Caucasus Business Week #176 by Caucasian Business Week

BUSINESS WEEK

DISTRIBUTED FREE OF CHARGE

caucasus1

January 16, 2017 #176

January 16, 2017, Issue 176 - www.cbw.ge

Interview Maia Bibiluri Business is a style of life, not job place

Georgian Railway Georgia to Earn Yearly 60 million GEL from Turkmen Oil Transit Pg. 11

Interview Temur Chkonia Economy, Business and Marijuana

Pg. 9

Pg. 5

Auto Importers Support Further Regulations

Gazprom’s Victory Russian Gas Giant to Pay Money for Gas Transit via Georgia Georgia has accepted the oﬀer of Russian gas giant Gazprom. As a result, the gas transit via Georgian corridor will be paid in money, instead of previous natural gas. Minister of Energy Kakha Kaladze noted that Georgia has obtained discount terms from Gazprom. If the country needs additional volume of natural gas, Gazprom will supply natural gas to Georgia for 185 USD per 1000 cubic meters, instead of previous 215 USD. As a result of long-term negotiations with the Russian state company, under the 2-year agreement, mixed payment mechanism will run for the initial year, while the second year will be entirely oriented on money payment. According to government members, this oﬀer is not unfavorable and in practice nothing changes for Georgia, while political opponents and a part of experts appraise the agreement as a step backward and unacceptable compromise. Pg. 4

The Shock Eﬀect of the Unstable Exchange Rate, and the Dilemma of ‘Larization’

Pg. 6

Instability regarding the exchange rate of the national currency has caused problems for the real estate business. The devaluation of the Lari has diminished the capacity of potential buyers to conduct purchases in foreign currency, leading to delays in their decision to purchase real estate. It should also be noted that a large part (more than 60%) of all costs associated with real estate development projects, as well as bank loans, are in foreign currency. Following from all of the above, one must ask whether or not the plans to denominate real estate prices in Lari are justified. General Director of Property Georgia Lika Kardava spoke to the heads of several leading local and international real estate companies about these important issues. Pg. 7

2 GOVERNMENT

NEWSROOM Georgia Wants to Attract Japan Investments It should be noted that many grant projects have been carried by the assistance of JICA, rehabilitation and development of country’s important economic sectors has been made.

International Tourism Revenue Exceeded $ 2 Bln This is the result of common efforts we’ve carried out in terms of infrastructure development and positioning Georgia as an international tourist destination. This trend will continue and intensify.

ECONOMY

The WB Improved Georgia’s Economic Growth Forecast to 5.2% World Bank in the new Global Economic Prospects report has improved the economic growth outlook in Georgia by 0.7 percent. In 2018 GDP growth will be at 5.3% while in 2019- at 5%.

Georgian Corridor Lost 6 mln t Cargos through the Last 4 Years Georgian corridor transferred cargo 38,3 mln t in11 months of the previous year. According to Ministry of Economy, the decline is 4.4% y-o-y, while the corridor has lost 6,4 million t cargos comparing to January-November, 2012.

BANKING

EBRD and TBC to Invest 14.3 Million USD for Lukhumi HPP “Lukhumi” Hydro Electric Power Station has the capacity of 17.2 MW. Expected annual power equals to 86.3 MW in an hour. During summer, HPP will use river recourses and it will be able to export the energy to Turkey.

ProCredit Listed in Frankfurt Stock Exchange This fact provides additional opportunities for development and improvement of reputation among Europe’s major and influential investors, the bank’s press release reads.

BUSINESS

Georgian Wool Enters EU Market Based on decision of National Food Agency, Georgian wool has entered EU market. The information was released by National Food Agency. Before, the Agency had carried out due measures for adjusting Georgian legislation with EU standards.

Certiﬁcation of Cereals Seed Underway in Georgia Certification of cereals seed has started in Georgia, under Government’s resolution on Approval of Additional Conditions for Dissemination of Seed and Plant Materials (N569, December 23, 2016).

COMPANY

January 16, 2017 #176

Reorganization at JSC ENERGO-PRO Georgia has been completed Major factors for the reorganization are future legislative reforms, implementation of which is caused by the joining of Georgia to the energy community.

Foreign Minister: Turkey among Georgia’s greatest trade partners

eorgian Foreign Minister Mikheil Janelidze says Turkey has been Georgia’s greatest trade partner for more than a decade. Addressing Turkish diplomats at the Ninth Ambassadors Conference during his twoday visit to Turkey, Minister Janelidze said 2016 has proved how economic relations have deepened between the two countries. Janelidze encouraged his Turkish colleagues to increase bilateral and multilateral cooperation for promoting the region’s economic, transit and energy potential. Janelidze said economically last year was “one of the hardest” not only for the region but for the world at large. However, he praised the fact that Georgia and Turkey have continued

to strengthening ties despite “ negative global and locals trends”. In his speech Janelidze thanked his Turkish colleagues for supporting Georgia’s sovereignty and territorial integrity as well as the country’s EuroAtlantic aspirations. Condemning the recent terror attacks in Turkey, Janelidze expressed his condolence to the families of those who died in various attacks and promised continued support for Turkey’s fight against terrorism. I believe the connection between the two countries will deepen in the future and will become the basis of safety and stability in the region”, Janelidze said. Welcoming the long-lasting partnership between the two countries, Janelidze men-

tioned the 25th anniversary of the establishment of Georgian Turkish diplomatic relations. These 25 years have been exemplary for our partnership, cooperation and friendship”, Janelidze said. He believes the two countries have “wonderful” political relations, which also reflects on successful trade-economic developments. During his visit to Ankara Janelidze met with numerous high-ranking oﬃcials including Turkish President Recep Tayyip Erdogan, Foreign Minister Mevlut Cavusoglu, Prime Minister Binali Yıldırım and the Deputy Speaker of the Grand National Assembly, Ahmet Aydın. During the talks, the parties exchanged views on bilateral relations as well as regional and international issues.

Monetary compensation in return for transit rights

eorgia will shift to a system of financial compensation with Russian energy giant Gazprom for the transit of Russian gas through Georgia into Armenia. At government meeting the Government of Georgia decided to sign a new two-year agreement with Gazprom as the former agreement expired on December 31, 2016. The new agreement entails monetary compensation for the transport of Russian gas to Armenia through Georgia in place of the former arrangement, which afforded Georgia 10 percent of all natural gas transported through the country. After several rounds of negotiations, we have reached a deal with Gazprom and accepted an optimal proposal from them. Under the new agree-

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

ment, Georgia’s dependence on Russian energy resources will not increase. Only the payment conditions have been changed. And it will be one of the highest transit fees among European countries”, said Georgian Energy Minister Kakha Kaladze. The Minister further explained that the agreement of 2016 will remain valid for 2017, after which the new payment system will come into eﬀect. In addition Kaladze said Georgia may receive additional gas supplies from Russia in order to fill the deficit during the winter months when gas consumption is higher. We will be able to receive additional gas supply for a reduced price – for $185 instead of $215 [per 1,000 m3] ,” said Kaladze. In 2013, Gazprom and Gazprom Armenia signed the contract for up to 2.5 billion cubic me-

ters of Russian gas to be supplied annually to Armenia in 2014–2018. On April 7, 2016, an addendum to the contract was signed. Gas is delivered to the Armenian border by Gazprom Export. In 2015, Gazprom supplied Armenia with 1.9 billion cubic meters of gas.

www.cbw.ge <<

Economic Changes Government Implements Suit EU Standards

Details of Construction of American Hospital Will be Discussed Late this Month

Tbilisi to Host GeorgiaChina Mega Business Forum in July 2017

New Silk Road Project to Change Region’s Fate

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

January 16, 2017 #176

PUBLICITY

ECONO-MIX

January 16, 2017 #176

Gazprom’s Victory Zurab Gvasalia President of the Association of Banks of Georgia

Lasha Papashvili Businessmen

There is a Lack of Information about the Larization Program “More information should be provided on the government’s larization program “ - a former banker Lasha Papashvili says while commenting on the de-dollarization plan approved by the government yesterday. According to him, the government should provide more information on what way the state helps the borrower and what will be the role of banks in this. “We need more programs, which will explain where the risk is and a way the state will help as well as the bank’s role in the process. I see a lack of such communication,-Papashvili notes. When asked whether the de-dollarization plan approved by the government will be profitable for commercial banks, Papashvili explains that the program will not be unprofitable anyway. He says the bank benefits when benefits its client. Therefore, if a client suﬀers a loss, the bank will not be happy. In his words, the de-dollarization program will strengthen the exchange rate of the lari. The Georgian government has approved the program, which envisages issuance and transformation of credits in Georgian national currency. Transformation of credits in Lari and subsidizing will refer to those persons, who took roans before 2015, their annual income during 2015 did not exceed 100 thousand GEL and their credit balance was not more than USD 40 thousand.

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

eorgia has accepted the offer of Russian gas giant Gazprom. As a result, the gas transit via Georgian corridor will be paid in money, instead of previous natural gas. Minister of Energy Kakha Kaladze noted that Georgia has obtained discount terms from Gazprom. If the country needs additional volume of natural gas, Gazprom will supply natural gas to Georgia for 185 USD per 1000 cubic meters, instead of previous 215 USD. As a result of long-term negotiations with the Russian state company, under the 2-year agreement, mixed payment mechanism will run for the initial year, while the second year will be entirely oriented on money payment. According to government members, this offer is not unfavorable and in practice nothing changes for Georgia, while political opponents and a part of experts appraise the agreement as a step backward and unacceptable compromise. “We are able to replenish seasonal deficit, if necessary, and receive additional volumes of natural gas for 185 USD instead of 215 USD per 1000 cubic meters”, Kaladze noted. Starting 2018 Georgia will receive money payment for natural gas transit via main gas pipeline, instead of 10% volume of transited natural gas. The service will be paid in natural gas throughout 2017. Georgia’s dependence on Russia will not increase through this change, Kaladze noted. “At the government meeting we discussed a final proposal by Gazprom concerning natural gas transportation to Armenia. The existing agreement validity expired on December 31, 2016. After negotiations of several stages, we have managed to obtain optimal conditions from Gazprom-Export, based on the existing circumstances. Government has analyzed this offer and took decision to sign this agreement. I would like to stress that by this agreement Georgia’s dependence on Russian energy carriers will not increase. Only the form of payment will change, namely, our service will be paid in money, instead of natural gas, in line with international practice. As to gas transit tariff to be paid to Georgia, it will be one of the highest one in Europe. I do not know their arguments as if we have agreed on cheap tariffs. International practice suggests to follow monetization practice. As to com-

‘‘

The Association of Banks of Georgia backs the government’s de-dollarization program, - the President of the Association of Banks of Georgia Zurab Gvasalia states. According to him, all this will reduce pressure on the national currency and lift currency risks for the lenders. Gvasalia recommends the ordinary people to address the commercial bank that issued a loan, if not informed within 5 days about being in the list of possible applicants of the program. The larization program will be launched on January 17. The banks will contact the consumers within five days.

‘‘

De-dollarization Program will Reduce Pressure on the National Currency

Russian Gas Giant to Pay Money for Gas Transit via Georgia petitive tariffs, we receive almost the same result as in case with natural gas. I reaffirm that we have taken an optimal decision, based on the current circumstances”, Kaladze noted. According to information of Minister of Energy, Gazprom-Export is ready to sell additional volumes of natural gas to Georgia for 185 USD per 1000 cubic meters, instead of previous 215 USD. Georgia’s main gas pipeline has transported total of 2.1 billion cubic meters of natural gas to Armenia in 2016, of which 0.3 billion cubic meters remained in Georgia. It should be also noted that money payments for natural gas transit will be more unfavorable for Georgia, compared to payment in raw material, because there is no more favorable mechanism for transit tariff payment than the raw material is. Moreover, it should be also noted that Russia supplies natural gas to Armenia for lower tariffs compared to market prices. This signifies that Georgia will not receive adequate remuneration for gas transit so as to buy the corresponding volume of natural gas later. Therefore, this decision cannot be appraised as successful. However, government officials assert that the mentioned agreement was an optimal variant amid current situation. Gazprom was trying to revise the existing agreement conditions even in 2016. In that period the Russian company set ultimatum that it would supply natural gas to Armenia from Iran if Georgia would not accept monetization mechanism. However, it is famous that 700mm gas pipeline’s capability between Iran and Armenia does not exceed 1 billion cubic meters a year, while Armenia consumes 2 billion cubic meters. However, negotiation process changed in March 2016, when SOCAR President and Kakha Kaladze signed agreement on growth in Azerbaijani gas supply to Georgia. And in 2017 Georgia accepted Gazprom conditions. It should be also noted that the 2-year agreement conditions are classified and Georgian society cannot learn even the amount of tariffs. Therefore, it is unclear how much our country will be damaged of this new agreement. One thing is evident, this agreement cannot be appraised as a step forward.

“De-dollarization will bring results in mid-term period. Banking sector had over a month to get ready for larization project and I regard, that any types of problems or hampers will not take place even on the first stage”

Vakhtang Butskhrikidze General Director of TBC Bank

INTERVIEW

January 16, 2017 #176

INTERVIEW WITH TEMUR CHKONIA

t is not interesting to talk about my business in the New Year period, Georgian businessman Temur Chkonia said. «Nobody is interested in these details. They have much more problems», he said and appraised the current situation in the country instead. My activities are related to common topics and problems, Chkonia added. «Isolated happiness is impossible and only my own happiness does not count... Sales in business sector may grow thanks to hardworking, human and financial investments», Chkonia noted. I am happy that generations change and the generation of Coca-Cola has grown. This is our victory. People have changed their taste and become world members!, Chkonia said and overviewed current situation in the country. «Any year is interesting in the life, while in economy every year is very difficult. Every year brings its own challenges. The earth does not remember the best year ever. Personal life may have bad or good years, while in economy there is no bad or good year! We have difficult years since the 2012 elections. We still remain in political competition regime. Winner party competes with the loser for six years. Winner party should follow other purposes. It has more obligations compared to the previous regime. Serious economic changes are taking place in the world and if Georgia wants to be integrated into the global economy, then we should remember that visa liberalization does not imply only travel, it implies integration into the global and European systems. The current economic developments in Georgia are interconnected with external factors. For example, Turkey faces economic problems and this factor affects Georgia too. What does the economic might mean? When many reasonable people create export products, but, regretfully, we lack for similar people. We are people infected by Communist set of mind and we only ask Government to rescue us. The 25th year has passed and Georgian business cannot realize we should not wait for government mercy, the

“ We do not need so

Economy, Business and Marijuana

many Ministries. Our economy cannot put up with such expenditures in government structures. When business takes costs, we try to optimize expenditures. Sometimes we have to even dismiss workers, regretfully

”

businessman noted. Government should cut expenditures despite painfulness of similar decisions. Number of Ministries should be also reduced. Economy implies tireless eﬀorts and regretfully, not everybody can win and be happy in this war. Economy strengthens thanks to many smart professionals and exports-oriented business companies, while our country lacks for these components. The time has come that Georgian businessmen reject Soviet state of mind, Temur Chkonia said. Our economy is heading to the bottom and in this situation Government should cut expenditures. We do not need so many Ministries. Our economy cannot put up with such expenditures in government structures. When business takes costs, we try to optimize expenditures. Sometimes we have to even dismiss workers, regretfully, he added. Educated Prime Minister governs the country. He noted that it would be good to cut expenditures at Ministries by 10%. And all members of the government grasped this 10%, while the Prime Minister mentioned this figure for sake of only politeness, while there are Ministries that should be abolished entirely, Chkonia noted. As to state budget, it is not difficult to prepare a bill. The question is who will spend it. This is a genuine problem! We allocated huge financial resources for agriculture sector, but for whom? We do not have farmers and skillful peasants, who would reasonably employ these financial resources, regretfully. What is the wayout? The solution

consists in foreign countries! Government was to introduce Estonian model, but they were to invite professionals for implementing this model too. We need top specialists. Georgia may have good specialists with good knowledge, but this knowledge and experience is not sufficient to take the country out of this blind alley. We need Mesi, Ronaldo”, Temur Chkonia noted. The businessman also commented on privatization of land plots to foreign citizens. “There are discussions about transmitting land plots to foreign citizens in ownership. This is necessary! Foreign citizens should be in Georgia! We need European integration for not only our visits to Europe, but foreign citizens should also arrive in our country and integration implies this process. As to tourism business, “Sea,

nature, mountains, snow, sunlight are everywhere. In 2015 amid Russia-Turkey tensions, we expected that a major part of Russian tourists would arrive in Georgia…. but this is foolishness – Russians will not arrive to lie on mattress for 5 GEL and will not wait for Acharuli Khachapuri for 4 hours. They will not drive from Tbilisi to Kobuleti. Road infrastructure is wonderful, but cows rest on the road from Lanchkhuti to Kobuleti and they have to waste much time on that. They will be late. There is no flight communication from Batumi to European countries. Only Batumi-Kyiv flights are not suﬃcient”, Chkonia noted and added that marijuana should be legalized in Georgia. “Marijuana legalization issue has caused serious discussions. Both supporters and objectors

actively defend their positions. Marijuana legalization is possible in Georgia and it should be legalized. This is much inspiration for economic recovery and for attracting tourists”,Temur Chkonia pointed out. However, legalization procedures should be determined by regulations, the businessman noted. “This issue should be regulated by the law. There are multiple samples worldwide: Netherlands, California, where marijuana is legal, but nothing terrible happens there. This is very important component for tourism. If we legalize weed, tourists will walk to Georgia without flights”, Chkonia said. I hope the year of 2017 will record many successful pages in the state economy if government manages to implement announced projects, Chkonia concluded.

AUTO IMPORT

January 16, 2017 #176

AUTO IMPORTERS SUPPORT FURTHER REGULATIONS According to the bill of amendments to Tax Code, excise tax increased on automobile imports starting January 1, 2017. The decision is part of government plan for strengthening national currency exchange rate and mobilizing additional financial resources to state budget. Starting January 1, 2017, imports of automobiles manufactured after 2003 will become more expensive. As to hybrid automobiles, excise tax has halved by 60% in this segment. Tax Code amendments turned out especially painful for importers of right-steering automobiles: starting January 1, 2017 excise tax on similar vehicles will triple. The Caucasus Business Week (CBW) has explored how this decision aﬀect and will aﬀect economic developments in the country.

Association of Automobile Importers Reformation process was to start long ago in automobile imports field, Misha Alkhanishvili, head of Association of Automobile Importers noted. Consequently, we should consider this government regulation to be the first step in this direction. Many other steps should be also taken and many other regulations should be also introduced, including technical inspection details, he added. «Otherwise, we will receive very heavy situation. Vehicle fleet is outdated. Number of road accidents has increased. There is very heavy situation in terms of emissions», Alkhanishvili noted. This regulation will mainly concern importers of right-steering and used vehicles. Their sales are expected to drop. Despite this fact, no considerable losses are expected and they will manage to get adapted to existing environment, Alkhanishvili said. «Trade in used cars is a temporary event. Similar companies are created, when the field is not regulated by legislation. This is an ordinary case. Any advanced country considers used vehicles as undesirable products. All countries block them and get rid of them. And this undesirable product was imported to Georgia from around the whole world», Alkhanishvili said. Various countries regulate this problem through various mechanisms, including through growth in tax rates and other barriers. Sooner or later Georgia will also have to bring order into this field and this regulation is an ordinary case, he added. Ratio of new vehicles in total automobile imports is very small and makes up about 5%, Alkhanishvili pointed out and added that automobiles imports and sales will decline, because secondary market was saturated by used vehicles. Many other reforms should be implemented in the automobile field and many other regulations should be also introduced, including ecological norms, security issues and technical inspection issues, he said. Caucasus Auto Import Giorgi Surguladze, director for Caucasus Auto Import, explains that this government initiative will bring useful results

for the company. Uncertainty period will arise among customers for a short period, but everything will be settled soon. This decision will restrict imports of old vehicles and this is a genuinely good decision, Surguladze said. This regulation will hit importers of right-steering vehicles, he said. In response to the question, whether this decision will aﬀect the company sales, Surguladze noted that sales traditionally drop in the month of January and the current year contraction is identical to the previous year’s indicators, he added. Mycar.ge Company David Rekhviashvili, director of MyCar. ge company, welcomes this decision if no other frustrating factors arise. If solvency of our citizens grow, this government decision cannot damage the business genuinely, David Rekhviashvili noted. Current tendencies do not contain contraction signs,he said. «Orders from Japan have ceased. The segment of vehicles of about 2500 USD with customs clearance is expected to disappear. Despite these expectations, the company will be adjusted to new reality. This regulation was genuinely acceptable», Rekhviashvili noted. East Gate Group This government regulation will change sales statistics, Irakli Iashvili, head of supervisory board of East Gate Group company said. Despite the decision will reduce sales, it is an acceptable decision and the company will not protest against these regulations. This decision was to be taken sooner or later, Irakli Iashvili noted. «Vehicles imported from Japan held serious ratio in total vehicle imports of our company. Nevertheless, we welcome this decision and we do not protest against it. An automobile is a type of cargo for our company that is loaded on container. Places will be freed on ships, because imports will be reduced. I believe the Government was to take this decision earlier», Iashvili said. The Caucasus Business Week also tried to contact importers of Japanese right-steering vehicles. A part of them abstained from making comments, while we could not contact another part of importers for comments.

January 16, 2017 #176

REAL ESTATE

The Shock Eﬀect of the Unstable Exchange Rate, and the Dilemma of ‘Larization’ Instability regarding the exchange rate of the national currency has caused problems for the real estate business. The devaluation of the Lari has diminished the capacity of potential buyers to conduct purchases in foreign currency, leading to delays in their decision to purchase real estate. It should also be noted that a large part (more than 60%) of all costs associated with real estate development projects, as well as bank loans, are in foreign currency. Following from all of the above, one must ask whether or not the plans to denominate real estate prices in Lari are justified. General Director of Property Georgia Lika Kardava spoke to the heads of several leading local and international real estate companies about these important issues. PROPERTYGEORGIA.GE

Irakli Kilauridze, Managing Director of Colliers International Georgia: “Instability of the exchange rate has had a negative effect on real estate companies. The majority of potential customers still earn the same salary in Lari, meaning that their capacity to conduct purchases in foreign currency has diminished, especially at a time when the sale of real estate in local currency has become mandatory, while the majority of loan financing is still in foreign currency. Furthermore, a large part of development costs is in foreign currency, and even the part which is in Lari is significantly dependent upon imported raw materials, or is suffering under pressure from stronger foreign currency. When we speak about the development business, we must take into consideration not only the construction costs, but the full structure of costs associated with development. Thus, 15-25% of the development budget for a residential complex is taken up by the cost of land alone (this varies from one area to another, with the cost of land in central districts being higher). Nearly all transactions for land that is designated for development are conducted in US dollars. Moreover, the costs associated with planning, marketing, loan interests and professional services are almost entirely in US dollars, amounting to a further 12-15% of the development budget. As for the costs associated directly with the construction process, which usually take up 60-65% of the development budget, the ratio here is 55% to 45% in favour of the Lari. However, since a significant part of this section is taken up by the payment of salaries, it too is suffering from the devaluation of the local currency. To summarise, between 60% and 75% of the total development budget for a project in Tbilisi (depending on the district) is attached to the US dollar, while the remaining 25-40% is also sensitive with regards to the exchange rate of the Lari. The development budgets for other types of real estate (hotels, offices, shopping malls, etc.) are even more tightly attached to the US dollar, since a larger share is taken up by professional services, loan interests, decorating materials, mechanic and electric items, etc. From a developer’s point of view, it is important for the income currency on the one hand, and for the costs and funding (capital, loans) currency on the other, to be one and the same, in order to minimise currency risks. If regulations make it mandatory for developers to conduct sales in local currency, then mortgage loans should also be issued in Lari, and the funding of the development projects by the banks should be in Lari as well. Local banks do not usually issue funding in Lari at all, or they do so at high interest rates, thereby increasing the costs both for the buyer (in case of mortgages) and the developer (in case of project funding). In a highly competitive climate, this leads to a decrease in profitability, which in turn diminishes the attractiveness of this sector for the investors. As for the international financial institutions, they conduct funding in foreign currency, which will pose high risks for the developers if prices become fixed in Lari. Essentially, this regulation will hinder the flow of foreign investment to the real estate sector. With regards to the commercial real estate developers, we believe that the situation is even graver here. If office or shopping mall developers are forced to fix rental prices in Lariand to change existing contracts accordingly, at a time when they receive funding in foreign currency, then the devaluation of the Lari will create a risk of the projects being unable to service foreign currency debts, or having to do so at the expense of diminished income, which will naturally render this sector less attractive for foreign investors.”

Giorgi Kapanadze – General Director of AXIS: “The instability of the Lari is having an unequivocally negative effect, as real estate priced in US dollars becomes more expensive for buyers who receive their income in local currency. Unfortunately, this leads to a decrease in purchasing power. Ultimately, this environment will have a negative effect on demand. With regards to building materials and costs associated with development projects, these depend upon the company’s orders and the project’s characteristics. There have been cases of specific construction projects having been completed using 80% Georgian materials, while at other times, a similar proportion of imported materials is used. For example, Georgian-produced embedded reinforcement is frequently being used in construction. AXIS predominantly uses materials purchased in foreign currency for its high-value projects – effectively, only the concrete is Georgian. Denominating real estate prices in Lari would be justified if the banking sector was to take helpful steps on its part, offering the developers financial resources in national currency at favourable terms. We have been informed that according to the ‘Larization’plan, in case of long-term acquisition contracts it will be possible to attach real estate price to a certain index, which will mitigate risks both for the buyer and the developer.”

Mariam Asatiani – Owner of Remax-Capital: “It is not so much the devaluation of the Lari that has had a shock effect on the real estate market, as the instability of the exchange rate. Fluctuating exchange rates have an unequivocally negative effect, and will hinder the buyer’s decision to purchase real estate for a certain period, until the exchange rate is stabilised. As soon as a certain degree of stability is achieved, however, the buyer will once again start planning the purchase. Naturally, rising mortgage prices have also had a negative effect, although since the banks have started offering improved loan terms in Lari, and have even offered multi-year fixed exchange rates to the market, this problem has also been resolved more easily. The devaluation of the Lari will clearly have a negative effect on a construction project’s business plan, should the building materials be purchased in US dollars, while the sale of the real estate property is conducted in Lari. I believe that the initiative to fix the prices of real estate in Lari will be almost impossible to implement, as it would lead to the changing of prices on an almost daily basis. It would complicate the pricing and sales process, possibly also leading to a slight rise in prices as developers and property owners will want to insure themselves by fixing prices at the highest expected exchange rate mark.”

January 16, 2017 #176

Interview with MEKO ABRAMIA, brand manager for Corporation Georgian Wine.

“I think PR cannot be taught. It just combines various human features, to put simply, interpersonal skills+ability of management”

PR is Complex of Human Features – Interpersonal Skills+ Management Talent -What are you by profession? - I have graduated management course at Black Sea International University’s business administration faculty. - Your first job place. - Not counting probation periods at various companies, the position of a marketing manager at PSP Pharmacy network was my first job place. - Current job and position. - Corporation Georgian Wine, brand manager. - Your first success. - My first success is related to my first job place. During my studies at university, I passed probation period at several companies. In that period I was seeking specific field for myself and I was not determined which direction to choose for my career. I finished my university studies and I decided to leave for somewhere for relaxation and after that to continue active search of job. Fortunately, these plans changed when PSP company representatives called me and my university recommended my candidacy for a specific position. I was called to an interview, then for tests, then for interview again. Finally, I was selected from among several candidates and I started my job that continues even today and that does not enable me to relax. This was my first success, because I determined myself in a specific field and I like and love the business I do. This decision has changed all my life. - Business, project that you take pride in even today. - I did not have experience in PR and marketing field, when I started working at PSP marketing oﬃce and it was still questionable whether I would justify the credits... I first was assigned to prepare an innovative project. In that period, Smartphone was a novelty, a new trend. I developed a project – mobile application that would be the first software in Georgia with loyal system that would incentivize online sales and consumers would receive desirable products from pharmacies, earn scores, store health history in application, would remind drug reception hours and

“

Crisis situation in the best opportunity to test yourself how efﬁcient you are for the business you do. Naturally, crisis situations inﬂuence the quality of working process. Based on my experience I think I can resolve crisis situations.

would have many other innovative functions. I remember when I submitted my first project, they told me that the project was wonderful, but the company did not have due resources... And then I guessed that the main thing is not to find a job place, but you should take important steps, you should fight for your decisions anywhere. This project was implemented later, when the company acquired due resources. However, I know that this was the first project and nobody had implemented such a project before. Other generations will continue this project and I am very happy that they are successfully developing this project. - The field, where you would never work. - The reality suggests to take efforts in the required and necessary fields. I have gained much experience in various fields, but the finance sector is the space, where I cannot imagine myself working. - What makes a person successful in your field? Besides knowledge, what other special features are required? - Self-confidence, interpersonal skills and ability to cope with emergency situations. - Is it possible today in Georgia to learn PR very well or international knowledge and experience is required? -I think PR cannot be taught. It just combines various human features, to put simply, interpersonal skills+ability of management. Theoretical knowledge is necessary, as it develops certain PR skills in a person, jointly with experience. - Is PR field perceived and understood in Georgia in its classical nature? - Regretfully, today PR is perceived as Facebook sponsorship and media placement. This is considered to be the simplest, quickest and lowbudget way to measure efficiency of activity. - How easily can you resolve crisis situations and take decisions? Does similar cases affect quality of the working process? - Crisis situation in the best opportunity to test yourself how efficient you are for the business you do. Naturally, crisis situations influence the quality of working process. Based on my experi-

ence I think I can resolve crisis situations. I am happy to have worked with big professional teams at all companies and all my decisions were acceptable and successful. - Interesting episode that has changed your life. - There were many similar episodes in my life and I am sure many others will come. Changes are necessary for development. When I take decisions there are always alternatives and perspectives for continuation and I follow them... I think, besides efficacy, you should make your business interesting and you should always take risks. - Without this procession,, where would you work? - I would be a chef, because I like making experiments in the kitchen and by the way, I cook delicious meals in free time. - Strong aspects and features of you, as a businesswoman. - Pragmatics, interpersonal skills, hardworking, purposefulness. - What makes your company interesting for you? - Corporation Georgian Wine has been operating for 16 years and takes efforts for popularizing and sales of Georgian wines abroad. International contracts are interesting and important for me, as well as sharing experience and information exchange with them. Every country is different and there are different demands on each market with their own peculiarities. I have been acquiring much experience in this company in terms of planning PR activities on international markets and collecting international contacts. - What creates major comfort in working process? - I think unhealthy and nonprofessional environment makes major discomfort in working process. - Where do you see yourself after 20 years? - It is difficult to answer this question, because I like making spontaneous decisions. I always change something, I always seek something. I am a person of feelings and new impressions. Therefore, I do not set long-term plans in my life.

GEORGIAN RAILWAY

January 16, 2017 #176

Georgia to Earn Yearly 60 million GEL from Turkmen Oil Transit

nder Georgia-Turkmenistan agreement, for 3 years Georgian corridor will handle 4.5 million tons of Turkish oil and state budget will receive yearly 60 million GEL. The Georgian Party obtained this rights after Caspian Transport company won the tender. Caspian Transit director general Rati Ghvaberia noted that Dragon Oil company, which trades in Turkmen oil had announced tender. About 25 companies were taking part in the tender, including serious competitors such as Witol Trafigura and Enoch. “Our consortium has persuaded Turkmen Party that we are able to transport this cargo through Georgian corridor and will ensure its safe delivery to Batumi terminal and their

supply to various international companies”, Ghvaberia said. This is an unprecedented event. The agreement came into force on January 1 and cargo transportation by ships will start on January 14. “Our consortium owns about 37 ships. Two terminals serve in Kaspi and we implement these operations through these resources”, Ghvaberia said. The 2016 practice has proved that we are able to serve this volume of cargo. The company plans to increase this volume further, he added. As reported, under the agreement with Turkmenistan, 1.5 million tons of Turkmen oil will be transported through Georgian corridor every year. Georgia’s yearly revenues will be

about 60 million GEL. Agreement with Turkmenistan proves the confidence towards our country, David Chivadze, head of GR Transit company, a subsidiary of Georgian Railway, noted. Previously, it was very diﬃcult to sign similar agreements, he added. “This is a genuinely unprecedented agreement. The 3-year contract signifies stability in our country and confidence in Georgian Railway. Naturally, it was diﬃcult to sign such an agreement. Both government and Georgian railway management have provided active job to direct cargo to Georgia. Good conditions and valuable operation of Georgian Railway created our advantage”, Chivadze said. Such major cargo consignments will attract additional smaller volume of cargoes, he added.

As reported, in 2007-2008, about 600 000 tons of oil was transported through Georgia. After August 2008 developments, cargo was redirected to Novorosiisk seaport through Makhachkala. Starting 2013 Georgian Railway management was conducting active negotiations for attracting Turkmen oil and oil products to the Georgian corridor. «After 7 years, Turkmen cargo has returned to Georgian corridor. After the first successful consignment in 2015, Georgian corridor handled 1.3 tons of Turkmen oil in 2016. According to the achieved 3-year agreement, Georgian Railway corridor will handle 1.5 million tons of oil and oil products every year», Georgian Railway representatives noted.

Smart Capital: Davos to Host Caspian Week Business Forum

n January 16-20 Davos will host Caspian Week business forum that is organized by Swiss Integral Petroleum and its Georgian partner oil products transporting company – Smart Capital. Objective of the forum is to intensify employment of Caspian-Black Sea and Silk Road resources and to create business development opportunities in the region. The Forum will be attended by representatives of business sector, global financial institutions, banks, logistics and transportation companies, manufacturing and investment companies and Silk Road countries, including Georgia. At the Forum experts will introduce regional development perspectives and new business opportunities in

transport, investments attraction, healthcare and human resources management, infrastructure development and energy issues. The Forum provides a good platform to introduce the Region’s resources to businessmen and outline new opportunities for business development, Smart Capital founder Vano Chkhartishvili said. «It is Georgia’s interest to attract as many cargo as possible and increase the role of our country, as a a key transport and energy hub of Silk Road. Over the past years our company has handled millions tons of oil products via Georgian railway and seaports. We hope after the Forum we will increase cargo turnover and create new job places. The Forum will be held every year», Vano Chkhartishvili said.

BUSINESS

January 16, 2017 #176

Treepex-A Successful Georgian Startup Appeared on the US Market Georgian start-up Treepex will start functioning in New York in 2017. According to one of the authors of startup, Bacho Khachidze, this project will enable business companies and individuals to get involved in tree planting process with the means of web and mobile applications. „Treepex is an innovative way to involve business companies and individuals in the tree planting process. With the help of web and mobile application, users can choose the tree and plant it after her/his name or devote it to their beloved ones. 5000 trees have already been planted and the project started a year ago. At this stage, in the frame of the project, trees have been planted in Borjomi and Ajameti protected territories. It is planned to plant trees in Tbilisi as well.

MADE IN GEORGIA

STARTUP

“Flying Painter”-A Place Where Clothes are Created as a Work of Art Karamaniani. “Karamaniani” is inspired by Persian herotic epos and tells about the dreams seen over nine mountains and adventures of heroes wandering under seven skies. Karamaniani clothes are made for heroes and people looking for crazy adventures. How did you maintain the clothes made in “Nino” in your shop? During 80s , there were boxes of clothes made in that factory for many years. Pressumably, before USSR fell apart, there were a lot of clothes made and part of it was sold but part of it was left unsold. The clothes were kept and waited the light of the day. How did you open the shop? Eka Ketsbaia was oﬀered to open the shop in the former factory. Eka invited others and the idea of “Flying painter” was created. We have been working a lot on the concept of the shop and creating a diﬀerent and interesting space for a long time. The shop was opened at the beginning of the November.

“The Flying Painter” is a shop and workplace which is located in “Fabrika”, Tbilisi. The shop unites three directions: Conceptual clothes and accessories created by artists and Soviet vintage. “Flying Painter” reanimated the story which was based on clothes factory “Nino”on Ninoshvili street in 1970 and the movie “Nino” which was madein 1937. Artist and curator, Mariam Natroshvil talks about the history of the shop and exhibited works. Tells us about the shop, what is the concept of “Flying painter”? The clothes and accessories created by Georgian artists and

designers are sold in the shop. The shape and content of the items exhibited here is unique: Each of them has their own history and tells us a different story. If you want to travel in time, you can also buy clothes made in 80s in Factory “Nino”. The shop also offers you the clothes made in the shop. All the items made in “Flying painter” is work of art to wear. What do you offer customers? Our shop focuses on art, works and creations of artists- clothes and accessories.Here,you can buy clothes made in 80s, or clothes made in the shop. The first project is called

NEWS

WINE

More than 60 Types of Cheese to be Produced in Teleti Factory

19-year-old from Kiziki Created his own Brand

In the following days, Teleti Cheese New Factory will start functioning. As one of the factory founder, “Cheese House” founder, Ana Mikadze-Chikvadze says, the factory is determined to produce more than 60 types of cheese. “I’m going to produce all the cheese based on the recipes I have been collecting for years. My partner bought the land and buildings in Teleti for the factory by auction. I gained the grant, we united our strengths and built a new factory which will only produce the cheese”-says Ana.

ENA Textile Plant to Open in Ozurgeti in 6 Month ENA Textile Turkish company is interested in constructing a clothing factory of the world’s famous brand of Zara in Ozurgeti, Guria Region. ENA Textile will invest several millions of USD in Ozurgeti. The plant will employ about 1000 local residents and will operate on a 2-3 hectare land plot. Spanish and Turkish parties have already reached agreement. The Turkish company representatives will visit Georgia on January 16 to sign due agreements, the Guria Governor noted.

Jemal Khatiashvili, who lives in the village of Tibaani made wine from his grapes in the vineyard and the poured the wine in the bottles. Then, he put the cheese in the wine and produced a new kind of cheese. He created a new brand and tourists liked it very much. Our vineyard is located in Signagi region in the village of Tibaani. I started everything when I was 14. That was the first time I made wine by myself. My family was always actively involved in the viticulture. I learned it from my family. To start a business was my idea and I succeeded in it. – What did it feel like to start producing the wine to sell for the first time? -It was an amazing feeling. I could not imagine if I could make the wine and sell it on such a large scale. I was 14 when I first made the wine but it was for family and friends. 3 years later I opened it and we liked it a lot. I liked the process so much that I decided to produce more wine. I was proud of myself. -I know you produce cheese as well… Producing of cheese is connected with my parents. They started this business few years ago and then I overtook the business. I decided to put cheese in my wine and produce it that way. I created a brand which unites all my activities. -What kind of aroma and taste makes your cheese unique? – I put the cheese in Saferavi which has a very strong wine aroma. It is especially delicious when you put the cheese in red wine. Do you have any new plans for the future? -First of all,I want to develop my brand and introduce to more people. I want people to taste my wine and cheese and I want to sophisticate my products.

Tell us about yourself, who are the founders and what kind of experience do you have in this field? Artist , Eka Ketsbaia and Natuka Vatsadze are the members of the group”Bulioni”. Bobo Mkhitari is a graphic designer. Mariam Natroshvili and Detu Jincharadze are artists and curators. We met each other during the interveiw. Mariam and Detu were interviewing “Bulioni” for the newspaper “Revolver”. This is how our friendship and collaboration started. Except shop, we collaborate with each other in many art projects. We are all artists and our aims are common. What news does “Flying Painter” oﬀer to the customers? In the future, “Flying painter” is going to collaborate with artists who have never tried creating clothes or accessories. The results of this experiment will be exhibited in the shop and it will oﬀer the society work of art you can wear.

Georgia’s First Jacket Manufacturer to Compete with Imported Products ATA, Georgia’s first manufacturer of jackets and ski equipment, plans to compete with imported goods. The company was founded several months ago and initially, it produces jackets and waterproof trousers for 3-15 year old children. Retail prices of jackets start from 39 GEL. Georgian product is not of lower quality compared to European analogues and the production standards are satisfied by 100% – clothes are waterproof and healthy (breathable). ATA company actively cooperates with Carrefour hypermarket, where ATA goods are sold since December 2016. As to other networks, ATA representatives noted that negotiations are not underway at this stage. “This is a new brand and we have limited potential of production. Negotiations will be underway with other networks after we expand our production”, the company representatives noted. In the future the company plans to add textile production chain. The company has already produced ski equipment that will appear in retail chain starting January 11. ATA also plans to activate the line of special clothes. This sort of cloths are mainly imported to Georgia, while the company has already fulfilled similar orders, including for Security Police structure. ATA company may also show interest in Produce in Georgia state program.

January 16, 2017 #176

WOMEN

Business is a style of life, not job place DAVID BAGHASHVILI

he Caucasus Business Week (CBW) introduces an interview with Maia Bibiluri, member of Women for Tomorrow association and director of BTL Georgia. The company operates in business tourism field, covers several directions (Business Travel & MICE) and is one of the major, successful and reliable companies on the market. BTL Georgia functions exclusively for B2B market.

- Mrs. Maia, how did you undertake your business? - I was born in 1967, in Soviet Georgia. I graduated from a Russian-language secondary school and then I finished a university faculty of cybernetics and applied mathematics. From my first grade I wanted to become a mathematics teacher, because I wanted to explain this or that issue to pupils in my own way. For example, in my studentship years, I used to teach secondary school graduates. Based on “conduct” of trigonometry functions, I substantiated that the sinus was a male and the cosine was a female. After that no children has forgotten these formulas. After university graduation I went to aviation sector and worked for Georgian airlines for 18 years. Having seen my personal and professional advancement ceased, I accepted an offer from a startup airline and continued studies abroad. In this way I arrived in the USA and spent several months on studying various courses. After I returned to Georgia, the airline suspended operation and for 6 months I stayed unemployed. Despite all efforts I could not find the vacant position of even a maid. In that period BTL founder arrived in Georgia for opening a domestic representation. In the process of staff selection, the company director took into account recommendations of my friend, as well as my experience. After an interview, I was offered to occupy the position of a director in the company. This was my first steps in business, because previously I had not worked as a manager. Thus, I came to business at my 42. - What challenges have you faced when undertaking this business? - The main challenge was that I did not have experience in doing business. I had been a hardworking and tireless worker every time, but I lacked for knowledge. I considered business to be a job, but it turned out a style of life. From the very first steps, I realized that the main thing was to settle relations with people with whom I had to do business. It is important that all individuals around you be as motivated as you. They must be sure they are able to make the best company without any doubts. - How have to overcome these challenges? - First of all, I started studying key principles and formulas of doing business from the BTL Ukraine director and founder. I understand everything better in the form of formulas. Then I got through a final stage of Swedish program and learned strategic business management. As to our team, I has individual attitude to my employees and my position of a director just made me more responsible. In all other issues we are one team and we stand side by side in any case. If you want to arrange a genuine team, you should correctly distribute priorities, first of all, upon the people with whom you do business. And a company is shaped in this way. Only after that you have moral rights to think of your own welfare. - What does BTL Georgia represent today? - BTL Georgia is an only major and successful company on our market. We work on only business segment and we try to make contribution to tourism sector development, namely, to business tourism development. Initially, we hired only three employees. Now our team consists of 25 persons. As part of National Tourism Award project, in 2015 we won the Best Business Tourism nomination of the first national travel awards Welcome to Georgia, while in 2016 we won the Mice

“Our key advantage consists in the fact were make focus on clients, flexible and high-quality services thanks to independent, tireless and professional staﬀ”

I think the main problem for a businesswoman is a relation between family affairs and business. I cannot name other special problems. Would I have achieved anything easier being a male?!

Report Awards 2012 “Best DMC Georgia” (Meetings, Incentives, Conferences, Event And Exhibitions). -This is a very difficult field that requires experience, professionalism, risks and luck. How have you managed to cope with al these tasks and what is your advantage compared to other competitors? - This is a genuinely difficult and diverse field. Despite tourism is a priority field, it is very difficult to search out professional staff. In practice, we have to grow personnel ourselves. We appreciate every employee. Therefore, we show individual approaches to each of them to shape such a team. Our key advantage consists in the fact were make focus on clients, flexible and high-quality services thanks to independent, tireless and professional staff. Naturally, we also take erroneous decisions, but the whole team gets involved in the problem resolution process and we overcome all difficulties in this way. - Have the job of so many years justified your expectations? - We are proud of all content clients and successful projects. There are cases when we lose tenders despite customers want to cooperate with us and they wait for a new tender to continue cooperation with us. There are moments when you guess your abnormally heavy job have brought real results. I would not specify any project. Our company is famous and popular. It occupies certain niche thanks to all projects implemented by us. - What is the key challenge before the company at this stage? - Like all business, major challenges arise when moving to a new stage of development. A company always needs stability, but continuous development is also very important for both the company and each member of the team. In 2016 we founded BTL Azerbaijan and the whole team is working on making BTL Azerbaijan successful and profitable. Joining PCO (Professional Conference Organizer) is the next phase and the nearest key challenge for our company. We also want to participate in international projects as partners and organizers. A mega business forum IBF (International Business Forum) will be held in Batumi in 2017. We are official partners of the forum and our objective is to draw as many guests as possible and successfully hold the business forum. - The issue of businesswomen has been actualized over the past years. What problems do

women face today? Where do real problems exist and what are real needs in this direction? - I think the main problem for a businesswoman is a relation between family affairs and business. I cannot name other special problems. Would I have achieved anything easier being a male?! - You are active member of Women for Tomorrow business association. How would you appraise performance of this organization? -Business association of women is a rare case, when you realize the association has not established for formality, because motivation for growth brings real benefits and you go to any meeting with joy. Therefore, I welcome all similar activities and experience. - Do you personally plan to take efforts in new business? - At this stage I do not plan to launch new business, but I have thought of any other business activities that are close to our current specialization. Maybe, the time will come to take new efforts too. - The ways and instructions of how to undertake business and achieve success is an ordinary topic of trainings and public lectures. What do you think how should we undertake business? - This is an interesting question. I would not act as a mentor, because even I am “a beginner” in business. Nevertheless, based on my experience and past way, I would answer the question in this way: You should not undertake business if: • You do not believe in success; • You have not analyzed risks and outcomes; • You are not hardworking (readiness for working for 24 hours) • you are not able to withstand and resolve problems • you do not like people • you are insolent and strive for leading positions (especially at initial phases, full involvement is required); • you do not have strategy and plan on how, where and how to move; - What would you suggest to beginner businessmen? - I would not make suggestions, because even I do not always follow suggestions. I would just say that business is not a job place. It is a style of life, because everything changes in the process of building and management. Maximally healthy and free environment is the most important thing for people who should work jointly with you, because discontent employee will never bring good results.

PUBLICITY

January 16, 2017 #176

WORLD NEWS

January 16, 2017 #176

Quotes

“ You’re never too “We are expecting these logistical issues to continue in Black Sea ports for next few days,” Wibke Baars, a consultant at Parisbased farm adviser Agritel, said by phone”

old to set another goal or to dream a new dream.

”

“ASEAN, South Asian and Central Asian countries as well as China, Russia and Mongolia are already embracing crossborder energy connectivity.”

C.S. Lewis

Black Sea Freeze Hitting Major Ports Spurs GrainCrunch Concern The cold blast across eastern Europe is raising concerns about a grain-export crunch as icy conditions restrict navigation at some of the region’s most important ports. Blizzards and gales are curbing movements of vessels at Bulgaria’s Varna port and navigation in the Hungarian part of the Danube river has been suspended. Romania’s major grain-exporting hub of Constanta was disrupted this week and at least three ports in Ukraine’s Odessa region have limited ship maneuvers due to ice. As forecasters expect another cold spell next week in Ukraine, one of Europe’s top wheat and corn shippers, traders are concerned ports may close again and slow exports. The Black Sea region accounts for about a quarter of the world’s grain shipments and further disruptions may help boost wheat and corn prices that reached multi-year lows in 2016. “We are expecting these logistical issues to continue in Black Sea ports for next few days,” Wibke Baars, a consultant at Paris-based farm adviser Agritel, said by phone. “If colder conditions continue and it slows loading even more, then we could see an impact on prices.” Traders are also closely watching weather conditions because severe cold can damage crops during winter dormancy. While temperatures plunged from Russia to Poland,

crops have mostly been protected by an insulating layer of snow. In Bulgaria, ship movement is suspended in some parts at the port of Varna, while terminals at Burgas have reopened after closing Tuesday, the Bulgarian Ports Infrastructure Co. said Thursday. There’s no information yet that grain exports will be impacted and shipments are taking place as normal, the Agriculture and Food Ministry said. Romania’s Constanta port reopened Wednesday after being closed overnight. Ice-related restrictions mean ship loading may be slightly slower in Reni, Izmail and Ust-Dunaysk in Ukraine’s Odessa region, according to a spokesman for the nation’s Administration of Seaports, and the Infrastructure Ministry. Other ports in Bilhorod-Dnistrovskyi, Mykolayiv, and Oktyabrsk have taken similar measures. In the Hungarian section of the Danube, ice breakers are in use near Gyor by the Austrian border and on the Tisza river close to Szeged near Serbia to clear way for ports, a spokeswoman for the National Water Authority said. Hungary is a large corn producer. Temperatures may be as much as 20 degrees Celsius (36 degrees Fahrenheit) below normal in parts of eastern Europe next week, said Kenny Miller, a meteorologist at MDA Weather Services.

First multimodal transport from Europe to Iran, via Armenia, was conducted in 2016

he year 2016 was pretty diﬃcult for the railway of Armenia, and the South Caucasus Railway (SCR) CJSC was working in conditions of strong competition, SCR Director General Sergey Valko stated while summing up the company’s activities in the year past. In his words, they managed to ensure the railway’s revenues at 100.7 percent of the envisioned indicator. The company director also noted that the first electric train that underwent a ТР-3 repair in Armenia was put into operation, and the first multimodal transport—also

known as combined transport, is the transportation of goods under a single contract, but with at least two diﬀerent means of transport—from Europe to Iran, via Armenia, was conducted in 2016. Valko added that the 2016 exports by way of Armenia’s railway exceeded the 2015 indicator by 9 percent, whereas the imports reduced by 18.5 percent. The SCR chief also informed that 12.7 km of railroad tracks in Armenia were fully renovated in the year past. Sergey Valko added that railway passenger commuting increased by 12.1 percent, in 2016.

Regional Solutions Key for Baku-TbilisiKars Railway Asia-Pacific’s Transition to to Go into Ser- Sustainable Energy vice Mid-2017 Baku-Tbilisi-Kars railway will go into service in mid-2017, Turkey’s Transportation Minister Ahmet Arslan said Saturday, Anadolu reported. The minister’s remarks came in Ankara during a press briefing on the year review. “We will finish the Baku-TbilisiKars railway project in mid-2017 and the railway will go into service,” said Arslan. The Baku-Tbilisi-Kars railway project is expected to link London with Beijing. The railway is being built in accordance with an intergovernmental agreement reached by Azerbaijan, Georgia and Turkey. It is expected to increase the flow of containers and other types of cargo from Asia to Europe.

Turkey to offer citizenship to foreigners who buy $1 mln in property, invest $2 mln Turkey will grant citizenship to foreigners who buy properties worth at least $1 million and invest a minimum of $2 million or deposit at least $3 million in a bank account for more than three years, according to a revised decree that was published in the Official Gazette on Jan. 12, Doğan News Agency reported. “Foreigners who buy a minimum of $1 million worth of immovable properties on the condition that they do not sell them for at least three years, who make an equity investment worth over $2 million or who prove that they have made a deposit of more than $3 million at a Turkish lenders or kept that amount of money in the country’s debt instruments for a minimum of three years will be granted Turkish citizenship,” said the decree. The decree also stipulated that foreigners who document their creation of a minimum of 100 jobs in the country will also be offered citizenship. Meanwhile, Turkish real estate companies earlier claimed they could sell a minimum of $10 billion worth of property to foreigners if citizenship or residence permits were offered to foreigners who buy houses in the country.

he Asia-Pacific region is at a turning point in its energy trajectory. The energy solutions that have fuelled growth in the region over the past few decades are no longer compatible with the sustainable development aspirations of our nations and their people. In transitioning to a new era of sustainable energy, policymakers across the region face complex decisions. Supplies must be secure and aﬀordable, and they must fill the energy access gap which leaves half a billion people across the region without access to electricity. At the same time mitigating the local impacts of energy generation and use will be vital in resolving problems such as the air pollution choking our cities and the global consequences of greenhouse gas emissions causing climate change. Solutions exist, but only through regional cooperation and integration can Asia and the Pacific transition to sustainable energy in time to meet the ambitious 2030 Agenda for Sustainable Development and its Goals. Countries have committed to moving towards a more diverse and low carbon energy mix through the 2030 Agenda and the Paris Agreement on Climate Change. However, fossil fuels stubbornly remain a major part of the regional energy mix, making up three-quarters of electricity generation. Unless the region’s countries work together to accelerate the incorporation of sustainable energy into their strategies, business-as-usual approaches will result in a continuation of fossil fuel use and associated impacts. While some countries suﬀer from energy shortages which limit their economic and social development, others enjoy energy surpluses, such as hydropower and natural gas. Trading these resources through new crossborder power grids, drawing on renewable energy when possible, as well as gas pipeline infrastructures, can open up enormous opportunities for both economic growth and decarbonisation. The energy technology renaissance already underway in some countries is playing a vital role in the transition. New technologies are reducing the cost of clean energy and renewable power. Smart grids and electric vehicles are rapidly gaining market share. Since 2010, the cost of solar power generation has declined by 58 percent,[1] with the cost of wind power down by one-third. The International Renewable Energy Agency projects cost reductions of 59 percent in solar power and 12 percent in wind power within 10 years, edging below fossil fuel electricity costs in most Asia-Pacific countries. Advances in long-distance power transmission technologies enable the linking of renewable energy resource-rich areas such as the Gobi Desert, Central Asia and far eastern Russia, with distant population centers. Asia-Pacific has emerged as an engine for clean energy, both as a manufacturing center for renewable energy technologies and as the leading region for deployment, with $160 billion

invested in renewables in 2015. On the demand side, energy efficiency technologies have an important role to play in the energy transition. Better energy efficiency is a key driver in decoupling energy use and GDP growth in many economies. With 15 percent of the world’s electricity consumed by lighting,[2] efficient LED lighting technology, which consumes up to 85 percent less energy, will make substantial savings. Energy storage technologies for vehicles and power applications have also leapt ahead, offering flexibility in power usage and balancing variable electricity generation from renewables. Here again, regional cooperation, technology transfer and south-south collaboration will play a vital role in the transition. Despite these encouraging developments, the success of the energy transition will require sustained commitment at national and regional levels through better policies, incentives and allocation of investments. The inertia of the existing energy sector is considerable, with its long-lived assets and entrenched institutional arrangements. Regional cooperation, through sharing of policy experiences, building capacity and mobilizing finance can play a significant role in assisting countries to implement their own energy sector reforms and capture the many co-benefits. The importance of regional energy cooperation is evident in the transboundary nature of many prominent energy challenges – improving regional energy security, managing air pollution and establishing cross-border energy infrastructure. ASEAN, South Asian and Central Asian countries as well as China, Russia and Mongolia are already embracing cross-border energy connectivity. Initiatives such as the CASA 1000 and the ASEAN Power Grid will allow low carbon energy from gas, hydropower, solar or wind to be traded across borders. Long-term regional dialogue is required to further develop these complex and infrastructure-intensive initiatives. Connecting countries, finding regional solutions and promoting regional standards and guidelines has been at the core of the work of the United Nations Economic and Social Commission for Asia and the Pacific for the past 70 years. We recognize the need for regional energy cooperation, and with the support of our member States established an intergovernmental Committee on Energy that will meet for the first time in Bangkok, 17-19 January. Through the Committee, countries will help to map out key regional energy solutions for the region such as accelerating uptake of renewables and energy efficiency, establishing cross-border energy connectivity, promoting regional approaches to energy security, and providing modern energy access throughout the region to ensure a sustainable energy future for all. Through regional cooperation and integration I am confident that the countries of Asia-Pacific region can transform their energy trajectories to better serve their people, the region and the planet.

PUBLICITY

January 16, 2017 #176

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

January 16, 2017 #176