Caucasus Business Week #166 by Caucasian Business Week

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October 24, 2016 #166

October 24, 2016, Issue 166 - www.cbw.ge

Energy Whether Fuel Prices Keep Rising

Janos Herman A transformation in Georgia, led by the Georgians Pg. 5

Econo-mix Erroneous Panics around GEL Pg. 4

Pg. 7

What Georgia should Expect from Membership in European Energy Community

The main reason of mortgage loan problematics is machinations created Problematic loans are one of the contentious issues through the Georgian financial sector. A large share of borrowers is unable to repay their loans on time, thus facing negative consequences. Amidst the various forms of loans, mortgage loans exceed in the severity of such consequences. A mortgage loan is a heavier liability with the pledged property at risk. Not long ago the government was asked for financial assistance after the growing anger between borrowers and lenders, lead to protests and, in some instances, violence. Currently, three types of lenders operate on the Georgian market: Banks, MFOs and private lenders. A loan agreement is concluded between a lending party and a borrowing party. In Georgia, it is not unusual that borrowers and lenders find each other using the services of private loan brokers. But this additional component brings in several diﬃculties. Pg. 9

Georgia’s “Seasonal Curse”

Pg. 6

These unlucky countries are plagued by the so called “resource curse” or “paradox of plenty”. After some time countries with such “cursed” natural resources become less developed economically as compared to countries with no resources. The latter’s economic growth rate is, in the long run, much higher than in the resource-based economies. Also civil wars happen more often in the resource-rich countries than in the countries with no resources. There are many examples of that: on one side there are Nigeria, Venezuela, Russia, Sudan (oil exports) or Angola, Sierra-Leone, Congo (suppliers of “blood diamonds”), while on the other there are Singapore, Taiwan, Hong Kong, South Korea (the four “East Asian tigers” which were able to change from agrarian to hi-tech economies over the course of 50 years). Pg. 11

2 GOVERNMENT

NEWSROOM EU building a Digital Community with Georgia Georgia and other eastern partner countries of the European Union (EU) are discussing ways to collaborate on digital issues to bring economic growth, generate jobs, improve people’s lives and help businesses.

Government to Spend 22 Million EUR on Tbilisi Schools Rehabilitation This resource will be enlarged by 2 million EUR co-participation of Georgia. The total amount will be spent on reconstruction of about 25 public schools and increasing energy eﬃciency in the mentioned schools.

ECONOMY

The Expected Volume Indicator of National Debt will Amount to Maximum Rate According to the state audit office, the expected volume of national debt will amount to Maximum Rate. As it is presented in the 2017 state bill, fixed volume of state budget amounted to 15 billion and 403.1 million GEL

External Trade of Georgia in JanuarySeptember 2016 External Trade of Georgia in January-September 2016 In January-September 2016 external merchandise trade (excluding non-declared trade) in Georgia amounted to USD 9104 million, 24 percent higher year-on-year.

BANKING

Four Million Online Loans Registered in Georgia

he country’s central bank says high budget deficits forecast for 2017 do not create inflation risks although it was preferable to keep the budget deficit as low as possible. This was mentioned in a report of the 2017 draft budget created by the National Bank of Georgia (NBG) and presented to Parliament of Georgia. NBG stressed high budget deficits in 2017 would not create inflation risks but it was desirable to keep the budget deficit below three percent to maintain debt sustainability and fiscal stability. A budget deficit is an indicator of financial health in which expenditures exceed revenue. In the report the central bank welcomed the Government’s

ment of Georgia will hold a closing session regarding the 2017 state budget after completing the first stage of discussions about next year’s budget. The 2017 draft budget will be given to the Government by October 22, which will include remarks from Parliament’s Budget and Finance Committee. The Government must present the final budget to Parliament no later than November 5. Georgia was currently enjoying a stable economy and was expected to end the year 2016 on a financial high. Between January and September 2016 Georgia’s consolidated budget incomes reached 6.47 billion GEL – a 140 million GEL surplus, said the Finance Ministry.

TBC Bank has become owner of 100% stake in Bank Republic

Georgian Farmers to Grow Potato Cancer Resistant Breeds in Private Land Plots

Chinese Companies Submit Business Plan for Tea Industry Development in Georgia At the meeting the Chinese delegation introduced high-budget business plan for tea industry development and specific investment proposals.

Silknet Plans to Attract Capital Market Players Silknet will introduce new instruments of positioning, but it is unknown which instrument is to attract capital market players.

ow much money was donated to Georgia’s political parties in the lead up to the Parliamentary Elections? Georgia’s State Audit Agency released data showing how much was donated to various political parties and majoritarian candidates during the preelection period, from June 8 to October 1, 2016. The data showed the most donations were received by current ruling Georgian DreamDemocratic Georgia party, Paata Burchuladze’s State for People party and Alliance of Patriots. How much did these three parties receive in donations? Georgian Dream -Democratic Georgia party- $6,780,336 Paata Burchuladze-State for People- $1,770,867 Alliance of Patriots- $462,454 The following political parties also received donations. These donations were: United National Movement $428,923

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

decision to issue more treasury bills as this would reduce the currency risks and develop the securities market. Earlier in October Georgia’s Ministry of Finance announced next year Georgia will have a budget of 10 billion GEL – a 410 million GEL more than the 2016 budget. The initial version of the draft state budget was 10.55 billion GEL, of which 9.52 billion GEL will be composed of budgetary funds, 135 million GEL will be grants and 900 million GEL will be credits. State budget revenues will be about 8.71 billion GEL while budget expenditures will reach 8.17 billion GEL, which was 22.3 percent of GDP. Looking ahead the Budget and Finance Committee of Parlia-

Who received the most election donations?

Starting spring 2016 specialists of the Agriculture Ministry research center and the national food agency have been testing potato breeds resistant to pathogens that provoke potato cancer disease.

COMPANY

NBG: 2017 high budget deficits do not create inflation risks

“This happens when, according to the last census, only 3.720 million persons live in Georgia, including children and adolescents, while online loans are not issued to persons over 65 years old”.

The transaction ended on October 20, under which, Scoeiete Generale and European Bank for Reconstruction and Development (EBRD) sold 100% stake of Bank Republic to TBC Bank.

BUSINESS

October 24, 2016 #166

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

Free Democrats-$177,573 New Georgia-$157,000 New Political Centre Girchi$97,426 Democratic Movement-United Georgia- $74,812 Republican Party- $24,893 Industry will save Georgia$24,933 Other parties that competed in the Parliamentary Elections also received donations but the amount received was less than any of the above mentioned parties. Meanwhile majoritarian candidates that received the highest donations were: Ilia Kokaia, independent majoritarian candidate in western Zestaponi area- $235,400 Vasil Khanishvili, independent majoritarian candidate in eastern Kareli region- $180,230 Tsezar Chocheli, independent majoritarian candidate in eastern Mtskheta-$94,747 Legal entities have the right to donate maximum of $50,531 annually to a political party. Donations from an individual citizen can not be higher than $25,265 per year.

www.cbw.ge <<

World Bank is Pledging Support Towards the Four Point Reform Plan

Khachapuri Index, Exchange Rate Dynamics and International Tourism

Azerbaijan Oﬀers Uzbekistan to Benefit from BTK

Produce in Georgia Program Created more than 100 000 Job Places

New Pipelines Helps Georgia to Become a Major Partner for Europe

Georgia to Launch Fuel Imports from Iran

LG Glass Starts Procurement and Production of Natural Stone

Israeli Businessman to Invest 15 million USD in Greens Production in Imereti Region

Spanish Company to Unveil Spirits Factory in Kutaisi FIZ

Editor: Nutsa Galumashvili. Mobile phone: 595 380382 Reporters: Medea Samkharadze; Mariam Kopaliani; Merab Janiashvili Designer illustrator: Ilia Chrelashvili. Technical Assistant: Giorgi Kheladze

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

October 24, 2016 #166

PUBLICITY

ECONO-MIX

Erroneous Panics around GEL

Hila Peled CEO of Topishare

Why Are You Single? Or: How to Find the Right Investor for your Startup

‘‘

Merab Janiashvili Economic Analyst

Analysis of Georgia’s macroeconomic indicators that aﬀect the GEL exchange rate formation shows up that no particular deterioration is seen that could provoke long-term depreciation of the exchange rate

It is Fraudulent Statement as if GEL Depreciation Brings Negative Outcomes and Appreciation Yields Positive Results Currency Exchange Rate Must Be Stable

he last period has actualized the GEL exchange rate issue again. The Georgian national currency rate against USD has not changed considerably, but our society has demonstrated certain signs of panics anyway. And government oﬃcials have largely provoked similar tendencies by creating incorrect expectations in the society. These erroneous expectations were frequently supported by experts, who were making incompetent forecasts. First of all, we should note that GEL exchange rate in summer period demonstrated stabilization and slight appreciation signs. The National Bank of Georgia (NBG) started purchasing USD at currency market to prevent sharp strengthening of the national currency exchange rate. As a result, since March up to September 2016, NBG bought 278 million USD. In late August GEL strengthened slightly and it was fixed at 2.27 point against USD. In autumn period, the national currency started demonstrating depreciation signs and in September-October period GEL dropped to 2.30-2.31 points. In the mentioned period the NBG continued making currency interventions, but now the NBG is trying to prevent sharp depreciation of GEL. Since late September, GEL rate continued unimportant contraction and it was fixed at 2.32-2.36 point. At a glance, nothing catastrophic has happened, even more so GEL rate against USD stood at 2.48 point. Moreover, 4-Tetri change for 3 weeks cannot be appraised as a serious event, taking into account current unstable macroeconomic tendencies in Georgian economy. However, media agencies have covered this slight depreciation as a crisis. It should be also noted that starting August the NBG has supplied 180 million USD to the market. The NBG has released a special explanation after the last currency intervention. According to the NBG, the exchange rate volatility was provoked by several major transactions and the situation was a little aggravated by pre-election expectations too. «Georgia maintains floating exchange rate, while the National Bank carries out interventions to alleviate excessive volatility of the exchange rate. Consequently, when certain major streams cause excessive volatility of exchange rate and if fundamental factors give the chance, the National Bank applies instrument of currency interventions to smooth the undesirable tendencies. At this stage external shocks have lost influence on the national currency and only temporary factors continue aﬀecting the exchange rate – several major transactions in combination with pre-election expectations. The recent interventions were to alleviate this short-term volatility tendencies. The National Bank has carried out similar interferences previously too and it is natural that the NBG will apply this instrument in the future. However, this practice does not signify that the NBG will always intervene in these processes”, the NBG special statement reads. The Georgian society has no information on specific transactions. Media agencies suppose that TBC Bank transaction for purchase of Bank Republic has slightly depreciated the national currency as a result of 270 million USD transfer. However, this is unimportant factor, because if the exchange rate goes volatile because of several transactions, the situation is bad and proves weakness of Georgian economy. Anyway, the NBG

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inding the right investor to invest in your start-up is like finding a lifepartner to marry. And it isn’t easy. It’s like going on a thousand dates until you find the one whom you share the same vision and goals with in life. Because, honestly, divorce isn’t something you’d want to happen. And in the past 15 years, the time I’ve spent founding and running start-ups, a lot has changed in the dynamics between investors and startups. The world has become a global village, bringing opportunities, but also challenges. So, what are the magic ingredients? Now, I have a lot of metaphors in this article, because honestly it’s the easiest way to explain it all. Picture this, building a successful startup is like building a house, finding the right investor is like getting married, and for both of these you need some spicy ingredients to make it all work. Ingredient #1: Your idea by itself is not going to get you anywhere. You need the right people to build your startup with, your co-founders. And this is not an easy task either, as you need to be 100% sure you share the same goals, values, and mission. Building a start-up is like building something with Lego bricks: if some parts don’t fit, you’ll probably fail. And the founders of a start-up are the foundation that you will build your product on. Ingredient #2: The second layer of bricks differ with each startup. It can either be a seedinvestor, or it’s the team that you will build your product with. In both cases it is crucial to decide on the right people, as you will continue building on top of the first bricks, supporting the entire building. Ingredient #3: Know your goals, your values. Why? Because you need to know what may obstruct a healthy relationship with your potential investor. We’ve experienced this first hand when we had to end our engagement with an investor after he told us he wanted us to sell our users data to third parties. Even though we had previously agreed we wouldn’t do this under no circumstance. Privacy is one of topishare’s corner stones, and that’s why we ended our engagement in mutual agreement. But it wasn’t fun, make sure you don’t make the same mistake as we did. Ingredient #4: Connections. Ok, I know, this isn’t the easiest for all of us. But network your b#t off. It will pay off in the end. For us it’s slightly easier, as I have already 15 years of startup experience in my pocket. I initially didn’t want to use my connections, but I have decided to go for it after some friends who invest told me: “we do not open presentation send to us via email without recommendation”. And this is really understandable. Can you imagine receiving, on a daily basis, thousands of emails of which perhaps only one might be interesting? So, I keep on sending out those ‘cold’ emails, but have also told people I know to ask around. And this two-way approach really yields the most results. topishare is currently growing very fast, we’ve consolidated partnerships with Forbes (Georgia), CBW, myvideo, and several others both in Georgia and across the world. And we are ready for an investor, to take the big step, and get married. Because you can do fine on your own, but it’s nice to have an equal partner in life that you can grow with together, a mutual beneficial relationship. We’ve had several investors already interested, and we believe that any investor (angel or VC), will not hesitate to “pop the question” after understanding the major potential topishare has globally in changing the way we connect online.

October 24, 2016 #166

interventions should be positively appraised, because the GEL was saved from extreme volatility. Analysis of Georgia’s macroeconomic indicators that affect the GEL exchange rate formation shows up that no particular deterioration is seen that could provoke long-term depreciation of the exchange rate. For example, if exports declined by 8% in JanuarySeptember, imports also dropped by 3%. In money terms, this signifies imports have declined more. Over the past period, higher refinancing loans caused major discussions, as the figure rose to 1 billion from 250 million. However, analysis of money aggregates show that all aggregates have slightly increased. This signifies the NBG has extracted GEL mass from turnover through USD sales and now the NBG is trying to compensate misbalance by refinancing loans. It should be also noted that, besides GEL exchange rate depreciation, upturn in products prices have also caused serious discussions, but this is the result of only incompetence and unprofessional approaches. There is certain correlation between the GEL exchange rate and growth in prices, but this correlation cannot make influence in two weeks. Moreover, over the past 2 years, GEL depreciation has already affected product prices, when at the end of 2015 and at the beginning of 2016, inflation indicator missed the target figure and exceeded 6%. As to 2016, starting March, inflation indicator is declining month on month and annual inflation made up 0.9% in August and 0.1% in September. This signifies we are moving to deflation. Therefore, the NBG want to increase money mass in turnover, on the one hand, and stay cautious, on the other hand, to prevent this money to get into currency market. Therefore, it is incompetent and fraudulent statement as if 4-Tetri depreciation of the national currency has provoked upturn in product prices. For example, sugar or petrol may rise in value, but general picture does not change, i.e. if sugar and petrol grows in value, salt and apple cheapen and so on. Panics in clear sky generates erroneous expectations in the society and government officials frequently provoke similar tendencies. absolutely incompetent statements by several state officials should be also stressed. For example, Deputy Minister of Economy released statement that at the end of 2016 the GEL exchange rate would be 2.20-2.25 against USD. Nobody is able to forecast currency exchange rate for this or that period. Therefore, the society should know that specified figures are to either cheat society or/and the author of similar statements is incompetent or they may be interested to spread similar information. However, it is unclear why Deputy Economy Minister Nikoloz Gagua has announced similar forecasts for GEL exchange rate appreciation. Economic development requires financial stability and this is unimaginable without the national currency stability. This signifies it is of less importance whether 1USD=2 GEL or =2.80 GEL. The main thing is that the national currency exchange rate must be stable and steady. Therefore, any speculations as if GEL depreciation is negative tendency and appreciation is a positive tendency is an absolute fraud. Both tendencies comprise positive and negative aspects. Both tendencies inflict damages to a certain part of our citizens, while another part makes benefits of them. Therefore, the GEL exchange rate must be stable and strong.

Considering the changes, currency exchange offices are obliged to give full information to customers about the currency exchange rate, commission fee and fixed rate. Fixed rate is a currency rate which is defined by the currency exchange offices and the difference between buying and selling the currency is usually more than 3%.

National Bank of Georgia

October 24, 2016 #166

FUEL

Whether Fuel Prices Keep Rising S

everal days ago, fuel prices increased in major parts of refueling stations in Georgia, with the average upturn per liter making up to 5-6 Tetri. The Caucasus Business Week (CBW) has examined reasons for growing fuel prices all over the country, as well as expected tendencies for the future. “An absolute majority of gas filling stations in Georgia have increased fuel tariffs,” Vano Mtvralashvili, head of Union of Oil Products Importers, told the CBW. “Tariffs growth tendency started earlier at non-branded gas filling stations, while several days ago, branded gas filling stations also increased fuel tariffs,” Mtvralashvili said. “Several factors have provoked upturn in fuel prices, including oil prices on international market and GEL exchange rate against USD,” Vano Mtvralashvili said. “Oil products prices have increased on international markets due to classes. OPEC member countries have agreed on oil extraction reduction. The agreement aimed at rising oil price and OPEC nonmember countries, including Russia, an influential oil extraction country, have also joined this agreement. Thus, oil product prices have considerably increased in the international market. Moreover, GEL exchange rate depreciated in relation to USD. Today, both factors are in neutral position and fuel prices growth was inevitable. The complexity of both components provokes a surge in fuel prices in the country. These two factors determine price correction in our country”, Mtvralashvili said. “We should not expect fuel prices to increase further. We hope GEL exchange rate will strengthen and create a positive influence on the fuel prices,” he added, but he abstained to make exact forecasts and said it is difficult to make prognosis in similar situations. Regarding the position of petrol refueling stations, a part of them refrained from making comments, while another part referred to international prices and GEL depreciation as a main precondition for upturn in fuel prices in the country. SOCAR Georgia Petroleum “No company wants to increase fuel prices. The cheaper the fuel, the higher turnover. This balance brings positive results to companies,” SOCAR Georgia Petroleum director David Zubitashvili noted. “SOCAR company was trying to avoid raising prices, but there were no other options,” Zubitashvili said.

Prices at branded filling stations are as follows: It should be noted that SOCAR and Lukoil have not changed prices, while Wissol, Rompetrol and Gulf companies raised prices by 5-6 Tetri. Wissol filling stations: Eco Super – 2 GEL, up from 1.95 GEL Eco Premium – 1.84 GEL, up from 1.79 GEL; Euro Regular – 1.64 GEL, up from 1.59 GEL Prices of Eco Euro Regular remains the same – 1.75 GEL; As to diesel, the price of Eco Diesel is the same – 1.75 GEL; Price of Diesel Energy rose to 1.60 GEL from 1.55 GEL. As to Rompetrol petrol filling stations: Euro Premium – 1.83 GEL, up from 1.77 GEL; Euro Regular – 1.61 GEL, up from 1.55 GEL. Price of Super is the same – 1.99 GEL; Efix Euro Diesel – 1.80 GEL, up from 1.76 GEL; Euro Diesel – 1.61 GEL, up from 1.57 GEL. As to Gulf stations, G-Force Premium – 1.82 GEL, up from 1.77 GEL; G-Force Euro Regular – 1.72 GEL, up from 1.67 GEL; Regular – 1.64 GEL, up from 1.58 GEL. Diesel price has not changed. Namely, Euro Diesel price is 1.75 GEL and Diesel price is 1.59 GEL.

Wissol “Our company had preserved certain reserves to maintain prices, but now the company has bought oil at higher rates. Therefore, we had to correct fuel prices in Georgia too,” Wissol Group director general Vasil Khorava said. «International markets demonstrate the tariﬀ growth tendency and it is not ruled out that we will increase the price by 5 Tetri, again, in several days », Khorava said. Per economic expert Paata Sheshelidze, “global market dynamics prove that, over the past period, oil prices have considerably increased. Additionally, GEL depreciation contributes as a serious factor.” «Oil importers have to pay liabilities in USD. Therefore, they try to shift their burden onto consumers, based on the degree of risks», Sheshelidze noted. “The solution lies in the reduction of oil excise tax,” Sheshelidze said. According to the last report by Bloomberg, fuel prices on global market rose by 0.55%. OPEC also reports on growing oil tariﬀs. Under the last report, the value of a barrel of oil made up 48.63 USD, while several days prior, the price was 48.07 USD.

ENERGY SECTOR

October 24, 2016 #166

What Georgia should Expect from Membership in European Energy Community Last week Sarajevo, the capital city of Bosnia-Herzogovina hosted a ministerial of European Energy Community member countries. At the Ministerial, Minister of Energy of Georgia Ilia Eloshvili signed a protocol on Georgia’s engagement in the Energy Community foundation agreement.

ngagement protocol comprises several EU instructions and regulations which Georgia becomes obliged to fulfill. It is worth noting that all instructions and regulations must be fulfilled through 2020. Georgia gives priority to European and EuroAtlantic integration policy. It is important that the country considers the practice of Europe’s leading countries in all fields, including the power sector that implies development of sustainable, competitive and safe energy system. The ground for such development was created through the signing of the EU-Georgia association agreement in 2014. Energy Market Transformation It should be noted that several instructions require modernizing the energy markets. As reported, the electricity power market consists of several phases: generation, transmission and distribution. Generation implies electricity generation. Transmission implies high-voltage transmission lines operated by JSC State Electrosystem. As to distribution and arranging distribution lines in settle-

ments, the market players are JSC Telasi, JSC Kakheti Energy Distribution and JSC EnergoPro Georgia. JSC Telasi and JSC Kakheti Energy Distribution own only distribution lines and substations, while JSC EnergoPro Georgia, additionally, owns several transmission lines. This system of electricity market does not violate legislation, under applicable legal norms in Georgia. However, under the obligations of the association agreement, this system is inadmissible in terms of market liberalization. Specifically, it is unpermitted for the same company to own transmission and distribution lines. Moreover, besides distribution lines and substations, JSC EnergoPro Georgia and JSC TELASI also own generation facilities, contradicting the energy market liberalization principles. Consequently, new regulations will clearly determine the range of company activities and their fields of activities will be differentiated. Natural Gas Sector Natural Gas is the most demanded energy source in Georgia. In 2012 natural gas constituted 43% of Georgia’s total

To prevent risks of excessive expenditures, companies escape being direct consumers.

primary energy supply. One of the EU instructions shapes joint regulations for natural gas supply, transportation, distribution and reserve systems. One of the main objectives is to promote competition in the EU joint market, as well as to stimulate trans-frontier energy unions through nondiscriminative, transparent and unified tariffs in long-term perspective. The 3rd article of the instruction promulgates that the participant sides should ensure formation of competitive and safe natural gas market through institutional organization, without discrimination of any enterprise. And it is impermissible to deviate from this article. European instructions determine differentiation of production and supply activities as one of the efficient instruments for boosting competition. Differentiation implies efficient separation of transportation and distribution fields from those that should operate under competition principles (including activities related to both wholesale and retail trades: production, supply, imports), which should eliminate discrimination on competitive market. Market Openness

ANDRIA GVIDIANI Economic Analyst

The mentioned instruction implies the formation of competitive electricity market. For boosting competition on domestic electricity market, all consumers should have the freedom to choose a supplier.

Engagement protocol comprises several EU instructions and regulations which Georgia becomes obliged to fulﬁll. It is worth noting that all instructions and regulations must be fulﬁlled through 2020.

The market in Georgia has opened for consumers that use about 3 million kw/h electricity a year. Under the Georgian parliament’s resolution on main energy policy directions, in 2017 the market will open for consumers of about 1 kw/h electricity. At this stage, the market openness is not in practice. Resulting from the absence of suppliers of comparatively cheaper electricity, the quantity of direct consumers declines annually resulting. Under the market rules, cheapest electricity goes to distributor companies. Therefore, direct consumers must only use balance electricity. Its price, especially during winters, exceeds the sales tariﬀ set by the regulatory commission for distributor companies. To prevent risks of excessive expenditures, companies escape being direct consumers. Additionally, it should be noted that Georgian electricity sector is a model of vertically integrated monopolistic market and this model will change in 2017. As noted above, the consumers should have the option to choose suppliers and this system implies the model of horizontally integrated competitive market.

A transformation in Georgia, led by the Georgians The Head of the European Union Delegation to Georgia, Ambassador Janos Herman, explains in an interview how common values and shared interests are driving forward the partnership between Georgia and the EU

This interview has been produced by the EU Neighbours East project

hat are the shared values that underpin the EU’s relations with Georgia? - The values that we promote in Georgia are the same values that we promote in the European Union. There is no difference between the two. They are democracy, the rule of law, human rights, a market economy. In fact one can say that these are the values on which the European Union itself is built. Actually, I wouldn’t say we are promoting these values in Georgia: it is more precise to say that Georgia wants to come closer to the European Union and it is the conviction of the Georgian people that this should be done based on common values. Common values are very important from a political point of view, but also from a practical perspective, because when we build up our cooperation, the association with Georgia, the integration into the internal market, this is a process that is much more solid if it is underpinned by a clear understanding of the two sides, Georgia and the European Union, sharing fundamental values. - Do you see any differences between the values we have in Europe and Georgia? - No, I don’t think so. I think there is a very clear determination in Georgia in putting these values at the heart of our cooperation. Even within the European Union, there are differences among member states concerning different approaches to some values, which are shared by all of us. What is particular in Georgia is that they strengthen the presence of these values inside

October 24, 2016 #166

Georgia as part of a general approximation between us, and yes, if they are facing obstacles or difficulties in some areas, they are not so different from the obstacles and difficulties we might also have here and there inside the European Union. But of course Georgia has started later, so in that sense they are coming from further away, and are facing some problems, which in our own processes inside the EU have already been solved. So the difference is not so much about the substance of the values, but about the content of a value-based cooperation. It is more linked to the fact that Georgia is introducing the institutional framework and the legal basis for a consequent implementation of these values somewhat later than our member states. - Why do you think that this partnership with Georgia is important for Europe? - It’s important to both sides. All good cooperation should be based on a clear understanding of the interests of both sides, so I don’t think it would be right for us to build up cooperation with partner countries which cannot be linked to clear European Union interests. The main interests of the European Union are very clearly expressed in our basic documents, the European Neighbourhood Policy, the Eastern Partnership: we are interested in democracy, prosperity, rule of law, and security in the countries which are our neighbours, whether to the east or to the south. Is Georgia interested in this? Yes, of course, and I think that this is the basis of our cooperation. Essentially what happens is that Georgia tells us, ‘I would like to come closer to you’, and we say, ‘yes, you can do it, and we will help you’, and this is based both on our values and our interests.

Is the European Union interested in a prosperous and democratic Georgia that is stable and which can be a partner of increasing importance in many aspects, not only in our bilateral cooperation but also having an impact in the region, radiating progress and stability in the region, with Georgia functioning as an important link between Asia and Europe, where there are energy connections, pipelines, transport, roads, new ports, and other economic opportunities also for our companies? Yes, we are interested in that, so we are working together on that. This is a cooperation that is based on common, shared interests, on shared values, but also on a clear understanding that there are important interests on both sides. - What is the real impact of EU support to Georgia? - The impact is visible. But if you look at the transformation of the country, it is not the impact of the European Union, it is the impact of the Georgians, and the decision of the Georgians to move closer to the European Union. Under this sign, there is a very ambitious transformation in Georgia – the legal system, the governance system, the judiciary, the public administration have already gone through a very important transformation, this is visible. I hope we are now entering into the second phase of our association. As we now implement the agreement in all its components, we feel the time has come to make the Georgians themselves, the wider population feel the impact, and the first signs are there, we have increasing trade between us, there are new Georgian exports coming to the European Union market. There has already been a significant impact in the area of agriculture and rural development, there are hundreds and even thousands of cooperatives formed with European Union support, there are new Georgian products emerging in agriculture. We hope very much that we can contribute also with direct support to the private sector, promoting small and medium-sized enterprises, providing good condition loans to them. And there is also the visa liberalisation that will deliver a significant impact for the Georgian population. By promoting better conditions, jobs, trade, economic development, small and mediumsized enterprises, more mobility between us, people-to-people contacts, study opportunities for young people in the EU, and easier conditions for travel, like the visa liberalisation, we are gradually moving into the second phase of our cooperation, where it is not just a transformation, it is also already the first benefits of creating a new Georgia that will better serve its citizens.

“It is more precise to say that Georgia wants to come closer to the European Union and it is the conviction of the Georgian people that this should be done based on common values”

October 24, 2016 #166

“I would not specify any episode, but my life changes daily. The process continues from morning to evening, even in dreams”

In PR Time Genuinely Means Money and We should Learn How to save it Caucasus Business Week oﬀers you an Interview with Eka Zhvania, director for GEPRA PR and marketing communications company, where she talks about her first job experience and shared some pieces of advice in public relation field.

MARIAM KOPALIANI

-What is your profession? -I have graduated from commerce and marketing faculty and I am a tourism trader-economist by profession. -What about current job place and position? -Since 2013 I have been director for GEPRA PR and marketing communications company. Our field is very interesting and diverse. We provide services for many major and small companies, state sector and create very interesting products. Our company is a united creative team and we take decisions jointly. I like this practice most of all in GEPRA. -What about your first job place? - I started my first oﬃcial job at a computer company, as a sales manager. I was second-year student in that period. My professional career started from this job as a starting point and this job brought huge experience to me. Before, I had always tried to earn my pocket money – in my childhood I used to fulfill a great

number of various small tasks. Naturally, my family members and their friends/colleagues were main employers and I used to fulfill assigned work with much pleasures. - Project, business that you are proud of even today. - In 2010 I implemented a very big and interesting project jointly with very strong and glorious team. This is a state sales platform, under which state property sales are carried out successfully thanks to simplified procedures. This is project that I would talk about even with my grandchildren. - Field where you would never work in. - Never say never, but you ask me today and my answer is – politics. - Is it possible to valuably study PR technologies in Georgia or international knowledge and experience is necessary? - Naturally, his is possible! However, this knowledge is mainly accumulated from mistakes in working process, multiple trials and failures. As to foreign knowledge and experience, this is much advantage on Georgian market

and we need it very much. - Is PR perceived in Georgia in its classical form and nature? - In Georgia PR is mainly associated with good/friendly relations with media agencies. Naturally, this is a rooted stereotype. Everybody engaged in this field knows that PR field is not confined with only friendly relations with media agencies (however, relations with media is a very important component). PR field becomes more and more interesting and diverse day to day. Our 15-year experience enables us to share our knowledge to others – since 2007 many students have graduated GAU Tbilisi PR school. Therefore, number of people, who know what is PR and how to make it, grows every year. - How easily do you manage to settle crisis situations and take decisions? Do similar cases aﬀect quality of working process and performed job? - Experience gained for many years enables me to simply settle and manage processes. We should just make focus on positive aspects, including in crisis situations too. Despite degree of tension and complications, I always analyze the situation peacefully in details and take decisions by cold reason. I believe every problem is resolvable. - Interesting episode from your life that has changed your lifestyle. - I would not specify any episode, but my life changes daily. The process continues from morning to evening, even in dreams. Changes proceed continuously and this process enriches/develops/grows me. - If not PR sector, where would you work?

- If not PR and marketing field, it would be very comfortable and interesting for me to work in sales direction of any major corporation. - What are your strong features, as a businessperson? - First of all, I am woman and this is a strong aspect in itself. I do my favorite aﬀair with people, who make me feel comfortable. All these factors make me stronger. I try to make focus on positive aspects in everything and this factor has helped me many times in the life. -What is your benefit from the company where you work? What makes your job interesting? -I like diversity and GEPRA is the company, where each day brings diﬀerent clients and projects. I adore relations with people, acquaintance with new people and GEPRA provides all these opportunities. - What factors create major discomfort in the working process? - Waiting for response, when the time is deliberately protracted to say no. In our field time means money and all of us should learn how to save it. I appreciate timely notification in any case, despite the response is negative or positive. - Where do you see yourself after 20 years? - On Seychelles with cocktail in hands.

We should just make focus on positive aspects, including in crisis situations too. Despite degree of tension and complications, I always analyze the situation peacefully in details and take decisions by cold reason.

MORTGAGE LOAN

October 24, 2016 #166

Millimetre LL to design and create customized clocks for your walls Targeting a unique niche segment, Lasha Kvartskhava and Lana Chakvetadze elaborate on their newly established enterprise offering intricately hand-crafted clocks to its customers. The services include a collaboration of consumer ideas and the creativity of the working architects to create a foundation for creating unique designs for their products. Please, describe your company. When was it created? Who founded it? -We established Millimetre LL company about 4 months ago. The name derives from our architectural company «Millimetre Architecture” and “LL” are the initials of our team members. How did the idea of developing the brand arise? -We used to make similar wooden clocks, when we were 12-15 years old and this process took a lot of time, energy and resource. It was unimaginable, during that period, that we would ever make better-quality clocks in shorter time and with less expenditures. And today we can implement our ideas through PubLab of TechnoPark, where our first brand models were created with ideal accuracy. How and what materials do you use to make the product? -At this stage we make clocks on CNC devices and mainly use natural wood, metal, MDF with natural wooden cover and leather. Our main direction is to demonstrate different designs that are distinctive and not analogous. Every detail of each clock is hand-made with design ideas arising during the working process. Moreover, we make our products from ecologically clean materials. These factors make our products diverse. How many people does your company employ? Our team consists of two architects who have made substantial influence on our ideas. Which segment do you focus on? -We provide affordable prices. We make products for all segments- hotels, private consumers, private companies and organizations. Simultaneously, by specifying the clock designs jointly with the customers, we provide the service for creating individual designs. Additionally, we provide free delivery services in Tbilisi. Why should people buy your products? What is your unique niche and what is your competitive advantage over rivaling companies and brands? -Special design and ecologically clean material. Thanks to these values, we attract consumers. Where are your products sold? -At this stage, we have introduced our products on our official website: http:// millimetrell.com/ ; Facebook page: https://www.facebook.com/MillimetreLL ; We had already organized several exhibition and sales. But at this stage, our main objective is to advertise our clocks to as many people possible and then introduce our brand into foreign markets. What are your plans for popularizing the brand in Georgia and abroad? -We plan to launch production of lamps and wall lamps. Brand products will be offered at affordable prices for the public. Also, we will have a line for people who appreciate special and unique things.

and choices for extracting loans. However, this eliminates other possible alternatives and choices for the borrowers and limits them to brokers’ suggestions. Brokers begin coordinating with other brokers, rummaging through their baskets for more suitable customers when they lack desirable customers of their own. Because they organize the meetings of the borrowers and We need to pay attention to a network generated lenders, they receive high income by brokers because they effect borrowers and but with several brokers involved, lenders negatively the risks rise simultaneously. Moreover, they create informational vacuums and obstruct borrowers and lenders from finding other alternatives. This means DAVID BAGHASHVILI that if borrowers want direct coroblematic loans are initiate a loan contract and prof- operation with private lenders, a broker has the chance to manipuone of the contentious it from higher loan amounts, late their chances. issues through the shorter loan terms and higher Brokers have bigger Georgian financial secpayment delay influences than we can The situation tor. A large share of borrowers penalties. Shortimagine. In attempts is unable to repay their loans lived loan terms described there to maximize their profon time, thus facing negative and elevated is problematic its and commission consequences. Amidst the vari- payment delay and requires fees, brokers invent ous forms of loans, mortgage penalties increase solutions. Firstly, and turn their legal loans exceed in the severity of the frequency of we need to and illegal schemes such consequences. A mortturnover. Moreprovide people into realities. Broker’s gage loan is a heavier liability over, by not being with alternatives schemes are full of with the pledged property at a contract party and fill the gaps machinations, but also risk. Not long ago the governof the loan, they in knowledge very refined. Comment was asked for financial suffer from zero created by the monly, the hunt starts assistance after the growing risks and have no informational directly at banks. Once anger between borrowers and liability should vacuum. a customer is denied a lenders, lead to protests and, in the contract party Borrowers and mortgage bank loan, a some instances, violence. default on its oblilenders should be broker swoops into the Currently, three types of lendgations. given the freedom disappointment and ers operate on the Georgian Brokers have acof choice to weigh offers their services market: Banks, MFOs and pricess to all private the options offered with promises of good vate lenders. A loan agreement lenders which by the market and, deals and conditions. is concluded between a lending serves as the main Like moths to a flame, finally depending party and a borrowing party. In reason for borcustomers find the Georgia, it is not unusual that rowers referring on competition, borrowers and lenders find to their services. offers tempting and choose the best each other using the services In comparison to accept the proposals. offer. of private loan brokers. But this lenders, borrowOnce borrowers decide additional component brings in ers have more to corporate with broseveral difficulties. flexibility in avoiding brokers’ kers, they are asked to pay a perCitizens owning desirable services altogether. However, centage of the loan and a broker’s property with legal income and lack of motivation hinders their commission fee (sometimes for a good credit history, find it flexibility. On the other hand, multiple brokers). To illustrate, if I unproblematic to receive loans lenders are tied to the brokers am taking a loan using two broker at acceptable market condibecause of their access to and companies, I need to pay 3% of tions from a bank. But borrowknowledge of various willing loan for each company and 3% to ers who cannot pass the risk borrowers. If we observe the a lender which amounts to a cataassessment, for reasons such as “Sityva da saqme” magazine’s strophic 9%, instead of just 3%. a declined credit history, must lending section announceBrokers work with other look for financial alternatives. ments, in 99 occasions out of a schemes and tactics, one if which In most cases, borrowers des100, a broker is negotiated with is to lend loans to borrowers perately turn to loan brokers to when searching for a lender. themselves. They already have source lenders who, if the colThe scheme of brokers is the borrowers in their baskets, so laterals are covering the default following: borrowers are placed for themselves they choose the losses, are unaffected by the in one basket and exclusive ones who will pay more comliquidity of their loan portfolio. lenders in another with a mission fees and pay on time. Commonly, loan brokers earn promise that the borrowers will Other borrowers go to other transaction fees each time they be given the best conditions lenders which results in the sup-

The main reason of mortgage loan problematics is machinations created by brokers

9 ply and demand never meeting each other because of brokers’ vast control and manipulation. They like to generate situations involving substantial risks. Why? Because a borrower is under the risk of being uncappable of paying the loan and, therefore, losing his property to the brokers. Lenders are lured into mistrusting brokers who attempt to delay a borrower’s payment to the banks. When the case of selling the property approaches, a broker enjoys the process because selling a property requires time and an agreement between both sides. Then, a lender buys a property to get his money back and a few to give to a borrower. The main cause of this misfortune is a broker, who had to think before what kind of risks would he expect. Although, there can be worse cases when a borrower can’t pay monthly fees and he needs a refinance. In this case, a broker will find another lender for this borrower and will refinance this loan, getting their own commission fee. This kind of refinances are not stable and require a change in lenders, averagely per 2-3 months. With each refinance, a broker gets its percentages. Moreover, there are instances when a borrower must make 5-6 refinances per year. If a broker gets 2% per refinance, the cost for the borrower becomes enormous, at which point, selling oﬀ the property in the beginning begins to feel like the better option. The situation described there is problematic and requires solutions. Firstly, we need to provide people with alternatives and fill the gaps in knowledge created by the informational vacuum. Borrowers and lenders should be given the freedom of choice to weigh the options offered by the market and, finally depending on competition, choose the best offer. It is essential to perform legal controls and initiate activism from corporations for solutions. Evidently, mortgage loans are an epidemic in Georgia. With time, an increasing number of people fall into these traps. Although, the issue has improved. Recently, the company “Creditplatform” emerged in the Georgian mortgage loan market. It provides an opportunity to receive or deliver a loan online, without any involvement of a third party. In this case, you are exposed to all kind of lenders with firm confidentiality. A borrower makes a loan request and connects with all kind of lenders. The quantity of competing lenders drives lower commission fees, loan rates and provides good conditions to each loan. Although, we still don’t know how attractive this oﬀer will prove for customers and only time will tell. However, a serious approach is detrimental and multiple solutions are mandatory. Most importantly, everyone must take matters into their own hands and contribute with their own abilities to save time, money and stabilize security.

BUSINESS

October 24, 2016 #166

Georgian AD Agencies Win 2 Silver Medals at ADCE A Guest of Honor – FOX/Co, a project by Windfor’s Communication, and Smells Like Teen Spirit, a project by Leavingstone, have won silver awards at the Art Directors Club of Europe (ADCE). Agencies, who win national festivals, are welcome to take part in ADCE. Therefore, four works that had won the AD Black Sea advertising festival in Georgia, were represented at the final stage of competition of Best European Works.

Ikano video clip obtained silver medal in the category of Film&Radio, while Zombi work obtained silver medal in the category of Promotions&New Media. Vato Kavtaradze, founder of Windfor’s and co-founder of AD Black Sea, was member of ADCE jury this year.

FARMER

HUB TBILISI

Marble Meat Manufacturer from Natsreti

urab Psuturi – Farmer of the Future. He started active farming 6 years ago by breeding beef cattle in village Natsreti, Gori District. Today the young farmer has a farm of 72 cows and supplies products to top class hotels. “Initially, my farther started this business. Later I continued this undertaking. I faced many obstacles in terms of growing and feeding cattle and sales of beef products. Later I joined the Farmer of the Future program and my approaches changed entirely. The program helped me consider this undertaking as business. I received infor-

mation on new technologies, biopharmaceuticals and, thanks to these innovations, my revenues rose by 30-40%. Today I apply new technologies to grow cattle in my farm. I use innovative approaches and all farmers should grow cattle by new technologies. Daily gain in weight was 1kg-1200 kg, while biopharmaceuticals increased the volume to 1500-1700 kg. I had to spend 7-8 GEL on one kilogram production, while new technologies have reduced expenditure to 5-6 GEL, while selling price ranges from 8 to 10 GEL”, Zurab Psuturi said.

NEWS

CANNES LIONS

Things All Business Companies Need:

Georgian Women Created New Marketing Startup Properly planned marketing is a necessary precondition for any company development. This direction is necessary in small, medium and major business sectors. Major companies, as a rule, develop marketing direction themselves, they plan new strategies and improve old experience.

Average and Small Business Market Refused Pirate Software Maintenance for the Benefit of the Legal Computer Program In the previous year, 228 small and average business companies started to use the legal version of Microsoft oﬃce program. Average and small businesses started to refuse illegal software to give benefits to oﬃcial one. According to the statistics, companies have dangerous program attacks every 7 minutes.

It is of crucial importance to correctly choose cattle breeds and correctly feed them. “Replacement and improvement of cattle breeds is a relevant issue in Georgia. I mainly grow domestic breeds from Samtskhe-Javakheti region, hybrid of Caucasian Tsabla and Swiss cattle. They give excellent results in terms of gain in weight. Feeding is of crucial importance in cattle growing. Balanced feeding brings good results in terms of gain in weight. Biopharmaceuticals promote feed balance aspects significantly”, the farmer said. Zurab Psuturi also makes accent on protection of sanitary norms and quality control issues. His product has deserved highest evaluation after laboratory examination and this factor has enabled

Being chosen by the Cannes Festival is a big victory for Georgia On 17th and 19th of October, there was a 64th gathering of representatives of Cannes creative festival in London. The aim of the meeting is to invite all the representatives in the world to evaluate the whole year and discuss the strategy for the upcoming year. 2016 was very successful year for Georgia. The festival judges recognized a Georgian project as the best one in the world. Official representatives of the festival: Levan Lepsevidze and Ako Akhalaia will talk about what exactly this victory means. “It’s been 64 years since the Cannes festival is held annually. The biggest award that the participant company can get at the festival is The Cannes Lions. Nowadays, it’s the most prestigious festival for creative industries in the world. We had to work a lot to prepare for the festival and our hard work has been appreciated in the end with the award which we received at the festival.” Developed countries have 10 years of experience of participating in the festival together with the support from different organizations in their countries. This was different for Georgia. However, it has to be noted that the role of GITA was very important in terms of supporting our project. The victory at the Cannes Festival was a great honor, but except that our success helped us get some more benefits: Now, we can send two groups to Eurobest We maintained 4 categories on the Cannes Festival and added FILM category which is the most popular category in the world. They will discuss to invite Georgian speakers for a speech at the Cannes Festival. We have places for Georgian judges at the festival. Therefore, we can send them professionals at the Cannes Festival. Some of the countries expressed their wish to organize exchange programs for Georgian Students to see agencies in different countries and see how they work to get experience. On the local level, Georgian agencies will host professionals who will share their experiences with with us. Except the happiness which we this victory brought for us, It is a big responsibility as well, because now the whole world is observing us. According to Philip Thomas, there has never been a country on the festival, which entered the competition so actively and memorably. Therefore, by 2017 we will do our best to maintain the performance, but for that we will need the support.

the farmer to sell beef to topclass hotels. “Today farmers try to sell their products, but they have to pass 2-3 mediator chains before final sales outlets and their expenditures considerably grow. Thanks to the Farmer of the Future program, several farmers have united under the same opinion for cooperation and this is very good, because the cooperative is able to have direct contact with sales market. As a result, the consumer also receives benefits as the product price gets lower. Thanks to the Farmer of the Future program, I have contacted top-class hotels and they called my product as Marble Meat, Zurab Psuturi, 31, said. He urges other farmers to follow his experience and develop their businesses in this way.

Tbilisi Joins Impact Hub – Global Network of International Workspace Open work space for small companies, freelancers and people with interesting ideas – Impact Hub Tbilisi offers training, workshops and various events to interesting bodies, besides Private Office. Impact Hub Tbilisi is located on territory of Fabrika, a hostel of different concept. A week ago Tbilisi joined Impact Hub, the global network of joint workspace. Ketevan Ebanoidze, founder of Impact Hub Tbilisi, told the Business Contract that, jointly with 86 hubs of the world, Tbilisi hub will be active, inspirational, motivated and a place of assembly of people oriented on innovations. The space will unite people interested in entrepreneurship, who will implement interesting ideas and initiatives.The Hub will host various events, education programs, discussions and presentations. “For the purpose of making positive changes, Impact Hub will foster outlining relevant and problematic issues with multi-functional and flexible infrastructure. The hub will be the best place for working, meeting, knowledge or establishing interesting ties”, Ketevan Ebanoidze said. Interested bodies must pay membership fee to have access to Impact Hub joint workspace. “This signifies you have your office in open space. The principle is this – we wanted to have open space to connect people from various fields and interests who will form and implement interesting ideas as a result of joint working process”, Ketevan Ebanoidze said.

Georgia’s “Seasonal Curse” There are quite many countries around the world that had a tremendously “bad luck”: their territory holds large deposits of some natural resources inside their borders (be it oil, gas, diamonds, non-ferrous or precious metals).

Dr. Andrei Maximov Maximov&Partners LLC am@maximov.com www.maximov.ge

hese unlucky countries are plagued by the so called “resource curse” or “paradox of plenty”. After some time countries with such “cursed” natural resources become less developed economically as compared to countries with no resources. The latter’s economic growth rate is, in the long run, much higher than in the resource-based economies. Also civil wars happen more often in the resource-rich countries than in the countries with no resources. There are many examples of that: on one side there are Nigeria, Venezuela, Russia, Sudan (oil exports) or Angola, Sierra-Leone, Congo (suppliers of “blood diamonds”), while on the other there are Singapore, Taiwan, Hong Kong, South Korea (the four “East Asian tigers” which were able to change from agrarian to hi-tech economies over the course of 50 years). In most cases unearned affluence does not make people happy and does not bring prosperity to the country. Easy money shape a consumptive economy which is based not on value creation, but on redistribution of the resource rent. This “divvying up” leads to ineffective economy, growth of consumer imports and to undue social expenditures. It hampers the diversification of economic branches and the development of hi-tech sectors: when owning plenty of resources innovation and high technologies are non-essential. It also helps launching projects that are quite senseless from the viewpoint of the population of the resource-poor countries: the tallest skyscraper, artificial islands, sky resort in the middle of the desert, etc. And the ruling elite keeps participating in a race to show off their personal expenditures: for the longest yachts, palaces all over the world, prestigious soccer clubs. In the richest countries, however, the Establishment will not forget that this resource rent better be shared with the populace. Medicine and education are free there, including higher education abroad. In Bahrain, for example, young families get their mortgage debt halved after the birth of their second child, in Kuwait young couples get an interest-free mortgage of $250 thousand right after they get married, and in the UAE parents get an award of $25 thousand for the birth of every child. In Kuwait the minimum pension is $3000, and a woman gets after her divorce financial allowance of $1400 per month until she finds a permanent job. Etc, and so on. Resource economy favors the creation of authoritarian regimes which get even deeper into the trap of the resource curse. The reason is that commodity resources lower the dependence of the authorities on the population: with high commodity prices they do not necessarily need taxes that the voters pay. The rent, on the other hand, helps the authorities finance its security agencies for suppressing the opposition, corrupt the population and thus lessen the stimuli for enhancing political freedoms. To be fair, it should be mentioned at this point that democratic countries with diversified economies can successfully evade the trap of the resource curse (Norway, Canada, Australia and, of course, the USA). Let us, however, return to the topic indicated in the heading of this article. Georgia was “lucky” that it could escape the “paradox of plenty”, since it does not have, with minor exceptions, any raw material resources. Nevertheless, Georgia (or, at least, some of its regions) has its own curse which is also related to abundance. The abundance of its nature and its

OPINION

October 24, 2016 #166

climate. It manifests itself in the seasonal character of its tourism and its agriculture in the regions. I have been wondering all along, why, for example, Scandinavian countries or Canada do not experience this notion of “season”? Is it due to the fact that it is always high season there or always low season? Well, seasonal fluctuations do exist, one way or the other, in all countries in the Adriatic and Mediterranean seas. It is common story for the economy based on tourism, especially on beach tourism. In Georgia, however, the seasonal character of tourism reaches the highest degree of the absurd. It so happened that for three years in a row I have been observing during all seasons the economic activities in Ureki, a small Georgian resort township at the shore of the Black Sea. So, what are the characteristic features of the “seasonal curse” drawing on the example of this fabulous (and I mean it, without even a trace of irony), gorgeous natural and climactic resort with its one-of-a-kind magnetic sands? First of all, the tourist season here is only two months long (July and August)—or one could stretch it to two and a half months, until mid-September, when children start going to school. In my opinion— which is supported by the opinions of many of my acquaintances from Russia, Ukraine, Poland and Germany—July and August are the worst months here: there are hordes of people everywhere, the weather is hot and sweltering. The best time to visit is, no doubt, in April to June and in September to November. However, as they say, “the sand is not in the desert, it is in the head of the Bedouin”. Hotel and restaurant owners in Ureki are somehow convinced that the tourist season starts in July, so they start all construction work, all preparatory activities and all cosmetic changes in the second half of June—and never earlier than that! By tradition, local authorities join them in their own eﬀort using building contractors. No infrastructure work was ever done in Ureki during winter months (I have no idea, why?), but as the tourist season was drawing closer, in April and May every year the resort was always dug up everywhere and then the earth mounds were put back into the ditches again… In April of 2013 and 2014 I had visitor in Ureki: they were representatives of foreign travel agencies who were checking out the place for their possible clients in the future. But upon witnessing the construction-related “sights” none of them returned to Ureki: why waste time? In early September all hotels and restaurants get closed as if by order and also no one keeps the beach clean anymore. Well, why waste money and diesel fuel, indeed, if the season is over? Just imagine a foreign tourist who came by chance to Ureki (and that happens all the time, even in winter months), but could not find neither a hotel or a restaurant, who had to jump over the ditches and saw with his own eyes the unique black-sand beach that is littered with all kinds of rubbish. Do you think he would back to Ureki one more time? The super-short tourist season creates changes in the business mentality of the locals due to very justifiable reasons: one must make money during the two months to feed the family for the rest of the year. During the tourist season prices in Ureki for both goods and services are absurdly high: you won’t find anywhere else such an illogical quality-price ratio. There is one more negative development: locals are used to waiting for the tourist season in order to resolve all of their problems, so they do not even try looking for a job in winter—even when there are possibilities for that.

It’s not the nature, but human beings who are responsible for the absurdly short tourist season in Ureki and, by the way, in many other regions of Georgia. The proof for that is provided by my good friends. Aleksandr Meskhi came back to Ureki from Germany bringing his parents with him, and he built a family hotel called National. Every year he makes his tourist season 2-3 weeks longer than the rest of the hoteliers. This year, for example, he opened his hotel in April and it is still open now, in October. He told me that over 50% of his guests are the same visitors from foreign countries who keep coming back during the low season because they know for certain that they will find a functioning hotel here with a great service. Even if his hotel is not completely sold out in October, his restaurant is: tourists from all over otherwise deserted Ureki gather there for their meals and companionship. I asked him: “What do you need? How could I help you?” His answer was: “I do not need any help, we can cope with anything. If only they could clean the beach removing the litter and

Resource economy favors the creation of authoritarian regimes which get even deeper into the trap of the resource curse. The reason is that commodity resources lower the dependence of the authorities on the population: with high commodity prices they do not necessarily need taxes that the voters pay the manure… My guests do not come to see me, after all—they want to be at the seashore.” A great sanatorium Kolkhida is open throughout the winter, due to the inexhaustible enthusiasm of Amiran Chkhaidze, another my friend. His target group is, however, different, it is not very capable of paying the usual rates. Amiran is trying to survive by organizing Georgian conferences, banquets and training camps for sportsmen. What should the state do, among other players? First, create comfortable environment for tourists: clean the beach in Ureki throughout the year. Also lay the pipes, at the long last, for water, sewer system and gas. That means that in winter the township would be heated with gas and in summer it would not become a place for gastric infections. Second, it should support those who try to make the tourist season longer by their own effort. Experts should decide whether that could be done via special taxation or some other measures. Finally, the state should promote abroad the tourism in Georgia in all seasons. I liked a lot the idea to create a special state program for supporting organizing concerts of stars in Georgia. Thus stars’ performances at the concert hall in Shekveteli create the ripple effect for the developing of the whole local tourist zone, including Ureki. Its hotels were sold out during the summer concerts. But such concerts should become a permanent feature, and they better be organized not only in summer—and better not in summer alone.

ElmavalMshenebeli Introduces 8E1A Locomotive Design JSC ElmavalMshenebeli company has introduced a design of 8E1A cargo locomotive with asynchronous engine and direct current. In this project, besides JSC ElmavalMshenebeli, Czech Skoda Electric is a main contractor. The companies have achieved agreement and approved technical task for building the locomotive.

urrently, the design km/h design speed. When has been entirely developing 8E1A locomofinished and we tive, specialists were based are waiting for on the following principles: winner in interest expresmodern solutions in buildsion announced by Georgian ing locomotives; improving Railway. There is high probsafety norms; simplification ability and we are sure that of technical services and ElmavalMshenebeli will win maintenance; reduction of this interest expression and exploitation costs. we will obtain real rights Skoda Electric and JSC and opportunity to build ElmavalMshenebeli have one locomotive, under the jointly developed the 8E1A competition conditions, in locomotive design. Skoda 8-9 months, equip it with Electric will supply traction respective certificate for engines for 8E1A locomoadditional 3 tive, traction months and test Currently, transformers, it with Cuscircuit supply development tomer, Georgian of design and cabins for own Railway, for a consumption structural year. valves, quickdocumentation After all paresponse cutoﬀ have been rameters have cabin, and a set ﬁnished for 8-axis been satisfied, locomotive of 8E1A of transform44 locomotives with asynchronous ers on own must be built consumption engine that for Georgian valves, break operates on 3 Railway, under resistors with 000 voltage and the interest cooling vents, 1520mm width expression ventilator rails. Locomotive procedures. The has high tractive aggregates for machines must colling traction force and reaches be transmitted engine, cooling 120 km/h design to Georgian towers, comspeed Railway stage plex microproby stage, 5-6 cessor managelocomotives a ment system year. and monitor. This is our innovation that As part of project presentaenables our company to tion, media tour was also develop technologies, take held and reporters saw bold steps towards sucthe plant workshops, ascess, ElmavalMshenebeli sembly workshop, electric production director David machine workshop with Gorgadze said. full production cycle for Currently, development making traction engines and of design and structural auxiliary machines, as well documentation have as metal structures, stamp been finished for 8-axis workshops, industrial lolocomotive of 8E1A with comotives workshop, carts asynchronous engine that workshop and so on, Tour operates on 3 000 voltage participants also saw 8E1A and 1520mm width rails. cargo locomotive structure Locomotive has high tracwith asynchronous traction tive force and reaches 120 engine.

PUBLICITY

October 24, 2016 #166

WORLD NEWS

Quotes

“ The best “We need investment. What we expected has not happened yet, and this is what we need the Americans to solve”

way to make money will be to create impact

”

“We remain confident that TAP will be able to proceed with the replanting of the olive trees along the route, starting from the micro tunneling area”

Shiza Shahid

Iran Is Stuck With China Russia to Disto Finance Its Oil Dreams cuss Gas Tran-

mid the snake-infested marshlands on Iran’s border with Iraq, the control room monitoring North Azadegan oil field is manned entirely by Chinese technicians. In central Tehran, hundreds of Chinese pour out at noon from the telecommunications company Huawei to its canteen. There are now so many Chinese expatriates here, some say they outnumber all other nationalities combined. A decade of international sanctions aimed at blocking Iran’s nuclear program has left China the country’s dominant investor and trade partner. Now, with those restrictions formally lifted, a more pragmatic Iranian government has been trying to ease dependence on China, only to find itself stymied by hard-line resistance and residual U.S. sanctions. “China has done enough investment in Iran,” said Mansour Moazami, who was deputy oil minister until taking over as chairman of the massive Industrial Development & Renovation Organization this year. “We will provide opportunities and chances for others.” The tension illustrates a more nuanced situation in post-sanctions Iran than is often presented. Many in the U.S., including Donald Trump, portray Iran as the big win-

ner from last year’s nuclear sanctions deal as European companies rush into one of the world’s last big, untapped emerging markets. Yet in Tehran, the government is attacked for failing to deliver and pandering to a still hostile West. Western investors have been slow to arrive, forcing Iran back into the arms of the Chinese. That’s especially true in the energy sector, where pressure to increase production is intense. Elsewhere, Western clearing banks still refuse to do business with Iran for fear of falling foul of non-nuclear U.S. sanctions that remain in eﬀect, meaning Western companies can’t raise project finance. People including Moazami are becoming frustrated. His state conglomerate wants to raise $10 billion of foreign investment by the end of next year, for projects from shipbuilding to petrochemicals. “We need investment. What we expected has not happened yet, and this is what we need the Americans to solve,” Moazami said. It is unclear whether new U.S. guidelines on sanctions published Oct. 7 will change the situation. A “sense of being cheated” by the West is slowly sinking in among Iranians, according to Li Guofu of the Chinese Foreign Ministry’s Institute of International Studies.

Armenian Cabinet Pledges New Policy Reforms

rmenia’s newly reshuﬄed government has released its policy program that pledges to help speed up economic growth through a tougher fight against corruption, better tax administration and “equal conditions” for all businesses. The program adopted at a cabinet meeting in Yerevan late on Tuesday will be sent to the Armenian parliament on Thursday. Its approval by the National Assembly will amount to a vote of confidence in Prime Minister Karen Karapetyan’s cabinet. “I am instructing everyone to pay special attention to the program’s implementation,” Karapetyan told ministers. “We are going to be accountable.” “Given the ongoing global and regional developments, conventional approaches to [Armenia’s] development cannot ensure a pace

of progress congruent with our challenges,” declares the 33-page document. “Analysis of the economic situation shows that it is extremely diﬃcult to ensure progress with standard methods and tools,” it adds. The government’s stated “strategic” priorities include a strengthening of the fight against corruption and tax evasion, and “equal and fair conditions stimulating business.” The program commits it to improving Armenia’s business environment in a way that would be recognized next year in annual survey conducted by the World Bank. In particular, the government will reduce or simplify its licensing requirements and other regulations for some types of economic activity. It also pledged to reform Armenia’s tax and customs services with the aim of making tax collection less arbitrary.

sit Through Turkey with EC Russia will continue to stay in contact with the European Commission and the European Union countries regarding the feasibility of gas transit through Turkey, RIA Novosti reported citing Russian Energy Minister Alexander Novak. Undoubtedly, we will continue contacts with the European Commission and our counterparts from other countries in order to obtain confirmation of feasibility of implementation of these projects already on the territory of South-East Europe, Novak said in an interview with Russia 24 TV channel. The official noted that the work will continue.

Construction of large power unit in Azerbaijan finishes Construction of the second combined cycle power unit at the Shimal power plant in Baku has already ended, says the article of Azerbaijan’s Energy Minister Natig Aliyev, published by the oﬃcial press Oct. 20. “Construction of the unit with a capacity of 409 megawatts has already ended. It will be commissioned by end of 2016,” Natig Aliyev said. The capacity of the second combined cycle unit at the Shimal power plant will be 409 megawatts. The construction of the second unit is done under a contract with the Japanese company Toyo Engineering. Azerenergy’s power plants produced 16.5 billion kilowatt hours of electricity in JanuarySeptember 2016, as compared to 16.8 billion kilowatt hours generated in the same period of 2015. Azerenergy’s power plants produced around 1.7 billion kilowatt hours of electricity in September 2016. The capacity of the Azerbaijani power system is 11,110 megawatts.

TAP’s Location in Italy has Least Environmental Impact

AP will be able to proceed with the replanting of the olive trees along the route in Italy, starting from the micro tunneling area, from November 2016, Lisa Givert, TAP Head of Communications, told Trend Oct.17. She was commenting on protests in Italy’s Puglia region demanding the pipeline re-routed away from the prized grove, which includes olive trees thought to be more than 400 years old. Givert pointed out that TAP has been continuously engaging with a wide range of stakeholders and communities in Italy – including the Puglia region – since the early project planning phase. Several rounds of discussions have been held to listen to local concerns and provide clarification about the project’s environmental footprint, including concrete measures for mitigating or minimizing any environmental impact, she added. TAP is a part of the Southern Gas Corridor which is one of the priority energy projects for the EU. 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. The 870-kilometer pipeline 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. “One of the priorities of our communication activities in Puglia has been and remains to reinforce that the project has a minimal environmental impact, especially to people living in the area affected by TAP,” she said. “We have organized multiple campaigns to dispel any inaccuracies, falsehoods and concerns.” At the same time, she said, by using the example of other Italian regions and the beach resort island of Ibiza – where pipeline landfalls have been perfectly integrated into the environment – we have shown that infrastructure projects and tourist resorts can fully coexist, she added. Givert noted that most recently, TAP’s geological surveys on the San Foca beach have been conducted in record time (1.5 days versus the anticipated one week) and without any visible trace on the beach.

“It is worth adding that operations were conducted smoothly, thanks to the good cooperation with local authorities and the high-technical quality of our contractors’ services,” she said. “TAP will continue to engage in line with the highest industry standards.” TAP will also continue to inform and engage with local and regional stakeholders about the project, provide accurate information and clarify any queries they may have, she added. She pointed out that TAP remains on schedule and will be ready to receive first gas from Shah Deniz 2 in 2020. “In Italy, construction activities began in May 2016 and continue in line with the project schedule. UXO (unexploded ordnance) and archaeological surveys were carried out over the summer of 2016, phytosanitary treatment (spraying of olive trees along TAP’s route, in preparation of removing / replanting of olive trees) was performed and geological surveys were conducted on the San Foca beach between 3 and 5 October,” said Givert. In parallel, and in line with the single authorization granted by Italy’s Ministry of Economy on May 20, 2015, TAP continues to progress its secondary permitting activities, she added. “We remain confident that TAP will be able to proceed with the replanting of the olive trees along the route, starting from the micro tunneling area, from November 2016,” she said. Givert said that TAP is committed to responsibly deliver a world-class project along its entire length in Italy, Albania and Greece. “TAP’s landfall in San Foca was selected as the most optimum location for the TAP pipeline to enter Italy. It is the location with the least environmental impact – also during the construction phase,” she said. “This was confirmed and validated by the National Technical committee when they approved TAP’s Environmental Impact Assessment in September 2014.” She said that as part of this process, TAP analyzed 20 landfall points along the Apulian coastline and concluded that San Foca was the landfall with the least environmental impact.

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Embassy United States of America Embassy 11 Balanchivadze St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 53-23-34 E-mail: tbilisivisa@state.gov; askconsultbilisi@state.gov United Kingdom of Great Britain and Northern Ireland Embassy 51 Krtsanisi Str., Tbilisi, Tel: 227-47-47 E-mail: british.embassy.tbilisi@fco.gov.uk Republic of France Embassy 49, Krtsanisi Str. Tbilisi, Tel: 272 14 90 E-mail: ambafrance@access.sanet.ge Web-site: www.ambafrance-ge.org Federal Republic of Germany Embassy 20 Telavi St. Tbilisi Tel: 44 73 00, Fax: 44 73 64 Italian RepublicEmbassy 3a Chitadze St, Tbilisi, Tel: 299-64-18, 292-14-62, 292-18-54 E-mail: embassy.tbilisi@esteri.it Republic of Estonia Embassy 4 Likhauri St., Tbilisi, Tel: 236-51-40 E-mail: tbilisisaatkond@mfa.ee Republic of Lithuania Embassy 25 Tengiz Abuladze St, Tbilisi Tel: 291-29-33 E-mail: amb.ge@urm.lt Republic of Latvia Embassy 16 Akhmeta Str., Avlabari, 0144 Tbilisi. E-mail: embassy.georgia@mfa.gov.lv Greece Republic Embassy 37. Tabidze St. Tbilisi Tel: 91 49 70, 91 49 71, 91 49 72 Czech RepublicEmbassy 37 Chavchavadze St. Tbilisi ;Tel: 291-67-40/41/42 E-mail: czechembassy@gol.ge Web-sait: www.mzv.cz Japan Embassy 7 Krtsanisi St. Tbilisi Tel: +995 32 2 75 21 11, Fax: +995 32 2 75 21 20 Kingdom of Sweden Embassy 15 Kipshidze St. Tbilisi Tel: +995 32 2 55 03 20 , Fax: +995 32 2 22 48 90 Kingdom of the Netherlands Embassy 20 Telavi St. Tbilisi Tel: 27 62 00, Fax: 27 62 32 People’s Republic of China Embassy 52 Barnov St. Tbilisi Tel: 225-22-86, 225-21-75, 225-26-70 E-mail: zhangling@access.sanet.ge Republic of Bulgaria Embassy 15 Gorgasali Exit, 0105 Tbilisi, Georgia Tel: +995 32 291 01 94; +995 32 291 01 95 Fax: +99 532 291 02 70 Republic of Hungary Embassy 83 Lvovi Street, Tbilisi Tel: 39 90 08; E-mail: hunembtbs@gmail.com State of Israel Embassy 61 Agmashenebeli Ave. Tbilisi Tel: 95 17 09, 94 27 05 Embassy of Swiss Confederation’s Russian Federation Interests Section Embassy 51 Chavchavadze Av., Tbilisi Tel: 291-26-45, 291-24-06, 225-28-03 E-mail: RussianEmbassy@Caucasus.net Ukraine Embassy 75, Oniashvili St., Tbilisi Tel: 231-11-61, 231-12-02, 231-14-54 E-mail: ukraina_pu@wanex.net; emb_ge@mfa.gov.ua Consular Agency: 71, Melikishvili St., Batumi Tel: (8-88-222) 3-16-00/ 3-14-78 Republic of Turkey Embassy 35 Chavchavadze Ave., Tbilisi Tel: 225-20-72/73/74/76 embassy.tbilisi@mfa.gov.tr Consulate General in Batumi 9 Ninoshvili Street, Batumi Tel: 422 25 58 00 consulate.batumi@mfa.gov.tr Republic of Azerbaijan Embassy Kipshidze II-bl . N1., Tbilisi Tel: 225-26-39, 225-35-26/27/28 E-mail: tbilisi@mission.mfa.gov.az Address: Dumbadze str. 14, Batumi Tel: 222-7-67-00; Fax: 222-7-34-43 Republic of Armenia Embassy 4 Tetelashvili St. Tbilisi Tel: 95-94-43, 95-17-23, 95-44-08 E-mail: armemb@caucasus.net Web: www.armenianembassy.ge Consulate General, Batumi Address: Batumi, Gogebashvili str. 32, Apt. 16 Kingdom of Spain Embassy Rustaveli Ave. 24, I ﬂoor, Tbilisi Tel: 230-54-64 E-mail: emb.tiﬂis@maec.esRomania Embassy

TBILISI GUIDE 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

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

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,

LIMELIGHTTRAVELINFOCENTER Address: 13 Sioni Street, 0105, Tbilisi (at the end of Shardeni Street) Phone: +995 322 999 123 E-mail: info@limelight.ge Web-page: www.limelight.ge Facebook page: www.facebook.com/limelight.ge

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

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

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