Caucasus Business Week #174 by Caucasian Business Week

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December 19, 2016 #174

December 19, 2016, Issue 174 - www.cbw.ge

New Year How Much Does New Year Night Cost in Georgia Pg. 6

Newsroom Business Forum “Made in Georgia” was held in Techpark

PR Giorgi Kalatozishvili: Georgian PR Remains in Formation Process

Pg. 2

Annual Profits of Pharmaceutical Companies Hit 190 mln GEL

Pg. 8

GEL Beats All Records On December 15 GEL exchange rate dropped to historical minimum in relation to both USD and EUR. According to National Bank of Georgia (NBG), on December 15, 1USD=2.66 GEL and 1 EUR=2.83 GEL. GEL exchange rate devaluation has become an inseparable part of Georgian economy over the past 2 years. The process started in November 2014, slightly declined in 2016 spring-summer period and intensified again in November. The Authorities have lost all arguments to substantiate and justify the national currency collapse and to shift responsibility onto others. As a result, previously, all failures were explained by exogenous factors, but these arguments do not work any more, because the process continues for 2 years. And now state officials apply absolutely strange phraseology to explain GEL devaluation reasons. Some officials explain GEL exchange rate devaluation by Turkish Lira volatility, while another part is not sure GEL is depreciating. For example: “We understand that we have a small and open economy. Pg. 4

Lars Against the Lari! Only those who are, perhaps, exceedingly lazy did not comment on the fall of the Lari in the last few weeks. I could find, quite bewildered, all kinds of surprising and emotionally charged explanations for that I the print media: “profiteering and speculation”, “agio and frenzy”, “conspiracy”, “ignorance”. National currency rate was always for me the most important economic indicator, which is shaped through the influence of many factors—first of all, the longterm, objective ones and only subsequently by short-term and “man-made” impulses. The Lari-to-USDrate is the resulting component of the balance of trade and the balance of payments as well as of macroeconomic indicators (economic growth dynamics, inflation rate and unemployment rate). Pg. 11

2 GOVERNMENT

NEWSROOM Government to Allot 100 million USD Credit Line for Anaklia Seaport Project The government will invest 100-120 million USD. Moreover, additional 100 million USD credit line has been allocated for necessary cases.

Kheledula 3 HPP Construction Works Underway Installed generation of the facility is 50.77 megawatts. Total investment value of the project is 90 million USD. Averaged annual generation of the design HPP is 250 megawatt/hour.

ECONOMY

Georgia’s imports, exports surge 22% Between January and November 2016 the value of Georgia’s exports dropped five percent to $1.92 billion, while the value of imports increased 29 percent to $8.91 billion, said Geostat.

Georgia Wine Exports to China Reach Historic High Wine exports to China grew by 128% to about 4.89 million bottles, making China the country’s third largest export destination following Russia and Ukraine.

BANKING

Banker Names TBC Best Bank Of The Year The number of debtors is constantly growing - at the beginning of 2016 the number of entries in the register was 143 517 and in the past 10 years this figure rose to 40 000.

Bank of Georgia to Buy ProCredit Bank Portfolio Bank of Georgia plans to buy ProCredit Bank’s portfolio of micro and small business loans. The parties have already reached agreement and payment will be fulfilled in cash.

BUSINESS

A Minimum Cost of Cigarettes in Georgia will Reach GEL 3 Importers and manufacturers of cigarettes claim that the government’s decision was a complete surprise to them, because the government didn’t conduct consultations with them on this issue.

Georgian Manganese Launches Product Exports to China For the first in history Georgian Manganese has launched product exports to China. Since the company resumed extraction works, active works are underway for penetrating new markets.

COMPANY

Fitch Assigns GWP Second-Time ‘BB-‘ Ratings The rating reflects trust in the company, its financial sustainability, and solid management team. GWP is the first non-financial, private Georgian company to be assigned the same rating as the sovereign.

December 19, 2016 #174

Georgia’s PM: “2017 state budget focuses on fast economic development”

eorgia is starting a very important process of development. The process will not be easy but it will make the country’s economy healthier”. With these words, Georgia’s Prime Minister Giorgi Kvirikashvili started Governmental meeting where the main topic was the 2017 state budget, approved by the Parliament. PM Kvirikashvili noted the 2017 state budget was oriented on fast economic development. Every step we take is oriented on having better dynamics of development than our neighbouring countries. This is a competition … we should do our best to attract a large portion of the investments coming to the region,” he said. “Our budget aims to solve the problems that Georgia has been facing for decades. This will be a structural improvement and recovery of the economy,” he added. At the meeting Kvirikashvili high-

lighted the importance of making Georgia an export-oriented country where local entrepreneurs make investment-oriented decisions. Kvirikashvili alos accented the importance of developing tourism in Georgia and said “very important financial recourse” will be spent next year on improving touristic infrastructure all over the country. At the meeting today Georgia’s PM spoke about liberalising the country’s tax system and how this would have a positive impact on economic growth. Taxes will be increased in directions that will have the least negative impact on economic growth. Our goal is to ensure the structural recovery of the economy and trade balance so Georgia is less dependent on foreign currency fluctuations,” said Kvirikashvili. He then went on to discuss the reasons that had caused the de-

valuation of the national currency Lari (GEL). In the geographical area where we are now situated almost all currencies of our trade partner countries have devalued. All of the major currencies have been depreciated more than 100 percent; the Turkish Lira and Ukrainian Hryvnia by 200 percent, the Russian Ruble by 90 percent and the Azerbaijani Manat by 100 percent. To compare, the Georgian Lari depreciated about 60-65 percent,” said Kvirikashvili. The oﬃcial price of the United States Dollar is 2.6604 GEL. The National Bank of Georgia has set a new exchange rate where the Lari has fallen even further against the greenback. Today 1 USD will cost 2.6604 GEL. The previous rate was 2.6599 GEL. Georgia’s national currency has also lost value against the Euro. Today 1 EUR will cost 2.8301 GEL while the previous rate was 2.8222 GEL.

Business Forum “Made in Georgia” was held in Techpark

n December 15, at the Techpark Tbilisi, Business Georgia with the partnership of Business Contact and Maestro TV organized a Business Forum “Made in Georgia”. Within the topic were discussed the challenges and potential of local products produced in Georgia. The main objective of the event was to take the audience with in-depth information and answers on all the important questions, that will simplify the correct perception and estimated role of local businesses strengthening the country’s economy and creating favorable business environment. Chosen topics have precisely answered challenges, that local manufacturers face in a wide variety of contexts and are equally important for diﬀerent types of businesses. At the Forum participated high level government oﬃcials, commercial and international sectors, entrepreneurs and start-ups, chain store representatives, distributors, importer and exporter company representatives, investors, financial institutions, media, chambers of commerce and industry, individuals who represent decisionmaking organizations, play a key

BUSINESS WEEK caucasus

The Editorial Board Follows Press Freedom Principles Publisher: LLC Caucasian Business Week - CBW Address: Aleksidze Street 3 Director: Levan Beglarishvili; Mob: +995 591 013936 Sales: Mob: +995 558 36 61 07 WWW.CBW.GE Email: caucasianbusiness@gmail.com

role in creating eﬀective business environment and developing further process. Business Georgia’s General Director Ana Gogishvili talked about the positive aspects of the Business Forum. “This event was intended to promote the local production, to answer existing questions through discussion and provide deep study for the better understanding. Participants had an opportunity to get acquainted with the achievements in development of local business and share their experience in producing goods and services in the country. Business Georgia slightly contributed to stimulate advancement of Georgian entrepreneurship with organizing such Business forum “said Ana Gogishvili. At the Forum speakers discussed current situation of Georgian Products on Local and Global Markets, the production spectrum, product competitiveness - quality and international standards, the role of distribution channels and chain stores, trade relations, as an additional opportunity, its impact on export and import and success stories of Georgian brands. They have discussed Georgia’s potential in producing goods and services, main concerns of producers, gov-

ernment incentives, international facilitators, the role of innovation for production, financial resources, the role of the banking sector, foreign direct investments and the role of media in promoting entrepreneurship mindset. The Business Forum speakers were: CEO of Partnership Fund Davit Saganelidze, Deputy Minister of Economy and Sustainable Development Ketevan Bochorishvili, Chairman of the National Wine Agency Giorgi Samanishvili, Head of the Georgian National Tourism Administration Giorgi Chogovadze, Entrepreneurship Development Agency Ana Kvaratskhelia, President of the Georgian Small & Medium Enterprises Association Mikheil Chelidze, Secretary General of the EU-Georgia Business Council Zviad Tchumburidze, Director of the Start-up Georgia Vazha Menabde, Director of Sakpatenti Nikoloz Gogilidze, Chief of Party of the USAID G4G Natalia Beruashvili and Deputy Head of the GCCI Nato Chikovani. At the Business Forum “Made in Georgia” speakers reviewed and outlined plans for the expansion of the market for the Georgian products and increasing the scale of production in Georgia.

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

December 19, 2016 #174

PUBLICITY

ECONO-MIX

December 19, 2016 #174

GEL Beats All Records National Currency Sees Historical Depreciation

Levan Alapishvili Lawyer

Merab Janiashvili Economic Analyst

Finally, it should be noted that the Authorities are trying to hide a considerable growth in taxes through populism steps. On the one hand, the Authorities announced prohibition of online loans, which is impossible to implement, in practice, but grows taxes, on the other hand

‘‘

awyer Levan Alapishvili has commented on Government’s initiative for increasing tobacco excise tax and noted that smuggling risks will burst out in the country. Alapishvili also recalled several samples of smuggling and told the BPI that the Authorities should prevent each of them. “In not only our country, but all other countries, a certain percent of revenues may miss the state budget and be directed to the illegal sector. It is the government’s responsibility to reduce and prevent similar threats. To this end, the Government should apply administration leverages, create due legislative environment and business environment, economic conditions for stimulating tax payment. Therefore, the Government should envisage all risks of smuggling, even more so excise tax is expected to grow”, Alapishvili told the BPI. Tobacco excise tax upturn may provoke firing employees in the business sector. Higher excise tax will cut revenues and business companies will have to cut staﬀ, Alapishvili noted. All these factors will bring side aﬀects too in terms of distribution, advertising, imports and so on. All these issues should be resolved in a complex way. I will be happy if our government cares for these aspects and does not rely only on law enforcement bodies, because law enforcers cannot be always successful in this direction”, Alapishvili noted. In response to the question whether smuggling prevention measures will need due money and revenues from higher excise tax may be directed to smuggling prevention, Alapishvili said: “I do not think Government considers this issue in this light. The recent statements suggest that Government plans to fill the budget gap after profits tax reformation in 2017. This is not a good practice, because reforms should be clear and evident from the very beginning, they should be focused on specific directions and clear for our citizens. Reforms without public support are destined for failure. For example, if the Government had explained that growth in excise tax on vehicles or property tax were to improve road infrastructure, our citizens would receive clear messages, but Government does not talk about this and therefore, I think the mobilized resources are to fill the state budget gaps”, Alapishvili concluded.

‘‘

Smuggling and Unemployment will Burst out after Growth in Tobacco Excise Tax

n December 15 GEL exchange rate dropped to historical minimum in relation to both USD and EUR. According to National Bank of Georgia (NBG), on December 15, 1USD=2.66 GEL and 1 EUR=2.83 GEL. GEL exchange rate devaluation has become an inseparable part of Georgian economy over the past 2 years. The process started in November 2014, slightly declined in 2016 spring-summer period and intensified again in November. The Authorities have lost all arguments to substantiate and justify the national currency collapse and to shift responsibility onto others. As a result, previously, all failures were explained by exogenous factors, but these arguments do not work any more, because the process continues for 2 years. And now state officials apply absolutely strange phraseology to explain GEL devaluation reasons. Some officials explain GEL exchange rate devaluation by Turkish Lira volatility, while another part is not sure GEL is depreciating. For example: “We understand that we have a small and open economy. Consequently, we should be ready and we should realize that developments in our main trade partner countries cannot leave our economy without affect. Current tendencies of GEL exchange rate should be appraised as a volatility that is related to Turkish Lira. Consequently, this is a short-term topic. We expect GEL exchange rate to get stabilized”, Minister of Economy and Sustainable Development Giorgi Gakharia said. Georgian society has already heard from state officials that GEL exchange rate depreciation is a temporary process and the exchange rate will be stabilized in the near future, but this is less expected that someone trust the Economy Minister’s words, even more so several months ago the Deputy Economy Minister forecast GEL exchange rate would be around 2.20-2.25 in December 2016. Today this person is the Deputy Finance Minister and continues “successful” forecasts on economic developments at the Ministry of Finance. Meanwhile, another deputy finance Minister is not sure GEL exchange rate is collapsing. “I cannot name details and reasons. Do not believe in GEL depreciation. Everything will be OK”, Deputy Finance Minister Giorgi Tabuashvili noted. There is nothing to say. It is very difficult not to see that GEL exchange rate has dropped to historical minimum. And this has not happened in one day. The country has moved to this outcome for 2 years. Despite GEL exchange rate continues declining, NBG does not plan to tighten monetary policy. At the government meeting last week, the NBG monetary policy committee adopted a decision on maintaining the monetary policy rate unchanged. Currently, the monetary policy rate stands at 6.5%. The decision is based on macroeconomic forecasts, under which, in midterm period, demand factors affecting inflation are weak. However,

as a result of external shocks of last period and planned growth in excise tax, prices may rise single time, but this factor will have only shortterm effect on inflation indicator. The fact is that NBG failed to even get around the 2016 target inflation rate. As reported, target inflation rate in 2016 is 5%, while in November annual inflation was 0.2% and general deflation was recorded in October 2016. This signifies the NBG do not want to tighten monetary policy rate, on the one hand, in order to reach target inflation rate and it has even increased money mass in turnover. On the other hand, the NBG’s softened steps strengthens GEL exchange rate depreciation. We should also recall that amid sharpest currency crisis, Government decided to carry out large-scale dedollarization policy and announced several reforms in this light. Starting January 1, 2017, loans of about 100 000 GEL will not be issued in USD, while starting 2018 this limit will rise to 2018. Naturally, dedollarization is a positive tendency, but not in currency crisis periods. At the same time, dedollarization is a long-term process and requires 10-15 years, in case of valuable and correct reforms. Moreover, the history has also proved that when GEL exchange rate is stable more or less, dollarization indicator declines in itself, without extra regulations, while amid instable exchange rate, dollarization ratio grows. This signifies that now when our population shows least confidence in GEL, Government and NBG plan to make them refuse USD and EUR, but this is very difficult to fulfill and the GEL quick devaluation proves this. After Government announced a new 10-clause plan, which also comprises dedollarization component, GEL exchange rate is depreciating at high paces and NBG does not plan to halt this process either. Finally, I would like to say some works about our expectations. Authorities and NBG, last period, express pretensions against media and experts as if they were provoking panics in the society around the GEL exchange rate issues and creating incorrect expectations about the national currency. It is surprising that economic policy managers express similar accusations. The question is why they cannot manage these expectations?! NBG refuses to make comments on GEL time to time and reasons are unclear. If you do not like existing expectations, you should just manage them yourself. One of the NBG officials should make a TV address and spread correct messages, provide correct information to the society and manage the expectations that are perceived and understood incorrectly. However, the issue is that Government and NBG officials have made so many stupid statements around GEL exchange rate over the past 2 years that even their statements suffer from devaluation. How can the Deputy Economy Minister persuade our citizens in GEL exchange rate power, when his forecasts about the GEL exchange rate strength failed in several months?!

“Thanks to eﬀorts of Public Registry, Georgia is ready to join this system. We suppose that in 2017, as the first step of insertion of documents, we will store real estate extracts in the system. We will provide detailed information for our citizens. The main thing is that we have attained technical compatibility. As a result, Georgia will be one of the first countries in our regions and western Europe to establish this technology”

Tea Tsulukiani Minister of Justice of Georgia

December 19, 2016 #174

Gifts you need the most for Christmas from Arakishvili Residence Buy an Apartment and We will Accomplish It with Premium Class Equipment, besides You will Enjoy New Year Discount Schemes. Arakishvili Residence complex offers gifts and discount schemes for the coming New Year. Customers, who will buy an apartment in the complex, will receive a full set of premium-class German equipment for the whole apartment. Our customers will also enjoy a special discount scheme. As part of the campaign, the price of 1 square meter space starts from 1100 USD. Gift package includes two options for those wishing to buy up to 100 square meter space and a more than 100 square meter space. These package includes: Bosch fridge, gas set (oven, exhauster fan and gas stove), dishwasher, kitchen multi-robot, washing machine, breakfast set (toaster, electric teapot, coffee pot), vacuum cleaner, Samsung LED TV set and Hyundai air conditioner. Make Your Home at the Great Place Arakishvili Residence is located in the center of Vake, in one of the most best-selling residential parts of the capital city. Besides location, it is also an interesting project in terms of architecture. The complex comprises 84 apartments. Lower level of the building comprises bi-level parking place for vehicles and bicycles. There is a playground in the yard. The greened and accommodated yard is separated by electronic turnpike from the street. Apartments have optimal planning for diverse views and tastes. For additional comfort, the complex provides 24-hour security services. The building will have its own basketball and children playgrounds. The project is being implemented by financial support of Bank of Georgia. Besides the ongoing campaign, Arakishvili Residence also offers flexible payment conditions. Customers are able to enjoy interest-free internal installment payment scheme, as well as Bank of Georgia mortgage loan with only 6% interest rate. An exclusive broker of the project Colliers International Georgia is providing the lease, sales and marketing services to Arakishvili Residence. The residential complex construction works will end in November 2017. 224 30 60 sales@arakishvili.ge; www.arakishvili.ge

NEW YEAR

December 19, 2016 #174

HOW MUCH DOES NEW YEAR NIGHT COST IN GEORGIA

eorgia-based premiumclass hotels have already introduce New Year packages to consumers. New Year nights, traditionally, differ from ordinary days. Prices and services are diverse and tariffs start from 250-260 USD on average. The Caucasus Business Week (CBW) has explored how much visitors have to spend at premium-class restaurants at the New Year night and what services and packages they offer to Georgian and foreign consumers. Lopota SPA Resorts Administration of Lopota SPA Resorts hotel in Kakheti Region offers a three-day package for two persons (with 3 meals) and the package price is 980 USD. On December 31 Banderol group will play for guests. The hotel will host visitors by New Year gala dinner. According to the administration, on January 1 the Newton band will play music at the hotel, while in the evening Aleqs Kordzaia will continue the concert. On January 2 visitors will be able to listen to jazz concert. The hotel administration also offers a special program to children. Currently, all suites have been booked for the New Year period. 50% of visitors come from neighboring countries (Armenia, Azerbaijan).

Kvareli Eden Hotel Kvareli Eden plans to unveil the New Year evening with Glintwine. At 23 o’clock a gala supper will start. As to musical part, invited musicians and bands will play – Achiko Nizharadze and Soundtrack band. DJ will continue musical evening. The hotel administration says that joyful lotteries will be also held at December 31 night, including a 2-person tour to Milan will be raffled. According to hotel administration, after January 1 solemn breakfast, Georgian traditional master class will be held in Kakhetian yard (frying barbecue and so on). The evening will be finished by solemn supper. Kvareli Eden oﬀers two-day package to visitors in the New Year days for two persons for 1100 GEL. Rooms Hotel Kazbegi Rooms Hotel Kazbegi oﬀers a very interesting program to visitors. The hotel’s New Year package for December 31 and January 1 costs 3207 GEL (1239 USD) for foreign visitors. The hotel offers 20% discount package and its price is 992 USD, according to today’s exchange rate. Georgian citizens are able to enjoy 40% discount rate and the package price makes up 744 USD (1925 GEL). The cost includes a room for 2 persons for two nights (hotel with front view), gala

supper, concert by Nino Katamadze and Insight band, DJ Set, Glintwine, as well as breakfast on the second day.

for foreign guests – 5-night (6-day) New Year package for 900 USD (two-person standard package).

Tetnuldi Hotel Tetnuldi hotel oﬀers one-day New Year package to visitors. The New Year program will start on December 31, which includes a gala supper and musical part by DJ and domestic Georgian folklore band. Price of New Year night accommodation services at Tetnuldi hotel starts from 110 USD (for two persons). The price of entertainment also makes up 100 GEL in addition.

Radisson BLU Batumi Hotel Radisson BLU Batumi hotel oﬀers a combined package with accommodation and entertainment services. Visitors will have to pay accommodation price separately from entertainment package price for the New Year period, the hotel administration says. The price of two-person standard suite starts from 190 USD in December 31January 1 period. The package also includes an entertainment program, 175 GEL per person. The Georgian table will be combined with a New Year oﬀer with wine and spirits. Demand for the New Year package is very high, Radisson BLU Batumi hotel administration says.

Crown Plaza Borjomi Borjomi based hotel Crown Plaza oﬀers New Year program for December 31January 2 period. The package includes a gala supper with live music that will be replaced by a band, entertainment component for children (with animators and nurse). On January 1, in the evening, a New Year supper will be held with live music again. The New Year package price is 740 USD, the hotel administration says. Booking process started in last week of November. Currently, 70% of 101 suites have been booked mainly by foreign visitors,including Russian, Ukrainian and Azerbaijani citizens. According to the hotel administration, they have also prepared the second oﬀer

Radisson BLU Iveria The New Year package of Radisson BLU Iveria unites the suite price and New Year supper price. The price of two-person suite is 512 USD on December 31-January 1. The package includes breakfast, VAT and December 31 supper. According to hotel administration, the package prices does not include price of strong beverages. Music of various genres and languages will be performed at gala supper, including comic sketches. Almost all suites have been booked, the hotel administration noted.

December 19, 2016 #174

PHARMACEUTICS

Transparency International Detects Weak Oligopoly on Pharmaceutical Market GIORGI KAPANADZE

malgamation of Pharmadepot and GPC grows risks of competition restriction and misuse of market dominant positions. “Thus, pharmaceutical market may be characterized as a weak oligopoly, but according to recent information, ABC Pharmacy that holds a dominant position (second place after PSP) since 2015, plans to merge with GPC and establish a new corporation – Georgian Pharmacy (GEPHA), which will combine Pharmadepot and GPC management. As reported, Competition Agency assessment is required for final decision and this assessment will be published in about a month. As a result, GEPHA will control 25% of the market (based on imports indicators) and move to the market leader position. Thus, quantity of the market dominant companies will shrink to 4 ones from 5. This concentration may bring both negative and positive results. Negative factors may arise out of the company’s 25% market ratio that may provoke misuse of dominant position, while positive aspects signify that amalgamation process will combine resources, expenditures will be optimized and company efficiency will increase in all directions”, the report reads. Profits of pharmaceutical companies in 2014 made up 190 million GEL. As to the company turnover and revenues, according to the research, total annual turnover of in both retail and wholesale sectors made up about 2 billion GEL in 2014 (according to the recent indicators). To be precise, turnover of wholesaler companies is growing year to year and in 2014 it increase by 433 million GEL compared to 2010. As to retailers’ turnover, this indicator is changeable, but shows upturn tendency, in most cases, and the figure rose by 130 million GEL in 2014 compared to 2010. Total annual profits of companies involved in pharmaceutical business in 2014 made up about 190 million GEL. To be precise, wholesalers’ profits in 2014 rose by 58 million GEL compared to 2010, while retailers’ profits increased by 9 million GEL in 2014 compared to 2010. In 2012 pharmaceutical companies donated 415 000 GEL to United National Movement (UNM), but similar cases were not registered since 2012. In the process of exploring major market players, Transparency International – Georgia examines contacts of persons, associated with business companies, with political parties in order to determine corruption risks, amely, whether these persons have donated money to some political party. The report shows that the year of 2012 was a special one for pharmaceutical companies in this sense. If we consider a situation with 25 companies, stakeholders of 4 ones and otherwise related 9 bodies donated total of 415 000 GEL to UNM. Since 2012 these bodies have not donated money to political parties. To detect corruption risks, Transparency International – Georgia also examines involvement of these companies in state procurement deals. Namely, main accent is made on value of contracts received without tenders, in a simplified purchase mechanism. “ In this sense the years of 2010-2016 have not recorded a specially interesting tendency. A major part of state contracts obtained by companies were obtained by tenders, while the value of direct contracts, as a rule, was not too high”, the report reads. Price of medications rose by 25% and the process started 8 months earlier before GEL exchange rate depreciation. According to information of LEPL Medical Activities Regulatory State Agency, prices rose in some groups in 2012-2014 period. “If we discuss a group of all medications jointly, this period has not recorded an extreme change in prices. As to 2014, especially after 2014, prices considerably increased on all pharmaceutical products and the peak of growth reached 25% in the second half of 2015. Extreme surge in prices started in parallel regime with GEL exchange rate depreciation, to be precise, 8 months earlier. Representatives of pharmaceutical companies have shifted responsibility onto State Regulatory Agency because of alleged restriction of parallel imports, but the Agency rejects these accusations. Starting November 2015 price surge paces started declining and tariffs declined in some groups of medications. Price contraction tendency was maintained on almost all pharmaceutical products up to December 2016. If GEL exchange rate keeps dropping, naturally, medication prices will be also affected and their prices will be provoked for growth. However, it should be noted that, according to November 2016 statistics, annual inflation marked only 0.2%”, the research reads.

ANNUAL PROFITS OF PHARMACEUTICAL COMPANIES HIT 190 MILLION GEL

ransparency International -Georgia has published a report on pharmaceutical market. The work reflects main trends, problems and recommendations for their resolution. The reporting period of the research work covers the 2012-2016 period mainly, but the work also discusses some earlier issues. Five major companies control about 70% of the Georgian pharmaceutical market. According to the report, pharmaceutical market does not show evident concentration of market power. Based on the recent indicator, pharmaceutical market can be characterized as a weak oligopoly, because five major companies control about 70% of the market: LLC PSP Pharma (22.32%), LLC ABC Pharmacy (14.91%), LLC Aversi-Pharma (14.54%), JSC GPC (10.20%) and LLC Global Pharma (7.02%).

Every year imports exceeds exports about 5 times. As to exports and imports, the report shows that both imports and exports of the mentioned medications show growth tendency in 2012-2015. Every year imports exceed exports about 5 times. In 2012-2015 major exports was carried out by LLC GMP, LLC Pharma Impex and LLC Pharma Logistics. It should be noted that the latter two companies are specialized in re-exports. As to importer companies, in 2015 LLC PSP Pharma occupied the first position with 58 million USD (22.32% in total imports). This company emerges as a leading importer every year, excluding the year of 2013, when LLC AversiPharma topped the list with 62 million USD (19.25% in total imports). According to 2015 indicators, LLC ABC Pharmacy ranks second with 39 million USD (14.91% in total imports); LLC Aversi-Pharma is third with 38 million USD (14.54%), JSC GPC is fourth with 26 million USD (10.2%), LLC Global Pharma is fifth with 18 million USD (7.02%). At this stage, a total of 11 168 medications have been admitted to Georgian pharmaceutical market, including 1 367 medications are of Georgian origins. Based on imports indicators, Aversi Rational and GMP manufacturers control 97% of production sector. At this stage, a total of 11 168 medications have been admitted to

Georgian pharmaceutical market, including 1 367 medications are of Georgian origins, i.e. 12.25% in total number of admitted medications. Aversi Rational manufactures 259 ones and GMP produces 237 ones. Naturally, there are also manufacturers that produce pharmaceutical products of Georgian raw materials. Recognition regime registration regulations for pharmaceutical products creates risks for imports of low-quality medications. As to other market shortcomings, according to the report, Georgia has not managed to move to international standards yet and this factor considerably hampers exports of Georgia-manufactured medications and makes quality of domestically produced products questionable. Government of Georgia planned to move to international standards in 2016, but, according to new resolution of the Government, these reforms were rescheduled for 2018. According to the report, LEPL Medical Activities Regulatory State Agency, which is responsible for examination of medications quality, does not have suﬃcient financial resources/budget to eﬃciently fulfill this function. Moreover, the current legislation cannot ensure valuable implementation of this function. At the same time, the report says that Recognition regime registration regulations for pharmaceutical products creates risks for imports of low-quality medications.

December 19, 2016 #174

Interview with GIORGI KALATOZISHVILI, head of PR management of Delta state militarytechnical center

“Georgian PR remains in the process of formation. 99% of PR specialists do not have due experience in strategic PR. ”

Georgian PR Remains in Formation Process - What are you by profession? - I am a movie scholar by profession. I studied this profession, when movie sector existed thanks to artificial breathing in the country. Film directors had to spend several years on shooting one film. There were no infrastructure, while a major part of movie theaters were employed as storehouses. Despite these difficulties, my professionalism enabled me to work as a movie critic for various prestigious editions for many years. For 18 years, I published reviews and critical articles in about 25 magazines and newspapers. However, in the course of time I was interested in communications and PR field. I realized I could do much more useful affairs in this field. I wanted to motivate people, instead of demotivation, because criticism frequently discourages people, regretfully. - Your first job place. - My first job place in PR field is related to ACT marketing and social research company, where in 20042007 I occupied the position of junior advisor and media-monitoring department head (ACT launched operation with 4-member team in 2002 and today we have about 80 employees and the company is represented in three countries: Georgia, Azerbaijan and Kazakhstan). As PR specialist, I got major experience here. I first went to ACT in 2004. In that period my elder sister Tinatin Rukhadze was the company director. I went as a guest. When I opened the door of her study, I could not imagine I was opening the gate into the new world. On the first day I was assigned to manage crisis communications of one of the major international companies. This was huge responsibility, challenge and, naturally, stress. I am grateful to my friend, colleague and the then mentor Nika Javakhishvili, who enabled me to employ my potential in this field. - Current job place and position. - Starting November 2016 I am PR office head of Delta state military science-research center. There is very good environment and team here. Main mission of Delta is based on Georgia’s state interests and national defense strategy. Main objective of the center is to develop national military industry, designing-production of modern and innovative military technologies, designing of military weapon and armament in compliance with modern world trends. It is very interesting for PR specialist to work in similar organization, even more so, when you realize improvement of communication with internal and external groups considerably promotes development of national military industry, strengthens its reputation. Delta manufactures international-standard products that is of better quality compared to products of many developed countries. Our society receives information about

“

People of our profession do not divulge similar facts, do not specify them, but I would say – I have experience in political PR and my client became a municipal council member and then a member of parliament of Georgia

our achievements and advancements mainly on the May 26 Independence Day events, when Delta exhibits military equipment of its own production: armored vehicles, guns and so on. - Your first success. - People of our profession do not divulge similar facts, do not specify them, but I would say – I have experience in political PR and my client became a municipal council member and then a member of parliament of Georgia. - Business, project you take pride in even today. - As PR specialist I have been cooperating with Georgia’s Damage Reduction Network and Open Society – Georgian Foundation in the field of reduction of stigma-discrimination of People infected by Hepatitis C. I am proud of having made my own contribution to this great affair that has changed public attitude to the existing problem and today treatment is much more attainable, and even free for some public and social groups. - Field where you would never work. - Before 2012 I thought Interior Ministry was a similar field, but after 2012 I have worked in this structure for 2 years and I have never felt discomfort (in 2012-2014 I was head of Interior Ministry PR and Information Support Management), because I knew I could genuinely change a lot, especially in PR direction. I would not say this if Nino Giorgobiani was not a head of PR department and did not assist us and our team had not supported me in shaping and implementing all important project ideas, particularly Irina Vadachkoria and Roland Esakia. - What makes a person successful in your field? Besides knowledge what special features are required? - Earlier I would name creativeness, motivation and so on. But today I would say in different way – we should love People, love and respect the society, love our own profession and job that we can transform into art from ordinary job if we treat it frankly. - Is it possible today in Georgia to study PR at professional level, or international knowledge and experience is required? -I was learning PR field by practical work. I have not graduated from university courses in this field and I have not taken efforts for obtaining degrees in this field. I have personally fired a probationer ahead of schedule, because PR specialist educated in university with diploma could not perform elementary tasks, did not own elementary skills, did not have sufficient intuition. Today public offices and commercial organizations offer practical knowledge and experience to young people, but sometimes, we do not have time to “bring up” a professional and have to say goodbye to talented specialists who cannot meet our standards for a specific moment. Besides academic knowledge, students should perform practical job in permanent regime for various or-

ganizations. In this case we will receive prepared and trained professionals, who will manage to get adapted to real requirements after university graduation. As to international experience I believe this experience grows us faster. - Is PR perceived and understood in Georgia in its classical nature? - Georgian PR remains in the process of formation. 99% of PR specialists do not have due experience in strategic PR. They mainly perform functions of relation with media and events management. Only a small part of PR specialists are able to provide complex services for employers, but to a certain degree, this is the fault of employers too. - How simply do you resolve emergency situations and take decisions? Do similar cases affect quality of the working process? - I am a certified specialist of American PR association PRSA in the field of crisis communications effective management. In crisis situations, most of all, I appreciate the words of Nietzsche – What does not kill me, makes me stronger! That what does not kill us, gives major lesson and experience to us. There are many classifications of crisis situations, typology, symptoms, dynamics of developments, mechanism for prevention and diagnostics...Therefore, crisis is not a judgement. We just should know how to conduct in emergency situations. Maximal concentration is required in crisis situations, but in 99% of cases we lack for this feature. That’s why in critical situations people forget about everything that they have learned for a long period and they act instinctively. I also had similar cases, when emotions and nervous background dropped my productive capacity and this factor has made considerable influence on performed job. - Interesting episode from your life that has changed your life. - My visit to my syster Tika Rukhadze to ACT in 2004. - If not this profession which field would you work in? - I work in the field where I have precisely determined myself. - What benefit do you receive from your employer company? What makes it interesting for you? - This place combines patriotism and professional and we genuinely do affairs of national importance. I express my gratitude to all persons who have created Delta and contributed to enhancement of security of our country, promoted national production abroad, created system that serves military and civil and economic purposes. - What creates major discomfort in the working process? - Bureaucracy. - Where do you see yourself after 20 years? - Somewhere in the suburb area with my family.

FOREST WEEK

December 19, 2016 #174

Forest Week

Forest Week was inaugurated at Mziuri on December 3, where a photo exhibition was held and works of famous photographers were exposed. The guests were hosted by street painters, illusionists, clowns. Moreover, exhibition and sales of woodworks was also held. NUTSA GALUMASHVILI

efore, at tennis courts, near Mziuri territory, university teams held friendly football match with giant balloons. Teams were encourage by drummers, who led the procession after the match and completed the event at Mziuri. “Main objective of Forest Week is to draw public attention to environment protection issues, on how to employ our natural resources reasonably without damaging nature”, Ana Tsintsadze, head of WWF Caucasus regional partnership and communications department, noted. “Formation of Association of Environmentalist Journalists as part of the week was an important event. The association is to ensure correct communication around relevant issues and to popularize these issues. The week will be continued by similar events and will end on December 10”, Kakha Maghradze, senior partner for GEPRA PR and marketing communications company, noted. Several significant activities were carried out as part of Forest Week this year. On Sunday, on December 4, Radisson BLU Iveria hotel hosted a presentation of Association of Environmentalist Journalists as part of Forest Week campaign. Establishment of the association was initiated by GEPRA PR and marketing communications company and WWF Caucasus. The event was attended by representatives of Ministry of Environment and Natural Resources, environmentalist organizations and various media agencies. Gigla Agulashvili, Minister of Environment and Natural Resources, WWF Caucasus representation director Giorgi Sanadiradze, GEPRA senior partner Kakha Maghradze and Shorena Tskhovrebashvili, producer of Imedi TV company news department, delivered speech at the presentation. As part of Forest Week campaign, representatives of Association of Environmentalist Journalists planted 60 Georgian Oaks on Tbilisi national park territory. The greening campaign was organized by WWF Caucasus and Treepex. «We have last days of autumn and first days of winter and there are more chances for trees to survive. Today we have planted 60 Georgian oak trees in Tbilisi national park», Lasha Moistrapishvili, head of Agency of Protected Areas, noted. The Head of Forest Fund noted that interested bodies are able to supervise planted trees through mobile application. «Our organization is conducting Forest Week for the third time this year and it should be noted that this week coincides with tree planting season and the current process is diﬀerent, because Georgian Oak, appropriate specie for local conditions, is planted, on the one hand, and people, who have planted trees, are able to supervise the tree growing process through mobile application, as well as

to receive all information about contribution to global warming reduction and climate improvement. Based on experience of previous years and this year, we plan to more improve and refine this process. We will take all efforts to attain more systematic level, to wider cover this campaign and involve more people in this very mnportant affair», Ilia Osepashvili, head of Forest Fund, noted. Batumi, a seaside city, has also hosted Forest Week and Forest Agency has unveiled a training center (address; Fridon Khalvashi Avenue N51). The event was unveiled by Ajara Government Chairman Zurab Pataradze: «On basis of Forest Agency, for the first time in region, a training center was created and this is very importanmt for developmnet of our region. Care for ecology, upgrading public perception, efforts for maintaning ecology and natural resources are priorty directions for our country. We should also make focus on highland Ajara, where we have importamnt forest fund and we must maintain this resource. We should implement more projects in this respect, we should train specialists and all these efforts will ensure the sector development», the Ajara Government chairman noted. Vakhtang Tsuladze, head of Ajara Supreme Council commission for agrarian and environment protection issues, Jemal Nakashidze, acting head of Ajara environment protection and natural resources management, and Giorgi Sanadiradze, WWF Caucasus director also addressed the presentation guests. At the event 5 best foresters were named from each municipality and they received awards. The presentation was also attended by other representatives of Ajara Government, Environment Protection and Natural Resources management, Ajara Forest Agency, WWF and other organizations. “The training center was organized and equipped as part of WWF Project - Forest Eco System Sustainable Development through Adaptive Management”, the meeting organizers noted. Small children of foresters were also awarded. They received certificates for merit of their fathers. A special cognitive-entertainment program was also held for children. On December 9-10, in Borjomi, at Rixos Borjomi hotel, as part of Forest Week campaign, a workshop was held on environment protection issues. Members of the board of Association of Environmentalist Journalists, reporters, representatives of WWF Caucasus and Forest Agency attended the workshop. The workshop was held at visitor center of WWF Caucasus. Presentation was dedicated to WWF Caucasus activities. Achievements and challenges in forest sector, Orhu convention aspects was discussed – human rights in environmental protection field. Invited guests were also updated on innovations in Borjomi-

Members of Association of Environmentalist Journlasts Planted 60 Georgian Oaks on Tbilisi National Park Territory

Kharagauli park and so on. Practical works were also carried out. Ilia Osepashvili, WWF forestry programs coordinator, Ani Andronikashvili, head of Forest Agency PR service, Nata Sultanishvili, head of education projects oﬃce, and Natia Muladze, Borjomi-Kharagauli national park representative, delivered speech and introduced specially prepared presentations. Field campaign was conducted under workshop and field workers saw Borjomi plateau and village Daba neighboring territories. Finally, the workshop participants saw souvenirs made by local pupils of natural materials. In 2016 Forest Week campaign is being held as part of “Second Phase (FLEG II) of Program for Law Protection and Management Improvement in Forest Sector for Eastern Countries under European Neighborhood and Partnership Instrument”. The project is financed by EU and is being implemented in Georgia, Armenia, Azerbaijan, Moldova, Belarus, Ukraine and Russia by support of World Bank, WWF and IUCN.

BUSINESS

December 19, 2016 #174

Nino Chikovani Promoted to General Board of World Chambers Federation Voting process was carried out stage by stage in November 2016. A total of 1200 member chambers from 125 countries took part in the voting process. The voting process has selected 20 members of the general board and they will manage WCF for 2 years up to 2019. Role and commissions of Nino Chikovani at the general board will be determined in nearest future. The first meeting of the general board will be held on March 1, 2017 in Paris at central oﬃce of International Chamber of Commerce (ICC).

INVESTING

STARTUP

Japanese Candies ZOCY – Business of 11Grade Pupils As a result, we have acquired much experience and at the same time, new ideas appeared. When leaving for Intel conference, at Munich airport we decided to start business and we took first eﬀorts at computer of transit department. As to the company name, it arose absolutely by accident in Duty Free zone. -Why have you decided to make accent on Japanese candies and is Georgian customers interested in your products? Giorgi: - We are classmates and we used to order candies from Japan when we were 8-grade pupils. Then we grew up and gained experience, we decided to undertake this startup and I think we are success. Consumers show much interest. -What makes you special from other competitors? Mariam: -Since Georgian market lacks for Japanese candies, we do not nave competitors in practice. Moreover, I believe our idea is very attractive and interesting for Georgian youth, because we oﬀer absolutely new product. -How much do your products cost and where are they sold? Mariam: - Price depends on variety of candies and ranges from 2 to 5 GEL on average. Products may be bought

ZOCY is an online store that trades in Japanese candies, chewing gums and various confectioneries. 11-grade pupils of Georgian-American school have founded this startup – Mariam Kanashvili and Giorgi Meskhi. The idea of undertaking this business arose at an airplane. They started implementing the idea in the same place. The company name they invented in Duty Free zone. Having left airport, they started implementing the project. In their interview with the Marketer, Mariam and Giorgi have described their business in details. - How would you describe ZOCY’s Japanese Candies and what products do you oﬀer to

consumers? Mariam: - ZOCY is an online store of Japanese candies, where consumers are able to choose desirable products and couriers will deliver orders to desirable address in Tbilisi. The products include candies, chewing gums and other interesting, exotic and diverse Japanese confectioneries. - How did this business idea arise and how have you selected the company name? Mariam: - Over the past 3 years we have taken part in many international conferences in mathematics (ICYS,2015-Gold Medal; Intel ISEF 2016; IYIPO-Gold Medal and so on).

NEWS

WINE

New Business Center Opens at Freedom Square

Vladimir Boisa Introduces Wine of His Own Brand: I Make Wines and Care for Each Bottle Myself

Redix Group continues to set the high standards in the field of Real Estate as it opened new A Class Business Center located in the middle of the city, at Leonidze Street – the most attractive historical place for Tbilisi residents and guests, where despite of the permanent renovation, the city can be felt exclusively. It is an extension to Tabidze 1. Already well known A Class oﬃce property branded as Tabidze 1 located at the Freedom Square, was opened in 2009.

Adjara Group Builds Airport in Kazbegi Adjara Group plans to build airport in Kazbegi municipal. Aerodrome will be located in Stepantsminda and its construction is due to finish from 2017-2018 years. Within the frames of “Spatial Planning of the Country” project, implemented by Georgian Government, Adjara Group aims to contribute with various activities one of which is building Airport in Stepantsminda, which will support the positioning of Georgia as a modern tourism destination.

In his interview with the Business Morning, the vice president of Basketball Federation talks about his plans. -Why have you chosen winemaking business? -When I was playing basketball, I always had the feeling of love to brand wines and I always wanted to taste as many brand wines as possible, but I did not have this opportunity in that period. Having ended my career, I obtained the opportunity to bottle my own wine and develop my brand. I make wine myself, with my own hands, and I personally care for each bottle. -Did you need assistance? How have you chosen place and grapes to make specific variety of wine? Do you rely on your own views in business part? -Key and major investments were made in branding process. We have top quality bottles, as to grapes, we use Rkatsiteli. In general, you should be very careful when making wines. You should ask winemakers and specialists how to make wines. -Which price category will be your wines sold in? -My wines do not concede to many other good wines. I sell my wines to stores and restaurants for 22 GEL. I do not know whether this is high price or not, but it is impossible to sell our product for lower price. As to the brand, it has a very interesting history. People, who learned I was making wines, invited me to their wineries and enabled me to choose my taste and they arranged the brand taste for only me and it is very tasteful. The brand is a Georgian-Slovenian product. -Who are your partners and where are your products manufactured geographically? -The main thing is that I am alone. Only one partner helped me in Slovenia, who put small amount of money in my brand distribution and helped me somehow. In Georgia my partner is Otar Bregvadze. My sister is the company director and I am a key figure, in practice. I think I do not need assistance of more people. The main thing is to attain high quality in our products.

by online orders and on Facebook and Instagram pages. Distribution is carried out by a delivery service. -What difficulties have you overcome when undertaking this business and how do you manage to study and do business simultaneously? Giorgi: - There are many difficulties, because we are 11-grade pupils and we are considered to be prospective university students. It is very difficult to combine studies with business, even more so we do this business alone. It is difficult to resolve problems and objectives in short period. We have huge support from our parents who are more experienced in this case. -What stage of development have you reached and what innovations do you plan to offer to clients? Mariam: - The first consignment of candies were run out and we are waiting for the new one. We also plan to expand our business in social network to draw as many customers as possible. Giorgi: - We never stop developing our services and content. In the near future we plan to undertake a new direction in relation to the subscription box.

IFC and EBRD to Allocate 18 million EUR to Aversi International Finance Corporation (IFC) and European Bank for Reconstruction and Development (EBRD) will allocate 18 million EUR financial resources to Aversi Pharma. By this decision, intrnational organizations will assist the company to broaden public access to high-quality medical services in Georgia. IFC will allot 13 million EUR loan to enables the company to enlarge the network of medical facilities and provide cutting-edge medical services all over the country. EBRD will also allocate a loan to Aversi in the amount of 5 million EUR. High-level oncology services will be developed in Tbilisi and outpatient clinic construction will be financed in Telavi. The financial resources will be applied for purchase of modern medical equipment for clinics. “Attainable, high-quality medical services are of crucial importance for Georgia. These medical services ensure welfare of our society and assist in overcoming the poverty. Thanks to our cooperation with international finance institutions, our company plans to satisfy the existing demand for high-quality medical services in Georgia”, Aversi founder Paata Kurtanidze said. “We are happy to continue our successful cooperation with Aversi. This project is of crucial importance for public welfare and will improve healthcare infrastructure in the country. EBRD tries to provide overall support for economic development of Georgia. This important project is also a part of EBRD strategy aimed at growing energy eﬃciency, competitive capacity, developing innovative products and establishing corporate management standards in Georgia”, Bruno Balvanera, EBRD’s regional director for Caucasus, Moldova and Belarus, said.

Lars Against the Lari! Only those who are, perhaps, exceedingly lazy did not comment on the fall of the Lari in the last few weeks. I could find, quite bewildered, all kinds of surprising and emotionally charged explanations for that I the print media: “profiteering and speculation”, “agio and frenzy”, “conspiracy”, “ignorance”. National currency rate was always for me the most important economic indicator, which is shaped through the influence of many factors—first of all, the long-term, objective ones and only subsequently by short-term and “man-made” impulses.

Dr. Andrei Maximov Maximov&Partners LLC am@maximov.com www.maximov.ge Seeing Diﬀerently Foundation for children with autism spectrum disorder: www.autism.ge

he Lari-to-USDrate is the resulting component of the balance of trade and the balance of payments as well as of macroeconomic indicators (economic growth dynamics, inflation rate and unemployment rate). These long-term factors can be adjusted (within certain limits both quantitativelyand in terms of the time scale) through the policy of the National Bank: emission (i.e. the rate with which the printing presses run), exchange rate interventions (real or verbal ones), accounting rate and its debt management. People’s trust in the national currency is also superimposed on the aggregate result. With the lack of trust the “dollarization” of the economy happens (i.e. when foreign currency is dominant in the settlements and savings of the population)—then it is easy to start spreading panic and creating frenzied sentiments in order to get involved in high-gain speculation. Such speculation can only happen on a short-term basis and is unattainable under the conditions of stable balance of trade and balance of payments. Trade balance has a priority position in this long list—in accordance with the theory which is well-known to any freshman studying economics. Trade balance is the interrelation of export and import operations. If goods are exported, the country gets revenue from abroad, and when goods are imported, foreign currency leaves the importing country. So, if the trade balance is negative, with imports prevailing (i.e. the country imports more than it can export), it will invariably induce pressure on the national economy so that its exchange rate will inevitably be lower. Such a pressure can be partially compensated through the positive balance with regard to services (for example, tourism), money transfers, foreign credits, but in the long-term perspective it is the trade balance that will play a key role anyway. I am not at all surprised by the dire condition of the Lari exchange rate, because in recent years Georgia’s trade balance deficit (excess of imports over exports) has only been rising: thus during comparable time periods (which is the first three quarters of the year) it amounted to 43% in 2013, 47% in 2014 and 55% in 2015. In January of 2016 the exports were reduced once again, this time by 8% to 1.5 billion US dollars, while the imports grew rapidly to 7.5 billion USD (by 34%). Overall result: the trade deficit topped 6 billion USD and amounted to 67% of the balance. In other words, Georgia sells less and less while buying more and more. In this situation, the Lari can only get cheaper in the long term. It is possible to artificially support the exchange rate (for example, in the lead-up to theelections) by using various financial instruments, but the longer such adjustments are practiced for whatever non-economic reasons, the harder is the rebound. This is exactly what has happened in Georgia towards the end of this year. All kinds of speculative profiteering, frenzy and conspiracy were only some “scum” on top of the macroeconomic situation. If the latter were healthy, no “scum” would have appeared. I am convinced that the situation with Georgia’s trade balance will become substantially worse by the end of the year, and the main reason for it will be Lars (customs check point at the Georgian-Russian border).The season for citrus fruit began on November 15, but the Georgian Military Road was closed on November 30, and there was no traﬃc passing through it since then. Trucks accumulated in huge numbers on both sides of the border (in Russia the road police has been stopping trucks at a distance of 400 km from the border—there was never anything like that!), and the New Year is coming ever closer, inexorably, crushing all hopes of Georgian exporters for feverish demand. When the Lars checkpoint is closed, it is killing Georgian exports, both seasonal (tangerines

OPINION

December 19, 2016 #174

and green goods) and traditional, year-round ones. Just look what has been happening. Tangerines, just as any perishable commodity, require special conditions for their transportation and storage, and usually it is “+-2”. This is stated in the International Consignment Note and in other transportation documents. Yet our experience tells us that, as they say, “You can’t bite off more than you can chew”: transportation rates between Georgia and Russia cannot compete with the European routes. Therefore, old trucks get around here, outfitted with a not so reliable equipment, with no “spies, i.e. tracking devices which monitor storage conditions compliance in real time. So, one has to rely on the drivers’ words only, which is not too practical for any business, both in Georgia and elsewhere! Yet even a very honest truck driver does not have too much space to maneuver if he has gotten stuck for weeks on the Georgian Military Road and that during frosty weather. Diesel fuel in his truck’s fuel tank is not limitless, and it is not possible to find any more fuel up there (another issue is who would pay for it). Trying to support the functioning of the refrigerator without the fuel is a hopeless affair. Truck drivers start their refrigerators, get to the desired temperature inside, and then they switch off trying to stall for time relying on the air tightness of the refrigerator body. Then they start it again and again, until the fuel is gone. As a result, tangerines do not get better after all that. Even when storage conditions in the refrigerator truck are ideal, one, two or three weeks of extra life of the citrus fruit inside the truck will never make their quality or their look better. And if the storage conditions were completely disrupted (due to the non-functioning refrigerator), it should be a dreadful sight for the buyer when he will open the long-awaited cargo. Any of the partners will lose their money that they had already spent, either on buying tangerines from the farmers or as advance prepayment, in part or in full. All these are additional problems, on top of what was discussed earlier in my article called Battle For Tangerines (issue No. 179, December 5, 2016). Transportation by sea from Poti and Batumi will not save the situation, because the sea pretty often very rough and the ferries are very much behind schedule. Plus they are traditionally booked by Armenian cargo carriers, so that getting on a ferry even under force major conditions can be very difficult and very costly. The tangerine season was only 10-15 days this year. Farmers and buying centers were very happy to push up their prices haggling to death with potential buyers. Today the tangerines get cheaper and cheaper, no one is happy anymore, but the problem is that there are no buyers anywhere. The Lars checkpoint will not open, most likely, before December 15. When it does, some 5-7 days are needed for the all the trucks to pass there. But after December 22 or 23 no tangerines, wine, lemonade or mineral water would be of any interest to the wholesale merchants. The demand will become at least ten times less, if at all present. Storage conditions for Georgian wines and soft drinks are not as strict as for the citrus fruit. Yet with such temperature fluctuations as this year up there in Lars, they also have not too many chances for retaining consumer properties: even though they may keep their external appearance intact, but the taste of these wines and soft drinks would be far from perfect for the experienced and differentiating buyers, due to the many freeze-thaw cycles. It is small wonder that wine shipments to Russia are now completely stopped. And that during the period before the New Year, which is the best period for sales and active shopping. Buyers want Georgian tangerines, wine, lemonade and mineral water before the New Year! Weather conditions are, of course, a force major factor. Yet this year the human factor got superimposed as well, and it’s an open question which should be more blamed, the weather or the humans. Each year some companies and certain individuals did their small business using the difficultconditions of traveling via the Georgian Military road: they were offering big vans their services of assisting the ascent by providing chains and tractors. Previously it had cost 200 USD, and this year it is more expensive: 100 USD for the chains and 150 USD for a tractor or a four-wheel-drive KAMAZ truck. It is a great business too: everyone agrees to pay, since it is better to get up the hill, then to sit around and wait. This small business, however, coupled with unfavorable weather conditions has created huge problems for all of the Georgian export to Russia. Our drivers who settled along the Georgian Military Road are unanimous in stating that “never before was the situation as outrageous as this year!”

Lars was closed on November 30, and it was necessary to regularly clear the road, but no one did that along a rather short distance (about 15 km) expecting the usual demand for chains and tractors. Then the weather changed it all: at first, it rained, then the temperature dropped, and the road was covered with an ice layer 20 cm thick. By then it was too late to clear the road, and it was not possible for tractors and chains to assist the cars in getting uphill. Even passenger cars got stuck there. Some of the passengers could get to the closest hotels and stay there, while others, some of them with children, decided not to leave their cars and got trapped as a result. On December 8 only eight cars were allowed to get on up the road. They towed cars back and forth, one of the cars was completely ruined, but still, none of the large trucks could climb the grade. After that the weather got somewhat better, but no one has been clearing the road anyway preferring to movethe large trucks using tractors and doing it very slowly. The road congestion does not disappear dueto these eﬀorts. The road might be still closed until December 15-18. According to previous experience, some 5-7 days more are needed for the congested road to become passable. Then there is Christmas and New Year’s eve. And then Georgian export cargo will not be needed by anyone.

When the Lars checkpoint is closed, it is killing Georgian exports, both seasonal (tangerines and green goods) and traditional, yearround ones. Just look what has been happening. Tangerines, just as any perishable commodity, require special conditions for their transportation and storage, and usually it is “+-2”. This is stated in the International Consignment Note and in other transportation documents. Exporters and importers will start huge rows because of their settlements! This is a dire picture. I cannot understand why the state has stayed outside of this situation. There was no anticrisis headquarters, no one was authorized to go to the area and make sense of it all there. Why cannot the road be cleared timely and regularly? Why do some private companies and not the state rescue service or the Ministry of Transportation provide their services, while offering chains at a price 5-6 times higher than their nominal price? Why do they sell essential, life-saving goods to the truck drivers who got stuck on the road in poor weather conditions with a price tag ten times higher than normal (one loaf of bread costs 6 Lari up there!)? And why is no one responsible for the dismantling of the Georgian export? Underthese circumstances, we told our trucks to take a different route traveling via Azerbaijan. Well, first of all, our transportation rates increased; second, it is prohibited to transport wine across the territory of Azerbaijan (which is a Muslim country); third, it is physically not possible to turn around all of the trucks that got stuck at Lars. They will have to wait there until the weather gets better. For your information: today the transportation component of the agricultural export from Azerbaijan to Russia equals 2500 USD per truck and from Georgia to Russia it amounts to 4 thousand USD and more. This means that exports from Azerbaijan have become more competitive as compared to analogous exports from Georgia, and by 1500 USD per each transportation vehicle, mind! We will see how all this situation will affect the trade balance deficit on an annualized basis. Something tells me that there is no way we should be expecting something positive. That is, there is no use in hoping for a stronger Lari against the US dollar.

Vano Chkhartishvili Wins Trial Against the Patarkatsishvilis at London Court of Appeals It should be also noted that despite unjust claims, during the whole period of disputes, we have never taken steps that would abuse remembrance of Badri Patarkatsishvili and reputation of his family

On December 9, 2016 London Court of Appeals found an appeal by the Patarkatsishvilis’ companies against Vano Chkhartishvili ungrounded and put an end to the threeyear disputes that were provoked by dishonest people. “We have won all trials against the Family both in Georgia and abroad. The first case over the most expensive asset of Kulevi Terminal was over on our behalf at Great Britain’s Virginia Court in October 2013. The dispute continued at Georgian court, where Vano Chkhartishvili won both first and second instance courts”. London Court of Appeals has essentially probed into the Patarkatsishvili’s claims against Vano Chkhartishvili, recognized the appeal ungrounded and annulled the decision by Peter Smith, a magistrate of London first instance court. For reference, recently, the board of magistrates of England suspended his commissions because of his unethical behavior, inadequate reception of justice and law. This is a final decision because the superior supreme board discusses only those legal issues of special public interest or has no legal precedent. It should be also noted that despite unjust claims, during the whole period of disputes, we have never

taken steps that would abuse remembrance of Badri Patarkatsishvili and reputation of his family. We should also note that despite unjust claims during the whole period of trial, I have never taken the step that would abuse the remembrance of Badri Patarkatsishvili and reputation of his family. We hope that after the December 9 decision of London Court, the family will show the willpower to bring apologies for discrediting Vano Chkhartishvili, blackmailing him and staging defamatory media campaign against him over the past 4 years. Our society should know that an organized group of lurchers and perjurers stuck to the Patarkatsishvili’s family, were staging blackmails and psychological terror against Vano Chkhartishvili and they will certainly receive due response. In the near future Vano Chkhartishvili will hold a special briefing, where the group members will be publicly named and their criminal steps will be disclosed. This dispute was the case of dignity and honor for Vano Chkhartishvili, first of all, and we are happy that our truth was confirmed by the world’s most unbiased and influential British court system. Press oﬃce of Vano Chkhartishvili

PUBLICITY

December 19, 2016 #174

GEPRA become a partner of Ketchum Maslov in Georgia Georgian PR Agency joined the Europe largest network

ommunication agency Ketchum Maslov announced about signing of partnership agreements with Gepra in Georgia and Deem Communications in Armenia. Official partnership will increase the effectiveness of Gepra in terms of project management and quality of the services in serving international clients and at the same time strengthen the Ketchum positions in post-soviet countries. Partnership with Ketchum Maslov gives opportunities to Gepra to participate in the projects of the Moscow office, cooperate with partners and regional clients in Post-soviet and Eastern European countries and gain access to the resources and technologies of Ketchum global network. “Long term business relations with Ketchum was logically transformed in official partnership. We are happy to announce about

signing of the agreement and are ready to work on new, joint projects. For us, it is a great opportunity to gain the new experience and move to the next stage of the development. Partnership with Ketchum is a significant not only for Gepra, but also for Georgian PR market, in whole. Oﬃcial partnership status will boost new projects not only in Post-soviet, but also in Eastern Europe countries. Thanks to this strategic partnership, Gepra will have a great opportunity to further develop its relations with international corporations and

investors” – Ekaterine Zhvania, Director at Gepra told us. “Over the past years, we were receiving regular requests from our existing clients to expand the network in other countries. After implementing of several joint projects, we decide to oﬀer partnership status to Gepra and Deem Communications. We are sure, that the future cooperation will be fruitful for our clients and for Ketchum global network, both” – says Michael Maslov, Partner and General Director at Ketchum Maslov.

About Ketchum Maslov Ketchum Maslov is one of the largest and diversified international PR Agencies, operating in Russia and Post-Soviet Countries, with main focus on Startegic Communications. Since establishment, (November 1993), agency is a leader of the sphere: Holmes Report recognized Ketchum Maslov as the best PR Agency in Russia in 2016 and Agency of the Year in Eastern Europe in 2012. Ketchum Maslov is the only agency, which holds both awards.

WORLD NEWS

December 19, 2016 #174

Quotes

“ Keeping a little ahead “These are the countries where the global battle for poverty eradication will be won or lost”

of conditions is one of the secrets of business; the trailer seldom goes far

”

Charles M. Schwab

Poverty Trap Leaves Least EU to help Armenia town Developed Countries manufacture Ever Further Behind

lobal poverty is increasingly concentrated among a group of 48 countries, which are falling further behind the rest of the world in terms of economic development, according to a United Nations report released on Tuesday by UNCTAD. The Least Developed Countries Report 2016: The Path to Graduation and Beyond – Making the Most of the Process states that a global goal to halve the size of this group will be missed unless the international community takes more action. “These are the countries where the global battle for poverty eradication will be won or lost,” said UNCTAD Secretary-General Mukhisa Kituyi, launching the Report. “A year ago, the global community pledged to ‘leave no one behind’, but that is exactly what is happening to the least developed countries [LDCs].”The

proportion of the global poor in the 48 LDCs has more than doubled since 1990, to well over 40 per cent. Their share of those without access to water has also doubled to 43.5 per cent in the same period. And these countries now account for the majority (53.4 per cent) of the 1.1 billion people worldwide who do not have access to electricity, an increase of two thirds. In six LDCs, the rate of extreme poverty is between 70 per cent and 80 per cent, and in 10 more the rate is between 50 per cent and 70 per cent. There are only four other countries in the world where the rate is above 30 per cent, and nowhere else is it above 50 per cent. This leaves many LDCs stuck in a poverty trap, a vicious circle in which poverty leads to poor nutrition and health, and lack of education, undermining productivity and investment.

TANAP’s construction accelerates, costs decrease

he construction of the Trans Anatolian Natural Gas Pipeline (TANAP) project, which will to carry Azeri gas to Europe, is ahead of schedule and under budget by $3.2 billion, as more than half of the pipeline construction has already been completed, according to the TANAP’s general manager. The project aims to bring natural gas, produced from Azerbaijan’s Shah Deniz-2 gas field and other areas of the Caspian Sea, primarily to Turkey but also to Europe via the Trans-Adriatic Pipeline (TAP). “More than half of the project, or 55 percent, of its construction

was completed at the end of November and we are ahead of schedule,” TANAP General Manager Saltuk Düzyol told journalists at the project’s construction field trip on Dec. 8. Düzyol said the pipeline – which is 1,200 kilometers in length and 56 inches in width - has been welded, and a 1,570-kilometerlong area has been cleared and prepared for its laying. “We will supply 2 billion cubic meters (bcm) of natural gas by the end of June 2018 out of a total of 6 bcm to Turkey via TANAP. We will send another 2 bcm the next year followed by 2 bcm more in 2020, as per Turkey’s demand,” he added.

pavement curbs from recycled plastic The European Union (EU) will assist Kapan Municipality of Armenia in manufacturing pavement curbs out of recycled household plastic. The respective project was approved as a result of the grant tender by the EU Pilot Regional Development Programme. Accordingly, €750 thousand will be allocated for construction of the respective plant. A total of €510 thousand of this amount will be the EU grant, €127,500 will make up the national funding by Armenia, and €112,500 will comprise the participation by Kapan Municipality. Aside from solid plastic (household waste), however, soft and granular plastic as well as sand also will be required to manufacture these new pavement curbs.

Trump Tower in Azerbaijan Showed Conflict Risk in Strategic Area The Trump Organization’s announcement that it’s ending licensing deals for projects in Brazil and Azerbaijan suggests it is moving to fend oﬀ wide concerns about conflicts of interest in advance of Inauguration Day. Alan Garten, the organization’s executive vice president and general counsel, said Thursday that said the moves are “housecleaning,” and the organization is “assessing the future of various transactions.” President-Elect Donald Trump had promised to hold a news conference on Thursday to announce a full plan for separating himself from his businesses but delayed it until January. Any of Trump’s properties across more than 20 countries, if they remain in his family’s control, could be seen to influence his policies toward those countries. They also could cause embarrassment. In Brazil, for example, Trump’s name was removed from a beachfront hotel in Rio de Janeiro following the opening of a criminal probe into investments in the hotel.

“Diversification is always good and one should not rely only on Chinese exports, as in that case you can rise when China rises and decline when China does”

Reconnecting Asia: The Story Behind The Emerging Baku-TbilisiKars Rail Line

he South Caucasus region is coming together to leverage its geographic position and once again become the land bridge it was during the days of the ancient Silk Road — the link between the booming markets of East Asia and the booming markets of Europe. The new Baku-Tbilisi-Kars (BTK) rail line is emerging to become the central nervous system of this reestablished trade corridor, allowing goods to be seamlessly transported by rail from one side of Eurasia to the other in just 15 days — completely bypassing Russia and their reactionary embargo. The 826 kilometer long BTK rail line will extend from the bank of the Caspian Sea in Azerbaijan to the capital city of Georgia and then cut south to the east of Turkey before feeding into the broader Turkish rail system and Europe beyond. This rail line is designed to become a key part of the southern route of the emerging New Silk Road network of trade and transport corridors that are coming together between China and Europe. The idea to build the BTK rail line was first proposed in Ankara in 1993 after Turkey closed down the railway from its eastern city of Kars to Gumru, in Armenia, due to the Nagorno-Karabagh conflict. The proposal lingered on through the years, then in 2007 the leaders of Azerbaijan, Georgia, and Turkey came together in Tbilisi and signed an agreement to start construction on the rail line that would not only link together their countries but proverbial east and west as well. “Diversification is always good and

one should not rely only on Chinese exports, as in that case you can rise when China rises and decline when China does,” said Mahir Humbatov, an Azerbaijani researcher who has co-authored two books on the BTK rail line. Besides stimulating local manufacturing operations, the BTK line will also provide the countries it passes through with additional sources of new revenue, such as transit fees. Humbatov claims that preliminary studies have pegged the yearly earning potential of this rail line in excess of $170 million per year for Azerbaijan alone. While the demand for a new rail line extending across the South Caucasus has been evident for an extended amount of time, the financing for it hasn’t always been as forthcoming. According to Humbatov, the USA, World Bank, Asian Development Bank, European Union, and the European Bank for Reconstruction and Development initially refused to support the BTK project. The EU, in particular, denied financing based on the grounds that they preferred reestablishing the old rail route that went from Turkey through Armenia. This meant that the three countries involved in construction of the BTK would need to finance it themselves. Azerbaijan and Turkey were able to fund their portions, but Georgia was unable to follow suit for their 178 kilometer section. This propelled Azerbaijan’s State Oil Fund (SOFAZ) to step in and provide the necessary financing in the form of loans valued at $112 million (1% interest) and $323 million (5% interest) — another example of Azerbaijan using its glut of petrodollars to invest in regional transportation infrastructure.

PUBLICITY

December 19, 2016 #174

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

December 19, 2016 #174