Caucasus Business Week #198

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June 26, 2017 #198

June 26, 2017, Issue 198 - www.cbw.ge

Main events Georgian Railway Hosts Annual Meeting of CER Pg. 2

Ratings Ranked Law Firms and Lawyers in Georgia by Chambers & Partners

Natalia Khatiashvili: PR is Wider Concept than Ordinary Advertisement Pg. 8

Pg. 11

Absence of Qualified Workforce in Villages

Suspicious Medications Quality and High Prices

Villages lack for qualified workforce. This problem remains under discussion for a long period. Ministry of Agriculture also proves that this problem genuinely exists in villages.

«Today villages lack for engineers, agronomists, mechanizers and many other specialists», Deputy Agriculture Minister Giorgi Khanishvili said. Today, it is difficult to find due specialists in villages, he added. «We have two huge criteria in agriculture sector – negative trade balance and the Georgian business should work in this direction and Georgian agriculture sector should boost production. The second one: – There is a great number of unemployed citizens in Tbilisi. Job-seekers do not want to leave Tbilisi and find job in regions. I understand it is very difficult to listen to the truth, but people prefer to live in Tbilisi, remain unemployed and complain, or blame the authorities for their unemployment, while today it is a real problem to find workforce in villages.

Pg. 7

Negative Interest Rate

Pg. 4

Since the most recent global financial crisis, interest rates in developed countries have been unprecedentedly low. The real interest rates are close to zero and in a number of cases, are even negative. The European Central Bank was the initiator for establishing the negative interest rates when it began using monetary policy instruments previously unheard of.

The interest rates of the Central Banks of Europe, Japan, Denmark, Sweden and Switzerland were set at0.4% in March 2017.

As for the real interest rates of the United States, UK, Germany and Japan, they have been moving from positive to negative for the past 15 years (see the above diagram). Economists have yet to come up with a unified view about whether or not this new and paradoxical practice tailored for long-term economic growth according to its authors, will be successful.

Pg. 9

2 GOVERNMENT

NEWSROOM Over 20,000 new business ideas registered for ‘Produce in Georgia’ Once all business ideas were registered, a special commission started sorting out the best business ideas.

About 5,000 authors of the best business ideas will go through special trainings on entrepreneurship and designing a business plan.

Gov’t gifts homes to 389 internally displaced families Half of the gifted apartment and houses are in the capital of Tbilisi while the rest are in different cities and towns across Georgia, including Borjomi in the country’s central area, Poti and Zugdidi in the west of Georgia and Akhaltsikhe in southern Georgia.

ECONOMY

Averaged Monthly Salaries in Georgia due to Sectors According to Geostat, national statistics service of Georgia, in the first quarter of 2017, averaged monthly salary of an employee marked 989 GEL, up 8.4% year on year.

Georgian Exports to EU Countries Grow by 41% According to Geostat, national statistics service of Georgia, in January-May 2017 the country exported 260 million USD products to EU market, up 40.7% year on year. In the reporting period, imports totaled 830.4 million USD, up 9.1% year on year.

BANKING

TBC Bank Leads in Rating of Deposits Ratio of TBC Bank on deposits market has increased by 40% (01.05.2017 -37%). The portfolio has risen by 9.9% in May (01.05.2017 – 3.3 billion).

Industrial Products Producer Price Index Grows In May producer price index for industrial products rose by 9.4% year on year, while the index has not changed month on month.

In May 2017 prices rose by 0.6% for processing industry products, which was reflected by 0.51% in total indicator of the index.

EU Market Opens for Georgian Anchovy From June 20 Anchovy caught in Georgian Waters of the Black Sea basin will be the third products of animal origin admitted to the EU market. The EU human health and right protection directorate will officially publish the decision on June 20.

COMPANY

PM: Constitutional changes contribute to Georgia’s democratic development

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eorgian Prime Minister Giorgi Kvirikashvili summarised the main changes to the State Constitution.

According to Kvirikashvili: • The President will still be elected through direct elections in 2018 • The country will move to a fully proportional election system by 2024 • The election threshold will be decreased from 5 percent to 3 percent by 2020 • Parliamentary opposition will have increased authority. In particular, they will be eligible to create an investigative commission • Judiciary will have a stronger warranty of independence • Integration into European and Euro-Atlantic structures will be defined as Georgia’s foreign political choice • Georgia’s agricultural lands

will not be sold to foreign nationals, but long-term leasing will be available in exceptional cases • Quality of protection of labour rights will increase • The country’s social responsibility will increase.

Kvirikashvili said that all of the changes contribute to the country’s democratic development.

I want to address our society to realise the value of these achievements and welcome the progress that the constitutional changes will bring to the country in terms of balancing the branches of government and increasing the quality of democracy,” Kvirikashvili said.

Prime Minister also noted that after the 2010 constitutional amendments, the country ended up with a constitution containing numerous flaws, inconsistencies, and norms introduced in defiance of constitutional logic.

Eliminating these flaws, balancing the constitution, and switching over to a fully-fledged parliamentary system of government was our team’s goal in initiating changes”, Prime Minister said.

He said this is exactly why the State Constitutional Commission was established to bring together politicians, NGOs, and independent experts.

Most importantly, public debates of unprecedented dimensions were held and the population of our country was given an opportunity to express its opinion on the proposed amendments” Kvirikashvili said.

The State Constitutional Commission decided last year to review the current constitution by the end of April 2017, which has been followed by public discussions over the proposed changes. The 73-member commission unites state and civil society organisations, parliamentary and non-parliamentary parties, and experts.

Banking Sector Profits Keep Growing The banking sector’s profits rose by 19.5% in May month on month.

Fourteen commercial banks ended the month of May in profits.

Ratio of top leading commercial banks in total profits is 90.4%, while ratio of Bank of Georgia and and TBC Bank accounts for 79%.

BUSINESS

June 26, 2017 #198

Nabeghlavi to Open Multi-profile Soft Drinks Plant jointly with RAUCH The project is being implemented jointly with RAUCH, one of the leading juice production companies in Europe.

The project’s investment value made up 40 million EUR.

Georgian Railway Hosts Annual Meeting of CER

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n June 21 CER, the Community of European Railway and Infrastructure Companies, held its annual meeting in Tbilisi.

CER holds similar forums twice a year – in Brussels and EU member countries. The meeting that discusses the 4th railway package process, is being held for the first time in Georgia, a EU nonmember country.

After DCFTA agreement signature, Georgia assumed obligation of fulfilling various instructions and regulations, including 8 instructions regarding Georgian Railway. Georgian Railway is a CER member company. CER shares its experience to the Georgian company in both technical and legal issues. The forum that is held in Tbilisi is the best platform for establishing business relations with administrations of European railway companies.

Key direction of CER is to support the interests of member railway companies on EU territory. Its slogan is: The Voice of European Railways. CER acts as a railway ombudsman in EU. CER annual meeting in Tbilisi is being attended by directors of railway companies of EU member countries. The meeting is chaired

by CER executive director Libor Lochman. Ketevan Salukvadze,

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head of Transport Policy Department of Ministry of Economy of Georgia and representatives of European and Euroatlantic Integration Ministry are attending the meeting.

The Forum was unveiled by Georgian Railway director general Mamuka Bakhtadze. He noted that Georgian Railway has achieved significant progress in implementation of Georgia-EU association agreement.

«Today Georgian Railway is hosting a very important event and We are very proud of this fact. This is the first case when CER is holding its meeting in EU nonmember country. This signifies that Georgia is a member of European family. In 2014 Georgia signed EU association agreement and implementation of European instructions and regulations is a part of this agreement.

At this stage, the 4th railway pack-

age is being implemented in the railway transport part. Georgian Railway has made significant progress in the part of this instruction and today’s meeting will discuss this 4th package», Georgian Railway director Mamuka Bakhtadze said.

CER executive director Libor Lochman is leading the Forum.

He positively appraised Georgian Railway’s cooperation with CER. Useful cooperation with Europe and EU member countries is very important for railway transport development, he said.

«I am happy to be in Tbilisi to participate in this event. Here I am talking with Georgian colleagues and discuss internal issues and interests of EU member countries. Georgian colleagues’ efforts in this direction are of crucial importance and I deeply appreciate these efforts», Libor Lochman said.

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 26, 2017 #198

PUBLICITY

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ECONO-MIX

June 26, 2017 #198

Suspicious Medications Quality and High Prices Vepkhia Giorgadze Vice President of Economic Policy experts center

Medications (Generics) of Georgian Production are more Expensive than Original Ones

Foggy Pharmaceutical Market

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Merab Janiashvili Economic Analyst

As a result, unclear facts frequently take place on the market, especially, when price of medications of Georgian origin, the so-called Generics, are identical to the original ones, and sometimes they are even more expensive.

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The problem of free competition in the Georgian pharmaceutical market is noticeable and should be addressed by the Competition Agency.

The market is dominated by a cartel deal of four leading pharmaceutical companies regulating prices on the market.

The discussion to transition to international GMP standards has been postponed until 2018 and this significantly hinders the exports of medicines produced inside the country and also raises questions about the quality of medicines consumed inside Georgia.

Although there is a State Regulation Agency of Medical Activities: A) It does not have sufficient financial resources or a budget to perform its functions effectively. The Agency must have a modern laboratory and a respective budget, both which remain as unresolved problems.

B) According to the current legislation, the Agency cannot fully examine the quality of purchased medicies.

C) It is important that inspectors more frequently pay official inspection visits to pharmacies and increase the amount of fines for illicit medicines.

Despite the problems, there are some positive developments in the pharmacy market: A) In 2009, amendments were made to the Registration of Pharmaceutical Products. However, in the cases of confessions registration, there are still some risks allowing the entry of low quality medicines.

In order to eradicate this problem, coordination should be strengthened and or registration conditions should be reviewed once more between the Georgian regulator and the regulators of high reliability countries.

B) Also the prescription management system is an interesting issue in that there are gaps in its administration. Pharmaceutical networks do not always pay fines for medication without prescription. The fines are quite low and this does not serve to prevent breaches.

In conclusion, we can say that the Georgian pharmaceutical market unfortunately remains unregulated which lead to questions and complaints on the part of consumers and other interested people. Problems are identified with the state as well as with producers and importers.

nvaluable system of medication quality control is one of the problematic issues on Georgian pharmaceutical market, especially in the domestic production. Currently, medication quality control is carried out by an only responsible body State Regulation Agency for Medical Activities. The small budget of the agency does not enable to ensure valuable control over quality of medications. In 2016 the agency budget was 3.38 million GEL, while total expenditures made up 3.36 million GEL, of which 2.4 million GEL was spent on the staff salaries.

This signifies 71% of the whole budget are spent on salaries. As a result, we receive state structure and its operation is much more expensive compared to the amount of money that the staff spends on this structure. To put simply, we pay 2.4 million GEL to 180 persons so as they spend 0.96 million GEL a year.

As a rule, State Regulation Agency for Medical Activities selects the list of medications for exploration from the so-called Risk Group. However, there are more than 7000 medications on the market and less than 1% gets into this group and this factor cannot illustrate the real picture of the market.

Government cannot ensure valuable quality control on the market and the consumers remain unprotected, in practice. As a result, in the quality control process, sometimes critical outcomes are also recorded, but the policy remains the same.

For example, if we analyze the 2015 results, 10.6% of the examined pharmaceutical products do not satisfy state standards, while 1% of them did not have the right of registration on the market.

Invaluable quality control over medications is combined with noncompliance of domestic companies with international standards. There are no obligations for pharmaceutical companies for satisfying quality requirements or standards. Today, there are more than 60 medication production companies in Georgia.

Only starting January 1, 2018 pharmaceutical companies will become obliged to introduce GMP standards. Consequently, consumers have to blindly trust honesty of manufacturers. As a rule, Georgian manufacturers import medication substances and unpacked pharmaceutical products from Asian countries (China, India), where falsification level is high.

According to conclusion of World Health Organization (WHO), more than 35% of Indian market is saturated by falsified medications and the Indian market is shaped as the center of production of falsified medications, where 1/3 part of the world’s falsified and unreliable medications are made. Naturally, it is not correct to assert that pharmaceutical products imported from India do not satisfy standards at all. However, the fact is that influential international organizations consider Indian market as unreliable. At the same

time, medication quality control is invaluable in Georgia. Therefore, risks of penetration of falsified medications to the Georgian market grow.

Georgian doctors know from their practice that medications of Indian origin are less efficient and they frequently abstain to apply them.

Weak competition is one of the sharpest challenges on the Georgian pharmaceutical market.

As a result, unclear facts frequently take place on the market, especially, when price of medications of Georgian origin, the so-called Generics, are identical to the original ones, and sometimes they are even more expensive.

One of the justification arguments for Generics is that population should be able to buy medications at comparatively lower prices. For example: Siofor (Menarini Von Heyden) 850 mg, a pack of 60 pills - 13,18 GEL. Price of one pill - 0.22 GEL; Sioral (Aversi Pharma) 850 mg, a pack of 20 pills – 7.48 GEL. Price of one pill - 0.37 GEL; Levoploxatsin (GAMA) 500 mg, a pack of 10 pills- 25.50 GEL; Levostar (GMP) 500 mg, a pack of 10 pills – 50.40 GEL; Bisoprololo-Humanity (Windlas Healthcare Pvt) 10 mg, a pack of 30 pills – 6.77 GEL; Emcor (GMP) 10 mg, a pack of 30 pills – 20.40 GEL; Atorvastatini – Humanity (Mepro Pharmaceuticals Ltd.) 20 mg, a pack of 100 pills – 37.38 GEL. Price of one pill - 0.37 GEL; Torvitin (GMP) 20 mg, a pack of 20 pills – 10.50 GEL. Price of one pack - 0.52 GEL; CardioMagnil (Nycomed (Germany)) 75 mg, a pack of 100 pills - 11.72 GEL. Price of one pack – 0.11 GEL; Cardio Force (Aversi – Rational) 75 mg, a pack of 30 pills – 5.60 GEL. Price of one pill – 0.18 GEL; (prices are given by the situation of May 30, 2017).

In conclusion, it should be noted that Georgia cannot provide valuable medication quality control for many years. State Regulation Agency for Medical Activities examines only an unimportant part of medications and detected violations are not delivered to the society in due manner.

As a result, this category of medications may be used by patients, even if they are announced as hazardous for human health.

70% of the agency budget is spent on the staff salaries. Moreover, Georgia-based entrepreneurs are not obliged to satisfy any international standard regarding medication quality control.

Consequently, Georgian consumers have to rely on honesty of the market players and blindly trust quality of both imported and domestically manufactured medications.

At the same time, it is worth noting that some domestic Generics are sold for higher prices on the domestic market compared to their analogues from developed countries. And this fact cannot be explained. There is very weak competition on the Georgian pharmaceutical market, especially in terms of domestic production. As a result, major pharmaceutical companies make serious benefits.

“We will take every efforts to reach an agreement between the parties. Otherwise, we will have to move to arbitration space. Certainly, we will hold meetings.

The best solution will be to achieve agreement without interference of arbitration instance and court. We will do our best to reach agreement, otherwise the case will move to arbitration space”. As reported Kazakh state company KazTransGas has sued Government of Georgia to arbitration court and claims for remuneration of losses in the amount of 180 million USD.

Ilia Eloshvili Deputy Energy Minister of Georgia

June 26, 2017 #198

PUBLICITY

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FINANCE

June 26, 2017 #198

NEGATIVE INTEREST RATE Since the most recent global financial crisis, interest rates in developed countries have been unprecedentedly low. The real interest rates are close to zero and in a number of cases, are even negative. The European Central Bank was the initiator for establishing the negative interest rates when it began using monetary policy instruments previously unheard of.

MARIAM LASHKHI, TSU Center for Analysis and Forecasting

The interest rates of the Central Banks of Europe, Japan, Denmark, Sweden and Switzerland were set at0.4% in March 2017. As for the real interest rates of the United States, UK, Germany and Japan, they have been moving from positive to negative for the past 15 years (see the above diagram).

Economists have yet to come up with a unified view about whether or not this new and paradoxical practice tailored for long-term economic growth according to its authors, will be successful.

It must be pointed out that the trend towards negative interest rates has been around for the past seven years, aiming to avoid deflation and stimulate economic growth. The Head of the International Monetary Fund, Christine Lagarde, states: “If we had not had those negative rates, we would be in a much worse place today, with inflation probably lower than where it is, with growth probably lower than where we have it.It was a good thing to actually implement those negative rates under the current circumstances.”

The Georgian Example Unlike the national and commercial banks of developed countries, Georgia’s banking system has not yet reached close to zero or negative interest rates. Taking a loan in foreign currency costs an average of 10% while it is more than 20% in the national currency.

It is interesting to know how prudent it would be for Georgia to share this world experience and what kind of positive results or drawbacks could expected from establishing negative interest rates.

Firstly, it should be noted that the positive result of negative interest rates could be in the form of achieving a long-term goal; that is, economic growth. Making the refinancing rate policy less strict would make the national currency resources cheaper for Georgian commercial banks. If we take into account that loans up to GEL 100,000 can only be given in the national currency, this will push commercial banks to take more loans (in order to get lower interest rates).

As for depositaries, the possibility for them to receive profit in terms of the negative interest rate is disregarded. Furthermore, this individual or legal entity will have to think about inflation as well. Hence, depositors have no stimuli to place their savings in commercial banks and are faced with a choice: freeze their financial resources by turning them into non-financial assets, which is a rather risky measure taking into account the crime factor (robbery, for example), or spend money and facilitate economic activity.

It is no less important that the negative interest rate will influence the interest rates of commercial banks, thereby bringing them

down. This, in itself, is a stimulus for local investments. A chain will be created where investment will increase production while the production will make the economy stronger.

According to the examples presented above, we can argue that a negative interest rate positively influences the economy of the country.

On the other hand, however, it is still debatable whether or not the aforementioned monetary instrument is the right way for Georgia to help increase its economy.

First of all, we need to take a look at the structure of bank deposits and loans. The 2017 data of the National Bank of Georgia indicate that deposits attracted by commercial banks amount to GEL 17.6 billion while the amount of distributed loans is GEL 17.9 billion (overall in both national and foreign currencies). From this, we can infer that the amount of attracted deposits is vital for the functioning of commercial banks and decreasing them could, in its turn, decrease the number of loans given as well.

According to the assessment of experts, about 80% of the Georgian consumer basket consists of imported products and the import itself is four times larger than export.

Except for the small quantities of groceries produced locally, everything is imported: electrical appliances and computers, the majority of foodstuffs, petroleum products, medications, production equipment and machinery, cars and so on. Hence, in the case of a negative interest rate, the stimulation among the population to spend will increase the demand on imported products, rather than the local ones which, in reality, does not add much to the Georgian economy.

The issue of the stability of the national currency must also be underlined. Specifically, low interest rates on refinancing will increase the demand on GEL and consequently increase its supply as well. This, without adequate economic development (including the development of industry) could be counterproductive. Taking all of these factors into account, the depreciation of GEL would be the most likely outcome which will make imports and servicing foreign obligations more expensive.

The banking sector is one of the most powerful and stable sectors in the Georgian economy. However, given the current Georgian reality, it is no secret that despite the regulations on the banking sector, banks still manage to support non-profile assets. Hence, there is a significant risk that the competition in this sector will become even smaller. Banks are likely to invest more in non-profile assets.

In conclusion, we can say that despite the positive international experience, implementing negative interest rates in Georgia could prove to be risky.

Absence of Qualified Workforce in Villages – Reasons and Solutions

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illages lack for qualified workforce. This problem remains under discussion for a long period. Ministry of Agriculture also proves that this problem genuinely exists in villages. «Today villages lack for engineers, agronomists, mechanizers and many other specialists», Deputy Agriculture Minister Giorgi Khanishvili said.

Today, it is difficult to find due specialists in villages, he added.

«We have two huge criteria in agriculture sector – negative trade balance and the Georgian business should work in this direction and Georgian agriculture sector should boost production. The second one: – There is a great number of unemployed citizens in Tbilisi.

Job-seekers do not want to leave Tbilisi and find job in regions. I understand it is very difficult to listen to the truth, but people prefer to live in Tbilisi, remain unemployed and complain, or blame the authorities for their unemployment, while today it is a real problem to find workforce in villages. Rural areas lack for engineers, agronomists, mechanizers and all other specialists», Khanishvili noted.

Unemployed citizens should change profession, if necessary, go to villages, join state programs and improve their condition in this way, he said.

«The average statistics shows that one person changes profession three times during the lifetime. We joke about taxi drivers with two university diplomas, but this should not be funny. People should change profession to get employed at villages, produce goods, improve financial condition of their families and serve the country. State programs and assistance will enable to move in this direction», the Deputy Agriculture Minister said.

Besides Deputy Agriculture Minister Giorgi Khanishvili, Nino Zambakhidze, head of Georgian Farmers Association, also confirms that villages lack for qualified staff. I personally face this problem every day, because there is deficiency of various specialists in villages, Nino Zambakhidze said.

There are only several professional agronomists in the country, 5-6 ones, she added.

«Not only foreign investors, but also Georgian entrepreneurs face difficulties to find qualified staff in villages. This is our bitter reality. There is wider opportunity in big cities, while the problem with workforce is the sharpest in villages. I personally face deficiency of education, deficiency of qualified staff in everyday life. I frequently hear from private bodies and foreign business sector that they need qualified personnel in villages, while villages lacks for veterinaries, agronomists, livestock specialists, post-harvest mangers and so on», Zambakhidze noted.

The problem solution should start from making vocational education attainable in villages, Nino Zambakhidze said.

“Problem solution should start from making vocational education attainable. When we talk about lawyers and other popular professions, the demand is lower and the supply is higher. We have qualified staff in the mentioned fields, but there is serious deficiency of various professions in agriculture sector. The demand is huge, while supply is less. This problem should be removed. The more vocational education strengthens, the more benefits village and region residents will receive. Agriculture sector development is unimaginable without vocational education.

A book may be written every 5 years, while technologies change every minute. Private sector will not put money in unqualified staff. Therefore, serious invest-

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VILLAGE

June 26, 2017 #198

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Not only foreign investors, but also Georgian entrepreneurs face difficulties to find qualified staff in villages.

This is our bitter reality.

There is wider opportunity in big cities, while the problem with workforce is the sharpest in villages.

ments should be made in education sector. Private sector prefers to invite specialists from abroad than to take risks and entrust business to unqualified staff”, Nino Zambakhidze said.

Government should suspend subsidization of villages and investments should be made in people and their education, Nino Zambakhidze added.

“I believe subsidization should be ceased, because it is not a healthy mechanism for economy. You should know how to plough land. We need technologies, production and so on. We should put investments in people. We should have more vocational schools, arrange short-term trainings for village residents. Today people have specific demand at villages – they want to produce something new and they do not know how to do this. They want someone to teach them, provide recommendations, train them”, Nino Zambakhidze pointed out.

There is one additional problem in villages, despite unemployment and poverty. Sometimes, village residents refuse working because of two reasons – they find salaries unsatisfactory and secondly, they do not want to lose the social status, she said.

“In some cases people just do not want to work or they want to work, but find conditions unsatisfactory.

Despite unemployment and poverty, they refuse to work, because they demand for higher salaries. As to the category that does not want to work, this category consists of people with the status of socially vulnerable persons. They demand that employers issue salaries in cash, because they will lose the mentioned status if their salary transfers are registered. Cash payments should not be processed in the 21st century.

Companies avoid cash payments. I have heard that the private sector had invited workforce from big cities and they had not hired local residents in villages, because they did not want to issue salaries in cash”, Nino Zambakhidze said.

Zura Ramazashvili, head of Green Rancho company, also talks about a lack of professional staff. This problem is the sharpest one in this sector. Therefore, it is impossible to broaden business unless companies train staff themselves, he noted.

“Today we lack for proficient people in this sector. People have spent the whole life in villages and we expect them to know how to care for cattle, but it turns out that they do not know many details. Today I employ several persons who know the sector. Consequently, they train new staff”, Ramazashvili noted.

Agriculture sector development is carried out at scientific level abroad, while our country remains in a germ phase. That’s why agribusiness companies require huge investments in Georgia, he said.

“Even if you have the best goods and equipment, they should be managed by specialists. At this stage, we are carrying out training and improvement process at the company to make production more efficient”, Ramazashvili said.

LLC Green Rancho farm is located in Akhmeta District, Kakheti Region. In 2015 the company took part in agrocredits program and obtained 500 000 GEL financial support.

Archil Lursmanashvili, head of Razhdeni agriculture cooperative, also talks about a lack of agriculture specialists. Nobody wants to live and work in villages today and therefore, agriculture education is forgotten, he said.

Currently, our cooperative grows, packs, stores and sells agriculture products. Today, agriculture sector is not attractive direction and that’s why villages lack for due specialists, Lursmanashvili pointed out.

Land Ownership Problems in Georgia Georgia has unresolved problems with land ownership. The state owns all of the country’s timber and natural resources as well as 70% of agricultural land. In developed countries, agricultural land is all privately owned. Mineral resources and most of the timber supplies are also under private ownership.

Low prices and liquidity lead to the destruction of these natural resource which should serve to boost a country’s economic development. Cheap land resources (the average price for 1 hectare of agricultural land is USD 1,000) cannot attract enough funds to finance their farming. Therefore, the local production is not able to compete with imported goods.

In Georgia, timber resources are in a very poor state. Twenty-two years ago, the country was covered by 2.7 million hectares (or 38% of the territory) of forests but environmentalists now state that this number has decreased significantly due to cutting.

Nature has the ability to restore forests but only 4 million cubic meters are being restored whereas annually as opposed to the 6 million cubic meters which are being cut. One of the main reasons for this is that forests in Georgia are not privately owned.

“Forests are illegally cut by the people as well as by licensees. For the resource to survive, it needs an owner.”

Minerals also occupy an important place in the list of Georgia’s exports but the country’s mining industry faces serious problems because none of the 1,000 or so mines in the country employ modern technologies. For example, instead of receiving 100 grams of a precious metal which is mined, only one-third of the metal is retained which means that the remainder is lost forever alongside environmental damage which results as a part of the process. Rivers are poisoned, fish and other wild life are killed and so on.. Privatization of these resources is required in order for Georgia to be able to enter international trade and attract investments.

Solution In our opinion, privatization of these land resources should be done by special method, i.e. by special “money” which will be given to the population as a gift. The process should be long-term and permanent.

Every month, citizens should be made aware of the property which will be offered for privatization, but it is important that the only „gifted money” should be authorized to buy a portion of the lend. The first few months, citizens may “waste” their “special money”, but when they permanently realize the results of wasted special money, they will rationally use it in the following months. This will prevent a property concentration in the narrow circle of people, thus it will bring the same positive results for all “special money” holders on the market.

Mate Gardava - PhD Candidate at Tbilisi State University Ketevan Krialashvili, Director at the Economic Education and Strategic Research Center

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PR PERSON

June 26, 2017 #198

PR is Wider Concept than Ordinary Advertisement

Interview with Natalia Khatiashvili, head of RIXOS Borjomi Sales and Marketing Department - Which PR Companies inspire you?

- I am not PR specialist by profession and my job has less relation to PR management. Therefore, It is difficult for me to name specific PR company inspiring me in special manner.

- Which media outlets do you follow?

-I watch TV channels every day, basically Rustavi 2 TV channel.

-Talk about the difference between PR and advertising.

- PR or public relations is a wider concept not only advertisement created for sales of specific product or services to a specific segment. Good PR specialist should shape positive reputation in the society about the company or project, ensure appropriate mood that will bring long-term results for employers.

- Name your best project or period you take pride in.

- About a year ago Rixos Borjomi launched competition and its participants were to seek old photos taken in Likani and Borjomi, photos of their childhood, parents, grandparents and share them to us… In the end, we managed to revitalize many pleasant memories to our participants, shared many positive emotions and created a beautiful album that may be seen at our Facebook page.

It should be also noted that there were cases, when participants sent group photos, then we shared these pictures on our page and many friends found each other.

Thanks to this competition, we have also found historic photo, which became one of the winners of the competition, because it raised much public interest. The photo illustrated a small girl with her grandfather, who was later

“

However, it is golden rule in public relations that the company representatives should unveil truth about this or that crisis situation to the society.

Consequently, in crisis situation I would first of all summon a news conference as soon as possible.

identified as Petre Ioseliani, who had worked as director for Borjomi-Likani sanatorium for many years.

- How do you integrate social media with PR? - In the 21st century it is very easy to deliver information to wide society thanks to internet and social media. Naturally, we actively use this platform for communication with our audience.

- How do you support content marketing?

- We should not forget that this or that activity makes influence on the general reputation of a company, its values and principles. I believe that valuable support should be provided in this direction for PR content marketing.

- How would you present the results of your work?

-I believe that our department works successfully (sales and marketing department), because the company scrupulously follows the determined strategy and naturally, our department plays much role in this.

-Which of your campaigns was the most creative and efficient?

-As a usual, I always supervise social PR campaigns, because this direction is very interesting for me personally. In this direction I am interested in success of Georgian campaigns. Consequently, I suddenly recalled the campaign for solution of parking problem for persons with disabilities, when wheelchairs were placed on the parking places.

This was quite efficient performance, memorable and it was clearly expressing my mood.

- What would you do if a client or manager disagreed with your PR strategy?

- When you are professional in your

business, no matter the profession, and if you are confident in your potential and decisions, in this case you will maximally defend your positions.

- How do you overcome PR crisis situations in the company?

- Fortunately, no serious PR crisis situation has taken place at our company.

However, it is golden rule in public relations that the company representatives should unveil truth about this or that crisis situation to the society. Consequently, in crisis situation I would first of all summon a news conference as soon as possible.

- What would you say about your team members? What is their role?

- Current members of my team are professionals, hardworking and devoted people (sales and marketing specialists) and successful operation of our department is unimaginable without them.

- Describe a time you trained or mentored a colleague. What personal features are required in similar situations?

- Everyday routine of our department implies meetings with partners. Consequently, I always try to personally attend the meetings jointly with beginner colleagues and simplify practical experience to them. I teach them how to offer this or that product with correct strategy.

- What’s interesting about our current PR work? What would you improve?

- In PR field the most interesting part is when you take maximum effort to adjust the company interests to public welfare, and defend the balance that will serve the interests of both parties.

I think I would improve this direction more.

June 26, 2017 #198

INTERVIEW

In the beginning, I just thought it would be for a couple of years, to explore new business sector (banking) while using my technical skills and having a positive influence.

CISO got many challenges, some of them are technical and they must setup tools and/or methods to help them to detect an attack and mitigate their impacts but the number one defy is generally to get support from top management.

Jeremy Tolet Senior Operations Manager / Project Portfolio Manager at ISSP Georgia - Why Cyber Security? Please share how you have chosen this field? What drives and motivates you in cyber security?

- To make a long story short, I was fond of technology since I was a child. I got a computer when I was very young and became interested in “how do video games work” as much as playing them. I wanted to be an “electronic computer engineer” and decided to apply for Master studies in IT, Informatics Systems and Robotics.

Like many Security People, I fall in Cyber Security thanks to a security incident. In 2008 a now quite famous former trader of Societe Generale was convicted for forgery and unauthorized use of the bank’s computers, resulting in loss of billions euro. Following the incident, SG made it mandatory for each subsidiary to have a local Security Manager and implement security standards. Consequently, Bank Republic had to look for a one too and my technical background together with international project and standards experience easily convinced them to recruit me. That is how I became one of the first cyber security professionals in Georgia.

In the beginning, I just thought it would be for a couple of years, to explore new business sector (banking) while using my technical skills and having a positive influence.

However, I could not imagine how vast and fascinating cyber security sphere is. You really have to understand the business, IT and attacker’s ambition. It is a permanent process so you never stop learning and evolving your competencies. It is a very innovative domain, full of very interesting and smart people.

- Story from France to Georgia, why Georgia. Did you have any proposals to work for some Cyber Security companies in Europe? Why have you chosen to work in Georgia?

- During my studies, I was spending most of my free time with foreign students, then all of my working experience on projects were international, I was traveling a lot but only on short missions. It became a bit annoying to only scratch the surface of new culture and then leave… during my first visit to Georgia in May 2008; I met interesting people presenting to me a huge potential of development and difficulty to find experienced resources. I decided to take the challenge of “working abroad”.

Everyone in the world is trying to find Cyber Security resources so after 2/3 years of experience in this field I started to receive regular job opportunities in Europe. When the Bank Republic was sold, many of my cyber security contacts asked if I would like to return to France or Europe and join them but I rejected the idea because as many security people will tell you “it is not IF security incident will happen but WHEN”. So far, there was no big cyber security incident in Georgia but WHEN it will occur I want to be here and provide my support.

Moreover, cyber security got a lot of developments ahead in Georgia, therefore it is more interesting to me to work here. This gives me an opportunity to use my expertise and share my experience. I want to raise cyber security awareness and make people and companies prepared once the cyber-attack happens.

9

Cybersecurity and Banking: how it’s like to be on duty in Georgia?

- You have spent several years at the Bank Republic, based on your experience and with ongoing security breaches around the world how would you assess the Security of banking sector in Georgia in general, what are the main challenges and what are the principal threats for modern organizations?

- I can only judge the security maturity from my point of view. It widely depends on the bank itself, context, objectives, and priorities.

For every bank, the subject of cyber security is individual and they are all concerned about security.

The number of cyberattacks and cybercrime for financial benefits will grow in future. The bank that thinks more about cyber security will have a competitive advantage and bigger customer trust. I strongly suggest banks to fight cybercrime. Cyber criminals are very smart, educated; they unite and need to find just one weak spot to reach the goal. Cyber Security specialists need to know 100 times more and predict the actions of the criminals.

It would be much easier if there were more people working together.

I can say from my own experience, we always needed some additional consulting and advice of other professionals. That is why I started working in cyber security consulting and service company. There is a growing need for cyber security services with qualified and strong staff. It is hard for a bank to recruit such qualified cyber security professionals. As for me, it is much more interesting to work with many customers and see the whole picture. Nowadays, the banking sector is for sure a top target worldwide for international cyber criminals. They build

more and more powerful weapons. The challenge for a bank is to be ready to cope with those while developing their services including new technologies and keeping customerfriendly applications. I recommend banks to follow the security trend so they are ready when, eventually, they are attacked.

- What are the CISO challenges today?

Do top managers understand the importance of cyber security? Is it easy to communicate to directors, board members about cyber security issues?

- CISO got many challenges, some of them are technical and they must setup tools and/ or methods to help them to detect an attack and mitigate their impacts but the number one defy is generally to get support from top management. I think all top managers understand now that cybersecurity is a serious topic but too many of them think it is just a simple technical problem. However, they do not realize that it is a complicated matter that unifies technology, process, and people.

It is not a robot/computer fights on the web, “hackers” are people, trying to make a profit via technologies and the solution is not just a tool but a service (human with tool).

- Could you please tell us about the latest cyber-attacks in Georgia? What should we do to prevent future attacks?

Please tell us about cyber-attacks on the Bank Republic.

- I cannot be very specific about such attacks since this is a confidential information.

I think more important is that at the Bank Republic I was lucky to have services from internal CERT (Computer Security Response Team) of Société Générale, so when incidents occurred, those specialists were guid-

ing me to take proper steps. Alone I would have spent much more time and maybe got consequent damages. It is much better and more effective to work as a team. Even the best professional in cyber security needs an advice and assistance. The criminals work together as a group and are very smart; they have all the expertise they need. Therefore, it is better to work together with a team of cyber security professionals to make sure every detail is in focus.

- Banks have enhanced password-based authentication in online banking by adding additional layers such as tokens, but the recent introduction of biometrics speaks of a different strategy in the financial industry. Are banks looking for a solution to substitute traditional password-based authentication completely?

What other cyber security technologies are banks implementing now? How will the bank in 5 years look like?

- I can say that password security is already obsolete especially if entered with the physical keyboard. Banks are more or less digging into new security solutions but not really “promoting them” (most of the Georgian banks have been using security token for a long time).

There is a vicious circle, customers consider that banks shall take care of everything and on the other banks think that customers do not like security procedures and if an incident occurs then both sides lose. With the digital transformation, banks are slowly becoming online self-service companies (like Gmail, Amazon), they will offer some security options but it will be up-to people to use them. Customers shall ask banks how they protect their money, what are the options

for staying safe. “Security is everyone’s concern”, when you buy new home, you check the door and quality of locks, you get an alarm system and/or an insurance… it is time to take same measures for guaranteeing our own cyber security.

- As far as we know you were offered a job opportunity in the banking industry, why did you choose ISSP over that opportunity?

- It was a very tough decision because, after 8 years in the banking industry, I know the domain well and it is a very emulative environment for security specialist but I decided to handle security from a different angle. I wanted to extend my scope and challenge myself in other industry.

I started working in cyber security consulting and Service Company, as it is more interesting for me to work with many cyberattack cases and different customers. I want to see as large as possible picture of cybercrime and have more influence, to protect people and companies in Georgia, prevent damages and future cyberattacks. There is a growing need for cyber security companies with qualified and strong staff. While working at ISSP I can help more business sectors including bank and not just one.

In addition, as I said before, security is about human connection, and by choosing ISSP I join a network of more than 70 security specialists covering projects in more than 10 countries.

- Ransomware has been the hot topic for discussion during previous weeks, why do you think it is so successful.

- Extortion and black mail exist since forever; it is an expected evolution of crime into “cyber” crime. What has changed is the impact on our lives. In 2000, 17 years ago, virus “ILOVEYOU” did much more technical damage than recent ransomware but we were less concerned. Now we are much more dependent on our computers and mobile phones. A lot of people get so desperate that they pay the ransom. However, with such actions, they actually encourage the bad guys to continue their criminal activities.

- Advices for companies what they should concentrate on while thinking about security. What do you suggest the executive management do to improve the overall security of their organizations?

It could sound strange, but at first, company shall assume that it has already been compromised. You see, criminals do not hack their target infrastructures in seconds as we see it in the movies, the average attack lasts for months, sometimes more than a year. All this time, company is not aware of these malicious actions and attack is detected only on the latest stages – on the culmination.

Once company realizes, that it might be already compromised, it needs to get a serious security assessment of infrastructure and security processes. The best way is to involve third parties, as it should be an independent assessment. Once done, build an exact road map, what you need to achieve to become safer. Once it is achieved, regularly ask your security manager about the improvement progress (security is a continuous action).

- Finally what advice can you give to regular users to stay more secure in today’s cyber world?

- Get an antivirus for your computer and ensure that Operation System is patched, do not install applications that you do not trust and always make a backup copy of your precious data on an external drive, DVD or online storage (don’t forget data on your smartphone).

For online services (Email, E-banking, E-shopping) read the security recommendations and take steps according to your needs.

Most importantly be cautious: if you receive a suspicious Email, containing a link do not click on it!

10

BUSINESS

June 26, 2017 #198

YouTube to Start Paying Fees to Georgian Authors

The Ferrero Group presents its 7th CSR report in Georgia

Georgian Copyright Association has signed a licensing agreement with YouTube. The agreement calls for paying copyright royalties, when YouTube places authorial products. As a result, Georgian authors will receive financial benefits.

This fact stimulates Georgian authors to expand their intellectual job results onto YouTube.

“Agreement signature is the most important breakthrough in copyrights development for upgrading public perception in Georgia and improving Georgia’s international ratings”, the association representatives noted.

The Ferrero Group presented its 7th Corporate Social Responsibility report (CSR), with a Special Focus on projects in Georgia, at Residence of Ambassador of Italy in Georgia, Antonio Enrico Bartoli.

The report was introduced by Ambassador Francesco Paolo Fulci, Vice President of the Ferrero Group and Aldo Uva, Chief Operating Officer Strategic Business Units Ferrero International.

Prime Minister of Georgia, Giorgi Kvirikashvili also gave speech at the meeting.

The report is structured along two pillars: People (consumers, employees, local communities) and Planet (sustainable agricultural practices and efforts to minimize environmental impact). The report is revised

by Deloitte & Touche Spa. The full report is available at Error! Hyperlink reference not valid.

Quality, innovation, care for people, transparent communication, support for local communities, promotion of active lifestyles, a strong commitment to sustainable agricultural practices and the attention of the environment are the basis of Ferrero’s CSR.

Rooms Hotel of Farm Concept to Open in Sagarejo in 2019 Ajara Group plans to build a new Rooms hotel based on a farm concept. Oto Berishvili, representative of the company PR service, noted that the project implementation will end by 2019.

The hotel will comprise 3040 suites and have its own farmhouse. Rooms hotel will be constructed in the village of Sataple by LLC City Loft, subsidiary of Ajara Group. It is famous that the company will plant nut and almond trees, arrange artificial lake and family-style entertainment complex.

The company will spend 7 million GEL on hotel construction and arranging due infrastructure. Currently, the group owns two Rooms hotels in Tbilisi and Kazbegi.

Georgian Student Launches Trendy Spinner Goga Otinashvili is 18-year old startuper, who launched a new Georgian spinner brand. He started producing wooden intellectual toys under the name of Sago brand, in December.

The idea belongs to Goga and he is planning to create many more new tools for the future.

New Georgian spinner is different from other products on the market because it is made of wood and it is cheaper than others.

“I started producing wooden intellectual toys in December, 2016, when Techno Park launched a competition “Start business with hub lab”. At the same time, I found a sponsor who helped me to buy materials which cost 500 GEL”- noted Otinashvili.

“I had to overcome a lot of obstacles to achieve the goal, but it is important not to give up when you are striving for your goal.”

Currently, Goga Otinashvili works on a wooden automobile with an engine which is almost completed and will be presented to wider public in two months. Otinashvili is getting ready to pass national exams to continue studying business at the university.

Ice N Rolls – Ice Cream with Churchkhela and Kvanchkara Flavour Ice ‘N Rolls is an ice-cream made with Tai techniques which appeared in Tbilisi, recently. In spite of using Tai technique, the flavour of the ice-cream is Georgian. As one of the founders of the company, Nika Chugoshvili says that he and his friend discovered Tai ice-cream in the internet and bought special equipment to produce an icecream. “Wrap your ice-cream” is a main slogan for a new company and you can try an ice-cream with khvanchkara flavour. Nika Chugoshvili answered our questions.

What are ice-cream rolls in general?

Ice-cream rolls are made with Tai techniques in front of customers and they decide which ingredients they want to include in it. There are 40 different ingredients which give customers a variety of choices and it is possible to come up with more than 700 combinations.

How are Khvanchkara icecreams made?

We mix Khvanchkara in the liquid of the ice cream and freeze it in our ice-cream machine and scatter Churchkhela pieces into it and as a result, we make an ice-cream with an alcohol and Churchkhela flavour.

Are you competing with other ice-cream producer companies?

Our assortment is dynamic and we constantly add new ingredients and production. At the same time, other companies aren’t able to define ingredients for their products. As for us, we choose ingredients precisely and this is our advantage. We believe that with our techniques and flavours, we can be very competitive to other companies.

How do you advertise your company?

Currently, we advertise ourselves only on facebook and we also attended Startup market on the 26th of May where we met a lot of people.

We will soon have our spot in East Point.

Luggage Storage Tbilisi- Startup of Two Georgian Friends Keeping your luggage in Tbilisi is a problem, since it is only possible to leave your bags at the airports, train station and different hotels only in case you have already used their other services. Two Georgian friends, Saba Odisharia and Avtandili Gegenava decided to open Luggage Storage Tbilisi to handle this issue. One of the founders, Avtandil Gegenava talks about more details.

How did yo create luggage storage oriented service?

We came up with an idea while we were traveling for 10 days in Italy and we used this service 7 times. Afterwards, we conducted a small research in Tbilisi and discovered that we don’t have a luggage storage oriented service and we decided to try our idea.

How strategic is a place you chose for the service and who is your target group?

It is a strategic place since it

is located in the city center, next to Opera House. Our service is useful for tourists who check out from their hotels but still have got plenty of time to spend in the city before they leave. Therefore, they can leave the luggage at our storage service and take it whenever they head to the airport.

How do you deliver information to tourists?

We spread the information on facebook and we marked our business on Google Map. If someone need this service and looks up for it in the internet, it is easy to find it.

Is luggage storage service limited with time and weight and what is the cost of your service?

There are no limitations.

We have four categories of luggage: S,M,L,XL which costs 4,6, 8, and 10 GEL. It is possible to use our service for 24 hours.

11

RATINGS

June 26, 2017 #198

Ranked Law Firms and Lawyers in Georgia by Chambers & Partners C

hambers and Partners and its rankings have featured in many notable publications around the world. It covers over 190 countries across the world and also includes Regionwide and Global-wide sections.

It ranks both lawyers and law firms based on the research of more than 170 full-time editors and researchers.

Chambers Global is published annually. Accordingly we are providing the updated rankings of the new edition of ranked firms and lawyers in General Business Law - Georgia.

RANKED FIRMS

other parties spotted.”

Sandro Bibilashvili is increasingly recognised in the market. He is involved in some of the firm’s biggest project finance mandates and has recently been active working on energy projects.

Counsel Tamara Tevdoradze enters the rankings on the back of positive praise. “She is very reliable, accurate and punctual, thinks in a very logical way and has very strong arguments,” a client says. Her broad practice includes real estate, tax and employment.

Band 1

BLC Law Office Band 1 • BGI Legal • BLC Law Office • Dentons Georgia Band 2 • Business Legal Bureau • Dechert LLP • Gvinadze & Partners LLC • Mgaloblishvili Kipiani Dzidziguri (MKD) Band 3 • Nodia, Urumashvili and Partners Ltd Band 4 • Law Firm Begiashvili & Co. Ltd • Eristavi & Partners Band 1

BGI Legal Lasha Gogiberidze maintains an excellent reputation for his expertise in capital markets and project finance, handling some of the market’s most prominent lending transactions. Clients highlight him as an “open-minded” practitioner who “always comes up with a good solution” and provides advice which is “straight to the point and concise.”

Zaza Bibilashvili has experience of handling some of the biggest mandates in the market, most recently advising on substantial real estate projects. He is also a noted practitioner in the dispute resolution arena.

Legal director Unana Gogokhia focuses on financial transactions, and stands out for her experience of capital markets and derivatives. Clients appreciate her ability to “look at the issue very scrupulously and bring up points in the transaction that none of the

Eminent practitioner Alexander Bolkvadze enjoys a good reputation for his long track record in some of the market’s biggest projects. His vast experience includes commercial, energy and real estate. Clients describe him as “pleasant, fast and always available.”

Ketti Kvartskhava climbs to the top tier of the rankings due to her superb reputation for advising on market-leading transactions. Clients describe her as “one of the best lawyers, of very high standards,” and add that she is “very sharp, extremely intelligent and focused.”

Her broad practice includes M&A and financial transactions. She also stands out for her expertise in competition and is a well-respected litigator.

Clients say senior associate Tamta Ivanishvili is “very intelligent, monstrously detail-oriented and has an extraordinary appetite for hard work.” She receives strong feedback from all quarters and focuses on mandates covering corporate, financial, capital markets and M&A. Giorgi Batlidze is recommended for his expertise in energy-related projects, with a client highlighting his organisational skills and noting that “his experience in energy comes though.” He also handles IP, tax and financial matters, as well as M&A. Band 1

Dentons Georgia Eminent practitioner Ted Jonas is a US-qualified practitioner with a long-standing presence in the Georgian market. He is involved in a range of mandates and is particularly noted for his vast experience in advising foreign investors on

financial transactions and capital markets expertise.

Legal director Nino Suknidze has a strong reputation for her expertise in capital markets and regularly advises on major transactions in the finance sector. Peers and clients alike praise her “positive and cooperative” approach and say she can “listen very diligently and adapt, so that she can see both sides of the argument.”

According to clients, Avto Svanidze “stands out for his legal mindset and good knowledge of corporate law.”

He enjoys a good reputation and is active in a number of high-end mandates, often advising on M&A, corporate, finance and contractual issues. He is dual-qualified in Georgia and the UK. Managing partner Otar Kipshidze handles energy, corporate and banking and finance matters. He has particular experience in advising on major infrastructure projects. He also heads the firm’s litigation practice.

Band 2

Business Legal Bureau Managing partner Kakha Sharabidze is noted for his experience in crossborder work across a range of areas, including acquisitions, finance, corporate and real estate. “His knowledge of the law and experience really struck me,” a client reports.

Senior associate Mariam Vashakidze is active on a wide range of general

business matters. She is described as a “very thorough and very knowledgeable” lawyer who is also a good communicator.

Band 2

Dechert LLP Nicola Mariani is an international lawyer who is admitted to the Bar in Paris, Québec and New York.

He is particularly recommended for his M&A experience and also handles corporate matters. Sources appreciate that he brings in “lots of experience, creativity, a very international look at the business and an excellent business network.”

Archil Giorgadze is noted by market commentators for his visibility on M&A deals. He also advises on a range of other issues, including corporate, commercial and project finance.

Band 2

Gvinadze & Partners LLC Managing partner Nick Gvinadze is appreciated for his ability to “clearly explain potential issues and come up with practical solutions.” He maintains a broad general business law practice and regularly advises on projects in the energy and financial sectors.

Band 2

Mgaloblishvili Kipiani Dzidziguri (MKD) Victor Kipiani is a very well-established name in the Georgian market and focuses on project finance, capital

markets and banking and finance work. Clients describe him as a “skilled lawyer and a truly reliable man” who is “highly resistant to stress” and provides “quick and detailed answers.”

Irakli Mgaloblishvili is a noted practitioner who has practical experience of advising clients on project finance and privatisation mandates. He is also skilled in dispute resolution.

Band 3

Nodia, Urumashvili and Partners Ltd Efrem Urumashvili comes particularly recommended for his “precise knowledge of tax law,” “very flexible” approach and the ability to come up with solutions. He is also active on tax disputes.

Band 4

Law Firm Begiashvili & Co. Ltd Giorgi Begiashvili is an established figure in the market with a good reputation, advising on a host of business law matters. Market commentators recognise him for his banking M&A work and strong track record in commercial matters.

Band 4

Eristavi & Partners Revaz Beridze is complimented as a “very responsible” lawyer and is renowned for his expertise in specialist areas such as maritime law. He also handles public procurement, commercial and transport matters.

RANKED LAWYERS

12

June 26, 2017 #198

Brand History – KULA

K

ULA brand launched operation on basis of Gori cannery in 2008. The company produces several products.

Idea, how it started – Georgia is an agrarian country, where ecologically clean fruits grow.

Therefore, we have decided to manufacture products with advantageous quality and natural ingredients. We have long mulled over where to arrange the plant and, finally, selected Shida Kartli Region for strategic reasons. This region is located in the middle part of Georgia and we are able to accept fruits from any region.

Initially, we were producing only juices, later, we started production of wild plumbs, jams, stewed fruits, salads and pickles.

Tireless job of the whole

staff and management has brought this success to our brand. As a result, both Georgian and foreign consumers perceive KULA as a company producing ecologically clean products of natural raw materials.

Main Challenges in the Brand Establishment Process – We launched production after the 2008 Georgia-Russia war. Global economic crisis broke out in the same period. Those two processes created the heaviest problems that we had to overcome at the beginning of our production. KULA was not a famous brand and we had to perform huge job to make it perceptible among consumers. Key objective was to draw consumers to taste our products and then our products were making self-advertisement.

Our Logo consists of two parts – Name of Latin Letters and Ladybird. Ladybird is associated with nature. It does not touch fruits with pesticides and chemicals. We also make our products of ecologically clean fruits.

As to the brand name, KULA is a drinking vessel with a long throat and round belly. The drill of its throat gradually broadens and generates the sound of burbling in the drinking process.

Why KULA? - We care for products quality on permanent basis. Since the inception, we have never made compromises in terms of quality. Our clients are sure that they buy natural products without any food additives, emulsifiers and genetically modified bodies. These factors stress the advantage of our company.

June 26, 2017 #198

WORLD

13

Foreign tourist arrivals to Turkey rise 18 pct in April after months in doldrums

China may finance Russia’s natural gas pipeline to Europe Gazprom’s Nord Stream 2 pipeline may get Chinese financing if European companies are forced out of the project by the latest round of US sanctions, business daily Vedomosti reports. Russian officials have already contacted Chinese banks, sources have told the media. “Nord Stream 2 has a good rate of return and low risks for creditors. Chinese banks may be interested,” explains Aleksey Grivach, deputy CEO at Russia’s National Energy Security Fund. The extension will double the existing pipeline which delivers natural gas to Germany under the Baltic Sea and is estimated to cost €9.5 billion.

Initially, Engie, OMV, Royal Dutch Shell, Uniper, and Wintershall were to get a 50 percent stake minus one share in Nord Stream 2.

However, red tape at the European Commission made Gazprom and its partners come up with another financing option. Under this plan, European companies will each provide an equal long-term loan to Gazprom, which will fully own the pipeline.

Financing of Nord Stream 2 may be affected by new US sanctions which target firms investing in Russian gas and oil projects.

According to the new bill passed by the US Senate, and currently, before the House of Representatives, companies will be forbidden from making investments of over $1 million in the Russian energy sector.

On Wednesday, Russian President Vladimir Putin met the CEO of Royal Dutch Shell, Ben van Beurden. Among other things, they discussed Nord Stream 2. Van Beurden told Interfax the new project “will be realized for the benefit of all parties - both Europeans and the Russian Federation.”

Armenia to become regional electricity hub After the Iran-Armenia and Armenia-Georgia power transmission lines are put into operation, Armenia will become a regional electricity hub for the three countries, Armenia’s Ministry of Energy Infrastructure and Natural Resources said today in a press release.

It said the power lines are expected to be put into operation at the end of 2019. As part of the construction of the 400-kV Iran-Armenia power line, which has already started, installation of support poles and wire lines as well as construction of a substation will be completed this year and in 2018.

When commissioned the line and the substation will enable to triple electricity swaps between Iran and Armenia, the ministry said.

The construction of the 400 kV electricity transmission lines Armenia-Georgia is to kick off later this year and be completed in 2019.

At the moment, a tender is being conducted to select a contractor for the implementation of the project, the results of which will be announced in September.

The energy ministers of Armenia, Russia, Iran and the deputy energy minister of Georgia signed in April, 2016 in Yerevan a “road map” for the construction of about 1,000 MW North-South energy corridor.

The number of foreign tourists visiting Turkey saw a huge increase in April, with the number of arrivals from Russia jumping around 485 percent, after months of difficulties amid a series of negative incidents, from bomb attacks to a diplomatic crisis with Russia and a failed coup attempt. A total of 2.07 million foreign tourists visited Turkey in April, representing an 18.1 percent year-on-year increase, data from the Tourism Ministry showed on May 30. In the first four months of the year, more than 5.8 million foreigners visited the country, good for a year-on-year increase of around 1 percent, according to ministry data. The number of foreign arrivals to Turkey regressed to 3.8 million in the first three months of the year, a 6.4 percent decrease compared to the same period in 2016.

In April, foreign arrivals soared, especially from some key markets, with Russian tourist arrivals increasing to 181,865 – a 485.7 percent year-onyear increase. The number of arrivals from Iraq also hit 51,254 in April, a 302.3 percent of in-

crease compared to the same period of 2016. In April, Germany and Russia were the top tourism markets for Turkey after a long period. A total of 262,730 Germans visited Turkey in April, making Germany the country’s largest market with around 13 percent of the total. Russia was the second largest source for Turkey with an 8.78 percent share of the total. Georgia was the third largest market for Turkey’s tourism sector, with 180,478 people from the country visiting Turkey in April, according to the ministry.

Bulgaria and Iran rounded out the five, providing 147,231 and 119,998 respective arrivals in April. In the first four months of the year, Turkey’s top five markets were Georgia, Iran, Germany, Bulgaria and Russia, the ministry data showed. A steep decrease in the number of arrivals from Europe also decelerated in April, as a total of 944,900 Europeans visited the country, representing an approximate decrease of 2.4 percent compared to the same month of 2016.

Azerbaijan simplifies business registration for foreigners

Traces of 5,000 year Old Grapes from World’s First Vineyard Discovered Wine making began in the East European country of Georgia at least 5,000 years ago, suggests new research.

Traces of grape pollen from the world’s first vineyard have been discovered inside an animal-shaped ceramic jar used in ritual ceremonies.

It was dug up at an archaeological site called Aradetis Orgora – 62 miles (100 km) west of the Georgian capital Tbilisi.

The pottery dates to around 3,000BC and would have been used by an enigmatic village based people called the Kura-Araxes to ferment the fruit.

The discovery adds further weight to Georgia’s long-cherished and championed belief that it is the birthplace of wine making.

The first evidence of domesticated grapes in the form of pips have also been unearthed in the south west of the country and date back 6,000 years.

It means Georgia really was the cradle of viticulture from where the technology spread to the so-called ‘Fertile Crescent’ of Mesopotamia and the Eastern Mediterranean.

The vessel has an animal-shaped body with three small feet and a pouring hole on the back. The head is missing.

It was found with a second similar vessel and a Kura-Araxes jar on the burnt

floor of a large rectangular area with rounded corners – arguably a sort of shrine used for religious activities.

Scientists used a technique called radiometric (C14) analyses which dates specimens by determining proportions of chemicals to show they go back to 3000-2900 BC. The vessel was examined at the Georgian Museum of Tblisi by palynologist Dr Eliso Kvavadze.

She found it contains numerous well-preserved grains of pollen of Vitis vinifera – a common grape vine that is still used to make wine today.

Dr Kvavadze said it shows wine’s strategic role in the Kura-Araxes culture for ritual libations.

The ritual pourings would have been offered to a god or spirit or in memory of those who have died.

They were common in many religions of antiquity and continue to be offered in various cultures today. Various substances have been used for libations – most commonly wine or olive oil, and in India, ghee.

The vessels used in the ritual often had a significant form which differentiated them from secular ones. The libation could be poured onto something of religious significance, such as an altar, or into the earth.

The Azerbaijani Ministry of Taxes has prepared a bill on registration of enterprises in the country through a strengthened electronic signature, said Samira Musayeva, the General Director of the Tax Policy and Strategic Research Department at the Ministry.

Musayeva, addressing a presentation on innovation in tax administration on June 16, said that this bill allows non-residents to register businesses in Azerbaijan without visiting the country.

“The presidential decree on the creation of digital nodes gives a number of instructions to the Ministries of Taxes, Foreign Affairs, ASAN Service and other state bodies. We must provide the opportunity to receive the electronic signature ASAN Imza in the diplomatic corps of Azerbaijan abroad. On the other hand, we must ensure that those, who have a strengthened electronic signature, get an opportunity to register enterprises in the country without visiting it. We have already submitted the corresponding bill to the Cabinet of Ministers,” she said.

Musaeva noted that technical issues remain to be solved, so that diplomatic corps could provide electronic signature to non-residents.

She also added that the bill provides for amendments to existing laws, not the adoption of a separate law.

ASAN Imza (Easy signature), established by Azerbaijani’s Ministry of Taxes in partnership with ASAN Service Center and Ministry of Communication and Technologies, is service that allows a client to use a mobile phone as a form of secure electronic ID. Like the ID Card, it can be used for accessing secure e-services and digitally signing documents, but does not require an ID card reader.

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Embassy United States of America Embassy 11 Balanchivadze St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 53-23-34 E-mail: tbilisivisa@state.gov; askconsultbilisi@state.gov United Kingdom of Great Britain and Northern Ireland Embassy 51 Krtsanisi Str., Tbilisi, Tel: 227-47-47 E-mail: british.embassy.tbilisi@fco.gov.uk Republic of France Embassy 49, Krtsanisi Str. Tbilisi, Tel: 272 14 90 E-mail: ambafrance@access.sanet.ge Web-site: www.ambafrance-ge.org Federal Republic of Germany Embassy 20 Telavi St. Tbilisi Tel: 44 73 00, Fax: 44 73 64 Italian RepublicEmbassy 3a Chitadze St, Tbilisi, Tel: 299-64-18, 292-14-62, 292-18-54 E-mail: embassy.tbilisi@esteri.it Republic of Estonia Embassy 4 Likhauri St., Tbilisi, Tel: 236-51-40 E-mail: tbilisisaatkond@mfa.ee Republic of Lithuania Embassy 25 Tengiz Abuladze St, Tbilisi Tel: 291-29-33 E-mail: amb.ge@urm.lt Republic of Latvia Embassy 16 Akhmeta Str., Avlabari, 0144 Tbilisi.

E-mail: embassy.georgia@mfa.gov.lv Greece Republic Embassy 37. Tabidze St. Tbilisi Tel: 91 49 70, 91 49 71, 91 49 72 Czech RepublicEmbassy 37 Chavchavadze St. Tbilisi ;Tel: 291-67-40/41/42 E-mail: czechembassy@gol.ge Web-sait: www.mzv.cz Japan Embassy 7 Krtsanisi St. Tbilisi Tel: +995 32 2 75 21 11, Fax: +995 32 2 75 21 20 Kingdom of Sweden Embassy 15 Kipshidze St. Tbilisi Tel: +995 32 2 55 03 20 , Fax: +995 32 2 22 48 90 Kingdom of the Netherlands Embassy 20 Telavi St. Tbilisi Tel: 27 62 00, Fax: 27 62 32 People’s Republic of China Embassy 52 Barnov St. Tbilisi Tel: 225-22-86, 225-21-75, 225-26-70 E-mail: zhangling@access.sanet.ge Republic of Bulgaria Embassy 15 Gorgasali Exit, 0105 Tbilisi, Georgia Tel: +995 32 291 01 94; +995 32 291 01 95 Fax: +99 532 291 02 70 Republic of Hungary Embassy 83 Lvovi Street, Tbilisi Tel: 39 90 08; E-mail: hunembtbs@gmail.com State of Israel Embassy 61 Agmashenebeli Ave. Tbilisi Tel: 95 17 09, 94 27 05 Embassy of Swiss Confederation’s Russian Federation Interests Section Embassy 51 Chavchavadze Av., Tbilisi Tel: 291-26-45, 291-24-06, 225-28-03 E-mail: RussianEmbassy@Caucasus.net Ukraine Embassy 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

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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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