises has become a certain trend along with creating serious obstacles to the existing enterprises”

“A major part of the officials cannot realize the importance of successful operation of each business company for a small economy”

COMMERSANT.GE

Armaz Tavadze Businessman - Today, the Kvirikashvili’s Effect is a widely-discussed topic. What is your opinion about the New Prime Minister’s efforts and how useful is the Kvirikashvili’s Effect in the country?

- I cannot grasp the specific meaning of this term, but the government’s attitude to the business sector became more logic and adequate after Giorgi Kvirikashvili was appointed a head of the Georgian Government. Anyway, I think this is a seriously delayed effect and it will take much time until this policy brings real results. Appointment of western-minded person at the head of the Government has evidently changed the state apparatus. Even if a main part of the Georgian government officials shows the same state of mind, the country would make huge breakthrough. Regretfully, the state apparatus lacks for westernminded professionals at all levels.

- What steps should the Government take to boost the business sector’s real development?

- The government, first, should stop inventing new bicycles in any field. The civilized world has already invented and experienced all efficient systems and models. We should just pick up these models and adjust them to the Georgian reality. This is elementary job.

- The Government is announcing a creation of new enterprises in all fields…

- Promotion of creating new enterprises has become a certain trend along with creating serious obstacles to the existing enterprises. New companies are established genuinely, but the main thing how many of them continue successful operation.

Today the country provides many opportunities for establishing new enterprises, but the country cannot ensure their successful performance. It is interesting how many new enterprises were instituted and then closed over the past 25 years?

I am interested whether somebody makes the statistics of closed companies.

Today the business has to overcome serious challenges in the country. The current judicial system and

May 23, 2016 #146

Government Efforts Suffice for Establishing New Enterprises, not for Successful Performance

the state apparatus are main obstacles hindering the Georgian business development.

It is impossible to do business valuably avoiding contacts with either the judicial system or the state apparatus. High-level of bureaucracy and formalism, illogical decisions, inflexible system, unfriendly and non-partnership attitude towards the business sector, Soviet stereotypes and state of mind. Serious efforts should be taken to overcome the superficial changes in the court system and inner atmosphere in state structures.

None of the Governments could alleviate the estrangement between the Authorities and the business sector. All Governments have narrated about promoting the business sector development, but all these narrations are of abstract and virtual character.

If you ask what their priority is, they will answer proudly that development of entrepreneurship environment is their priority, while if you ask them to resolve elementary problems in this field, you will see that these words are invalid and useless. A major part of the officials cannot realize the importance of successful operation of each business company for a small economy.

Starting from the Shevardnadze’s Government until today, many enterprises have opened and closed in the country. State officials adore cutting red ribbons for TV cameras. They find their mission in participating in inauguration of a new facility. They think it is sufficient to give interviews to TV reporters at the inauguration ceremonies with busy faces.

However, real affairs start after the red ribbon is cut. I have been in the business sector for 10 years and

in this period, I have spent a major part of my time and efforts on tackling elementary problems with the state structures. Almost all state officials give the same answers – “You are capable, but… you are not capable”.

It has become a tradition that elementary trial lasts about 3 years and the results received after 3 years often are useless. Are you aware how many business disputes are not discussed at courts? And this factor seriously hurts the business.

Another problem arises when you sue against the state, when a business entity argues with the state. In this case, I assure you, a magistrate prefers not to cast light on the truth, but protect the so-called state interests.

It is understandable when one judge has to discuss hundreds of cases, he/ she cannot discuss them timely and cannot grasp the details of each case.

This problem is widely discussed and everybody knows the problem. But what is the result? Nothing. Both the Supreme Court chairman and the Justice Council secretary ignore these problems. In turn, if you ask them, they will answer solemnly that they prioritize entrepreneurship development in the country and all branches of the Authorities are to serve this goal. We have to live in this theater of the Absurd.

- What other problems would you name before the business sector?

- All governments talk about the necessity of developing a securities exchange to create an alternative source of attracting money to the business and to liberate the business from the dependence on expensive money of commercial banks. It is strange that so far nobody in the Authorities has actualized the necessity of developing the stock exchange.

Commercial banks own noncore assets and this fact creates obstacles to the development of many business fields. The authorities have failed to reach any essential success in this direction. It is anomaly when commercial banks are able to own companies indirectly in any field and the Authorities have no reaction. We meet the same anomaly when one business group owns insurance, pharmaceutical and hospital businesses.

Georgia is an only country without obligatory insurance. All Authorities have failed to develop the insurance sector as an instrument for protecting the population and business from risks.

Serious problems are recorded in the state procurement field too.

Over the past years many company were damaged because of invaluable state tender system. The Authorities have recognized these problems many times, but in vain – nothing has changed.

These themes are evident and no deep analytical thought is required to resolve them. As noted above, we should stop inventing new bicycles The civilized world has long adapted the most successful models. We should find these models and adjust them to our reality. To this end our country needs more open-minded officials with western state of mind and frank attitude to the business sector, who do not have hostile attitude to business under the pretext of state interests, but who recognize that the country will be successful thanks to a great number of successful people.

9

NEWS

May 23, 2016 #146

Egypt TRAVEL DEALS TO GEORGIAN TOURISTS

The official delegation of Egypt tourism and 10 leading tourism and travel companies visited Georgia.

On May 18, 2016, the meeting with media representatives was held and led by Tareq E. Maaty – the Ambassador of Egypt in Georgia, Ahmed Shokry – head of the planning sector (Egyptian tourism authority), Egyptian Hotel Association Board Member – Mohamed Ayoub, Aly Ghonaim – Egyptian Federation of Tourism Chamber Board member

and Fathi Attia – Air Cairo commercial director.

The members of the delegation from Egypt introduced the situation of tourism market in Egypt and further initiatives in this area.

They also presented the tourism services and new opportunities Egypt offers to its visitors. The representatives of 10 leading tourist companies will establish the connection between Georgian counterparts.

Today, Egypt is one of the most suit-

able, attractive and affordable countries for Georgians. In the last two years, 33 thousand people visited Egypt from Georgia. The most popular travel months are December, January and March. Due to the positive relationship and cooperation between Georgia and Egypt, Egypt’s Ministry of Tourism and tour operators hope to keep good relationship and offer tourists new and attractive packages for traveling.

Caucasus Business Week inter-

viewed Mohamed Ayoub, Egyptian Hotel Association board member.

Thus we are providing small piece of the interview.

- What is the dynamic of Georgian tourists in Egypt?

- “Last year we had 17 000 Georgian tourists; because of this we are going to increase the flights. We had only one flight from Georgia to Sharm El Sheikh and one flight from Georgia to Hurghada. In the nearest future, the flights will be carried out two times in

Sharm El Sheikh and 3 times in Xurgada per week. So totally 5 flights will be performed in a week”- said Ayoub.

- What can you tell us, how profitable is Georgian tourism market for Egypt?

- “It is a big value for us that we will have Georgian people in our country, this will build more relationships between both countries and of course we are targeting all markets to increase number people coming and visiting Egypt”, – noted Mohamed Ayoub.

Tbilisi Hosts 64th Session of Board of Railway Administration of 17 Countries Tbilisi has hosted the 64th session of the board of railway administrations of 17 countries. Georgia had not held similar events for more than 10 years.

Delegations from 180 countries have attended the event, including from Belarus, Ukraine, Lithuania, Latvia, Azerbaijan, Armenia, Kazakhstan, Kirgizstan, Moldova, Russia, Tajikistan, Iran, Turkmenistan, Uzbekistan, Finland, Estonia and so on.

The session discussed technical and commercial projects. Several important contracts were signed, including on arrangement of transparent tariffs in the

TransCaspian corridor to simplify additional drawing of cargo consignments, Georgian Railway director general Mamuka Bakhtadze noted.

The meeting participants agreed that the German railway operator Deutsche Bahn will use the Georgian corridor for Chinese cargo transportation. Georgian Railway and Deutsche Bahn will sign the due agreement in a couple of days.

At the same time, Georgian Railway has achieved agreement with the Kazakh party on introduction of special tariffs for oil and grain transportation services.

Stadler Bi-level Trains to Arrive in Georgia by July 17 Stadler bi-level trains will arrive in Georgia by July 17, Georgian Railway director general Mamuka Bakhtadze noted. In whole, four units of Stadler bi-level trains will run on Georgian railroads. Two additional trains will arrive in 2017, Mamuka Bakhtadze added.

After technical regulations, the train will launch operation in summer, Mamuka Bakhtadze noted.

The bi-level train will move from Tbilisi to the Black Sea direction in

nonstop regime and will stop at only seaside stations of Batumi, Kobuleti and Ureki, Georgian Railway noted.

Trains are adapted to disabled citizens. As to service tariffs, the company has purchased the train at preferential rates.

We will provide more comfortable and higher-class services, but the tariffs will not increase and our consumers will receive better services for the same price.

Georgian Railway has bought Stadler

trains by tender. The project’s value makes up about 40 million EUR and Georgian Railway has attracted the sum by support of Stadler.

The train consists of 16 carriages and each of them is able to transport 450 passengers, including 20 adapted places for disabled bodies, three VIP class compartments and economyclass and business class compartments.

Machinists and conductors with special licenses will serve the trains.

»

Several important contracts were signed, including on arrangement of transparent tariffs in the TransCaspian corridor to simplify additional drawing of cargo consignments

»

10

BUSINESS

May 23, 2016 #146

Georgian Wines Win 32 Awards at International Wine Challenge 2016 32 Georgian wines have received awards of International Wine Challenge (IWC), including Gold and Trophy.

Gold and Trophy were awarded to the same wine – Shumi’s Ilerco 2012. The results of annual IWC competition were announced recently in London. Congratulations to Shumi for double success! Georgia’s performance in 2016 was much better than in previous years, once again confirming its 2014’s huge achievement with 32 awards including gold.

WORLD MARKET

EXPORT

Georgian Brand “Gepherrini MC” Appears on Manhattan Georgian brand “Gepherrini MC” the bag manufacturer company will sell its production on Manhattan. That is the most densely populated borough of New York City.

According to the company’s founder, Ilia Gepheridze said to the Radio “Commersant“, that the production is already sent in the United States and in two weeks period it will go on sale.

At the same time the company’s online store will be launched, which has been prepared and is already almost ready. As a result it is in the process of

the production uploading.

Gepheridze says that sales through the mobile application is also planned.

Based on the information provided by Ilia Gepheridze, the Georgian bags will be sold in several boutiques located on Manhattan.

According to him, the premium class collection was sent in the United States, which will not be sold in Georgia.

“The products are made of Italian leather, Italian accessories are used and the quality is improved compared to the quality of

NEWS

BRAND

Freco to Start Potato Fries Enterprise in Akhaltsikhe Freco company plans to set up food products enterprise to produce at least 150 tons of potato fries. To this end, the National Property Agency has transmitted a 1386 square meter land plot and buildings in the village of Muskhi, the Akhaltsikhe District to Freco for a symbol price of 1 GEL. Investments of 67 920 GEL will be made in the enterprise development and at least 20 citizens will be employed.

KTW’s New Distillery in Gurjaani to Open in August The construction of a brandy distillery is underway in the village of Velistsikhe, Gurjaani district in Kakheti.

The plant will process local grapes to distill brandy spirits.

According to Georgian news site BusinessContact, Kakhetian Traditional Winemaking (KTW) has invested 3 million USD in the project implementation.

KTW’s general director Zurab Chkhaidze said the plant would be opened in the end of August.

existing products on the local market.”

The price ranges between 199 USD and 999 USD. The founder stated that in order to increase the popularity of the brand several special campaigns are planned to be carried out.

For instance, special webpages will be created in social networks, meetings with famous people will be arranged. Thus, this fact will meaningfully spread the information about the company’s production and the awareness of the brand “Gepherrini MC”.

In addition, Gepherrini

Shoe Brand Melissa Appears on Georgian market Anano Dzotsenidze CEO

Melissa is the shoe brand having more than 4 000 stores in 80 countries throughout the world. It produces shoes for women and children.

Melissa is an innovator in terms of Jelly Shoe manufacturing. The brand is distinguished and characterized by its elegant design.

Thanks to this brand new technology was created, which is called Melfex. Melissa is constantly looking for alternative ways to develop innovative ideas and collaborate with world-known designers, which makes it even more distinguished from others.

In 80-ies, Jean-Paul Gaultier worked on a shoe design. Later Vivienne Westwood, Karl Lagerfeld, Jay maskri, Campana Brothers and Jeremy Scott joined with him. Melissa is fast becoming one of the country’s most loved brands. This is 100% recyclable, hypoallergenic and elastic material Melissa uses in its production process.

First of all, Melissa is characterized by modern design and high quality.

In addition, having fastest growing dynamic and every year it manages to offer novelty to its customers. Melissa’s manufacturing technology is distinguished by its eco-friendly approach. The brand is distinguished by the aroma as well - all models have a characteristic sweet and pleasant fragrance. Global Brands Georgia is the official representative of Melissa in Georgia. The brand will appear on Georgian market in summer and it promises its customers an interesting novelty. The first store will be opened in June of this year 2016.

Marketer.ge

already has a store in Moscow and is negotiating with Ukraine for export possibilities.

Herewith, the company plans to move to the domestic regions in near future.

Gepherrini MC produces the bags for women, men and children, also bracelets.

Prices range from 23 GEL to 360 GEL. The prices range from 23 GEL to 360 GEL. The company was founded in 2014, having 6 stores in Georgia by now, and one is opened in Moscow as we mentioned before.

Georgian Mushrooms Exported to Dubai and Armenia The new enterprise of mushroom processing company “Tetri Qudi” will start its operations before Autumn. According to the company director Vano Ioseliani stated to “Business Press News” that at this stage according to the project the construction works are in the process. The total value of the investment carried out in this project will definitely exceed 1 million USD. It will be possible to prepare mushroom substrate in the new enterprise. However according to Vano Ioseliani, this raw material will be mainly intended for internal use in order to produce mushroom itself.

As for export, the company works in two directions. Recently, the production was exported in Dubai and Armenia. The director supposes demand increase by Autumn. “In general, mushroom is a seasonal product. In summer demand always drops. For instance, if we plan to export around 30 tons of mushroom in May, we hope, this indicator to be much greater in September”, – said Ioseliani.

According to him, the company will carry out 150-160 tons of mushroom substract exportation. “Tetri Qudi” produces 3 types of mushrooms: button mushroom, maitake, portobello.

May 23, 2016 #146

11

HEALTHCARE

As a rule, medication prices decline, when pharmaceutical networks and companies expect a new competitor to appear on the market

Panaskerteli Index Cheapened by 0.3% in April

Medication Prices will Increase Inevitably without Legislative Amendments The Association of Young Financers and Businessmen (AYFB), jointly with the Healthcare Platform nongovernmental organization, continues a monitoring of medication prices under the universal model of the Panaskerteli Index.

The recent report shows that in April prices of the most in-demand and popular medications reduced by 0.3%, as compared to March, to 11.07 point. In whole, prices reduced on 16 medications and increased on 5 ones. Prices remain unchanged on all other drugs.

The AYFB launched exploration of the medications market in November 2015.

Over the past 6 months, the Index records downturn tendency month to month thanks to several fundamental factors.

First, government interventions in terms of market diversification and sharpening the competition by stimulating the entrance of Humanity Georgia pharmaceu-

SOSO TSISKARISHVILI Head of Independent expert club

The Association of Young Financiers and Businessmen (AYFB), jointly with the Healthcare Platform nongovernmental organization, has published the April report for the Panaskerteli Index. The report shows that in April the Panaskerteli Index decreased slightly by 0.3 points to 11.7 point. In whole, prices declined on 16 medications and increased on 5 ones. Prices remain unchanged on other drugs.

The AYFB launched examination of drug tariffs in November 2015.

Since then, price downturn tendency strengthens month to month. It is interesting what factors are driving this tendency and what are the future prognosis around the pharmaceutical market. Soso Tsiskarishvili, president of the Club for Independent Experts, assures that appearance of a new competitor company on the market has triggered price reduction on the pharmaceutical market: “As a rule, medication prices decline, when pharmaceutical networks and companies expect a new competitor to appear on the market. We see such attempts in Georgia. We see that a new pharmaceutical company has entered the country – Humanity Georgia.

The fact is that over the past months the pharmaceutical market records a downturn tendency on a certain category of medications. However, we should remember that the earlier reality will be returned without adoption

tical company to the Georgian market.

Similar examples were recorded in the nearest past of the Georgian pharmaceutical market, when sharpened competition was lowering medication prices. On the other hand, the existing pharmaceutical companies have revised their strategies for drawing clients and lower prices are the most real and approbated way in this respect.

The GEL exchange rate recovery has made positive effect on medication prices. As a result, tariffs on imported drugs have decreased. At the same time, the last strengthening of GEL and its stabilization to 2.31-2.20 point in April has not further affected the Index and the picture remains unchanged.

Moreover, the pharmaceutical market has not registered any fundamental changes any more that would make direct or indirect influence on the market.

Tourist’s Medicine Kit Cheapens by 20% of respective legislative package.

Humanity Georgia has delayed imports of several hundreds of new medications to the Georgian market.

The company asserts that their drugs would be sold for cheaper tariffs. At this stage, the market does not see new medications. There is much probability that drug prices will increase again if the reality does not change”, Soso Tsiskarishvili said.

Georgia should introduce the English practice, the president of the club for independent experts, noted: “England has established a very good practice. If a pharmacy sells a drug for the price that exceeds the prime cost by more than 21%, the state structures extract them from the network and transit them to clinics. Georgia should also follow this experience, otherwise our feudal pharmaceutical companies will resume raising medication prices and our society will receive unsatisfactory results again”, Tsiskarishvili noted.

We remind you that the AYFB and the Healthcare Platform NGO launched supervising pharmaceutical market tendencies in November 2015. Medication prices are always widely discussed. To this end an economic index called as the Panaskerteli Idnex has been created to examine pharmaceutical market changes by observing prices on the most in-demand specific groups.

“

Humanity Georgia has delayed imports of several hundreds of new medications to the Georgian market

”

The Healthcare Platform has published the list and prices of medications of the tourist’s medicine chest for the month of April. The examination has showed that, as compared to March, the tourist’s medicine kit has cheapened by 18 GEL in April.

The Tourist medicine chest price was 91 GEL in March and 72.84 GEL in April.

Prices considerably declined on antiflu drug Taicold. Its price declined to 6.50 EGL from 9.50 GEL in April. Prices also declined on analgesic Drotaverine to 2.50 GEL from 3.92 GEL. The organization has examined prices of 20 medication and accessories of the Tourist medicine kit at four leading pharmacy networks.

The list and price of tourist’s medicine kit are as follows: The Tourist’s Medicine Chest: Antiseptics: Adhesiive Tape (bacteriocidal) – 2.00 GEL Sterile Bandage (7*14cm) – 1.04 GEL Cotton (steril) – 1.00 GEL Brilliant Green -0.30 GEL Hydrogen Dioxide – 1.25 GEL; Iodine (10mg) – 0.51 GEL Accessories: Binder – 14.80 GEL

Scissors – 1.50 GEL For Trip: Dramina – 5.60 GEL Antihistamines: Cetirizine: 3.50 GEL Insecticide Repellent: Aerosol Lavanda – 7.80 GEL Antiflu Drugs: TaiCold – 6.50 GEL Paracetamol – 0.30 GEL Analgesics: Ibuprofen – 2.80 GEL Drotavewrine (N20) – 2.50 GEL Remedies for heart: Corsiz – 1.50 GEL Validol -0.44 GEL Ammonia solution – 1.00 GEL Burn Ointment: Turmanidze Ointment – 4.90 GEL Protection from Solar Burn: Ziaja Spray – 13.60 GEL TOTAL: 72.84 GEL The Healthcare Platform has already published the March and April reports for baby, children, family, first aid, tourism medicine kits. The NGO plans to examine and publish the list and prices of medications for other social groups and segments too.

12

PUBLICITY

May 23, 2016 #146

13

WORLD NEWS

May 23, 2016 #146

Quotes

“ The capacities of TANAP and TAP pipelines will make it possible to export the gas of Absheron field as well

People want change but not too much change.

Finding that balance is tricky for every politician

”

The EU says it will ease sanctions only upon Russia’s full implementation of the Minsk agreements

Eleanor Clift

WHO Warns Georgia and Russia of Zika Virus Outbreak this Summer

Armenia and EU seen on track to U.S. to free extend economic businesses sanctions on Russia from double taxation

T

Armenian authorities are working on a draft agreement on avoidance of double taxation with the United States of America, Armenian economy minister Artsvik Minasyan said today.

“The Armenian ministry of economy continues the work on the agreement on avoidance of double taxation with the United States of America. According to the latest report, the work is progressing well.

The date when it may be considered and ratified will be announced in the near future”, Minasyan said.

The draft agreement had been already discussed in 2015 November by the Armenian and American experts at a meeting of the US-Armenia Task Force. Armenia’s foreign trade turnover with the United States in the first quarter of 2016 slashed by 40% from the year earlier to $28.8 million.

he Zika virus could spread to Europe this summer, although the likelihood of an outbreak is low to moderate, the World Health Organization has said. Areas most at risk are those where Aedes mosquitoes may spread the virus, like the Black Sea coast of Russia and Georgia and the island of Madeira.

Countries with a moderate risk include France, Spain, Italy and Greece, while the risk in the UK is low.

The UN agency is not issuing any new travel advice at this time.

The WHO is calling on countries to eliminate mosquito breeding sites and to make sure that people – particularly pregnant women – have information on the potential harmful consequences of the disease.

The agency says most countries that could be affected are well prepared to pick up any new cases and deal with them quickly – but others must bolster their ability to diagnose the virus.

Brain defects Zika has been linked to a rise in brain defects in babies and the virus has been seen in more than 50 countries during this outbreak. And WHO experts say the risk of spread increases in late spring and summer as Aedes mosquitoes – thought to carry the virus – become more active.

The report suggests 18 countries are at moderate likelihood of seeing Zika cases while the UK is one of 36 countries which have a low, very low or no likelihood of transmission.

Dr Zsuzsanna Jakab, at the WHO, said: “We call particularly on countries at higher risk to strengthen their national capacities and prioritise the activities that will prevent a large Zika outbreak.”

Meanwhile Prof Jimmy Whitworth, at the London School of Hygiene & Tropical Medicine, said the the risk of Zika spreading to Europe was real and called for holidaymakers to heed health advice.

He added: “The main mosquito vector for Zika, Aedes aegypti, is only found in Madeira and around the Black Sea, but another mosquito, Aedes albopictus, is more widespread and is capable of transmitting Zika, although not very efficiently.

“Countries in Southern Europe, including France and Italy, need to be especially vigilant and it’s important that holidaymakers follow public health advice while abroad, including taking all the necessary precautions to avoid getting bitten.

“This is especially so for pregnant women, or women planning to become pregnant, travelling to areas where there is Zika, as there is now a proven link with microcephaly and other birth defects.”

Work starts on new pipeline bringing Azeri gas to Italy

C

onstruction work is starting on a new pipeline project bringing Azeri gas through northern Greece and Albania to Italy, reducing Europe’s energy dependency on Russia.

The Trans Adriatic Pipeline will run for 878 kilometers (550 miles), from Greece’s border with Turkey to southern Italy, and includes a 105-kilometer (65-mile) stretch under the Adriatic Sea. First deliveries to Europe are expected in 2020.

Greek Prime Minister Alexis Tsipras said the project would create 8,000 jobs in his financially struggling country, which has more than 24 percent unemployment.

He spoke at a ceremony Tuesday to mark the beginning of the pipeline’s construction in the northern port city of Thessaloniki.

TAP is a joint project by Britain’s BP, Azerbaijan’s SOCAR, Italy’s Snam, Belgium’s Fluxys, Spain’s Enagas and Swiss Axpo.

TAP project envisages transportation of gas from the Stage 2 of development of Azerbaijan’s Shah Deniz gas and condensate field to the EU countries. arlier, the European Bank for Reconstruction and Development (EBRD) managing director of energy Riccardo Puliti said in an interview to Reuters that bank is considering financing of up to 1.5 billion euros for TAP. “We are considering up to 500 million euros of our own money for TAP plus we will try to arrange with other banks up to 1 billion euros in a syndicated loan,” Puliti said.

“Together with financing from the EIB, project sponsors’ equity and export credit agencies, I think the (project) will be fully financed,” he added.

The 870-kilometer TAP will be connected to the Trans Anatolian Pipeline (TANAP) on the Turkish-Greek border, run through Greece, Albania and the Adriatic Sea, before coming ashore in Italy’s south.

Four Turkish companies win huge highway project Two Turkish consortiums won tenders on May 17 to build sections of a 7 billion-Turkish-Lira ($2.35 billion) motorway project that will connect to a new bridge over Istanbul’s Bosphorus Strait.

Limak Holding and Cengiz Holding, which both have interests in many fields from energy to construction, together won a tender to build the Asian section of the road project, Transport, Maritime Affairs and Communications Minister Binali Yıldırım said in a televised interview. Kolin Construction and Kalyon Group won a second tender to build the European section of the road, he said.

Both sections were tendered under the build-operate-transfer model. All of the companies have recently won many tenders separately or together, including the 22 billion-euro third airport of Istanbul.

T

he European Union is on track to renew economic sanctions on Russia over the crisis in Ukraine when they expire in July, though an extension could be contested and only short-term, diplomats and officials said.

The 28-strong EU needs unanimity to keep the sanctions in place and the bloc’s unity has been increasingly tested on that.

While some states stress the resurgent Russia has not delivered on commitments in the so-called Minsk peace process for east Ukraine, others want to restore trade ties with Moscow.

EU foreign policy chief Federica Mogherini told German newspaper Die Welt on Thursday she expected the energy, financial and defense sanctions to be renewed.

“EU heads of state or government had tied the lifting of the sanctions to a full implementation of the Minsk Agreements. So far, this has not been reached,” Mogherini said in an interview.

“There have always been different opinions on some elements of our sanction policy. It will probably stay that way...What is important is that we keep this unity and decide all together.”

The EU slapped sanctions on Russia after Moscow annexed Crimea from Ukraine in March 2014.

It stepped them up later that year as the Kremlin backed rebels fighting Ukrainian troops in east Ukraine,

where more than 9,000 people have been killed.

The EU says it will ease sanctions only upon Russia’s full implementation of the Minsk agreements, but progress on applying the peace accords - negotiated by Berlin and Paris - has stalled for months.

Moscow and Kiev blame each other for failing to stick to the deal, which includes organizing local elections in east Ukraine, restoring Kiev’s control over the whole border with Russia, and the withdrawal of heavy weaponry from the conflict zone.

Italy, Greece, Cyprus, Hungary and Bulgaria are among EU states skeptical that sanctions should be extended, diplomats say, facing off against Britain, Sweden, Poland and the Baltic states.

“I don’t see how we could not extend them in July. The conditions, including Minsk, are not met,” said one EU official.

Another official said the most likely scenario was a six-month extension, adding that G7 leaders would discuss the matter at their next summit in Japan on May 26-27 as the EU and the United States aim to keep a joint stance on Russia.

Last year, G7 leaders meeting in Germany vowed to keep sanctions in place until Russia fully implements the terms of the peace deal.

Italian Prime Minister Matteo Renzi later briefly opposed extending the restrictive measures at the end of 2015, but eventually fell into line.

14

PUBLICITY

May 23, 2016 #146

May 23, 2016 #146

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

15

TBILISI GUIDE 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

16

PUBLICITY

May 23, 2016 #146