Caucasus Business Week #188 by Caucasian Business Week

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April 10, 2017 #188

April 10, 2017, Issue 188 - www.cbw.ge

AGL Shuakhevi HPP will be commissioned in 2017 Pg. 7

TBH Corporate Income Tax Reform in Georgia Pg. 9

As Easter Arrives Business Sector Expects Higher Spending

Teona Dumbadze: Limits Like Fears are Often Just An Illusion Pg. 8

Tourism in Georgian Economy: Only Industry Growing Constantly Revenues from tourism sector grow on annual basis and reach record figure. Despite two regions of Georgia have been invaded, tourists consider Georgia to be an attractive country anyway. Over the past 10 years, tourism is an only sector in Georgian economy that grows on annual basis, despite global or regional crisis periods. It should be also noted that tourism sector has become one of the important sources for currency inflows to the country. According to the statistics of national tourism administration, the year of 2016 and the beginning of 2017 were especially successful in terms tourist and currency inflows from tourism sector. According to March 2017 indicators, 511 045 visitors arrived in Georgia, up 13.% (+59 308 persons) year on year. Pg. 4

Owing Agricultural Land Should Not Determine Someone’s Citizenship The issue of selling the land to foreigners is the subject of discussion lately. There have been loud talks, discussions and debates upon the mentioned issue, even though the moratorium was announced for a while for the foreign citizens. At present time, the Constitutional Commission is working on making a clear report on this issue. Clearly some decision has to be made. It’s a fact, that number of lands sold to foreigners, have not been cultivated since purchase. It is also a fact that for the most of people it is unclear the reason why foreigners are buying lands if they do not cultivate them or do not implement the investments. In other words if they are not be able to (or don’t want to) gain the benefit from it, what is point buying them? First of all we must identify and fight against these causes. Mostly, foreign citizens buy the agricultural land just to get the resident permition in Georgia. Pg. 11

2 GOVERNMENT

NEWSROOM The Government is Preparing for Free Trade with India Delegation of Ministry of Economy, supervised by Minister Giorgi Gakharia is traveling to Delhi. The PM considers that Georgia should use its potential completely and become regional hub.

Parliament Approves Legislative Amendments on Tobacco Smoking with the 1st Reading The Bill envisages prevention norms on the harmful eﬀects of tobacco production and consumption. Tobacco smoking will be banned in some open space and gatherings.

ECONOMY

Georgia’s External Debts Mark 15.5 bln USD As of December 31, 2016, as compared to 2015, Georgia’s external debts have grown by 416 million USD and totaled 15.5 billion USD. Georgia’s external debts accounts for 108% of the 2016 GDP.

Georgia’s Annual Inﬂation Totaled 5.4% The monthly inflation rate was mainly influenced by price changes for the following groups: In the reporting period monthly inflation rate was mainly formed by price increase for food and nonalcoholic beverages.

BANKING

March Records 5.5% Upturn in GEL Exchange Rate against USD According to a monthly report by National Bank of Georgia (NBG), real eﬀective exchange rate of the national currency rose by 2.4% in February, while nominal eﬀective upturn constituted 1.1%.

TBC Bank Inks Three Loan Agreements Worth USD100 Million TBC Bank Group PLC said it has signed three loan agreements for a total of USD100 million, denominated in Georgian lari, with the European Bank for Reconstruction & Development.

BUSINESS

Fuel import increased in Georgia through March According to Union of Oil Product Importers, import of petrol and diesel has made up 83, 6 thousand t in Georgia through March, which exceeds by 11, 3 t thousand t i.e. 15, 6 % comparing to the index of February.

China is ranked as the 2nd in the Rating of Wine Export Market Wine export is increased by 85% y-o-y. According to Wine National Agency, 14, 2 million bottles (0, 75 l) are exported from Georgia to 38 countries through January-March with a total value of 32. 3 million USD.

COMPANY

Production of Famous Beer Hollandia starts in Georgia The beer is produced with the oldest German traditions and recipe of the famous family in the Netherlands (Lieshout) by the license of famous Bavaria N.V.

April 10, 2017 #188

World experts shape future for Georgia’s mountain tourism

undreds of top oﬃcials are now in Georgia’s capital, Tbilisi, discussing innovative methods to better position the country’s ski resorts on the international marketplace. Developing Georgia’s winter wonderlands into four-season mountain resorts is the focus of a third Euro-Asian Mountain Resorts Conference. The overall goal is to expand of the country’s ski tourism market and ensure its steady, sustainable growth. More than 65 percent of our country’s territory is mountainous. Diﬀerent research has shown that Georgia’s ski resorts have the potential to generate over $300 million from tourism. Taking into account all these reasons, the Government of Georgia has amassed substantial financial resources and applied them to development of our mountain resorts,” said Georgia’s Prime Minister Giorgi Kvirikashvili at the conference.

The PM talked about recent developments in Georgian mountainous areas. These include the opening of Goderdzi in the mountainous Adjara region and Tetnuldi in the highland region of Svaneti. In addition, the Government has started to design the general development plan for different resorts [such as Bakuriani, Tusheti, Mestia and Bakhmaro]. The idea is to turn all the resorts into four-season destinations. The four-season mountain resort concept will offer tourists different attractions at all times of the year,” said Kvirikashvili. The reason for developing Georgia’s mountainous areas was not only to offer better living conditions for the local population or improve facilities for domestic travellers, but also to cater to the growing number of international tourists. Georgia’s efforts to make the country’s ski resorts popular as tourist spots appears to be paying off – the number of visitors is increasing steadily.

Within the last five seasons, the number of travellers visiting Georgia’s ski resorts has increased by 800 percent. Besides, Georgia aims to host a variety of international championships for winter sports. For this reason Georgia is striving to develop its ski resorts in a way that boasts international standards,” said Kvirikashvili. The conference, organised by the World Tourism Organisation (UNWTO), the Government of Georgia and the Georgian Mountain Resorts Development Company, will continue tomorrow as well. About 300 delegates from diﬀerent countries are attending the third Euro-Asian Ski Resorts Conference in Tbilisi. Under the title ‘Innovative Strategies for Sustainable Mountain Tourism Development,’ international experts are discussing current and future challenges, illustrating success stories and creating a platform to exchange of innovative initiatives.

New shuttle train to Kutaisi Airport opens in 364 days

he countdown has started - in 364 days it will be possible to get in the Kutaisi International Airport with the new railway.” With these words Georgia’s Prime Minister Giorgi Kvirikashvili switched on the countdown board yesterday at Kutaisi International Airport showing the remaining construction time of the new railway. After laying the foundation for the new three kilometres railway, the PM said this was another step towards making Kutaisi an attractive touristic, logistic and transport centre of Georgia. The new line will start from the capital of Tbilisi and reach Kutaisi International Airport. It will also be a part of the larger Georgian Railway network. When the construction of

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new railway and its station is completed, all passenger trains moving from east to west and vice-versa will stop at Kutaisi International Airport – an airport which is known for its cheap international flights to other European countries. Together with this station Kutaisi International Airport will become the most important centre, where all our citizens will be able to enjoy aﬀordable visa-free travel to Europe,” said Kvirikashvili. Building the new railway to Kutaisi is part of the Government’s four-point reform agenda and Spatial Arrangement Plan, which aims at modernising infrastructural development in the country. Kutaisi International Airport, also known as David the Builder Kutaisi International Airport, is located 250 km west of Tbilisi, in the third largest

city in Georgia. It is one of three international airports currently in operation in Georgia, alongside Tbilisi International Airport and Batumi International Airport near the Adjara Black Sea resort. At present, travellers through Kutaisi International Airport usually either take a direct shuttle minibus to Tbilisi, or a local minibus to Kutaisi, and then train or bus from there. The railway station that is closest to the airport is Kopitnari, about one kilometre away. Both Tbilisi and Kutaisi airports have experienced strong growth in traﬃc in recent years as Georgia’s tourism boom continues. Tbilisi is building a second terminal building, while Kutaisi recently marked the opening of many new direct flights to European cities, including London.

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

April 10, 2017 #188

PUBLICITY

ECONO-MIX

Tourism in Georgian Economy: Only Industry Growing Constantly

Jun Yao I Head of the Georgian-Chinese Chamber of Commerce

The Georgian wine accounts for 1% of the Chinese wine market

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Merab Janiashvili Economic Analyst

According to March 2017 indicators, 511 045 visitors arrived in Georgia, up 13.% (+59 308 persons) year on year. According to National Tourism Administration, number of international tourists, who have stayed in Georgia for more than 24 hours, made up 219 642 persons, up 28.6% (+48 807 persons) compared to March of 2016.

In 2016 Revenues from International Tourism Totaled 2.2 billion USD

evenues from tourism sector grow on annual basis and reach record figure. Despite two regions of Georgia have been invaded, tourists consider Georgia to be an attractive country anyway. Over the past 10 years, tourism is an only sector in Georgian economy that grows on annual basis, despite global or regional crisis periods. It should be also noted that tourism sector has become one of the important sources for currency inflows to the country. According to the statistics of national tourism administration, the year of 2016 and the beginning of 2017 were especially successful in terms tourist and currency inflows from tourism sector. According to March 2017 indicators, 511 045 visitors arrived in Georgia, up 13.% (+59 308 persons) year on year. According to National Tourism Administration, number of international tourists, who have stayed in Georgia for more than 24 hours, made up 219 642 persons, up 28.6% (+48 807 persons) compared to March of 2016. Representatives of our neighboring countries are leaders on tourism map, but particular growth is recorded from Iran: In March 2017 a major part of visits was registered from Azerbaijan (+11.1%), Armenia (+11.2%), Turkey (-17.1%), Russia (+16.5%) and Iran (+194.8%). It should be noted that tourists inflow from Iran seriously declined after the parliament of the previous convocation abolished the visa-free regime. However, the Government realized its mistake soon and, as a result, number of Iranian tourists is growing every year. According to National Tourism Administration, positive trend is maintained with EU countries too. In March inflow of tourists from Poland rose by 39%, France +38%, Germany +19%, Greece +18% and Lithuania +17%, however, along with EU countries, considerable growth was recorded from eastern countries, namely from Iran +195%, India +182%, Egypt + 199%, Uzbekistan +97% and Israel +93%. According to January-February indicators, transactions made by international tourists by foreign payment cards constituted 293

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In recent years, Georgian wine is actively exported to China. In 2017, it grew by 280%. What is the reason for this trend? There are several factors. The first is the activity of the Georgian government in this direction. The Georgian Embassy in China and the National Wine Agency are working very actively to increase the recognition of Georgian wine in China. The second factor is the attention of the Chinese government to Georgia, in particular, the interest in its participation in the Great Silk Road project. Proceeding from this, the Chinese government is interested in deepening relations with Georgia. There is the third factor - the growing interest of Chinese business in Georgia, which in turn leads to an increase in interest in Georgian products. Houses of Georgian wine have already been opened in China, ads are shown on TV and other media in order to increase sales in China. But all this is just the beginning - now Georgian wine occupies only 1% of China’s wine market. Imagine what will happen if we increase this figure up to 10%. Can we say that the goal of promoting Georgian wine on the Chinese market is fulfilled? I think that soon the Georgian wine will be one of the leaders in the Chinese wine market, but this requires time and a very active advertising company. In China, little is known about Georgia, and first of all it is necessary to increase the recognition of the country. Apart from that, Georgian manufacturers should study the Chinese market which is very different from both Russian and European ones. All Chinese people prefer to buy cheap and at the same time quality goods. Therefore, many companies are trying to keep low prices by reducing quality, and this is a very big mistake. This can forever shut down the Chinese market for the Georgian wine, since the Chinese do not need anything of poor quality. There is one problem – many Georgian companies enter the Chinese market to get a one-off benefit from cheap and very low-quality wine. This greatly spoils the image of Georgia, especially in a situation where the Chinese consumer has just begun to show interest in Georgian products. The Georgian government must tighten the laws on the quality of the wine. The Chinese market is a completely different world which needs a different approach. If the Georgian wine loses the trust of Chinese consumers, then the market will close fot it. A considerable amount of falsified Georgian wine is supplied to China from some Chinese regions, as well as from Kazakhstan. They spoil the reputation of Georgian wine, that’s why exports to China should be tightly controlled by the Georgian government. Wine from which countries is the main competitor of Georgian wine in the Chinese market? Mainly French and Spanish wines that have been sold in China for many years, and its recognition is much higher. In general, the Chinese market is 90% designed for an average price level. 10-12% of the population are either very rich or very poor. As a rule, the quality of wine is higher than its price, and this is the best way to provoke consumer interest and win the market. The most important thing is that the Chinese people start drinking Georgian wine, and we do everything necessary for this. How many houses of Georgian wine are currently open and what are the plans for the future? To date, there are 25 Georgian wine houses in China, in the near future it is planned to increase their number to 100. We every day hold talks, and the interest in Georgian wine is quite large. However, the Wine House is not only a wine shop, but a house of culture, where you can get acquainted with Georgian culture, which is closely connected with winemaking. Such objects are precisely aimed at increasing the recognition of Georgia in our country.

April 10, 2017 #188

065 thousand GEL. According to the Tourism Department, in 2016 revenues from international tourism equaled to 2.2 billion USD, up 11.9% (+230 million USD) year on year. It is worth noting that in 2016 revenues from tourism sector exceeded the amount of foreign directs investments (FDI) by 555 million USD and this fact reaﬃrms that tourism sector is a priority direction for our country. Georgian Prime Minister Giorgi Kvirikashvili has talked about achievements in tourism sector at the inauguration of international conference for European and Asian Ski Resorts of UN World Tourism Organization. «Over the past 5 seasons number of visitors to Georgia’s ski resorts rose by 800%. We are happy this tendency continues today and this season has recorded 49% upturn. Objective of Georgia is to host international competition in winter sports. It should be also noted that in 2016 the country recorded 6.3 million tourists and revenues from the tourism sector exceeded 2 billion USD. EU has recently set visa-free regime for Georgian citizens and this is also an important achievement that will further deepen and foster contacts between people, business relations and tourism», Giorgi Kvirikashvili noted. According to National Tourism Administration, tourism sector’s ratio in total GDP is 6.3% under 4Q16 indicators and is up 15.85% compared to the same period of 2015. According to the 2016 final report, transactions by foreign payment cards made by international tourists constituted 1 624 808 GEL, up 11.4% year on year. According to the 2016 total indicators, the ratio in total GDP marked 7.1%, up 11.8% year on year. Naturally, 7% ratio in GDP cannot justify huge expectations from tourism sector, but the growing tendency in this sector and a wide range of people involved in this field confirms its importance. It should be also noted that the countries, where tourism sector’s ratio exceeds 15% in GDP, are very vulnerable to economic crisis periods, because financial crisis hits tourism sector, first of all.

“Today investors do not show interest in any country. There is global crisis… Georgia has the chance to draw investments thanks to active job. Maybe, this is a small volume, but the interest exists. More than 0.5 billion USD investments have entered from Israel to purchase lands, real estate and these deals need further continuation – additional investments are required”

Itsik Moshe President of Georgia-Israel Chamber of Business

April 10, 2017 #188

EASTER The Caucasus Business Week (CBW) has inquired when Easter cakes sales will start, how much they will cost and where they will be sold, as well as expectations of egg production companies for the coming Easter. It turned out Georgian confectionery stores have started preparations for the Easter. They will oﬀer various Easter cakes of various sizes and prices.

April 10, 2017 #188

As Easter Arrives Business Sector Expects Higher Spending

he Easter is always celebrated with special mood in Georgia. Preparations start several days earlier. People make Easter Cakes symbolizing the Golgotha, the mountain, where the Savior was crucified on Friday. Eggs are colored in red on Friday and this tradition also symbolizes the Savior Crucifixion. The Caucasus Business Week (CBW) has inquired when Easter cakes sales will start, how much they will cost and where they will be sold, as well as expectations of egg production companies for the coming Easter. It turned out Georgian confectionery stores have started preparations for the Easter. They will oﬀer various Easter cakes of various sizes and prices. Ipkli company has already launched production of Easter Cakes. Distribution is carried out stage by stage and will cover all networks. Prices will not be corrected and they will be identical to the prices of the previous years. Ipkli deputy director general Bakar Bakuradze explained that prices have increased slightly, by about 0.50 GEL, because of packing expenses. Price of Easter Cakes range from 2 GEL (250 gram) to 6 GEL (650 gram), he said. There is much competition on the market and we follow the market demands, Bakuradze noted. LLC Ipkli will sell products mainly in Tbilisi, as well as in several cities nearby Tbilisi and in Kutaisi. Clients will be able to buy Easter cakes of Ipkli company at major shopping malls and small stores, he said. Nino Mamulashvili, director for French-Georgian Gurme confectionery store, explains that Easter Cakes production has already started. Gurme products are oriented on medium and high segments. Gurme products are made of natural milk and butter. Consequently, the price of one kilogram of Easter Cake is 10 GEL, 1.2 kilograms – 15 GEL. Gurme company launched baking Easter Cakes five years

ago. Prices have not changed compared to the previous years, Mamulashvili noted. Gurme director explained that Easter Cakes are sold in Tbilisi, at two branches of the company (on Paliashvili Street and Aghmashenebeli Avenue). The company makes focus on corporate orders, Mamulashvili added. Keti Ujmajuridze, head of production of Asorti confectioneries bakery, noted that the company has started Easter Cakes production and the product will appear on the market in 1-2 days. At this stage, the company is carrying out calculation process. Therefore, Easter Cakes prices are being still determined, she said. As to egg manufacturer companies, Patardzeuli company head Otar Muchiashvili explained that the company does not expect sales to hike for coming Easter, because the market is oversaturated. Therefore, Patardzeuli company will not increase eggs production for the Easter period. «After the Easter period the demand for eggs will fall and I will have to throw away product», Muchiashvili said. Price of one egg is about 22-24 Tetri, he noted. Zurab Uchumbegashvili, head of Kumisi egg manufacturing company and chairman of Poultry Production Development Association, explained that preparations have started for the coming Easter. The supply will satisfy the demand and prices will not be revised, he added. Price of Kumisi egg will be 25-32 Tetris, Uchumbegashvili said.

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Price of Easter Cakes range from 2 GEL (250 gram) to 6 GEL (650 gram). There is much competition on the market and we follow the market demands. Clients will be able to buy Easter cakes of Ipkli company at major shopping malls and small stores.

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Gurme products are made of natural milk and butter. Consequently, the price of one kilogram of Easter Cake is 10 GEL, 1.2 kilograms – 15 GEL. Gurme company launched baking Easter Cakes five years ago. Prices have not changed compared to the previous years.

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After the Easter period the demand for eggs will fall and I will have to throw away product. rice of one egg is about 22-24 Tetri.

AGL

April 10, 2017 #188

Shuakhevi HPP will be commissioned in 2017

he country’s largest investment Hydro Project Shuakhevi HPP will be commissioned and will produce its first flow of electricity in 2017. The second largest hydro power plant in Georgia after Enguri HPP was constructed with the most up-to-date technologies, in record timeframe and with highest standards for quality. Recently, the Board of Adjaristsqali Georgia LLC (”AGL”) appointed Prashant Joshi as the new CEO of the Company for the Operations phase. The new CEO is a representative of , TATA Power, one of India’s largest and most respected private power utilities. TATA Power is one of the shareholders of AGL. One of the most notable features of the project is that the majority of the employees during the construction as well as the operations phase are citizens of Georgia.

Adjaristsqali Georgia, LLC (AGL) is developing hydropower resources on the Adjaristsqali River and its tributaries. The company is implementing one of the largest infrastructure investments in Georgia, the Shuakhevi Hydropower Project (HPP). AGL is a joint venture between Norway’s Clean Energy Invest AS and India’s Tata Power (40 percent each), and IFC, a member of the World Bank Group (20 percent). AGL adheres to high standards of corporate social responsibility in its work by supporting the economic and social development of the Adjara region and improving the living standards of the people in the project area. On September 16, 2013, Adjaristsqali Georgia LLC launched the construction of the Shuakhevi Hydro Power Project (HPP), one of the country’s largest investments and infrastructural projects. The project represents a foreign direct investment of approximately USD 420 million in Georgia, and the finished hydropower plant will contribute a total of 187 megawatts of power to the country’s electrical grid. The Tunnel works of Shuakhevi hydro power plant is the world’s second facility with 37.4 km length. The construction of the tunnels was achieved by the drill and blast method. The blasting was designed and tested to ensure the amount of explosives was suﬃciently minimal not to damage surrounding the surrounding rock mass or structures. There are three main tunnels at the Shuakhevi Project; a headrace tunnel from Chirukhistsqali to Skhalta (powering the Skhalta powerhouse),

The Shuakhevi plant will satisfy domestic electricity demand during the winter, thus reducing Georgia’s dependence on imported fuel and increasing its renewable energy output. The plant will also foster cross-border electricity trading at other times of the year by exporting excess electricity to Turkey.

a transfer tunnel from Skhalta to Didachara, and the main headrace tunnel from Didachara to Shuakhevi (powering the Shuakhevi powerhouse). The surface area of the Skhalta reservoir is approximately - 12ha at full supply level, with a volume of 0.75 MCM live storage. The surface area of the Didachara reservoir is approximately 15ha at full supply level, with a volume of 1.2 MCM live storage. The Shuakhevi plant will satisfy domestic electricity demand during the winter, thus reducing Georgia’s dependence on imported fuel and increasing its renewable energy output. The plant will also foster cross-border electricity trading at other times of the year by exporting excess electricity to Turkey. Another significant advantage of the Shuakhevi HPP is environmental. Climate change is one of the largest problems threatening both Georgia and the world, which makes the hydropower plant’s environmental aspects especially important. The Shuakhevi HPP is the first hydropower project in Georgia to be certified under the UN Framework Convention on Climate Change for carbon emission reductions. The Shuakhevi HPP will generate 450 million kWh of clean electricity annually, decreasing the emission of greenhouse gases by more than 200,000 tons per year.

One of Adjaristsqali Georgia’s top priorities is to avoid or reduce its environmental impact. With the help of experienced local and international professionals, the company is sparing no eﬀort to follow the mitigation hierarchy and has developed plans to address any potential impacts on environment that may arise from the company’s construction activities. Since the launch of the Shuakhevi HPP construction, ensuring sustainable development in mountainous Adjara has been a major challenge facing the company’s leadership. The company studied the region and the problems it faces and committed themselves to making a diﬀerence in the lives of people in Khulo and Shuakhevi. The company launched a comprehensive program of corporate social responsibility projects that have resulted in success stories demonstrating how the state and the private sector can cooperate to provide opportunities for sustainable development in the region. To develop these areas, AGL has planned over 70 social responsibility projects. The company is actively working with local NGOs to implement these projects. By implementing these projects in mountainous Adjara, the company seeks to improve the living standards of the local population.

PR PERSON

April 10, 2017 #188

Limits Like Fears are Often Just An Illusion “One just needs to be confident and know that there is nothing impossible, when there is a will there always is a might. Limits like fears are often just an illusion,” says Teona Dumbadze Hilton Batumi, Marketing Executive / PA to GM, who chatted with CBW to explain how she achieved success and gave us several pieces of advice in PR and Marketing field.

- What is your profession? - Translator – referent - Your first job place? - English Teacher at Private School. - Current job and position? - Hilton Batumi, Marketing Executive / PA to GM - Your first success? - First book I ever read, I even remember the book “King Matt the First” Janusz Korczak, I was 7, just started reading independently. The infinite kindness of the book is the lifelong impression of mine. - Business project that you take pride in even today? - I’ve participated in many projects, but the one that I will always be proud of is related to charity – 2 years ago, together with “Believe Charity Foundation” we started a project “I Believe in Santa Clause” – within this project Charity Foundation gave us the list of children with their Christmas wishes and we provided all the items on the list, we also went with “Santa” to deliver the presents to those children - this project enabled us to bring joy to underprivileged children, who most of the time are struggling to find food not to say about Christmas presents. And that became a tradition and this year all the other brand hotels in Batumi joined, so we got opportunity to make Christmas special for over 100 children. I hope we will have more success in future. - The field you would never work? - I could never work in banking system. - What makes a person successful in

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Development opportunities - this is my ﬁrst role in Hotel Marketing and everything I need to develop my personal and professional skills is there – trainings, workshops, local and regional support.

your field? Besides knowledge what special features are required? - In all the fields, to be successful, person needs to be determined. Besides knowledge Attitude to what you do means a lot. Knowledge is worthless without experience and right attitude to my subjective opinion. - Is it possible to study PR in Georgia very well, or international knowledge and experience are necessary anyway? - Coming out from my answer above, everything is possible everywhere! One just needs to be confident and know that there is nothing impossible! When there is a will there always is a might! Limits like fears are often just an illusion! - Is PR perceived and understood in Georgia in its classical nature? - I think it is, only that like everything else in Georgia everybody does it their own way. - How easily can you resolve emergency situations and take decisions? Do similar cases aﬀect quality of working process? -That’s my every day job. Working in a hospitality industry doesn’t give you any other chance. As Hilton we are very oriented on guest satisfaction, sometimes when issues arise there is no time to wait for other’s decision and you need to take ownership and act quickly and resolve the issue on spot. It definitely aﬀects the working process in very positive way and helps us to deliver our brand key message “spread the light and warmth of hospitality”.

- Interesting episode that has changed your life? - My 1st job in international company. First international experience helped me to go out of box, think bigger and see a bigger picture. Once I left the “comfort zone” I was like a diﬀerent person, more critical to myself that enabled me to develop faster and learn a lot. - If not this profession which filed would you work in? - Medicine or Journalism . - What are your strong personal features? - Patience, openness, honesty. - What does the employer company give you, what makes it interesting for you? - Development opportunities - this is my first role in Hotel Marketing and everything I need to develop my personal and professional skills is there – trainings, workshops, local and regional support. Hilton is a great place to work and every day is diﬀerently interesting, it is like back to school – every day I learn something new, something exciting. Most interesting is interaction with people – our guests, local and international media and so on. - What makes you major discomfort in working process? - That sometimes because of outside factors it takes very long to achieve results. -Where do you see yourself in 20 years? - I like diversity and my interests are growing and changing. In 20 years I might be a president of the country… who knows .

GIORGI KAVELASHVILI Managing partner of audit company ALTIDO LLC – exclusive partner of TBILISI BUSINESS HUB.

Overall, appropriate growth policies are always context specific. This is not because economics works differently in different settings, but because the environments in which households, firms and investors operate differ in term of opportunities and constraints.

Introduction Corporate income tax (CIT) is one of the six taxes defined by the Georgian tax legislation. In 2014 CIT was 11.5% of all tax revenues and 2.8% of GDP. Pursuant to the tax code of Georgia taxable profit shall be a taxable object of a resident enterprise. It shall be determined as a diﬀerence between the gross income of a taxpayer and the amount of deductions. CIT rate is flat 15% and tax period is a calendar year. In addition, Georgian Companies are liable to CIT on their worldwide income, subject to double taxation treaty reliefs. Foreign Companies are subject to tax on Georgian Source income only. Income subject to corporate income tax (tax base) is computed on the basis of International Financial Reporting Standards (IFRS) and modified by certain tax adjustments. The tax base may include trading income, gains from realization of assets, income from financial activities, dividend income etc. However, the Georgian law has some significant diﬀerences from the IFRS including for deduction of expenses (depreciation, travel costs, allowances). Naturally, the person responsible for a company’s accounting, as well as the auditor, should be comprehensively aware of financial accounting system and corporate income tax calculation. Depending on the size and complexity of the taxpayer’s transactions, the process can be very complicated. The relevance of funds for profit tax declaration mainly depends on the

TBILISI BUSINESS HUB

April 10, 2017 #188

declaration forms and requested information by the tax authorities. According to the World Bank’s 2015 “Doing Business” data, in Estonia taxpayers need 20 hours each year to complete their corporate income tax declarations. In Ireland, the average is 12 hours, in Norway, 15 hours, while in Lithuania, 28 hours. In Georgia, the average time spent on CIT declaration is 191 hours, which means that the Government has to introduce changes to the regulations in order to decrease tax burden on taxpayers and make the tax administration taxpayer friendly. Problem Definition The Georgian economy currently is experiencing challenges requiring adequate measures from the Government to address. Access to credit for entrepreneurs is still restricted because of a higher interest rate compared to international rates. There is no significant positive tendency in regard to Foreign Direct Investment (FDI) inflows and domestic savings are also insuﬃcient for boosting increase of stock for capital in businesses. As a result, the GDP growth rate has decreased in 2013 and 2014 compared to the tendency in the previous years. Economic slowdown is translated to a persistent high rate of unemployment and negative trade balance. The coincidence of the country’s economic problems with unfavorable international factors resulted as well in depreciation of Georgian Lari (GEL) compared to the US Dollar (USD).

Corporate Income Tax Reform in Georgia New Model of CIT Tax incentives are one of the significant stimulators for economic growth. In order to address these challenges, the Government considers abolishment of the retained earnings tax on companies, the reform that brought quite successful economic results in Estonia in 2000. According to the bill, corporate income tax will only apply to distributed profit; undistributed profits, reinvested or retained, will not be subject to income taxation starting from January, 2017. After introducing the new tax regime it is presumed that budget revenue will decrease by 400-600 Million. It is critical to define how the Government will compensate the losses. Whether the Government will introduce new taxes, or increase the tax rates on existing taxes, or by reducing the budget expenditures. General objective of the CIT reform is to improve economic growth prospects of the country through the nullification of the retained earnings tax on the companies. Specific objectives are to promote investments, create jobs, promote entrepreneurship, increase sustainability of companies in

the economic downturn and improve GDP growth. Effect of the Reform on Tax Revenues Pursuant to the USAID Regulatory Impact Assessment the CIT model has investment favouring effect. The stock of capital will increase by 3.23% within 1.5 years. This means that the net investment will increase. Economic agents will invest more than they used to invest. Real GDP will increase by 1.44% roughly within 1.5 years. Aggregate private consumption will increase by approximately 0.85% within 1.5 years. The reform will increase the government annual budget deficit by 3% at most. Current Account deficit will slightly decrease, implying some of dividends that were leaving the country will stay in Georgia due to investment favouring effect. (Graph 1) Overall, appropriate growth policies are always context specific. This is not because economics works differently in different settings, but because the environments in which households, firms and investors operate differ in term of opportunities and constraints. Implementation of CIT reform in Georgia will have

positive macroeconomic effects. Moreover, as seen in the last few years, the average economic growth rate has decreased and, therefore, this reform can be seen as a push for the economy not to stay in an economic growth trap. However, even though reform has a strong investment favoring effect, other developments in the economy, for example, the increase in ambiguity or institutional instability, might override the growth promoting incentives created by reform. Furthermore, methodology of reform implementation and how changes in tax law will be formulated will definitely affect results of the reform. These factors are crucial and should not be discounted. Conclusion Along with macroeconomic benefits, implementation of the new CIT model in Georgia could bear some risks, which need to be considered and discussed. Presently only Banks and large companies use IFRS financial accounting/financial reporting, while smaller companies do simple accounting. Dividend can be properly counted only in IFRS (deduction). This means higher cost for small and medium businesses.

Graph 1: The Main Impacts of the Reform

Source: USAID RIA; February, 2016

Taxpayers are familiar with the current system, hence imposing the new CIT model that also encourages capital accumulation, will probably cause distortion of taxpayers decisions and take time to adjust to a new system. Capital gains are not taxed separately - capital gains derived by companies remain exempt from tax until profit distribution occurs. This would obviate the need for complex capital gain rollover relief measures as companies churn assets for purposes of growing real investments. In conclusion, the policy makers have to carefully analyze macroeconomic eﬀect of a new CIT model, before introducing the new regulation. A model implemented successfully in one country does not necessary mean that it would work in another country, like Georgia. One thing is clear, in the short term deficit will increase and it has to be balanced. Furthermore, adoption of a CIT model may take from a few months to several years to be properly implemented and followed. So, it remains to be seen if these changes would have “a boomerang eﬀect” for the Government or not.

BUSINESS

April 10, 2017 #188

OSHEE is Already in Georgia The leader of European market in the category of isotonic and vitaminized Drinks, OSHEE is already in Georgia. OSHEE is a Polish brand, which produces high quality drinks and food filled with vitamins and minerals. OSHEE has been presented at the market for 10 years and it gained a trust in the whole Europe. “For me as a sportsman, it is nice to find out that OSHEE is already in Georgia. I tried OSHEE products few times and I’m completely satisfied with the result. I hope the company will be successful in Georgia”- declared Lasha Talakhadze.

BRAND

BANK

PASHA Bank Supports Eco Project in Kondoli Village

On April 1st Rotary Club Tbilisi Ambassador in partnership with PASHA Bank carried out an eco-project in Kondoli village (Telavi region, Kakheti). The project was also supported by World Vision and Palitra Holding bookstores chain Biblus. The project implied

planting the trees in the school yard, building a playground and formation of the eco-club. Local school children and World Vision beneficiaries were directly involved in the process. The outdoor activities were followed by screening of a film about the en-

NEWS

STARTUP

Nabeghlavi to Unveil New 30 million EUR Plant in June Tskali Margebeli company will unveil a new plant worth of 30 million EUR in June 2017. The company head Avtandil Svimonishvili told Business Course that products manufactured by the new plant will appear on the market in early summer. At this stage, modern equipments are being installed at the pant and soft drinks are being bottled in test regime. Besides traditional products, natural juices and nectars of Rauch Austrian brand will be also bottled, Avtandil Svimonishvili noted.

Georgian-French Wine Research Center to Open at Lisi Lake Construction of Georgian-French Wine Technologies ResearchTraining Center will be finished in about 3 months. Ramaz Krichinashvili, Zearis company director and one of the authors of the project, noted that the project is being implemented by Georgian-American investments on 5 000 square meter space. The four-storied building repeats the design of the Dadianis Palace in Zugdidi. “Construction works started on the territory about 10 days ago. The center will have several functions, including research of wine and grapes varieties. We will also have wine cellar. We also plan to build a hotel. Moreover, for popularizing sulfur water, we will arrange sulfur water pool too”, Krichinashvili said.

vironmental issues and a seminar concerning ecology. The newly established eco-club takes responsibility to take care of the garden and managing paper waste that will be delivered to Palitra Holding bookstore Biblus and exchanged for books. “Supporting this project was of double importance for PASHA Bank, as it combines both directions that we focus on as a part of our CSR. It was lovely to see the schoolchildren so eagerly involved in the working process together with World Vision beneficiaries. PASHA Bank plans to initiate and support more projects of eco-friendly nature,” - said Anano Korkia, Head of PR

Unique Startup of Georgian Cuisine Kits – Chemi Supra Chemi Supra presents unique D.I.Y. Georgian Cuisine Kits with all-natural ingredients and step-by-step instructions. Ideal for gifting It’s a great gift and activity for date nights in, dinner parties and family fun. With their kits you can prepare traditional Georgian dishes and enjoy the culinary tradition of Georgia right at home, we talkd with Gulmira Ulakova founder of the startup. Tell us about your company, what you do, how did you came up with the idea of creating one and etc. The idea of Georgian cuisine cooking kits popped into my head when for the umpteenth time I was thinking what gift from Georgia I should take with me when visiting friends abroad. It crossed my mind since I am a person who likes to cook and to explore local food when travelling. How many people work in your company? And how the concept works? As the company is so young, I am registered as individual entrepreneur and currently work alone. Of course I cooperate with many local professionals in the areas of design, gastronomy, editing etc. Also I’m distributing my products in local shops and hope to support the local economy. Who are your target group? How people reacted to your brand? I think that primarily my product would be interesting for local people who would like to make a gift with a local touch, and foreign visitors who would like to take a taste of Georgia with themselves back to their home country. I have a passion for Georgian cuisine and want to share it with the world. What are your future plans, will you expand your startup? I am currently working on creating new kits and would like to introduce them soon. Also I would like to be able to sell them abroad directly and I am working on creating a website, as I have some requests from overseas. I understand that development and expansion will result in needing more resources, however I am ready for that. I am participating in Startup market projects and I hope that this will help me to solve any issues that might arise.

and Marketing Department at PASHA Bank. “It should be noted that ecological situation in Georgia is getting worse day by day. This may cause certain natural disasters and other environmental issues in future. Thus our organization has decided to direct its resources towards slightly improving ecological situation, starting in Kondoli village. This project is multifunctional and will remain sustainable, considering the fact that here children learn about the importance of ecology and also plant trees to fully experience the process.” – said Bidzina Kumsiashvili, Charter President of Rotary Club Tbilisi Ambassador.

Skylantern Opens New Store in Tbilisi – Plans to Expand Business to Regions SkyLantern, a ceremony equipment brand, has expanded business and opened a new store in Gldani District, Khizanishvili Street N15a, on 120 square meter space. The company founder Giorgi Grigalashvili told Commersant that the company has maintained its concept and added new service. “The new branch operates on 120 square meter space at Khizanishvili N15A in Gldani. We unveiled the store on April 1. The new store trades in the same festivity accessories like the Saburtalo branch. However, we have also added gifts packing service. I unveiled the new store thanks to returns from the operating business and a bank loan. I hope the new branch will operate successfully and I will be able to cover the loan without problems”, Grigalashvili said. The company plans to expand business to regions too, he said. “We plan to open a branch in Gldani by September. SkyLantern plans to expand business to regions too, but at this stage I would refrain from unveiling additional information”, Giorgi Grigalashvili said. Giorgi Grigalashvili, 18, launched the business of ceremony accessories and equipment at his own garage, on 12 square mete space by investing 1000 GEL. He opened the first store at Saburtalo Street N37 when he turned 22.

April 10, 2017 #188

Agricultural land ownership should not be some kind of guarantee for the foreign citizens in order to get the right of residency in our country “We have generally to forbid Aliens from the right to purchase small sized lands and we have to submit them only the right to buy large areas”

Business Consulting Company

IRAKLI CHIKAVA Director

he issue of selling the land to foreigners is the subject of discussion lately. There have been loud talks, discussions and debates upon the mentioned issue, even though the moratorium was announced for a while for the foreign citizens. At present time, the Constitutional Commission is working on making a clear report on this issue. Clearly some decision has to be made. It’s a fact, that number of lands sold to foreigners, have not been cultivated since purchase. It is also a fact that for the most of people it is unclear the reason why foreigners are buying lands if they do not cultivate them or do not implement the investments. In other words if they are not be able to (or don’t want to) gain the benefit from it, what is point buying them? First of all we must identify and fight against these causes. Mostly, foreign citizens buy the agricultural land just to get the resident permition in Georgia. Perhaps it would be better if we reflect on Georgian legislation that only the ownership of agricultural land will not lead towards residence permision in our country. We all agree that foreign investments are suﬃcient for economy of our country and the agricultural sector in this direction is of great importance. We all agree that the foreign investments are important

AGRO BUSINESS

for development of country’s agriculture and has suﬃcient (long-term) impact on country’s economy. If the investments are sufficient for us, then we have to come up with the idea, so investor gets the land and hakes obligation of implementation investment on this land as well. Perhaps, it would be better if we work on this direction and determine the specific capacity of investment for per hectare. Both, Georgian and foreign citizens will be informed, that if the alien purchases the land it means that he definitely would make investment on it and the land will not be remained uncultivated. This commitment must be reflected in the Revenue Department and must be programatic control(led programmatically). If he/she does not execute the investment – he/ she must be fined. If the penalty is not covered – the land must be deprived and sold through the auction. Herewith, we can reduce the capacity of investment for per hectare, if the alien buys the land which should be cultivated, such as wetlands, landslides, etc. It is crucial (principal) to make criteria according to which the foreigner will be able to purchase the land. These criteria must be quite specific. According to these criteria the Public Registry must be authorized to register the land on behalf of the foreigner. Any Ministry or the Entity must not make decision for the registration of lands to foreigners. This creates the risk of corruption. The criteria must always be one. The basic point why the right of selling lands should be granted to the aliens is the

investment in our country. It means that we have to get acquainted with new technologies, the cultivation of plots will take place, the infrastructure will be arranged, the local people will be employed and wealth will be created. Shortly, investments have much benefit. Therefore, as our goal is to attract large number of investments, may be it would be better, if we generally prohibit the foreigners to buy small sized lands, and if we grant them the authority to purchase only the huge areas

Mostly, foreign citizens buy the agricultural land just to get the resident permition in Georgia. Perhaps it would be better if we reflect on Georgian legislation that only the ownership of agricultural land will not lead towards residence permision in our country. We all agree that foreign investments are sufficient for economy of our country and the agricultural sector in this direction is of great importance. We all agree that the foreign investments are important for development of country’s agriculture and has sufficient (long-term) impact on country’s economy.

of lands in order to enlarge the investment. The prohibition of buying small sized lands might have several advantages. Firstly, the more is the area of purchased land, the greater will be the commitment to fund investments. Secondly, low-budget foreigners will not be able to buy land in Georgia, correspondingly, only those will buy the land who have the opportunity of implementing big investments. This will be beneficial for our country. Finally, we must say that the above mentioned issue is very sensitive. The government must not disclaim the investments, although at the same time we must execute it so that the interests of our country will not be damaged.

EUGEORGIA.INFO

ENPARD Report: Total Revenues of Cooperatives Rose by Averaged 19% Year on Year

uropean Neighborhood Programme for Agriculture and Rural Development (ENPARD) has published an annual report on development of agriculture cooperatives financed by EU in Georgia. Under the report, the program has financed more than 260 cooperatives (financial component will be maintained in 2017 too). ENPARD has invested about 12 million GEL, while the co-financing ratio of cooperatives marked 4 million GEL. The report covers performance of ENPARDfinanced cooperatives in 2014-2015, excluding Ajara Region; However, the indicators were submitted by cooperatives themselves and, in most cases, they are not confirmed by oﬃcial documents. The report covers performance of 118 cooperatives that unite total of 1180 members (10 members in one cooperative on average). In 2015 one cooperative owned long-terms assets of 99 000 GEL, on average, up 12% compared to 2014. Cooperatives purchased 39% of long-term assets by EU financial support, while other part was purchased by such sources as: cooperative membership fees, leased assets and so on. Only 79 cooperatives of 118 ones inquired submitted report on revenues. According to the mentioned indicators, total revenues of organizations made up about 6 million GEL, 30% of which (1.8 million GEL) were net profits. As to inquiry conducted in 2014, only 48 cooperatives of 82 ones submitted indicators about revenues. As compared to 2014, in 2015 total revenues of one cooperative increased by 19% on average (up to 77 000 GEL from 64.6

thousand GEL). In 2014, forty-five cooperatives of 82 ones inquired received profits, in 2015 — 74 cooperatives out of 118 ones received profits, while 8 cooperatives ended the year in losses. Net profits of one cooperative increased by 21% for a year. As compared to 2014, in 2015 net profits (only in cooperatives with positive profits) rose by 41% (from 16.6 thousand GEL to 23.5 thousand GEL); 8 cooperatives saw 8.800 GEL losses on average in 2015. A major part of cooperatives (85%) reinvested a major part of profits in production for development purposes. Inquired cooperatives were involved in about 25 various chains of agriculture sector and they used to produce a wide range of assortments. For example, in 2015 fifteen cooperatives produced 34 tons of honey (2.3 tons by one cooperative on average); twelve cooperatives produced 1 726 tons of potato (144 tons by one cooperative on average); 8 cooperatives produced 250 hectoliters of wine (31 hectoliters by one cooperative on average); 8 cooperatives produced 90 tons of vegetables (11.2 tons by on cooperative on average); 6 cooperatives produced 143 tons of berry (23.8 tons by one cooperative on average). By 2013-2019 the ENPARD budget in Georgia marked 102 million EUR. Priority of the first phase of the program was the agriculture sector development, while the second phase aims at enhancing potential of economic development of village residents. The ENPARD small cooperation component for small farmers is carried out by CARE, OXFAM, Mercy Corps, PIN and UNDP Georgia.

PUBLICITY

April 10, 2017 #188

WORLD NEWS

April 10, 2017 #188

Quotes

“ The most common Energy cooperation is developing intensively, Russia is the largest supplier of natural gas to Armenia, Russian gas accounts for 100% of Armenian gas consumption.

Russia and Armenia may switch to settlements in national currencies

ussia and Armenia may switch to settlements in national currencies, President Vladimir Putin told reporters after talks with his Armenian counterpart Serzh Sargsyan. “With a view to further expansion and diversification of trade, the possibility of mutual settlements in national currencies is currently being discussed,” the Russian leader said. Putin noted that “Russia is Armenia’s leading economic partner.” According to him, “by the end of last year, bilateral trade increased by 6%.” The Russian leader considers such a result “a serious success that was achieved in conditions of unstable global environment.” The Russian president said that “Russian investments in the Armenian economy exceeded $3 billion, while about 2,000 enterprises with Russian capital operate in the country.” “Energy cooperation is developing intensively, Russia is the

largest supplier of natural gas to Armenia, Russian gas accounts for 100% of Armenian gas consumption,” the Russian leader said. He recalled that “with the assistance of Gazprom, the fifth power unit of the Hrazdan Thermal Power Station was reconstructed; the capacity was brought up to 480 megawatts.” Putin also stated that Russian nuclear energy agency Rosatom is upgrading the Armenian nuclear power plant, cooperation in the mining industry is making good progress, Russia’s Polymetal company is engaged in the development of gold deposits in Armenia, Rusal invested $120 million in a joint venture to produce aluminum products.” Putin added that Russia “helps the development of the transport infrastructure of Armenia - Russian Railways is implementing a large-scale program of technological renewal of the railway network, investments in this project amounted to $500 million.

Turkish mills buy EU, Black Sea wheat to replace Russian imports

urkish flour mills have covered their shortterm needs by purchasing several hundred thousand tons of wheat from EU and Black Sea countries, replacing Russian supplies blocked by a change to import rules, millers and traders said on April 5. Turkey has eﬀectively halted purchases from Russia of wheat, maize (corn) and sunflower seeds by removing Russian items from a duty-free import scheme from March 15. The Turkish move meant Russian supplies facing a prohibitive 130 percent duty, though Ankara has denied banning imports from Russia. Moscow has said the tariﬀs are hindering relations. Ankara has not said why it removed Russia from the duty-free

scheme, but the Turkish economy ministry has said an improvement in political ties with Russia was “not fully reflected yet in economic relations,” as Russia is yet to restore visafree travel with Turkey after a previous row. Relations between the two countries have been strained in recent years and Russia imposed trade restrictions on Turkish goods after Turkey shot down a Russian warplane in November 2015, but Moscow lifted most restrictions as the two countries restored ties in August last year. Turkey is the second-largest export market for Russian wheat and the disruption to trade has upset millers who use Russian wheat in their flour which is then exported in large volumes.

way people give up their power is by thinking they don’t have any

”

Alice Walker

Notwithstanding these incremental gains, a number of outstanding challenges remain which if not eﬀectively addressed may scuttle our collective eﬀorts.

EU Parliament Positive Signs as AsiaPacific Moves Towards Approves Global Development Goals Ukraine Visa Waiver Ukrainian citizens will be exempted from EU short-stay visa requirements, after Parliament endorsed an informal deal with the Council on Thursday. Under the new law, Ukrainians who hold a biometric passport will be able to enter the EU without a visa for 90 days in any 180-day period, for tourism, to visit relatives or friends, or for business purposes, but not to work. The exemption applies to all EU countries, except Ireland and the UK, plus Iceland, Liechtenstein, Norway and Switzerland. “Ukraine has achieved all the benchmarks, so the visa requirement should be lifted”, noted rapporteur for the proposal Mariya Gabriel (EPP, BG), adding that the visa waiver will be “another very strong message that Ukraine is a key partner for the European Union in the Eastern Partnership”. The legislation, approved by 521 votes to 75 with 36 abstentions, still needs to be formally adopted by the Council of Ministers. It is likely to enter into force in June, 20 days after it is published in the EU Oﬃcial Journal. Before exempting Ukrainians from visa requirements, the EU strengthened the visa waiver suspension mechanism, to allow visas to be reintroduced more easily in exceptional cases.

Azerbaijan to ink double taxation elimination deals with 5 more countries Azerbaijan will sign agreements on elimination of double taxation with five more countries in the near future, Zaur Fetizade, head of Azerbaijani Taxes Ministry’s Department for International Cooperation and Tax Monitoring in Financial Institutions, said in his interview with the Vergiler (Taxes) newspaper. “We have already agreed on draft agreements with Singapore, Malaysia, Slovakia, Ireland and Morocco, and they will be signed in the near future. Moreover, we are holding negotiations to sign similar agreements with Albania, Bangladesh, Kyrgyzstan, Syria, India, Turkmenistan, Portugal and Oman,” he noted. “We have already presented the model of agreements to 12 more countries – Argentina, Indonesia, Iraq, Philippines, Colombia, Lebanon, Egypt, Peru, Thailand, Tunisia, Uruguay and Andorra.” Fetizade said that to date, Azerbaijan has signed agreements on elimination of double taxation with 53 countries and added that 48 of them have already come into force. Agreements with five countries – Jordan, Spain, Malta, Israel and Denmark are waiting to be ratified, he noted.

ith just over a year since the adoption of a historic blueprint to end poverty and protect the planet, positive signs have already started to emerge among countries in the Asia-Pacific region as they push ahead with the implementation of the 17 Sustainable Development Goals (SDGs). It is encouraging to note that most countries in the region have made serious attempts to domesticate the landmark global action-plan by developing national sustainable development strategies– a first and crucial step if we are to fully realize the ambitious targets set out in the landmark agreement. Steady economic growth over the past year has seen a decline in poverty and an improvement in the quality of life. A bright spot worth highlighting is the progress on gender equality. Gender parity has been achieved in primary education, and maternal mortality rates have been brought down across the region with the exception of certain pockets. For example, maternal mortality dropped by 64 per cent in South Asia from 1990 to 2015 and by 57 per cent in the Pacific over the same period. Notwithstanding these incremental gains, a number of outstanding challenges remain which if not effectively addressed may scuttle our collective efforts. A joint study undertaken by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), the Asian Development Bank (ADB), and the UN Development Programme (UNDP) reveals that some 400 million people in Asia and the Pacific continue to live in extreme income poverty and more than one in four people experience poverty in multiple dimensions that impact their health, education, and standard of living. South Asia is the worst affected with 15 per cent of the population living in extreme poverty, and 86 per cent residing in rural areas where income diversification opportunities are limited and challenges of poor natural resource management persist. Of equal concern is the rise in income inequality within countries. The challenge is to ensure that prosperity is felt by all, and not just a fortunate few. With 12 per cent of the population, or 490 million people, still undernourished in our region, ending hunger and poverty will heavily depend on introducing sustainable food production systems and more resilient agricultural practices. Despite reductions in infant mortality rates, children in low income countries are still nearly nine times more likely to die before reaching the age of one than those in high income countries. Enhancing the health of citizens will also require expansion of coverage of health services in many countries. This means increasing

government spending on health, as per capita government spending is as low as $4 per person in low income economies of our region. Despite progress in gender equality and women’s empowerment made in Asia and the Pacific on several fronts, significant gaps still remain. Women continue to be paid less and are more likely to find themselves in vulnerable employment with low wages, no formal contracts or labour rights and minimal social protection. In 2015, the gender pay gap in the region as a whole reached an astounding 20 per cent. As a whole, the region has also experienced declining biodiversity levels – a major source of distress for Pacific island economies – where the value of fish caught in the territorial waters of some small island developing States is worth up to three times their GDP. Future risks to ocean resources are further underscored by the fact that 40 per cent of our oceans are heavily aﬀected by unsustainable practices. Finally, the Asia-Pacific region faces a high infrastructure deficit. At the same time, demand pressures will grow as the urban population will swell by 50 million each year, aggravating congestion, air pollution and waste management. Needless to say, these challenges must be urgently addressed. Strong continued leadership, knowledge sharing and UN system collaboration, are pivotal tools that will move us all closer to realizing the aspirations set out by the 2030 Agenda. The dynamism and development track record of our region lends us hope that we can achieve balanced economic, social and environmental development by pursuing the right blend of rebalancing to revive domestic and regional demand. ESCAP remains committed to strengthening the capacity of countries, so that they can embrace integrated strategies to confront the multidimensional facets of poverty, and promote the opportunity for prosperity for all. This week ESCAP held the Asia Pacific Forum on Sustainable Development (APFSD 2017) in Bangkok from 28-31 March, which brought together senior representatives from across the region to define a road map that will support member States’ implementation of the 2030 Agenda over the next 15 years. We are all working to come up with concrete measures that will enhance the region’s achievement of the SDGs to deal with multidimensional poverty, which when considered raises the level of the vulnerable population in Asia and the Pacific region to 900 million. Forums like these are key to marshalling the international support required to achieve this ambitious agenda. Progressing the SDGs in Asia and the Pacific is central to achieving the global 2030 Agenda. We have the opportunity for action now. By Shamshad Akhtar

PUBLICITY

April 10, 2017 #188

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 76-g Chavchavadze Ave., Tbilisi Tel: 231-11-61, 231-14-54 E-mail: emb_ge@mfa.gov.ua Consular Agency: 71, Melikishvili St., Batumi Tel: (8-88-222) 3-16-00/ 3-14-78 Republic of Turkey Embassy 35 Chavchavadze Ave., Tbilisi Tel: 225-20-72/73/74/76 embassy.tbilisi@mfa.gov.tr Consulate General in Batumi 9 Ninoshvili Street, Batumi Tel: 422 25 58 00 consulate.batumi@mfa.gov.tr Republic of Azerbaijan Embassy Kipshidze II-bl . N1., Tbilisi Tel: 225-26-39, 225-35-26/27/28 E-mail: tbilisi@mission.mfa.gov.az Address: Dumbadze str. 14, Batumi Tel: 222-7-67-00; Fax: 222-7-34-43 Republic of Armenia Embassy 4 Tetelashvili St. Tbilisi Tel: 95-94-43, 95-17-23, 95-44-08 E-mail: armemb@caucasus.net Web: www.armenianembassy.ge Consulate General, Batumi Address: Batumi, Gogebashvili str. 32, Apt. 16 Kingdom of Spain Embassy Rustaveli Ave. 24, I ﬂoor, Tbilisi Tel: 230-54-64 E-mail: emb.tiﬂis@maec.esRomania Embassy

TBILISI GUIDE 7 Kushitashvili St., Tbilisi Tel: 38-53-10; 25-00-98/97 E-mail: ambasada@caucasus.net Republic of Poland Embassy 19 Brothers Zubalashvili St., Tbilisi Tel: 292-03-98 Email:tbilisi.amb.sekretariat@msz.gov.pl Web-site: www.tbilisi.polemb.net Republic of Iraq Embassy Kobuleti str. 16, Tbilisi Tel: 291 35 96; 229 07 93 E-mail: iraqiageoemb@yahoo.com Federative Republic of Brazil Embassy Chanturia street 6/2, Tbilisi Tel.: +995-32-293-2419 Fax.: +995-32-293-2416 Islamic Republic of Iran Embassy 80, I.Chavchavadze St. Tbilisi, Tel: 291-36-56, 291-36-58, 291-36-59, 291-36-60; Fax: 291-36-28 E-mail: iranemb@geo.net.ge United Nations Ofﬁce Address: 9 Eristavi St. Tbilisi Tel: 225-11-26/28, 225-11-29/31 Fax: 225-02-71/72 E-mail: registry.geo@undp.org Web-site: www.undp.org International Monetary Fund Ofﬁce Address : 4 Freedom Sq., GMT Plaza, Tbilisi Tel: 292-04-32/33/34 E-mail: kdanelia@imf.org Web-site: www.imf.ge Asian Development Bank Georgian Resident Mission Address: 1, G. Tabidze Street

Freedom Square 0114 Tbilisi, Georgia Tel: +995 32 225 06 19 E-mail: adbgrm@adb.org; Web-site: www.adb.org World Bank Office Address : 5a Chavchavadze Av., lane-I, Tbilisi, Georgia ; Tel: 291-30-96, 291-26-89/59 Web-site: www.worldbank.org.ge Regional Office of European Bank for Reconstruction and Development Address: 6 Marjanishvili St. Tbilisi Tel: 244 74 00, 292 05 13, 292 05 14 Web-site: www.ebrd.com Representation of the Council of Europe in Georgia Address : 26 Br. Kakabadze, Tbilisi Tel: 995 32 291 38 70/71/72/73 Fax: 995 32 291 38 74 Web-site: www.coe.ge Embassy of the Slovak Republic Address: Chancery: 85 Irakli Abashidze St. Tbilisi, 0162 Georgia Consular Office: 38 Nino Chkheidze St. Tbilisi, 0102 Georgia Phone: 2 222 4437, 2 296 1913 e-mail: emb.tbilisi@mzv.sk

Hotels in Georgia TBILISI MARRIOTT Tbilisi , 13 Rustaveli Ave. Tel: 77 92 00, www.marriott.com COURTYARD MARRIOTT Tbilisi , 4 Freedom Sq. Tel: 77 91 00 www.marriott.com RADISSON BLU HOTEL, TBILISI Rose Revolution Square 1 0108, Tbilisi Tel: +995 32 402200 radissonblu.com/hotel-tbilisi RADISSON BLU HOTEL, BATUMI Ninoshvili Str. 1, 6000 Bat’umi, Georgia Tel: 8 422255555 http://radissonblu.com/hotel-batumi SHERATON METECHI PALACE Tbilisi , 20 Telavi St. Tel: 77 20 20, www.starwoodhotels.com SHERATON BATUMI 28 Rustaveli Street • Batumi Tel: (995)(422) 229000 www.sheratonbatumi.com HOLIDAY INN TBILISI Business hotel Addr: 1, 26 May Square Tel: +995 32 230 00 99 E-mail: info@hi-tbilisi.com Website: http://www.hi-tbilisi.com BETSY’S HOTEL With Marvellous Tbilisi Views Addr: 32/34 Makashvili St. Tbilisi Tel: +995 32 293 14 04; +995 32 292 39 96 Fax: +995 32 99 93 11 E-mail: info@betsyshotel.com Website: http://www.betsyshotel.com

Restaurants CORNER HOUSE Tbilisi, I. Chavchavadze ave. 10, Tel: 0322 47 00 49; Email: contact@cornerhouse.ge RESTAURANT BARAKONI Restaurant with healthy food. Georgian-European Cuisine Agmashenebeli Alley 13th Phone: 555 77 33 77 www.barakoni.com CHARDIN 12 Tbilisi , 12 Chardin St. , Tel: 92 32 38 CAFE 78 Best of the East and the West Lado Asatiani 33, SOLOLAKI 032 2305785; 574736290 BREAD HOUSE Tbilisi , 7 Gorgasali St. , Tel: 30 30 30 BUFETTI - ITALIAN RESTAURANT Tbilisi , 31 I. Abashidze St. , Tel: 22 49 61 DZVELI SAKHLI Tbilisi , 3 Right embankment , Tel: 92 34 97, 36 53 65, Fax: 98 27 81 IN THE SHADOW OF METEKHI Tbilisi , 29a Tsamebuli Ave. , Tel: 77 93 83, Fax: 77 93 83 SAKURA - JAPANESE RESTAURANT Tbilisi , 29 I. Abashidze St. , Tel: 29 31 08, Fax: 29 31 08 SIANGAN - CHINESE RESTAURANT Tbilisi , 41 Peking St , Tel: 37 96 88 VERA STEAK HOUSE Tbilisi , 37a Kostava St , Tel: 98 37 67 BELLE DE JOUR 29 I. Abashidze str, Tbilisi; Tel: (+995 32) 230 30 30 VONG 31 I. Abashidze str, Tbilisi Tel: (+995 32) 230 30 30 BRASSERIE L’EXPRESS 14 Chardin str, Tbilisi Tel: (+995 32) 230 30 30 TWO SIDE PARTY CLUB 7 Bambis Rigi, Tbilisi Tel: (+995 32) 230 30 30

SH. RUSTAVELI STATE THEATRE Tbilisi. 17 Rustaveli Ave. Tel: 93 65 83, Fax: 99 63 73 TBILISI STATE MARIONETTE THEATRE Tbilisi. 26 Shavteli St. Tel: 98 65 89, Fax: 98 65 89 Z. PALIASHVILI TBILISI STATE THEATRE OF OPERA AND BALLET Tbilisi. 25 Rustaveli Ave. Tel: 98 32 49, Fax: 98 32 50

Galleries ART GALLERY LINE Tbilisi. 44 Leselidze St. BAIA GALLERY Tbilisi. 10 Chardin St. Tel: 75 45 10 GALLERY Tbilisi. 12 Erekle II St. Tel: 93 12 89

Real Estate International Real Estate Company (IREC) Tbilisi. 9 P. Aslanidi St. Tel: +995 32 238 058 Mob: 599 95 76 71 Email: Info@irec.ge www.irec.ge

GSS Car rental offers a convenient service for those who are interested in renting car in Georgia. Rental ﬂeet mainly consist of Japanese made SUV’s, the company has various models of cars including sedans and minivans which are in good technical condition. Contact information: Email: info@gsservices.ge. Address: Shalva Dadiani 10

Cinemas AKHMETELI Tbilisi. “Akhmeteli” Subway Station Tel: 58 66 69 AMIRANI Tbilisi. 36 Kostava St. Tel: 99 99 55, RUSTAVELI Tbilisi. 5 Rustaveli Ave. Tel: 92 03 57, 92 02 85, SAKARTVELO Tbilisi. 2/9 Guramishvili Ave. Tel: 8 322308080,

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

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

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

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April 10, 2017 #188