Caucasus Business Week #196 by Caucasian Business Week

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June 12, 2017 #196

June 12, 2017, Issue 196 - www.cbw.ge

Agro Business New Bill Restricts Sales of Georgian Lands to Foreign Citizens

Summer 2017 Summer Resort Season 2017 – Novelties and Expectations

Nino Asatiani: All Companies and Organizations Need PR, not Advertisement

Pg. 11

Pg. 7

Pg. 8

Financial Disbalance Deepens Georgia Ranks 8th in terms of Inequality of Financial Revenues among Georgian Citizens

Role of the Tourism for Developing Social and Economic Conditions For any country, one of the most important goals is to increase economy which means to produce more and more high-quality products and services. To say in other words it means higher level of living. Naturally, economic increase is achieved by eﬀective use of the existing resources. Georgia is a very profitable place for tourism development because of it’s various natural-climatic conditions. The main principle of the tourism policy is to provide the country get as much profit from tourism economic and social revenues as possible. The final aim of the tourism policy is to improve the state progress and raise the living level of citizens. In Georgia tourism development will bring us strong economy, increase the middle class and public prosperity. It is very important to plan and develop eﬀective policy for the stable tourism industry in future. Pg. 9

Business Sector Using Estonian Model The year of 2017 started with positive tendencies in Georgian economy. In January, preliminary indicators of economic growth marked 5.2%, in February the figure totaled 4.4%, in March – 5.3%. As compared to the first quarter of 2016, economic growth indicator made up 5%, that is the highest figure after economic and political unrest started in the regions in the third quarter of 2014. In March, the following sectors made major contribution to economic growth: Housing sector (growth 18.4%, ratio p.p.) Processing industry (growth 9.1%; ratio 1.0 p.p.) Real estate operations (growth 12.1%; ratio p. p.) Hotels and restaurants (growth 29.9%; ratio 0.5 p.p.) Trade (growth 7.3%; ratio 0.5 p.p.) Economic tendencies were reflected on state budget fulfillment indicators too. In the first quarter, state budget revenues exceeded the planned indicator. Revenues marked 2 376.4 million GEL, up 327.9 million GEL as compared to the first quarter of 2016 (+16% year on year). Pg. 6

2 GOVERNMENT

NEWSROOM Agricultural lands mustn’t be sold to foreign citizens Kvirikashvili stated the Georgian Dream Government and the parliamentary majority made a joint decision to appeal to the State Constitutional Commission to make a relevant note in the draft of the constitutional amendments.

Georgia to play viral transit role connecting India to Europe Georgia, Azerbaijan are teaming up to launch a new international corridor South-West Transport Corridor for transportation of transit freight. The new corridor envisages transportation from the Persian Gulf and India to Europe.

ECONOMY

World Bank Downgrades Georgia’s Economic Growth Forecast to 3.5% According to the WB estimations, Azerbaijani economy will decline by 1.4%, Armenia is expected to record 2.7% upturn, Russia – 1.3% growth and Turkey – 3.5% growth.

Visitors Inﬂow to Georgia Grows by Annual 6% In May an inflow of visitors from Russia increased by 14 206 persons year on year. Iran is second and Armenia is third . Number of visitors has declined from Turkey – by 32 891 persons, while number of travelers from UAE has declined by 602 persons.

BANKING

EBRD Reduces Stake in TBC Bank Group After successful establishment of Georgia’s leading bank on the London Stock Exchange. The EBRD has today reduced its stake in TBC Bank Group PLC, Georgia’s largest bank, through a sale of 1.9 million or 30 per cent of its shares.

VTB Offers Cards with Exclusive Design VTB enables its clients to have bank cards with exclusive design. Clients are able to select the design of noncontact VISA Classic card and buy Design Card by online order (designcard.vtb.ge).

BUSINESS

Natural Disaster Annihilates 20-25% of Hazelnut Crop in 2017 This year natural disaster annihilated 20-25% of hazelnut crop. Similar problems arose in 2016 too and a major part of crop was lost, while the survived part was low-quality product.

Construction Sector Offers Companies to Combine Experiences in Tenders Infrastructure Construction Association reveals that Georgian companies don’t usually participate in government tenders which is explained by high standards Georgian companies do not match.

COMPANY

IC Group Sells Hospitals According to GBC news agency, IC Group has sold subsidiaries: Alliance Medi+, Medical Park Georgia, Bolnisi District Hospital, Bolnisi Adults District Polyclinics, Diagnostika-2000 and Bolnisi District Urgent Aid Service -03.

June 12, 2017 #196

International conference in Tbilisi shows new trends in IT

eorgia’s capital of Tbilisi is hosting the World Customs Organisation’s (WCO) conference and exhibition devoted to the exploration of modern information and communications technology. The16th international conference and exhibition on Modern Information and Communications Technology (ICT) demonstrates the importance of the ICT in further progress of customs activities. More than 500 guests from 180 countries customs oﬃces are now in Tbilisi to discuss topics related to e-commerce, single window, big data, data governance and integrated supply chain management. During the conference (June7-9) invited experts will share the new trends and opportunities which when used reasonably, can facilitate communication between thetrade sector, border agencies and private sector. Georgia’s Finance Minister Dimitry Kumsishvili welcomed all participants of the conference and thanked the WCO to hold the event in Tbilisi and especially when “Georgia is on the path of reestablishing itself as a major trade and transit hub not only for our immediate region, but also as one of the key links between Europe and Asia,” said Kumsishvili. The Minister gave guests a brief summary of the most important trends in recent economic development of Georgia, claiming that economy

exhibits positive dynamic in 2017. Kumsishvili talked about important trade deals Georgia has with the Euroepan Union (EU), with China, with the European Free Trade Association (EFTA), Commonwealth of Independent States (CIS) countries and Turkey. These trade regimes open to the business established in Georgia barrier-free access to the markets of 2.3 billion consumers,” said Kumsishvili. In addition, being located right on the cross-roads and having easy land, maritime and air access, we are investing heavily in developing modern transport and energy infrastructure that can serve the intraand inter-regional trade and transit. Next to the strategic location on the shortest route connecting Asia with Europe, we have also worked hard to develop business-friendly and secure environment,” he added. While talking about the favourable environment of Georgia, Kumsishvili highlighted the fact that Georgia is one of the lowest tax burden countries with a very simple tax structure, and streamlined regulations for businesses. The Minister talked about the Government-initiated four-point reform plant, accented the opportunities created by ‘One Belt-One Road’ project - a vast development strategy starting in China and spanning across Eurasia. Along with the construction of East-West highway, railway mod-

ernisation project and Anaklia Deep Sea Port project will be implemented enhancing Georgia transit potential and forming the country as a regional logistical hub,” said Kumsishvili. The Minister also paid particular attention to the ICT topic and how the sector is developing in Georgia. In his words, persons working in agriculture, tourism, transport, logistics and international trade, banking, manufacturing and other fields are all confronted with the ICT-enabled development process. Ministries and Governmental agencies are developing e-government systems throughout the country, introducing many e-services. Reforms implemented in customs field are multidimensional and cover all aspects related to customs procedures, starting with creation of appropriate and convenient legal system, and ending with one of the important pillars in order to guarantee smooth movement of people, cargo and transport means at the border crossing points - infrastructural projects and equipment provisions,” said Kumsishvili. The Minister stated that all above mentioned only proved that, Georgia as the member of world community makes its best endeavours to develop more informative and eﬀective data-driven decisionmaking system, through using ICT tools, ensuring high standard of transparency in public sector and inclusive development.

Georgian CSOs will Promote Free Trade with EU in Rural Areas

new project in support of economic development in rural areas in Georgia was launched. The project ‘Regional Civil Society Organisations as Vectors of Rural Economic Development’ is implemented by the Czech NGO People in Need with financial support of the European Union. The launching event was the occasion for PIN and its partners, Rural Communities Development Agency, PMC Research Center and Association “Atinati” as well as the Georgian Alliance on Agriculture and Rural Development, to present to stakeholders in the regions the project’s objectives and expected results together with the project activities. PIN country director Lauriane Gauny emphasized that DCFTA represents both a great opportunity, but also a challenge for the rural population of Georgia. “Small agricultural producers need support to adapt to new requirements and civil society organisations based in rural areas are the best placed to help producers along this adaptation process,” she said. Participants showed interest in the various trainings planned in the regions which will enhance the skills and capacities of 24 CSO and

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local action groups (LAG). Through these trainings, CSOs and LAG will acquire the necessary knowledge about DCFTA-related aspects, advocacy techniques and value chain research which will help regional producers to identify local products that have a potential to enter European markets. CSOs and LAGs with PIN’s assistance will ensure that regional CSOs and regional producers have access to information by establishing information and resource desks in the target rural areas, namely Imereti, Mtskheta-Mtianeti, Kakheti, Samtskhe-Javakheti, SamegreloZemo Svaneti, Adjara and KvemoKartli) . PIN project management and its partners answered questions from the audience, which mostly revolved around the functioning of information-resource desks, the channels of information delivery to the rural producers about free trade with Europe and dialogue with the government about the salient DCFTA related-issues to be identified during the project. Representatives of the EU delegation, Ministry of Agriculture, State Minister’s Oﬃce on European and Euro-Atlantic Integration spoke about the importance of promoting

awareness of DCFTA in the rural areas in order to boost Georgia’s integration into the EU market. The project aims at promoting the implementation of the Deep and Comprehensive Free Trade Area in Georgian in the seven target rural regions. To do so, capacities of Georgia’s civil society organizations (CSO) will be strengthened so that they can in return help regional small, micro and medium enterprises as well as individual agrarian-producers seize the opportunities opened by the EU Association Agreement and the Deep and Comprehensive Free Trade Area (DCFTA). The project is part of EU assistance to the Georgian Government in implementing the DCFTA), facilitating Georgia’s integration into the EU market. EU supports focuses on strengthening the capacities of Georgian small and mediumsized enterprises (SME) to adjust to a new regulatory environment, notably by strengthening economic actors and SMEs along the DCFTA process and ensuring the economic integration of targeted groups, such as internally displaced persons (IDPs), returned migrants, women in business and young entrepreneurs.

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

June 12, 2017 #196

PUBLICITY

ECONO-MIX

June 12, 2017 #196

Financial Disbalance Deepens

Merab Janiashvili Economic Analyst

Georgia’s current taxation regime deepens inequality, while the Government does not plan to revise it. Otherwise, it is unclear why people, whose monthly revenues are lower than cost of living, pay taxes.

ccording to information of Geostat, national statistics service of Georgia, in 2016 GINI coefficient in terms of total revenues made up 0.40 and this is a worsened indicator as compared to the previous year. The coefficient was 0.39 point in 2015. It should be noted that starting 2007 GINI index (inequality indicator) was declining slightly from 0.43 or maintaining the existing position. In 2016, for the first time over the past 8 years, the situation worsened. GINI coefficient is a mathematical concept that was developed by Italian mathematician Corrado GINI in 1914. Today this is the most accurate method for measuring inequality of distribution, where the figure 0 signifies the most equal, and the figure 1 signifies the unequal (or from 0 to 100). Naturally, the real practice is different. Despite the level of poverty in the society, they receive certain revenues anyway. The higher GINI coefficient, the bigger social differentiation and the state should carry out due policy to narrow this inequality. It is said that if revenues of the 10% richest part of the society exceeds revenues of the 10% poorest part of our society ten times, social tension and estrangement ripen. This coefficient is historically high in Georgia. In 2016 the figure recorded 0.40 point (that is 40%) in terms of distribution of total revenues, while the figure is higher and totals 43% in terms of distribution of money revenues. This difference proves that the lower the family incomes, the more the family tries to receive revenues in natural form – agriculture products, while the families with higher revenues receive comparatively less natural products. The developed world’s indicators prove that GINI coefficient exceeds the medium level in Georgia. Even in Post-soviet space only Russia has a little worse indicator. As noted above, Georgia’s GINI coefficient equals to 40.0 (per cent). For example, in Scandinavian countries this indicator is 25 on average and this is the world’s best indicator. African continent records a comparatively high index (about 70). Even in the region, where indicators of Post-Soviet countries are comparatively higher, Georgia’s coefficient is higher than indicators of both neighbors and post-Soviet countries, excluding Russia and Turkey. For example: Russia – 42% and Turkey – 40.2%. As to Armenia, GINI coefficient is 31.5 there. The indicator is 33.7 in Azerbaijan. Georgia’s indicator is identical to Senegal (40.3), Mali (40.1), Tunis (40.0) and Jordan (39.7). Characteristic sign of these countries is that there is no middle class or/and the middle class is very small. However, research by Brookings Institute of the USA, which decided to calculate GINI coefficient by different methodology, shows that GINI index was calculated not due to household revenues, but due to payment of taxes. It turned out that Georgia ranks 8th worldwide

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Pasha Bank hosted the third business conference in the frame of MEETING ROOM. The topic of the conference was “Healthcare Development & Expansion”, The aim of the conference was to gather healthcare sector employees and interested individuals. There were healthcare development strategies discussed: survey of Georgian Healthcare system, capital as a vital condition for the development of the sector, current situation in healthcare sector and future perspectives, establishment of hospital processes in the developing and dynamic healthcare system, integration of private insurance system in the universal healthcare, successful healthcare projects in the regions, financial support of healthcare projects. “We are happy to host the third Business Conference of MEETING ROOM which will focus on the issues of healthcare system. The topics of the previous meetings were: “Hotels Development in Georgia” and “Development of Renewable Energies based on Hydro Power Plant’s example”. We hope that the experience which will be shared at the event will be valuable for the participants, especially for those, who are interested to invest in this sector”- declared the Commercial Director and the member of Board of Directors, Goga Jafaridze. As a financial manager of Vivo Medical, Ana Kurkhuli declared, it is important that Pasha Bank supports such kind of event. According to her, healthcare sector development is in the active phase and it is important that customers receive a high quality service. It has to be noted that, it is important to manage quality control and management in general should be a priority, which is not very developed in Georgia. According to the head of Policy Department at Ministry of Healthcare of Georgia, Ketevan Goginashvili, there are few issues at the department and extra expenses are one of them. She noted that it is important to decrease such kind of expenses and she talked about the importance of collaboration between private and state sectors. Ketevan Goginashvili revealed that in July, government will start supporting vulnerable groups with chronic illnesses with medicine. At the same time, there are discussions with parliament to come up with healthcare sector development plans and by August, there should be some results. MEETING ROOM is a project initiated by Pasha Bank. It is series of businesses focused on diﬀerent sectors to create a new platform to share experiences and ideas of professionals from these fields.

Georgia Ranks 8th in terms of Inequality of Financial Revenues among Georgian Citizens

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Pasha Bank Hosted Healthcare Sector Development Conference

in terms of unequal distribution of revenues. This signifies that in the process of standard calculation of GINI coeﬃcient, households are asked about their revenues, taking into account both financial and natural revenues, while Brookings Institute method calculates inequality only due to financial revenues, because indicators are analyzed bycalculation of taxes paid by population. It should be noted that in the countries, where the medium living level is high or poverty level is low, inequality problem is not relevant, because comparatively poor population is able live normal life thanks to their incomes. For example, low-income segment in Norway or Sweden are much richer than poor population in Georgia. Not only financial inequality is at a high level in Georgia, but also poverty level is also very high. According to information of Georgian statistics department, 21% of population live in absolute poverty and this is a very high figure. This signifies every fifth person lives under poverty, about 800 000 persons. It should be noted that poverty level was declining over the past years and growth was recorded only in 2016. Finally, it should be noted that governments of all countries try to ensure equal distribution of revenues in population by using progressive system of taxes. All developed countries, including such liberal economies as the USA and Great Britain, practice progressive system of taxes and this signifies that higher-income citizens pay higher taxes. As to Georgia, there is a proportional payment regime in our country and introduction of progressive tax is banned by the basic law. According to article 94 of the basic law, Government is obliged to hold referendum on growth or change of taxes. At the same time, it is inadmissible to hold referendum on tax transformation, for example, introduction of progressive tax. Referendum may be conducted for only growth in taxes. Georgia’s current taxation regime deepens inequality, while the Government does not plan to revise it. Otherwise, it is unclear why people, whose monthly revenues are lower than cost of living, pay taxes. If the poor and rich pay the same tax, problems with inequality and poverty will always exist in the country. Developed countries have long realized this and now it is our turn to understand this to tackle these problems and develop useful taxation policy for our population.

The construction of Mestiachala HPP 1 and Mestiachala HPP 2 started today on the river Mestiachala in the Samegrelo-Zemo Svaneti region. “This is one more step towards our country’s energy independence. During constructing these HPPs the nearby territory will be developed, the infrastructure will be improved and will be suitable for tourists and first of all for the locals. Also, very important thing is that local people will be employed during the works”

Kakha Kaladze Georgia’s Energy Minister

June 12, 2017 #196

Surged Prices Aggravates Economic Condition of Our Population The year of 2017 started with positive tendencies in Georgian economy. In January, preliminary indicators of economic growth marked 5.2%, in February the figure totaled 4.4%, in March – 5.3%. As compared to the first quarter of 2016, economic growth indicator made up 5%, that is the highest figure after economic and political unrest started in the regions in the third quarter of 2014. In March, the following sectors made major contribution to economic growth: Housing sector (growth 18.4%, ratio p.p.) Processing industry (growth 9.1%; ratio 1.0 p.p.) Real estate operations (growth 12.1%; ratio p. p.) Hotels and restaurants (growth 29.9%; ratio 0.5 p.p.) Trade (growth 7.3%; ratio 0.5 p.p.)

June 12, 2017 #196

Business Sector Using Estonian Model Economic tendencies were reflected on state budget fulfillment indicators too. In the first quarter, state budget revenues exceeded the planned indicator. Revenues marked 2 376.4 million GEL, up 327.9 million GEL as compared to the first quarter of 2016 (+16% year on year). This figure constituted 24.9% of the annual forecast and this is an unprecedented high indicator. As compared to the first quarter plans, the surplus made up 163.4 million GEL (7.4%). Positive tendencies are recorded in other sectors too. As a result, accumulated funds in the first quarter made up 2 914 million GEL, up 180.9 million GEL as compared to the planned indicators (2 733.1 million GEL) and it constitutes 23.1% of the annual plan. The January-March 2017 state budget forecast revenues were determined by 2 233 537.6 thousand GEL. In the reporting period, the state budget mobilized 2 426 727.8 thousand GEL, that is 108.6% of forecast indicator. Payments forecast indicator made up 2 097 000.0 thousand GEL,

while in the reporting period 2 274 272.0 thousand GEL was mobilized, that is 108.5% of the planned indicator. It should be also noted that the profits tax reformation started on January 1, 2017. Profits tax was replaced by distributed profits tax that was enacted on January 1, 2017. According to the first quarter of 2017, it was planned to mobilize 206 000 000 GEL from profits tax. Revenues marked 259 184 000 GEL, up 53 184 000 GEL, up 25.8% year on year. This reform was to promote business sector in terms of reinvestments. Consequently, it should make positive eﬀect on economic growth. However, according to the first quarter indicators, revenues from profits tax exceeds the planned revenues. In the first quarter, the business sector has not applied the so-called Estonian Model and surplus from profits tax proves this. Namely, the plan in the first quarter was 206 000 000 GEL, and the fact was 259 184 000 GEL. The state budget received 53 184 000 GEL more revenues from the mentioned tax, compared to the plan. As a result of this reform, the state budget was to be replenished by 400-500 million GEL. However, the Government raised excise tax on tobacco, oil products and automobiles. Referendum is required to increase other taxes. Higher excise tax became the heaviest burden for our population, product prices increased amid unfavorable social conditions. Why does the business sector prefer not to apply the Estonian model? Maybe, business sector needs a certain period to get adapted to the new model, but this reform was announced long before and businessmen had enough time to reasonably apply it. As a result, business and state sectors are content, while population has to suﬀer from the burden of increased prices.

Price is $6000 per m2 at Redix Apartments on Chavchavadze Avenue Acquisition of an apartment at Redix Apartments on Chavchavadze Avenue will cost 4.2 million USD. Founder of Redix talked about the most expensive residential complex in the history of independent Georgia with Property Georgia. According to Lasha Papashvili, Sales of residential properties are strictly limited due to quantity. There are only 11 flats spread across 11 floors, each with an area of 700 m2. The price is $6000 per m2. “Interior works have not even started yet, but we have already sold 7 of the flats”, – Lasha Papashvili declares. The $70 million project is being funded by the European Bank for Reconstruction and Development (EBRD) and the Bank of Georgia. It includes residential and oﬃce properties, as well as a hotel. The 14-storey tower will be occupied by the Hilton Hotel. As for the 18-storey tower, the top 11 floors will have residential properties, while the bottom 7 floors will be taken up by oﬃces. “Even though this is a mixed-use project, all reception points will be fully independent from each other. Each flat will have a private cinema and a built-in wine room with a temperature and humidity control system. I would like to emphasise that we use only premium-quality materials for all interior works. These same properties would cost three times more in London or Paris. Redix Apartments on Chavchavadze Avenue reflect latest trends from global megalopolises right here in Tbilisi”, – the businessman declares and notes, that the residential part of the complex will be completed in the first half of 2019, while the 4-star Hilton Garden Inn hotel will open by the end of 2018. With regards to the hotel itself, Papashvili notes, that they are introducing the world’s leading brand onto the market in Tbilisi.

“With the exception of the five-star Pullman hotel, which is to be opened across the road from us, Hilton Garden Inn will have no competitors within a radius of 2 to 3 kilometres”

SUMMER 2017

June 12, 2017 #196

National Tourism Administration started summer season preparations two months ago. National Tourism Administration has been conducting marketing campaigns in 14 countries. The agency has already spent 7.5 million GEL on these campaigns and selected 8 internet platforms for conducting online advertising campaigns, including 4 Russian platforms.

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Summer Resort Season 2017 – Novelties and Expectations

In April 2017 Giorgi Chogovadze, head of national tourism administration, noted that Google was actively involved in preparing summer marketing campaign, including in planning process, analysis and consultations with Georgian specialists. «Results of our activities will be analyzed with Google specialists. In 2016 Google took part in TOUCH

- the first international conference in digital marketing conducted by national tourism administration», Chogovadze noted. Internet campaigns are being conducted in the following countries: Russia, United Arab Emirates, Germany, Italy, Israel, Ukraine, Poland, Belarus, Azerbaijan, Kazakhstan, Turkey, Armenia, Lithuania, Latvia. Georgia’s tourism potential will be advertised on the mentioned market, including sea and ski resorts, nature, wine, cuisine, culture, infrastructure and adventure tourism, Chogovadze said. Summer marketing campaign will boost interest in Georgia and increase an inflow of tourists to the country, Chogovadze noted.

“The year of 2016 ended in record indicators and the inflow of travelers hit historical maximum (6, 350, 825). The growth tendency continued in 2017 too and positive indicators were fixed in January (tourists +32.4%) and February (tourists + 16.4%). We believe summer period will be also successful and we are conducting active marketing campaigns”, Giorgi Chogovadze said. The Caucasus Business Week (CBW) has inquired what 2017 summer season expectations are. «Sumer Starts Here» - Summer Tourism Season opened in Ajara on June 9 with this slogan. Meri Emiridze, aide to Ajara Tourism Department chairman in media relation issues, explains that Ajara is ready for tourism season. This year Ajara will meet the new season with 5 new directions, including new hotels, renovated beach infrastructure, increased frequency of flights and newtourism routes in Ajara highland. New tourism products have been also developed and service quality was improved. For the first time in Georgia, in 2017 trained staﬀ will serve guests at guesthouses and food outlets in highland Ajara. As part of tourism development school, 207 owners were trained in international standards of services and management of guesthouses. Moreover, guides trained at Ajara tourism department and tourism products agency will oﬀer valuable and perfect tours to tourists interested in in Batumi and Ajara highland. Batumi international Airport is meeting the new tourism season with increased frequency of flights. In 2017 summer tourism season, 7 new airlines will perform flights to Batumi: Fly Dubai, Wings of Lebanon, Anda Air, Small Planet Airlines, Nordavia, Nordstar Airlines and Severstal. Flights will be performed from Dubai, Beirut, Warsaw, Kiev, Moscow, Cherepovets and St. Petersburg. According to TAV Georgia information, in summer tourism season 22 airlines will perform flights to Batumi from Israel, Iran, Russia, United Arab Emirates, Belarus, Turkey and other countries. Charter flights will be also performed, in addition. Many new accommodation places have also opened in the region. Four new hotels have opened in addition to 348 registered accommodation facilities – Sky Tower, Vintermi IRE Palace and Black Sea Hostel. Consequently, quantity of registered beds increased to 18 950 ones in Ajara. The region’s most attractive places such as Batumi, Batumi botanical garden and Batumi delphinarium have met the new

season with renovated infrastructure. At the Boulevard beach, renovated showers, lockers, beach chairs will serve the visitors. Tourists arrived by train will receive comprehensive information on Ajara’s tourism potential at information-tourism center of Batumi Central. They will be also able to buy domestically produced souvenirs, products and purchase specific tours for Ajara highland. The 2017 summer season will be full of various culture and entertainment programs. The city will host all international events associated with Batumi: Black Sea Jazz Festival, Topuz – festival of animated films, Classical Music International Festival and BIAFF international festival of author cinema. Ajara tourism department has been conducting marketing and advertising campaigns in 16 target countries. Consequently, the region expects a growth in tourist inflows from the mentioned countries. This year Bakuriani expect touris inflow to increase in 2017. A number of infrastructural projects is being implemented in the country and construction works will end before season commencement, Bakuriani Governor Gocha Gobronidzehe noted. «Bicycle tracks were arranged, 14 domestic roads were asphalted. Sidewalks and street illumination are being arranged. At this stage, active works are being carried

New tourism products have been also developed and service quality was improved. For the first time in Georgia, in 2017 trained staﬀ will serve guests at guesthouses and food outlets in highland Ajara.

This year 30-40 new guesthouses will launch operation in Mestia as part of Produce in Georgia program out in tight cooperation with municipal development fund and local municipality», Gobronidze said. Resort season in Bakuriani will start on July 10-15, he noted. Construction works proceed in active regime, Gobronidze added. «We expect an inflow of tourists to increase in 2017, because we have more entertainment spaces and more accommodation places», Gobronidze noted. Racha Region also expects an inflow of tourists to increase thanks to a new airdrome in Ambrolauri. New flights will start in several days and Ambrolauri airdrome will perform flights 3 times a week, Racha Governor Papuna Margvelidze said. «This will be a very good fact for our region. Moreover, infrastructure is being also developed, including the motorway to Shovi to increase tourists inflow», Margvelidze said. Several guesthouses also opened in Racha in 2017. Family wine cellars and family tourism are also developed, he said. Summer tourism season has already opened in Racha and the Region is hosting tourists, he added. Mestia Governor Kakha Zhorzholiani explains that Svaneti Region hosts tourists throughout the year. Winter season ended on June 10 and summer season started on the same day, he explained. This year 30-40 new guesthouses will launch operation in Mestia as part of Produce in Georgia program, Zhorzholiani noted. A reconstructed tourism route will also launch operation this year from Chuberi to Ushguli. Trash dump will also open in several weeks in Mestia, he added.

PR PERSON

June 12, 2017 #196

All Companies and Organizations Need PR, not Advertisement

Interview with Nino Asatiani, Trans Electrica Georgia PR manager. - Which PR firms do you admire and why? - PR, as a professional system, was shaped by Edward Bernays, a nephew of Sigmund Freud, in the USA. He developed a management system based on practice of psychology, sociology, consumer relations and social sciences. He united two words - Public and Relations to shape a new system. PR is a unity of several professions with focus on company reputation and popularization, public awareness, establishing positive and long-term contacts. I believe all projects based on loyalty to consumers and their stimulation are successful projects. I would name Edelan PR campaign with about 1 billion USD revenues in 2015. This company employed about 6000 persons all over the world. - Which media outlets do you follow? - I have been working in PR sector for more than 20 years and my traditional morning starts with media, despite location. I follow almost all media agencies to know what they write, whet they offer, what happens in the country. We should know all these aspects, because this knowledge helps us in our business. PR is unimaginable without media. Journalist and media is a bridge between you and audience. I also follow international editions with economic and energy profile, because of peculiarity of my profession. - Talk about the difference between PR and advertising. - It is an old formulation: “Advertising you pay for; publicity you pray for». Key difference between PR and advertisement is that all companies and organizations need PR, not advertisement. Unlike advertisements, PR develops long-term strategies, while priority of advertisement is its laconic and quick effect. PR plans and tries to foresee outcomes, while advertisement is a supplement to PR. Results achieved through advertisements are of temporary character, because the company cannot be considered successful if it does not use due schemes for improving reputation. It should be noted that both sectors are tightly interconnected with each other and frequently it is difficult to differentiate them. - What media placements are you most proud of? - in 205 The Rezonansi newspaper was publishing a series of my articles – About Gas Problems in Georgia. In that period SOCAR was entering Georgia’s energy market and new relations were shaped in the region. Since 2012 I have been also cooperating with FOR.GE internet portal. I am proud that I had the opportunity to be member of this group that developed Georgian Energy Strategy in 2014 and published it in three languages. - Describe some affiliate networks you’ve collaborated with and why you chose them. - At the beginning of my career there was very complicated situation in our country. I started business that was an innovation for everybody. I started with literature xeroxed in a small room and reached innovative technologies. I started working in power sector in 1997, one of the heaviest periods. I believe PR campaign for reformation of Georgian energy sector was successful. - PR and communication strategies developed in 2001, acquaintance of energy sector reforms to society. ERRA and NARUC recognized the communication

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Crisis situation is an inseparable part of Georgian reality. How do I act in crisis period? We develop anti-crisis plan, maximally improve internal communication, immediately gather members of anticrisis group, improve message boxes, shift accents, prepare answers to undesirable questions, appoint speakers in their directions and carry out media monitoring every day.

strategy developed by me in 2007 for tariffs determination as the best case and included it into the teaching methodology of European and the US regulators. The last one was Khudoni HPP PR campaign that was interesting and very sophisticated. I think it is very difficult to ruin 40-year negatives, but it is also very pleasant process at the same time. - How do you integrate social media with PR? - Considerable part of PR campaigns is recorded for social media. Today it is the most efficient mechanism of communication that enables to determine target groups and set direct contact with them. Today’s relevant question is whether social media is able to replace traditional media. I think no! Blog post of Facebook or a Twitter status does not suffice, compared to an article or expression in popular and readable newspaper. Social media may be an additional service that strengthens PR. - How does PR support content marketing? - Content marketing was actualized in 2009, while today content marketing is one of the important tendencies in global marketing. Content marketing creates and spreads valuable, timely, necessary information for drawing attention of target audience and making impression. Today in this segment info-graphics and video info-graphics are one of the most required components. It visualizes the content. As a result, the content draws the attention of the reader. They easily perceive information and remember it for a long period. - How would you present the results of your work? - When you do your best and devote yourself to your job that becomes a part of your life, in this case these attempts justify and bring success. I try to learn something new every day, to have a wider access to new and innovative technologies. A person should not be ever satisfied with achieved results. On the contrary, I always seek novelties every day and try to become more professional and successful. - What would you do if a client or manager disagreed with your PR strategy? - PR is the world of persuasion, even the art. I always try to persuade my audience to back my position and acknowledge achievements and success. However, I am also flexible to reach consensus. If I, as a PR specialist, fail to persuade my client or manager, how can I persuade the society in righteousness of my position? Therefore, when I develop a PR strategy, I maximally try to take into account the client demands, adapt them to the existing reality and harmonize public demands with the company plans. - How would you define thought leadership? - Thought leadership is a content marketing form driven by talent, creative capacity, experience that makes your business successful. Our content should be absolutely different and differentiated in terms of thought leadership. However, audience demands to provide best answers to questions, like Brian Rodas who: «You should gain victory over the internet every day». The very thought leadership makes you a communication leader and you are more active when communicating with your clients and target audience. - Describe a time you had to manage negative media attention. - In my biography I have answered a lot of negative media attacks and turned around the situation. I had to treat

problematic and difficult projects everywhere, where I started working. PR promotion of the agreement with Gazprom was the heaviest process in 2003. This was not one specific agreement. This was politics and all parties were trying to make benefit of this situation. However, the time has showed that under this agreement Georgia has received natural gas up to 2016 and the party that fought against the agreement, has usefully used this agreement, because this was a necessary agreement with quite favorable conditions. Moreover, quite negative reaction was expressed in relation to growth in gas and electricity tariffs, when we were trying to make breakthrough in public opinion and we successfully managed to change the exiting stereotypes and deliver our messages and opinion to our society. - Describe a time your PR communications were misunderstood by your target audience. How did you handle it? - I remember aggression of target audience in the process of TELASI privatization in 2000 and errors made in the PR communication. However, the problem was identified soon and PR communication was corrected and we received desirable results. - How have you worked with a team to handle a PR crisis? - Crisis situation is an inseparable part of Georgian reality. How do I act in crisis period? We develop anti-crisis plan, maximally improve internal communication, immediately gather members of anti-crisis group, improve message boxes, shift accents, prepare answers to undesirable questions, appoint speakers in their directions and carry out media monitoring every day. Post-crisis working is also very important: evaluation of crisis and analysis of its reasons. Adapting of messages for post communication, post-crisis analysis (what was made correctly and what incorrectly). - Describe a time you trained or mentored a colleague. - Mainly, power and economic international companies invite me for conducting workshops and lectures on PR issues. I was specially invited as a trainer to Budapest for conducting trainings for PR specialists, where I read lectures for developing efficient communication ways and planning issues. In 2008 I was a mentor for ERRA digital education course for staff of regulatory commission – the topic was: “Principle of Operation of Regulatory Commissions and Public Involvement». I have cooperated with Danish company Rambo for developing a communication strategy for Green Economy project, where I was a mentor and a group leader. The key personal feature is the ability of efficient transition of knowledge and experience, introducing innovative ideas to colleagues and finding ways for resolving sharp problems. It is also important to have logical mind, creative captivity, analytical mind, ability for easy adaptation and resolving several problems simultaneously. - What’s interesting about our current PR work? What would you improve? - I think making accents on details in the most interesting thing in PR. You should be able to guess reaction in advance to your PR campaign. You should improve your skills every day and broaden your knowledge. You should study, write, read, receive pleasure from writing and talking. Those, who are able to make good interpretation, are always able to persuade others.

June 12, 2017 #196

TOURISM

Aslan Jashi CARTU BANK Servisce Center Director Iakob Gogebashvili Telavi state university Doctoral student

For any country, one of the most important goals is to increase economy which means to produce more and more highquality products and services. To say in other words it means higher level of living. Naturally, economic increase is achieved by effective use of the existing resources. Georgia is a very profitable place for tourism development because of it’s various natural-climatic conditions. The main principle of the tourism policy is to provide the country get as much profit from tourism economic and social revenues as possible. The final aim of the tourism policy is to improve the state progress and raise the living level of citizens. In Georgia tourism development will bring us strong economy, increase the middle class and public prosperity. It is very important to plan and develop effective policy for the stable tourism industry in future. The politicians, officials and concerned parties who plan this process will have to determine the developing tendency of tourism and take new measures which will cause sequential advance and create quality production. All of these will be useful for both tourism and local population. Unfortunately, in past the government was not as interested in tourism development as - in the development of industry or other services. In Georgia tourism development is one of the most important parts of the economy raise. Tourism sector as the part of economy can bring us high revenues. Today it is one of the quickly-developing and highyielding industries in the world which is going on development with quick steps. In the country the tourism popularization helps to develop such services as: hotels and restaurants, transport and communication. Finally, all of these provide with new workplaces. Above mentioned process is especially important for regions where the employment level is very low. The tourism influences on region economy development essentially, helps foreign currency income in the country, improves infrastructure and so on. In the world market tourism can be mentioned as invisible export which contrib-

In Georgia tourism development will bring us strong economy, increase the middle class and public prosperity. It is very important to plan and develop effective policy for the stable tourism industry in future.

Photo/Nate Robert

Role of the Tourism for Developing Social and Economic Conditions The main goal of the state social-economy policy is tourism’s purposeful and complex development. Tourism is one of the quickly-increasing sectors of Georgia’s economy. utes the country to develop successfully. Tourism as the consumers service takes an especial role as in the world economy development as in our country development process. Hotel business is one of the most important parts of tourism. Under globalization conditions hotel industry is selected with high quality level. The number and demands of hotel costumers are increased annually and accordingly higher the service culture and quality much more attractive and successful the hotel is. Lately in Georgia after political and economical challenges there was formed business and cultural

relationship between our country and the world friendship. This process became a serious reason for increasing the number of visitors in our country. After this, it became necessary to provide them with high level hotels. That’s why it caused to increase investments in hotel business. There were made hotel building projects in diﬀerent cities. Such famous and transnational hotel companies as: Hilton, Marriot, Radisson, etc. were interested in Georgia tourism market and of course it is really very important for our country. The most number of economists think that tourism is more successful when the country is less depended on import and has its own production. That’s why it gives extra motivation to stimulate and produce Georgian products, improve its quality and develop industries. In Georgia there were created the state programs “Produce in Georgia” and “Host in Georgia”. Their aim is to help our industry, agriculture, hotel and restaurant business develop successfully. Finally, it will cause to increase the number of visitors and economy level in our country. Tourism influence on economy may be very huge because it can create workplaces,

decrease unemployment, develop industry, local trading. It demands eﬀective communication and helps through cultural exchanges. According to the international organizations statistics a tourist spends about 1000$ in a week (except transport expenses for arriving at the country). It means that currency resources creation is depended on tourism development. One new workplace in the tourism sector means at least two workplaces in the related sectors (transport, trade, etc.). The tourism helps to develop a social-economic level in regions that is very problematic in Georgia. In many developing and less developed countries the tourism is the main source of revenue. It can be mentioned that region population can get much more benefit from tourism revenues. They have abilities to be self-employed, sell their local products and services. That’s why there were increased the number of employed and hired people in regions. Modern tourism is one of the important reserves of employment and at the same time it is considered as an important factor to overcome the poverty. The main goal of the state social-economy policy is tourism’s purposeful and complex development. Tourism is one of the quickly-increasing sectors of Georgia’s economy. In 2016 (besides from our neighbor countries) the visitors arrived here from Ukraine, Iran, Israel, Kazakhstan, Saudi Arabia and Belarus. Georgia has a great potential for developing the tourism. By complex activation of it there can be increased revenues especially currency resources, develop infrastructure and other sectors. After all these our economy can be strengthened which is so necessary to make new workplaces and raise the living level in Georgia.

BUSINESS

June 12, 2017 #196

Philip Morris Wins Trial Against Tbilisi Tobacco

Natasha – Handmade Knitted Bra Startup by Georgian Journalist

Court of Appeal canceled Tbilisi City Court decision to charge tobacco producer multinational company, Philip Morris, with 93 million GEL. Tbilisi tobacco filed a case against Philip Morris, claiming that the company operated with dumping prices in 20132015 at the market. Court of Appeal closed the case and completely canceled Tbilisi City Court decision.

Hand-made Knitted Bra brand, Natasha was launched two months ago. The founder of the startup is Imedi Morning journalist, Nata Tabidze. The founder talks about the challenges, advantages and startup development plans with Marketer. I started working for the brand alone with the help of the tailor. I have no experience in this filed but I like linen myself and I often buy it. I thought that if I wanted to buy a perfect bra, it would be knitted, but surprisingly, I couldn’t even find it on the Internet. That encouraged me to think about creating a new brand.I named the brand after my nickname, Natasha. Where is it possible to purchase your product? At present, it is available to buy the product only via facebook. Customers contact us on facebook page and order specific models. Product is handmade, therefore, it doesn’t match exactly what you order but it’s quite similar. Besides, our production is sold in two shops, in Batumi. We are planning to launch swimming suits and underwear line, however, currently; we don’t have enough capital to implement the plan yet.

Zaza Broladze Moves to PMCG’s Governing Board After making the decision in February this year, Zaza Broladze will complete his move from Deputy CEO to the Governing Board of PMCG this month. As a Non-Executive Director, Zaza will have more opportunity to encourage and support PMCG’s strategic development and innovation, the exploration of new business ideas, facilitate sustainable growth, provide strategic directions and guide quality improvement. He will also be involved in the implementation of specific projects. He has been an integral part of PMCG from the very beginning and has played a crucial role in developing and expanding the company. He is a valuable team member, with about 20 years of impressive experience in top management positions and has sound experience of working with international organizations and government institutions alike. We are confident that Zaza will continue to contribute significantly to PMCG’s development and success in his new position.

Blockchain Keeps More Than 200 000 Information Records Georgia is one of the first countries to use blockchain technology to register properties. Innovative technology of blockchain provides aﬀordable, transparent and safe registration transactions. From February 20, 2017 any kind of realty record information is automatically transferred to blockchain system. At this time, blockchain keeps more 200 000 record information. The Blockchain is the underlying technology supporting digital currencies like Bitcoin; it’s a decentralized platform that securely processes transactions through encryption. Since this technology cannot be owned by any one person, company, or entity, and each user has the ability to view or access the state of Blockchain at any given time, the Blockchain has become increasingly lauded as a new underlying protocol and infrastructure to do completely new and revolutionary functions that have a great impact on business, industry, government, and potentially society.

TBC Leasing Presents Innovative Product Starto Starto is a new product of TBC leasing, which enables physical persons to fill in online application and purchase second hand automobiles without having to leave their houses. Starto is a unique product, because it matches customers’ needs. If you want to buy a car, you don’t have to go to the oﬃce anymore, talk to a sales assistant and wait for the decision. Starto will make everything happen online in the shortest time possible. First of all, you need to choose the automobile you want to purchase,fill in the online application at Starto website www. starto.ge (If the car is allocated on the website, customers can copy the link and download the pictures of the car as well). In few minutes, Starto representatives will call you and let you know about financing, considers all the details and purchase the car for you which will be granted to you with leasing. You will have to go to the oﬃce only once to sign the agreement and automobile registration process will take about 30 minutes. In addition, if you already have a car, you can get financing for it and continue using the car dur-

ing the leasing term. The ones, who are already using auto leasing or auto loan in other micro finance organizations, are able to switch to Starto. To use Starto products, you have to be at least 21 and the cost of automobile should amount to 2000 USD. Anyone can get Starto financing: If you want to purchase an automobile but don’t have enough savings, you can get financing up to 100%. If you already have a car and need to add money, you can get financing of 100% via providing the automobile. If you want to renew your car or purchase more economical automobile, you can get special conditions for hybrid automobiles. If your credit history is positive, we will consider your application and considering few additional conditions, you will get financing. Starto annual percentage rate is individual for specific automobiles and customers and it depends on diﬀerent index, such as client credit history, type of the automobile, commercial value and the volume of participation of the customer.

Arabuli Art House – Intangible Cultural Heritage Turned into Family Brand Arabuli Arthouse Traditional Workshop was established in 2015, in the village of Korsha, Khevsureti. Its aim is to save intangible cultural heritage in Khevsureti. Arabuli Art house produces clothes with old ornaments as well as knitted souvenirs, wooden items and jewelery. The founder of the workshop is Nino Berdia and Shota Berdia and their motto is Wear History and Create In the Mountains. One of the founders, Nino Arabuli will talk about regional business social responsibility, traditional technologies of producing modern products and how Arabuli family is going to develop the business. What is the concept of Arabuli Arthouse and what made you decide to create family brand? We create new products considering khevsureti traditions. Our main duty is to explore ethnic, intangible cultural heritage, keep it and develop it to present to wider public.My uncle, Shota

Arabuli had been collecting old items and he created a museum afterwards. I have been involved in tourism industry for more than 10 years and I could see that there was a demand for good quality souvenirs. Khevsureti has a big potential in this field. Where can customers purchase your production and what is your pricing policy? We participate in many exhibitions where we sell our production very often. You can buy our products online as well as in our workshop. The minimum price is 7 GEL and it can reach up to 1500 GEL. What are your future plans to develop the brand? We are working to find financial support to increase our production.We want to introduce our production to diﬀerent tourist shops in Tbilisi. We are also planning to sign the agreement with few large companies and we have negotiations with companies abroad to export our product.

AGRO BUSINESS

June 12, 2017 #196

The ruling political party has taken a decision to adopt constitutional amendments and restrict sales of agriculture lands to persons, who do not possess Georgian citizenship, Prime Minister Giorgi Kvirikashvili told the government meeting.

New Bill Restricts Sales of Georgian Lands to Foreign Citizens

he ruling party has held consultations with the participation of government oﬃcials, parliament’s majority members and we have agreed to apply to the constitutional commission and to make a record into the constitutional law, under which persons without Georgian citizenship will not be authorized to buy agriculture lands in Georgia. We will have the following formulation: a Georgian citizen, a group of Georgian citizens, the state and a self-government unit will be authorized to own an agriculture land in Georgia”, Giorgi Kvirikashvili said. The legislative bill has been already submitted to the Parliament. The document sets restrictions and certain conditions on transmitting

gia will be authorized to own a land in Georgia if its founder or owner of more than 50% of shares is a Georgian citizen or a legal entity founded by a Georgian citizen. The bill, which restricts sales of agriculture lands to foreign citizens, consists of 5 bills. It should be noted that the law will not be applied to legal relations arisen before its enactment. Parliament’s majority seems very content with the new legislative initiative. Georgian Dream MP Gedevan Popkhadze noted that agriculture land regulations should, first of all, enable Georgian citizens to become land owners, not foreign citizens. Popkhadze is sure that an absolute majority of population backs the new agriculture land

The Plant Nursery Certification Process Will Protect the Farmer from Falsification The Farmer Himself Is Not Interested In Verifying the Quality of the Seedlings

Business Consulting Company

IRAKLI CHIKAVA Commercial director of Consulting Company “Agro Solutions”

agriculture lands to foreign citizens in ownership. Under the bill, foreign citizens are authorized to own agriculture lands if they have inherited the land or the due land is a co-ownership asset obtained through a marriage with Georgian citizen or obtained with the participation of a Georgian citizen, who is a household member. Foreign citizens will not be authorized to buy less than 5 hectares and more than 100 hectare lands. Like a legal entity in Georgia, a foreign citizen will be obliged to submit an investment plan and proofs to the Ministry that he/she genuinely owns due financial resources for implementing an investment plan, as well as the agreement proving that he/she has used an agriculture land for at least 5 years. If a foreign citizen owns more than 50% stake in authorized capital of commercial banks, microfinance organizations and international financial institutions, he/she will receive a land for only one year. After the year, they are obliged to alienate the land to an authorized body. If they fail to fulfill the mentioned regulation, then they must notify Ministry of Economy and the Government will ensure a transition of the land into state ownership, under the state-determined price. Legal entity registered in Geor-

regulations. “Motivation for introducing special regulations is that land is an limited resource. Its space has been determined in specific numbers. Therefore, first of all, our population, should have access to this resource in terms of property ownership. Our priority is to ensure rights of Georgian citizens on land. Those, who defends this land, first of all, should own ownership rights on this land. The bill does not refer to nonagriculture lands. If someone, including foreign investors, want to build a hotel or factory, they are authorized to receive corresponding lands”, Gedevan Popkhadze told InterPressNews. Zurab Chiaberashvili, member of parliament faction Movement for Freedom – Regions, expressed absolutely diﬀerent position. Restriction on sales of lands to foreign citizens will make negative aﬀect on Georgia’s economic activity, he said. “Current position of Georgian Dream does not enable to use a land as a resource of economic activity. Regretfully, we should expect land prices to decline if the new bill is adopted. Consequently, many citizens, who own lands, will not be able to use them. This component will restrict economic activity and harm economic interests of our country”, Zurab Chiaberashvili said.

In recent years, cultivation of fruit tree gardens is very active in Georgia. All the above mentioned were stimulated by the Project of Agricultural Projects Management Agency-“Start the Future.” Within this program, Georgian nurseries were able to register in the Agency. The Georgian farmers, who were cultivating fruit tree gardens through the future project, have purchased the seedlings from these registered companies. Correspondingly, stimulation of sales helped farmers to make a decision to start cultivation of seedlings. So it happened and already 44 nursery farms have been observed in ”Start the future” program and whilst in Italy, for example, there are about 40 nurseries. Naturally, most of the seedlings do not meet the basic agrotechnic requirements. In order to protect the Georgian farmer, Georgian Parliament has approved the law on “Access and Methodology for Distribution of Agricultural Varieties which is Subject to mandatory Certification”. This law regulates the relationship concerning the production, reproduction, processing, storage, certification, realization, traceability and local and imported seeds and planting material of agriculturel seeds and planting materials. According to the law, there will be created national catalog, which will include a list of agriculture crop varieties, which are allowed for distribution and are expe-

rienced on agricultural use on Georgian teritory. According to the law, certification of agricultural crop varieties is voluntary, except for the agricultural crop varieties which subordinates to the compulsory certification determined by the Government of Georgia. Before 1st of January, 2019, the Certification of agriculture crop varieties and planting materials which are subject to mandatory certification will be free of charge for the interested persons, and from 1st of January, 2019 – it will be chargeable. The mentioned law also regulates the seeds which are intended for sale and terms for labeling of planting material for sale. Currently, the process of voluntary certification of seedlings has been started. According to international standards of certification procedures of planting and multiplication materials COUNCIL DIRECTIVE 2008/90/EC and EPPO Standards SCHEMES FOR THE PRODUCTION OF HEALTHY PLANTS FOR PLANTING, the farmers who produce planting materials are obliged to submit the test results of soil analysis to the Scientific Research Center of Agriculture and Seed Planting Materials Standards and Certification Research Service. On the existence of virus transmitter nematodes in the soil of nurseries species owned by them such as Prunus (cherry, plums, apricots, peaches), Juglans (walnut), Rubus (raspberry, blackberry), Ribes (currants, gooseberries) and Fragaria (strawberries). The Laboratory of Ministry of Agriculture has a technical ability to conduct testing of viruses in vegetable material, as well as to identify virus transmitter nematodes in the soil. The problem is

that, the farmer himself is not interested in verifying the seedling quality. In most cases, the awareness of the farmer is low and he does not know what damage can cause viral or other diseases. One of the most important risk factors of completion of stable and long-term development of nurseries is the program “Start the Future” itself. It has caused the stimulation of this sector and majority of nurseries have been increased their capacities by the high interest of the state program, which was emphasized by the farmers. Therefore, the future of the nurseries is unclear after the completion of the project. Supposedly, there will be suspension of guaranteed sales, which will result in a decrease of market prices. Although, if there is a high demand for Georgian products in the international markets and there will appear exports ways from Georgia (as it happened on the nut case), the development of the mentioned field is possible without the project “Start the Future”. • The problems of development of local nurseries are: • Deficit of special techniques (plant recycling, planting equipment) • Lack of skilled specialists is problematic • Lack of usage of modern technologies. However, it should be noted that 10 nursery saplings in Georgia are producing high quality nurseries, having relevant knowledge, technology and technical equipment. We hope that the certification process will further assist the process of producing high quality seedlings and this, in its turn, will protect the farmer from falsification, which ensures the production of high quality products.

PUBLICITY

June 12, 2017 #196

WORLD TAP contractors receive over 66% of pipes for Greek section

Armenia joins OECD convention on counteracting tax evasion Armenia has joined the multilateral convention of the Organization for Economic Cooperation and Development (OECD) on counteracting the tax base erosion and profit shifting (BEPS), the Armenian ministry of finance said today in a press release. The convention was signed Wednesday by Armenian finance minister Vardan Aramyan in Paris, reaffirming Armenia’s commitment to cooperate in the global efforts to tackle aggressive tax planning. Representatives of 68 jurisdictions, including Armenia, Austria, Australia, Finland, Georgia, Germany, France, Italy, Sweden, India, Great Britain, Russia, Switzerland and others, signed the Convention which will have the effect of amending most of the bilateral tax treaties of the signatory jurisdictions in respect of treaty related measures under the BEPS package for preventing artificial tax avoidance, prevention of treaty abuse, and improve dispute resolution. However, countries do have the liberty to argue their point and make sure that they meet minimum BEPS standards. The Convention will ensure that the minimum standards regarding prevention of treaty abuse and amelioration of the international tax dispute resolution process are implemented in all covered tax agreements quickly. OECD is one of the world’s leading economic organizations, comprising 35 most developed countries. The headquarters of the organization is in Paris, France.

The construction of Greek section of the Trans Adriatic Pipeline (TAP), the pipeline’s greatest geography, advances on time, on track and on budget, TAP AG consortium said in a message on its website. “Thanks to the eﬀorts of over 3,000 people working for the project, 13 months after the inauguration ceremony works have significantly progressed in two of the three Northern Greek Prefectures to be traversed by the pipeline: Eastern Macedonia-Thrace and Central Macedonia,” said the message. As of end-May 2017, out of the ca. 550 km of pipeline in total to be built on Greek soil, TAP’s contractors have already received more than 66 percent of the total 32,000 line pipes to be used for the construction of the pipeline’s Greek section; cleared and graded almost 300 km of the route; strung 272 km of pipeline; and welded ca. 250 km of the mainline.

For the implementation of the project, TAP is collaborating with multiple domestic partners investing millions for goods and services. Overall, 176 companies operating in Greece have already been involved in the implementation of the project – reaping both financial benefits and invaluable expertise. TAP is a part of the Southern Gas Corridor, which is one of the priority energy projects for the European Union. The project envisages transportation of gas from Azerbaijan’s Shah Deniz Stage 2 to the EU countries. The pipeline will connect to the Trans Anatolian Natural Gas Pipeline (TANAP) on the Turkish-Greek border, run through Greece, Albania and the Adriatic Sea, before coming ashore in Italy’s south. TAP will be 878 kilometers in length (Greece 550 kilometers, Albania 215 kilometers, Adriatic Sea 105 kilometers, and Italy 8 kilometers).

With enough gas storage, Turkey can turn into energy hub, says top energy oﬃcial

Roughly 11M tons of Azerbaijani Oil Transported via BTC

Russian Wheat Farmers Will Get Relief as Soggy Fields to Dry Out

Roughly 2,237,140 tons of Azerbaijani oil was transported via the BTC main export pipeline in May 2017. Over 10 million tons of oil was transported via this pipeline in January-May. In general, more than 332 million tons of oil has been pumped to BTC since the start of pipeline exploitation until June 1, 2017. In addition, overall 561, 762 tons of Turkmen oil was pumped via BTC in May 2017. Some 2 million tons of Azerbaijani oil was delivered from Ceyhan Port to the world market in May 2017. SOCAR reported that 1,322 million tons of this volume was the oil of the State Oil Fund of Azerbaijan Republic. During January-May of 2017, the volume of the exported oil from Ceyhan Port to the world market totaled 10, 275 million. In general, 330,110 million tons of Azerbaijani oil has been exported from Ceyhan Port to the world market since the start of BTC exploitation until June 1, 2017. Baku-Tbilisi Ceyhan pipeline carries oil from the Azeri-ChiragDeepwater Gunashli (ACG) field and condensate from Shah Deniz across Azerbaijan, Georgia and Turkey. The pipe links Sangachal terminal on the shores of the Caspian Sea to Ceyhan marine terminal on the Turkish Mediterranean coast.

Russia’s wheat fields are expected to see warm, dry weather in the next two weeks, a relief for farmers that have struggled with a cold and soggy planting season. Wet fields of winter wheat will start drying out, which would benefit the crop to be harvested next month, according to Commodity Weather Group. Later in June, most models show rain will return, which would replenish soil moisture and keep the crop in good shape, said David Streit, a forecaster for the Bethesda, Maryland-based firm. “Russia has a good soil moisture supply in place going into this drier spell that the wheat can tap into,” Streit said, adding that the dry weather will help prevent disease. Bad weather has lowered expectations for Russia’s total grains production, and traders are closely watching weather forecasts ahead. Earlier this month, the Agriculture Ministry cut production estimates to as low as 100 million metric tons from a previous forecast of 110 million tons, according to a report from Tass news service, which cited an interview with the minister. Earlier in the year, cold weather in central and southern Russia, the main areas for winter wheat, raised the risk of

delays to the wheat and barley harvest. It’s also possible that central and eastern Ukraine, and central portions of Russia’s North Caucasus could see lower yields, said Kyle Tapley, a senior agricultural meteorologist at MDA Weather Services. “I don’t see major problems for the winter wheat except for some falling behind with vegetation, but it is not the major issue,” said Dmitry Rylko, director general of Institute for Agricultural Market Studies in Moscow. The weather could be a bigger problem for spring crops, such as wheat, barley and corn, which are falling behind in planting and development, he said. In the spring-wheat areas of Volga region and the Urals, the fields will likely remain cold and wet over the next 10 days, which could slow planting and early crop growth, said Tapley of MDA. However, conditions could improve later in the season, he said. Sowing of spring wheat, the smaller of the two main wheat harvests in Russia, are lagging behind last year’s pace. Plantings account for 12.5 million hectares (30.9 million acres) as of June 2, compared with 13.3 million hectares a year before, according to the Agriculture Ministry.

If Turkey has sufficient physical gas storage to trade large volumes of gas passing through its territories, the country will have every opportunity of becoming a genuine energy hub for southeast Europe, International Energy Charter SecretaryGeneral Urban Rusnak told state-run Anadolu Agency. Speaking to the agency on the sidelines of the Ashgabat International Energy Charter Forum, Rusnak said Turkey is a very significant energy transit country and an important energy hub in a broader sense. The country is trying to develop its own upstream projects in fossil fuels, but on the other hand, is also diversifying through expanding the use of renewable energy, Rusnak stressed. “So Turkey is becoming a laboratory of all kind of energies in production, trade and investments,” he said. If Turkey wants to pursue its goal of becoming a real trading hub, the volumes and ability to physically store these volumes will be very important, according to Rusnak. He asserted that in order to create the conditions for a trading hub, it is not enough to be merely a transit territory with the provision of vital pipelines and interconnections, but it also requires physical storage to be able to trade large volumes of gas. If Turkey can achieve this, then the country will be able to become a genuine hub for southeast Europe, he added. Rusnak hailed the importance of the Energy Charter Treaty for energy cooperation and governance - elements that would be vital to support Turkey’s ambitions as a hub.

PUBLICITY

June 12, 2017 #196

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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June 12, 2017 #196