Caucasus Business Week #207 by Caucasian Business Week

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September 11, 2017 #207

September 11, 2017, Issue 207 - www.cbw.ge

Experience Lika torikashvili: A trip to the Kingdom of Swaziland to test my limits Pg. 9

Main Pg. 2 EBRD President: Georgia’s positions have improved in all international rankings

Giorgi Avaliani: ‘’Never be satisfied with something that does not surprise you everyday” What Drives LARI

Starting August 21, GEL exchange rate has been declining. 1 USD was equal to 2.38 GEL and 1 EUR was equal to 2.80 GEL on August 21 . As of September 6, the exchange rates have dropped to 2.49 GEL and 2.96 EUR respectively. National Bank has not carried out currency interventions and has not even mentioned the national currency. Over the past years, the NBG has been carrying out policy without mentioning GEL. Maybe, they think the problem will be resolved in itself by ignoring it and Georgian national currency will maintain stability in itself. Regretfully, this is not realistic and the past two weeks have proved this. Now we should analyze the indicators that could cause GEL exchange rate changes. Naturally, current situation in our external partner countries is very interesting. Currencies of our partner countries have strengthened from August 21 to September 6. For example, EUR strengthened against USD to 0.83 point from 0.84 point. Russian Ruble against USD rrose from 59.1 point to 57.3 point. Azerbaijani Manat slightly rose against USD from 1.699 to 1.698 point. Armenian Dram also insignificantly strengthened from 478.54 point to 478.19 point, while Turkish Lira strengthened to 3.44 point from 3.51 point. Pg. 4

Economic Outcomes of Conflagrations

Hem Prices Either Rise or Disappear from Market

Valuable and viable ecosystem is very important for state economy. Healthy ecosystem, development of natural resources, change in climate conditions, ecological environment make influence on Economy of Climate. It should be noted that conflagrations generate significant impact on economic sustainability and social welfare of the country, both global and local outcomes of conflagrations and their outcomes cause serious challenges and risks to business sector. According to reports by the world’s leading global organizations, conflagrations are recorded in ten top global threats that change ecosystem of the earth, damage flora and fauna on the planet. Pg. 6

Newsroom

2 Government

EBRD Implemented Projects of More than $3 billion in Georgia

The project of the Deep and Comprehensive Free Trade Space Agreement with the European Commission, that foresees issuance of GEL denominated loans for Georgian companies.

Major Greek Holding Mouzenidis Group Plans to Expand Business in Georgia

Mouzenidis Group travel companyt owns more than 80 representations in 18 countries. ELLINAIR airline performs flights to 12 countries, including flights from Crete and Thessaloníki to Georgia.

economy

Georgian Corridor Lost 400 Thousand Tone Cargos

According to Ministry of Economy, transporting branches have processed 21.4 mln t cargo, the volume is less by 0.4 million comparing. Neither, Sea Port could not manage to sustain growing trend, where cargo of 9.6 mln t has been processed in total, less by 0.3 million y-o-y.

More Than 5 Million International Travelers Visited Georgia in 8 Months

In August, Georgia received 1,080,449 international travelers, which is 232,068 more than in the same period of the previous year (growth + 27.4%).

banking

NBG Keeps Its Policy Rate Unchanged At 7%

The annual inflation in August has decreased to 5.7%. According to the forecast the inflation will remain above the target until the end of the year, once the temporary factors will have petered out, the inflation will get close to the 3% level.

ADB Names TBC Bank as the Best Bank in Trade Financing

The awards ceremony was held in Singapore and over 150 representatives from 17 countries attended the event. The ADB has identified 18 best partner banks with which ADB is actively cooperating.

business

Georgian Chacha Export Increased on International Markets

According to the National Wine Agency, exports of Georgian chacha have increased by 153% during one year and 132 746 bottles (0,5 l) were exported to the 17 countries in 8 months in 2017.

Georgian Mining Completes $6m Investment into GCG

Georgian Mining Corporation announced it had satisfied its obligation of a $6m initial investment to GCG. As a result of the investment Georgian Mining were granted a 50% equity stake in GCG.

company

Company Silknet Issued 34 Million GEL worth Bonds With TBC Capital

TBC Capital successfully completed the placement of Silknet bonds. The volume of bonds is 34 million GEL. It’s the first time on the Georgian telecommunication market company issue the bonds.

September 11, 2017 #207

EBRD President: “Georgia’s positions have improved in all international rankings”

eorgia’s positions in all international rankings have advanced in the past five years and is a front-runner among the countries we work with, says President of the European Bank for Reconstruction and Development (EBRD) Sir Suma Chakrabarti. Chakrabarti spoke about Georgia’s latest achievements at a joint press conference together with Prime Minister Giorgi Kvirikashvili in Tbilisi. We are very grateful for the good and successful meetings we had with the government of Georgia. What we could sense is a joint determination to work towards further improving Georgia’s economic performance. This is also illustrated in the EBRD’s high volume of investments”, he said. Already the country is one of our largest partners in terms of GDP per capita, and after a record year in 2016 with close to €250 million of new investments we are on course towards an even stronger result this year”. He added that Georgia has a government that is determined to continue economic and other reforms in order to

turn the country into a more European state. Chakrabarti said that the EBRD will keep supporting Georgia with both giving recommendations and investments. I think we have a group here in Government, that really wants keep reforming the economy and the political space to make it more European in every angle”. The EBRD President said he is sure that Georgia will exceed this and next year’s’ economic growth forecasts by the EBRD. In May, the EBRD announced this year’s economic growth forecast for Georgia and reassured it will grow by 3.9 percent. Furthermore, the EBRD said Georgia’s economy will hit 4.2 percent growth in 2018. We will offer you our newest forecasts in November but I am sure Georgia will keep growing faster than any other country where we operate in”, Chakrabarti said. EBRD President Chakrabarti visited Georgia for meetings with the government and to participate as a guest at the Investors’ Council on his current tour of the Caucasus. During his third visit as EBRD President, he met with Prime

Minister Giorgi Kvirikashvili, Deputy Prime Minister and Minister of Finance Dimitry Kumsishvili, Minister of Energy Ilia Eloshvili, Minister of Economy and Sustainable Development Giorgi Gakharia, and the Minister of Justice Thea Tsulukiani. The discussions focused on ways to further strengthen Georgia’s economic performance. A key element for the country’s economic performance is continuous improvement of the business environment”, President Chakrabarti said. He attended a session of the Investors’ Council, a platform for public-private dialogue. The government of Georgia and the EBRD established the Investors’ Council in May 2015 during the Bank’s Annual Meeting, which took place in Tbilisi that year. The EBRD approved its latest country strategy for Georgia in December 2016. It defines support for the competitiveness of the private sector, development of the local capital market and regional expansion of local companies as the Bank’s priorities.

Azerbaijani, Georgian, Turkish FMs Meet in Baku

oreign Ministers of Azerbaijan, Georgia and Turkey, Elmar Mammadyarov, Mikheil Janelidze and Mevlüt Çavuşoğlu, respectively, met in Baku on September 6 at their sixth trilateral meeting since 2012 when the trilateral format was launched in Trabzon. At the ministerial meeting, the foreign ministers spoke, among other issues, on regional and trilateral economic and commercial cooperation. In their joint statement of the meeting, the foreign ministers stressed the importance of the

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“earliest start of operation” of the Baku-Tbilisi-Kars Railway, which will link Azerbaijan with Turkey via Georgia. The sides also highlighted their strategic partnership in the field of energy and “reaffirmed their full political support for Trans Anatolian Pipeline (TANAP), other important components of the Southern Gas Corridor (SGC), as well as for energy projects aimed at transporting hydrocarbon from the Caspian basin to Europe.” They also highlighted the importance of trilateral cooperation along the Great Silk

Road route in order “to revive and conserve the Road, and underlined further enhancing cooperation in the fields of transport, energy, trade, culture and tourism, and peopleto-people contacts across the Silk Road route.” As part of his visit to Azerbaijan, Foreign Minister Mikheil Janelidze held faceto-face meetings with Elmar Mammadyarov and Mevlüt Çavuşoğlu, as well as with Azerbaijani President Ilham Aliyev. The foreign ministers agreed to hold the next trilateral meeting in Turkey.

Editor: Nutsa Galumashvili. Mobile phone: 595 380382 Reporters: Nina Gomarteli; Mariam Kopaliani; Merab Janiashvili Technical Assistant: Giorgi Kheladze;

Source: www.commersant.ge, www.bpi.ge, www.gbc.ge, www.agenda.ge, www.civil.ge

September 11, 2017 #207

publicity

econo-mix

September 11, 2017 #207

What Drives LARI

Merab Janiashvili Economic Analyst

The fact is that NBG has failed to manage these processes in cooperation with Ministry of Finances and now their statements aim at justification of this or that event and they abstain from naming real reasons.

tarting August 21, GEL exchange rate has been declining. 1 USD was equal to 2.38 GEL and 1 EUR was equal to 2.80 GEL on August 21 . As of September 6, the exchange rates have dropped to 2.49 GEL and 2.96 EUR respectively. National Bank has not carried out currency interventions and has not even mentioned the national currency. Over the past years, the NBG has been carrying out policy without mentioning GEL. Maybe, they think the problem will be resolved in itself by ignoring it and Georgian national currency will maintain stability in itself. Regretfully, this is not realistic and the past two weeks have proved this. Now we should analyze the indicators that could cause GEL exchange rate changes. Naturally, current situation in our external partner countries is very interesting. Currencies of our partner countries have strengthened from August 21 to September 6. For example, EUR strengthened against USD to 0.83 point from 0.84 point. Russian Ruble against USD rrose from 59.1 point to 57.3 point. Azerbaijani Manat slightly rose against USD from 1.699 to 1.698 point. Armenian Dram also insignificantly strengthened from 478.54 point to 478.19 point, while Turkish Lira strengthened to 3.44 point from 3.51 point. Only Ukrainian Hryvnia has declined slightly against USD from 25.5 point to 25.97 point. Currency exchanges of our neighbors and partner countries clearly show that it is not right to blame external factors for 2-week depreciation of GEL. Current account deficit plays considerable role in GEL exchange rate volatility. According to the first quarter of 2017 indicators, current account deficit constituted 377mln USD, up 38.6mln USD (+9.3%) year on year. Regretfully, the second quarter indicators are not attainable yet (they have not been published yet). As to external trade, in January-July Georgia’s negative trade balance made up 2.7819bln USD, up 50mln GEL year on year and this is the best indicator over the past 6 months, excluding the year of 2016. At the same time, the current year is recording a growth in money transfers to Georgia. In JanuaryJuly 2017, money transfers to Georgia constituted 749.89mln USD, up 123.8mln as compared to the same period of 2016 and up 120mln GEL as compared to 2015. It should be also noted that in July and August Georgia recorded a major inflow of visitors: 982 487 ones in July and 1 080 449 ones in August, up 232 068 visitors year on year. Only contraction was recorded in an inflow of foreign direct investments. According to preliminary indicators, FDI inflows in the second quarter marked 346.6mln USD, down 14.3% year on year. FDI inflows in the first half of 2017 marked 751mln USD, down 5.5% year on year. In short, the country records an advancement

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The 10th International Forum of Local Economic Development (LED) will be held at ”The Biltmore Hotel Tbilisi”, organized by Tbilisi City Hall ,on September 13-14. The capital has been hosting the event since 2007. During this period, the Forum became a unique regional platform for discussing issues related to development of municipalities. In addition, the forum participants have the opportunity to share ideas and experience. The forum is a good opportunity for the future cooperation between private and public sector, local and international experts and members of civil society. This year’s “International Economic Forum for Local Economic Development” is a large-scale event based on sessions of multilateral topics and numerous rapporteurs. The following countries will be represented: USA, Austria, England, Germany, Spain, Italy, France, Sweden, Moldova, Ukraine, Holland, Denmark, Jordan, Poland, Slovakia, Belgium, Israel, Turkey, Azerbaijan, Armenia and Kazakhstan. The conference will be attended by up to hundred international speakers, including Director General of the European Commission Neighborhood Policy and Enlargement Negotiation Director – Christian Danielsson, Asian Development Bank Knowledge Management and Vice President of Sustainable Development – Bambang Susantono, EBRD Chief Economist – Kathyl Twadt, EBRD Consultant – Robert Bailey, Executive Director of Barcelona Tourism Council – Jord Williams Carnes and others. The conference part of the event will last for two days. 16 Topic Sessions will be held: Good Governance, Cities for Economic Growth, Urban Resilience, Resilient Future, Smart Environment, Energy Efficiency, Future Cities, Goals & Visions, International Relations, EAP & Enlargement, Invest in City, Entrepreneurial Opportunities in Global Trade, City Tourism, Innovative Positioning and Branding Strategies, Integrated Approaches for Territorial Development, Open Government Partnership. 16 moderators will moderate forum, up to 100 presenters, including 50 invited international speakers. As a result of the Forum Tbilisi City will receive recommendations, consultations and specific projects for development of the city as well as economic, urban and environmental development; Developing international relations and establishing new contacts; City’s investment potential presentation; Introducing the wide range of activities in the field of electronic management in Tbilisi; Sharing successful experiences from different cities in energy efficiency and green towns; Future views of the city will be developed. The “Green City Action Plan” will be presented at the concluding part of the Forum. Also, Tbilisi will be awarded the Club Membership Certificate for “Mayors for Economic Growth”.

National Bank Changes 3-Year Position on Refinancing Loans’ Impact on GEL Exchange Rate

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The 10th International Forum of Local Economic Development to be Held at The Biltmore Hotel Tbilisi

in all components of USD inflow, excluding FDI, where contraction recorded 23.8mln USD and this is not a significant reduction. Consequently, these processes were to strengthen GEL exchange rate. In summer period the national currency marked revaluation signs, but NBG carried out currency interventions and extracted 110mln USD from turnover and halted the GEL strengthening process in this way. As to refinancing loans, the last month has recorded declination signs. As of June 15 NBG had issued 1.35bln GEL refinancing loan to commercial banks and since then the crediting volume showed contraction trend and on September 7 the volume of refinancing loans declined by 520mln GEL to 830mln GEL. However, at the same time, the Government started applying a new instrument in June 2017 and the Finance Ministry treasury office placed 500mln GEL on 3-month deposits at commercial banks. Opposition MPs point to this factor as a key source of GEL exchange rate depreciation. «The parliament meeting yesterday started by speculations. Nobody expected anything else from United National Movement members, but our population deserves to have comprehensive information about money placed by State Treasury at commercial banks. Today money market has been arranged it the form of a shared vessel and the refinancing loans volume shrank in the same amount of money that was placed by State Treasury at commercial banks. Consequently, it had not impact on whole money supply», Dimitri Kumsishvili said in response. NBG vice president Archil Mestvirishvili has commented on State Treasury money management operations. The mechanism has been agreed with NBG and is implemented under NBG coordination. It has been developed by World Bank and IMF. «These operations does not grow money supply, because the demand for NBG refinancing loans is declining in the same amount. These are similar products and they balance each other», Mestvirishvili noted. It is paradox that over the past 3 years representatives of Government and NBG have asserted that refinancing loans could not affect GEL exchange rate, but now they assert the opposite considerations without feeling awkward. They contradict their own positions. Regretfully, NBG changes its position in so quickly. GEL exchange rate has depreciated, not because of external factors. This happened because of expectations or Finance Ministry’s new instrument, but this is less important for a final outcome. The fact is that NBG has failed to manage these processes in cooperation with Ministry of Finances and now their statements aim at justification of this or that event and they abstain from naming real reasons.

“Access to finances is very important for businessmen in such countries as Georgia. EU4Business-EBRD Credit Line provides this opportunity to business companies so as they have an access to finances and re-equip their enterprises. Similar projects will promote Georgia’s integration with EU. Georgian economy is being developed at good paces. We believe this pace will be accelerated in the coming years”.

Suma Chakrabarti EBRD President

September 11, 2017 #207

publicity

opinion

September 11, 2017 #207

Rati Abuladze Professor, Doctor of Economics

Economic Outcomes of Conflagrations Valuable and viable ecosystem is very important for state economy. Healthy ecosystem, development of natural resources, change in climate conditions, ecological environment make influence on Economy of Climate.

t should be noted that conflagrations generate significant impact on economic sustainability and social welfare of the country, both global and local outcomes of conflagrations and their outcomes cause serious challenges and risks to business sector. According to reports by the world’s leading global organizations, conflagrations are recorded in ten top global threats that change ecosystem of the earth, damage flora and fauna on the planet. More than 7.5mln conflagrations are registered in the world on average every year, covering 5% of the planet surface and generating negative climate changes, including there are more than one million centers of forest and landscape conflagrations. If we realize that woodlands are of crucial importance for human race survival (they absorb carbon dioxide, halt climate changes, give food, water, wood materials, bioenergy, play important role in shaping micro climate and weather conditions), the Authorities are obliged to ensure efficient mechanisms and infrastructure for fire prevention. It should be noted that 25% of the planet population depend on woodland resources. However, regretfully, 13mln hectares of woodland are annihilated every year by conflagrations, forestry management, private or civil sector (World Resources Institute). It should be stressed that forest conflagrations bring serious impact on state economy, including in terms of: • reduction/annihilation of natural resources; annihilation

of wood materials; • Human death and injuries; • Damage and annihilation of infrastructure; • Direct of indirect losses in recreation zones and tourism sector. • Insurance costs and losses; • Reduction in political will (conflagration causes the feeling of uncertainty and instability). At the same time, accompanying processes such as air pollution, water and soil ecological problems need corresponding treatment and preventive mechanisms. And this factor puts certain burden on the state budget. It is worth noting that in developed countries «the value» of conflagrations constitute 1% in GDP and it includes: direct and indirect damages, management of firefighting offices, monitoring and distance control systems, insurance and safety systems, scientific-technical research of fire safety, consulting and scientific work. It is important to note the scales of losses inflicted by conflagrations to Georgian business sector (Eliava Fair, World of Children building and other complexes) remain as «general and unclear statistics» for uninsured bodies, for those who receive tiny state compensations. The mentioned conflagrations in business space has certain relation to beneficiaries of social allowances, growth in emigration and unemployment. Note that besides economic losses, social losses should be also taken into account. Social losses are not subject to economic

“The article reads that at this stage the country continues fighting against fire and it is difficult to reflect all direct or indirect damages in monetary value and carry out economic analysis. We should also take into account forecasts made by international organizations. In the coming years, forest conflagration scales will enlarge and they will bring more disastrous outcomes (Union of Concerned Scientists).”

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As a result, the Government should develop a flexible management center with due equipment and efficient programs for timely notification and detection of fires, prevention of threats in risk zones.

calculation, but evaluation of separate social damages may be reflected in economic indicators. For example, the life of one American citizen is valued at 278 000 USD, including 172 000 USD for quitting job, 1200 USD for burial, 13 000 USD for medical assistance. Moreover, according to the US bureau, the life of US citizens is valued by 386 000 USD at the age of 30 and by 205 000 USD after the age of 50. Every year in the USA 100 000 persons are hospitalized because of conflagrations and expenditures on them exceed 1bln USD (the US National Security Association). Keeping such indicators and statistics is impossible in Georgia because the government structures of Georgia lack for analysts and scientistresearchers. In 2001-2015, a total of 20860 cases of conflagrations were registered in Georgia, where 313 persons died and 633 were injured (Interior Ministry statistics). According to the report by Global Forest Watch Fires, in 2012-2017, more than 4000 forest conflagration cases were

registered in Georgia. These cases have caused degeneration and «fragmentation» of environment. Finally, «isolated spaces» were also violated. The article reads that at this stage the country continues fighting against fire and it is difficult to reflect all direct or indirect damages in monetary value and carry out economic analysis. We should also take into account forecasts made by international organizations. In the coming years, forest conflagration scales will enlarge and they will bring more disastrous outcomes (Union of Concerned Scientists). At the same time, forest conflagration break out mostly in unattainable places and it is necessary to use forest monitoring global systems, satellite systems, and online platforms for fire prevention (American Association for the Advancement of Science). As a result, the Government should develop a flexible management center with due equipment and efficient programs for timely notification and detection of fires, prevention of threats in risk zones.

economy

September 11, 2017 #207

Hem Prices Either riSe or Disappear from Market

omestic manufacturers of poultry meat speak out about artificial obstacles in the sector development and rising product prices. The poultry meat manufacturers complain about the standard act that was enacted several days ago. Namely, the new regulations introduces an additional tax on poultry meat. Namely, under the government’s resolution, starting August 24, 2017, the law on approval of deadlines and prices for National Food Agency services determines deadlines and prices for the agency services, including veterinary inspection of poultry meat, the so-called form N2. The price for issuing the document for one chicken is 5 Tetri. A part of domestic entrepreneurs states that similar precedents are not met in any country of the world and this decision may be appraised as an artificial frustration of Georgian production. Elguja Nozade, director of LLC Gantiadi (Mukhrani Chicken), noted that National Food Agency has made entrepreneurs pay the mentioned tax on each slaughtered chicken. The entrepreneur says that the Government has taken the mentioned decision arbitrarily without a consent of business sector and this is a very bad precedent. «We were not warned. A day earlier they called to us from National Food Agency and warned in the form of an ultimatum that we were to sign an agreement with them, otherwise they would impose fines on us. This is a wrong step and this is the shame of our Authorities», Nozadze noted. All countries promote poultry production, both egg and chicken meat production. Moreover, in all countries domestic production is subsidized. “We pay VAT and now we have to pay 5 Tetri for each chicken in addition. These are huge expenditures for entrepreneurs”, Nozadze said. The created realities will raise prices on domestic poultry production. It is not ruled out that production be suspended entirely, he added. “Georgian poultry meat will rise in price or may disappear from the market entirely”, Nozadze said. LLC Gantiadi produces 1000-1500 chickens a day and the company will have to pay 50 GEL a day in addition, Nozadze said. We have already calculated how much the price of one kilogram of poultry meat will increase as a result of the mentioned regulations. One kilogram will rise in price by about 10 Tetri, as additional 5-Tetri tax constitutes 6-7% of the product’s prime cost, Nozadze added. “Currently, one kilogram of chicken price ranges from 4.50 GEL to 5 GEL. In all countries poultrty meat production is subsidized as part of social programs, while this practice does not work in Georgia and this creates problems. This 5-Tetri tax would not hit so bitterly if we did not pay VAT”, Nozadze pointed out. Revaz Vashakidze, founder of Chirina (Biubiu) company noted that Chirina company entered the market in 2013 and the company still remains unprofitable. “We have been working without profits. The situation is difficult. The country imports low-quality chicken meat from Turkey and this meat is unfit for eating. This meat is not imported to Azerbaijan, Armenia, while our country admits it. It is worth not-

ing that quality of similar chicken complies with the price and is very cheap and our citizens prefer to buy this product, because today in Georgia the ratio of solvent population is very unimportant. Moreover, there are very small entrepreneurs on the market, who are exempted from VAT. Consequently, they have much better conditions compared to us”, Vashakidze noted. The ratio of the mentioned tax in the prime cost of a chicken meat accounts for 7%. Companies have to pay the sum in advance, before the product sales and this is an unreasonable decision of the Government, he added. “Government has not communicated with us. They were to meet with us and learn about the condition of our products and finances. We follow our budget, but they imposed a new tax in the middle of the year. Where should we take this sum from?”, Vashakidze asked. Business cannot understand why to pay this tax, while Chirina owns an international standard slaughterhouse, where 12 veterinaries are employed. Business cannot understand why the Government has introduced this tax, while almost all major entrepreneurs have established HACCP standards (Hazard Analysis Critical Control Point) in Georgia, including, Chirina company. Consequently, quality is also controlled. Vashakidze noted that despite this entrepreneurs have to pay money to the Government for taking meat safety certificate, the form N2. This 5 Tetri is not a small amount in the end, he said. Chirina produces about 30 000 chickens a day and the new regulations oblige the company to pay 1500 GEL a day, 45 000 GEL a month, Revaz Vashakidze noted. These regulations will raise price of chicken meat on

the market, he said. “It is more profitable to import chicken from Turkey or other countries. What can we do? This decision was taken mainly against Chirina, because slaughterhouses in Georgia are very few or rhey do not exist at all”, Vashakidze said. Poultry meat production in Georgia becomes nonsense, Vashakidze concluded. Paata Kurdadze, head of food safety department of National Food Agency, explains that state veterinary control and supervision functions in all countries. A state official works at slaughterhouses in all countries and Georgia is not an exception, he said. “We have veterinary doctors at all slaughterhouses, who control the whole process before and after slaughtering. This is a paid service”. He said. These regulations will ensure market protection without changing product prices, Kurdadze noted. “All these decisions are taken deliberately and purposefully to protect the life and health of our population. We expand control and this policy has touched bird slaughterhouses too. The same regulations were introduced into animal slaughterhouses too and beef prices have not increased”, Kurdadze noted. National Food Agency keeps intense communication with business operators and this decision was not a surprise for them, he added. Besides additional tax, poultry companies talk about another problem – quality of poultry meat. “In Georgia, poultry meat market is not controlled and the distribution network is full of questionable and low quality products”, businessmen assert. Revenue Service rejects the mentioned accusations by poultry companies and asserts that no product enters the country without monitoring and the product that do not meet food safety standards, cannot appear on the Georgian market.

PR Person

September 11, 2017 #207

“Never be satisfied with something that does not surprise you everyday” Giorgi Avaliani, Head of Public Relations Department of Agriculture Projects Management Agency talked with Caucasus Business Week about public relations and advertising in Georgia and how he handles several projects during his hard working days. He also shared some of his experiences in crisis situations and named five important components to better explain thought leadership. -Which PR firms do you admire and why? -It’s hard to pick the one, I observe implemented campaigns by various companies annually, including Georgia. It’s notable that advertising business is being developed quite fast and this fact is positively reflected for the customers. -Which media outlets do you follow? One of the most important things in our profession is to have correct information, if you do not have it, it will be hard to disseminate itself. I would like to underline the word ‘’correct’’ because the media is very polarized and often happens to come across unverified by various media outlets. Every morning, it does not matter whether it is a working day or not, it starts with getting information. I use monitoring platform for the first place. Mobile phone and various online information applications are an integral part of my daily life. In terms of receiving information, social media plays a big role for me, mainly Facebook, because all kinds of media outlets and information are available there. -Talk about the difference between PR and advertising? Communication and advertising campaigns intersects often. In both directions it is important to express the main message that you want to provide to your company’s target audience. Public relations may involve advertising campaigns for achieving the set goals. The winner of this year’s Cannes Creative Festival is the outdoor advertising campaign for “Fearless Girl” , which is a clear example of the above mentioned McCann New York advertising agency. To sum up, communication with the public in some cases uses advertisements as one of the tools to communicate with the target audience, and the ad is one of the ways that the company can support to facilitate its short term goals, increase awareness, sales, as well as public relations. The most important thing to note when talking about PR and advertising is that the first one is free and the second is paid. Let’s start with advertising, what is advertising? The amount paid on your company’s activities, it is fully controlled, what you show and what they say. Advertising creates visibility, potential customers know that you are spending money on your business, advertising is intended for short-term purposes and supports specific products. It is a onesided communication and applies to emotions and impressions, it has a volatile criterion that measures the results. As for PR, what is PR? PR is a permanent and intentional bilateral communication and dialogue between the organization / person and its target audience / stakeholders, which aims to meet the bilateral interests. Initiating coverage, oriented relationships and moods, it is used for both short-term and long-term goals. PR invests on values to create an organization’s look for external and internal users. In spite of the difference between the dividing line in Georgia and

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Arguments and discussions are an integral part of the work process, I think you can always find a way out of argumentative discussions. If your cannot persuade your manager, it means you are inconceivable to make it more relevant to your customers. By consensus I think that all the problems can be solved.

the PR is not sharp and frequently interfere with each other, we encounter the same content as advertising and PR. Here I would like to quote PR Gurus Robert Wayne, who speaks about the difference between advertising and PR, in a single sentence: “Advertising is what you pay for, PR is what you pray for”. -Describe some affiliate networks you’ve collaborated with and why you chose them? For more than 6 years I have been working in agriculture, I did not know anything about this field and it was very hard to work, but over time it changed and I think that I am very lucky to be able to present myself in this agriculture. It is the merit of this sector that I visited all regions of Georgia And got a chance to meet very interesting people, who are living daily labor and reinforce our country. In recent years many projects have been implemented in agriculture in Georgia, at present the Agriculture Project Management Agency is implementing more than 6 projects. Due to the number of projects and components it was complicated to communicate separate projects with the public. Occasionally the conditions, criteria and the contents were interrupted, making it difficult for the potential beneficiary to see all stimulating mechanisms. Beneficiaries interested in one of the private projects often find it difficult to see other parallel projects and associate with the agency. Despite the fact that it was actively communicated to the Agency / Ministry symbols communication, potential beneficiaries were constantly in trouble during identification of agricultural projects. Due to the Agency’s strategy, we decided to unite all projects under one goal. The existing projects come in conjunction with each other and complement each other as components of project themselves. Therefore, it is necessary “aggregate agro project” to exist, which gave us opportunity to show common goal and united, systemic image. Due to the above, the Agency has made a decision to unify all the projects under the Unified Brand (Unified AgroProject). On the one hand, the amendment has been to ease communication with the general strategy of the public, and on the other hand the efficiency of existing communication has increased. This is a union and I think it’s one of the best periods of my career at Agriculture Project Management Agency. -How do you integrate social media with PR? Everyone uses social media in my profession, especially Facebook, in order to receive and share information. I’m glad that this connection is getting stronger. For me, social media is a virtual world for various organizations, opinions and services. There you get information about your choice, receive critics, etc. It’s an international service which develops day by day. -How does PR support content marketing? Content marketing becomes more popular in digital world. We communicate with public through almost every social network and receive opinion of your

company from your audience. Any product/service is being reviewed in digital world. It’s important to show them that we communicate not just in a commercial way. Some other tools are various forums and online editions, through which we share valuable information to our customers. -How would you present the results of your work? I think it’s early to evaluate my results. I try to learn something new every day, get more qualified, I never stop and focus on personal, as well as professional development. Never be satisfied with something that doesn’t surprise you day by day. -What would you consider to be your most creative or effective campaign? I want to mark out one of the project we started in 2015, called ‘’Plant future’’, it means intensive constructions of gardens. Our aim was resonance campaign, which would stand out and cause interest. We decided to find universal stimulating mechanisms: joy, support, successful future, self-realization, nationality- these are positive emotions, that brings everyone together and simplifies communication with them. Land and agriculture is associated with patriotism and nationalism among people, so we focused on this sense during project. We got 3600 hectare orchards as a result. Entrepreneurs will be able to produce high-quality products, which will be competitive on local market with imported product. -What would you do if a client or manager disagreed with your PR strategy? Arguments and discussions are an integral part of the work process, I think you can always find a way out of argumentative discussions. If your cannot persuade your manager, it means you are inconceivable to make it more relevant to your customers. By consensus I think that all the problems can be solved. -How would you define thought leadership? -Thought leadership -this is a content marketing form, saying “leader thinking” where talent, creativity, experience is directing. These are 5 components to explain the thinking leadership: Alter: Think creative when sending main message; Overtake statistics: There must be an emotional story that makes statistic stronger. Ideally, creative person that shares a story in non-standard way. Risk: There must be some bold stories; Make information shareable: It’s necessary to analyze what would be liked by an audience, after what you create content. Entertain: It shouldn’t be boring to read, watch, listen stories that you share. -How have you worked with a team to handle a PR crisis? In the beginning of each project, we see negative factors that can hamper or harm the company’s activities when you have a situation and know your weak and strong sides, which is relatively easy to handle and solve the crisis. -What’s interesting about current PR work? -People and communication with them, this is the most delightful in our profession.

September 11, 2017 #207

Experience

A trip to the Kingdom of Swaziland to test my limits how I told my family the biggest lie in my life Lika torikashvili How many middle class 19 years old Georgian girls who have never been abroad can say that they celebrated their 20th birthday in Africa? The real one, the continent called Africa, in a little kingdom SWAZILAND ? Well, I am one of those lucky ones. And the story of how I got there and what happened there is unbelievable and even crazy… Going to Africa has always been my dream, but I would never imagine that I’d have to lie to make my dream come true. I lied to my parents in order to go to Africa and spent 9 month there. I told them that I was going to work for the United Nations while being there, that my flight ticket and accommodation was sponsored and this trip would be a great experience for me. In reality, I worked for 4 months after graduating my college in Wales, in order to earn enough money to travel to Africa and survive in one of the villages there, working in an orphanage. I grew up in a family with a disabled aunt. In a Post Soviet country like Georgia,she really suffered and my family members did not really know what to do with her and her “special” abilities. My precious aunt was the one who inspired me to care about creating a better, more colourful world for underprivileged and disabled people. That’s how “Paint the World” NGO was born. The main aim of the organisation, that I started in Tbilisi at the age of 15, was to inspire teenagers to bring colours and happiness to people in need. Youth would gather and visit orphanages and hospitals, bringing sweets and balloons, performing activities that could cheer up the residents and make them smile. Sometimes the members would dress up like clowns or princesses, and bring face paints and guitars along. It started with a group of 15 year-old teenagers, but in 5 years time it became an international organisation with branches in Malaysia, Oman, Qatar and now Swaziland! After becoming a young Imedi Hero I got a 100% scholarship to continue my studies in UWC Atlantic College in Wales, and I headed off to the biggest adventure of my life- my first trip abroad, to the real world. While studying in Atlantic College, I met an extraordinary Math teacher, whose name was Lindsey Dunseith. She used to teach at the same UWC college, in Swaziland. That’s when I first heard about the Kingdom of Swaziland, and this thought of going there crossed my mind. How amazing it would be to volunteer in Africa and gain the experience, and fulfil my main mission:paint the world, paint more, a bigger portion of this globe? expand my horizons and see more. Meet amazing people.Save lives! I was in love. In Love with this idea- to spend some time travelling in Africa and learning more about life. Lindsey said she knew someone called Ann, who

runs an orphanage in Mhtlanya, one of the villages in the Kingdom. Ann agreed to hire me as a volunteer, if I would manage to get myself to Swaziland and back. I said yes. Earning 2.000 pounds for a ticket to Africa from Tbilisi was not easy. Applying for a Swazi visa if you are a Georgian citizen is also extremely difficult.But nothing is easy in life, right? I was given 2 jobs on campus of my college. In May, the class of 2016 graduated from UWC Atlantic College. Everyone went on a Euro Trip, to celebrate graduation. I had to stay on campus and work, trying to sponsor my gap year. For the next 3 months, I was a waitress and a gardener. But my jobs were very glamorous: I was a gardener and a waiter in a real castle! I don’t think I will ever have the courage to tell my parents that I spent the entire 3.000 pounds salary that I earned that month on a ticket to Swaziland, and my visa.

where I was supposed to play with the children and teach them English, I realised that Africa is not what I thought it would be. And my 9 month would be very lonely and isolated, in a tiny village called Mhtlanya, where everything is dirty, muddy, poor and unbearably hot. The hut where I stayed was a little room with no sink, tiny bed, a toilet and a little room for taking showers. The place was near the bus stop, although there were no places to go. Literally a road which led to the orphanage and high mountains around my little hut. No internet, no running water, no communication with the real word. Only local Africans around me, who were very hospitable and nice, but I still felt lonely.I was starting to think about going back home. Looking back, I think those days were the most miserable and challenging. I could not tell my parents about my struggles. I could not Skype my friends properly. All I could do is get used to my new role as

me to kids from local universities and schools, who sponsored my events and helped me to even get in touch with the Royal Family in Swaziland. Soon Paint the World was born, and I tried to unite young Swazi teenagers to do the same activities as we used to do in Georgia: Visit places where people needed smiles and happiness, and bring lots of balloon and music and make everyone smile and dance. Metropolitan Swaziland and Star Paint Swaziland became our main sponsors. African teenagers and myself would find a place in a village, ask for sponsorship of our transportation, sweets and presents. When I told Judy about my living conditions, she said I have to move to her place. Her house was beautiful, on the top of a mountain in Mbabane, the capital of Swaziland. She always had very interesting visitors and they would all be amazed to hear that she “adopted me”, a stranger from Georgia.

“I spent the entire salary to get flight tickets and visa for Swaziland to volunteer there” I did buy the ticket, and I even came up with the biggest lie I have ever told to my parents. I said that I would work for the UN youth project in Africa for 9 month. I also said that my ticket, housing, meals and transportation would be all covered by the UN, and I would not have to pay anything at all. This would sound more glamorous for my Georgian family, who would panic if I would say the truth- I am going to an unknown continent, knowing no one except one person who owns the orphanage where I will work, I am going as a volunteer meaning that I won’t earn anything, and this trip is extremely dangerous..I am going leaving my comfort zone... I showed fake UN invitations to my family,tied to act cool and lie as hard as I could. They believed me. The next thing I remember is boarding the cheapest plane to Dubai, shaking with fear. The next one was a 10 hours flight to Johannesburg,where I was thinking to myself, how will I survive in an unknown country knowing no one? But there was no way back. I was already on the African continent. I realised how undeveloped Swaziland was: no buildings, no shops, no malls, I looked out of the tiny airplane and saw nothing at all! Expect tiny African huts and forests… I was very scared. After meeting Ann, the owner of the orphanage

a teacher at the orphanage and try to fill my free time with activities, such as reading; writing a book about the African people I met on daily basis. I would see the pain all around me: I would see people with no shoes walking on the road right next to my house, I would see kids with torn clothes on, hungry and very dirty. I would see mothers with 5-7 children, who were abandoned by their husbands who had to become prostitutes in order to feel the children. So my life was waking up at 5 am,I would finish work at 4 and had nothing to do after that. The sun was hot and my hut was boiling. I had no friends. The job definitely did not fit me, and Ann did not want to admit that. I was a bad teacher, kids did not listen to me. Secretly I dreamt about starting “paint the world” Swaziland, and doing community projects at local hospitals and orphanages. Project that would not be just about teaching, but also simply cheering sad people up and bringing some colours into their lives. Then I met Judy Currie. Judy was a white South African lady, independent, confident, successful. Judy introduced me to the people who worked at the local hospitals, who ran companies, who travelled and took me to travel with them,who introduced

After some time, my Malaysian friend Aziza came over to Mbabane, after she heard that Paint the World Swaziland was a success. She was the founder of Paint the World Branch in Malaysia. Together we met the Prince of Swaziland and the Princess Sibahle. It was amazing to go to their palace and the their lifestyle, fancy cars and posh furniture. I have never seen a place before, and this was an amazing but also sad experience- down the road from their place, kids were dying of huger. And they did not bother about that. I also had the honour to present my Paint the World Project to Mr.Beka Dvali, the Ambassador of Georgia to South Africa, when I visited Pretoria. He supported the project and said that he would be interested to see how it will grow in the future. On 15th of June, when I celebrated my 20th birthday in Swaziland, I asked Star Paint company to sponsor enough paint to paint 20 African huts. Our team painted all the huts in the area where my own hut was, in that village in Mhtlanya. Now, whoever goes to that road, will see the colourful houses and the phrase “Paint the World” on them. I like to dream big, and my dream is to paint the entire world.I think thats my mission- to help create a better world with smiles, happiness and colours in it.

business

10 Fitch Ratings Confirmed Silknet’s ‘B +’ Credit Rating Leading international rating company Fitch confirmed Silknet B + credit rating in 2017 as well. The rating was given to company in 2016. ”We are glad that Fitch has confirmed the Silknet credit rating, which was first received about a year ago.We are one of the first companies from non-finance sector of Georgia who received international credit ratings and issued public securities. We hope to improve the standards of financial sustainability, transparency and corporate governance in the future,” – Said Ilia Enukashvili, head of the Silknet Strategic Development Department. JSC Silknet is a leading telecommunications company in Georgia, providing customers with internet, television, fixed telephone and business telecommunication services. According to the data of 6 months of 2017 (Georgian National Communications Commission), Silknet holds 41% of Georgia’s fixed Internet segment, 30% of broadcast transit (pay TV) segment and 48% of fixed telecom segment.

New Brand of Auto-leasing and Auto Pawn Turbo Appeared on the Market Georgian Leasing Company (GLC) announced about opening of the first branch of its new brand – Turbo. The branch is located in Tsereteli Ave. 71. Turbo offers instant purchasing procedure of new or used cars via auto pawn or auto-leasing. “Auto-leasing of Turbo and auto pawn has the best terms on the market and it is accessible for any interested customer, including law interest rate”, – the company declares. Filling of application is available online, however the customers is going to the company for evaluation the car. Moreover, checking credit history is not required and submitting identity card is sufficient. A client can cover monthly fees of auto-leasing and auto pawn via internet banking and any branch of Bank of Georgia. A customer will be granted with SOCAR CARD and a discount of 15 tetri on the petrol.

Entrepreneur of the Week – Glass Art Studio “Our studio-workshop launched operation in September 2016. We decided to develop a product that would grow popular on daily basis and our clients would be content by quality and appearance of purchased product. -What has inspired you to develop this startup? -Key objective and stimulator of Glass Art Studio was to offer a new and different product to Georgian consumers. This business inspires us and we create each thing with this energy and impulse. -Do you cooperate with Georgian startup companies? -In August 2017 we took part in Startup Market Batumi exhibition and we got acquainted ourselves with many young entrepreneurs and set important business contacts. Consequently, we plan to launch active cooperation with several companies.

September 11, 2017 #207

Winery Khareba won top award gold medal at prestigious competition MUNDUS VINI International Wine Award 2017 in Germany for “MUKUZANI”. Nearly 164 international wine experts from 41 countries were judging wines from more than 150 wine growing regions all over the world in Worldly recognized MUNDUS VINI 2017 summer competition MUKUZANI Dry Red Wine: Made of Saperavi grape variety in the Mukuzani microzone, Kakheti, east region of Gergia, where the wine-making tradition streches back to antiquity. It has dark ruby color, with fine fruity bouquet and a full, fresh and harmonious taste. Best served with mutton dish and fresh vegetables.

How Delonix Georgian Startup Of Wooden Watches Plans to Position Itself on Competitive Market Delonix is a startup of wooden handmade watches. The business was undertaken by friends of various professions. Competition in the field is sharp and several companies produce similar products and each of them tries to stress their advantages. Beka Makharoblishvili, one of the founders of Delonix says that their product is simple with refined design. Soon the company will also introduce engraving services to make their products as unique gifts. -The idea of creating Delonix was born in 2016. In that period I an my friends, Levan Kirtskhalia and Luka Makharoblishvili were students. Currently we have absolutely different professions. However, watches have long become our hobby. One day we were looking at new models of our favorite brand and we saw wooden watches of

absolutely different style produced by Jord brand. We liked them very much and started thinking of producing wooden handmade watches with simple and refined design that would be affordable for Georgian consumers. The market is saturated. What features make your startup special? -The Georgian market research in our field outlined encouraging aspects. We discovered a quite competitive environment. I acknowledge that we have several serious competitors, who have recently undertaken their startups. To be frank, this is not bad at all. On the contrary, this is good, because healthy competition does not enable us to slacken and stimulates us for continuous development. As a result, all these factors will make positive effect on state economy and Georgian products will be popularized.

PwC Georgia, Samsung Georgia and Colliers International Georgia are now represented at the King David Business Center The first A class business center in Tbilisi King David Business Center started operating already in summer. The first skyscraper King David, which is worth of 70 million USD and unites several business directions, is now complete and has become a host for various business companies in its office space. The respective project belongs to the Austrian Rezid Holding GmbH and it satisfies all the requirements set forth for companies of international level; it is equipped with a well-organized lobby, reception, security and technical assistance services operating for 24 hours and ensures maintenance of the initial interface of the venue. The following companies, such as PwC Georgia, Samsung Georgia and Colliers

International Georgia have already acquired office spaces for their headquarters at the King David Business Center. Meanwhile, the King David’s residential area is actively working for welcoming the first residents. King David Residences tower has 32 floors, where lower ones are equipped with fitness center, spa, swimming pool, residential lobby, lobby bar and event hall. The premium class multifunctional complex sets new standards of a five-star lifestyle. King David has been officially accepted into exploitation in July 2017, while grand opening is planned for November 2017.

September 11, 2017 #207

Black Sea International Folk Festival – More Participant Countries, More Folklore and Diversity ninna gomarteli

lack Sea International Folk Festival organizers held press-conference at Black Sea Arena, on September 1. Director of Folklore State Center Giorgi Donadze, Director of ”Black Sea Arena Georgia” Ana Kavlelishvili, Guria State Governor Merab Chanukvadze and Spanish Folktorist Polo Vallejo shared concert details and future plans. Festival has been held traditionally by the black sea for three days. Ajara joined Guria in hosting this year. International Folk Festival took a start in Batumi Summer Theater on August 31, followed Ureki Culture House on September 1, where admission was free for anyone. Final gala concert took place at Black Sea Arena. ”Folklore is very important in culture development, one must work with this genre very carefully, as it is a treasure descending from generation to generation. It makes me proud to be involved in such event, and we work to make this festival more massive and interesting. This year’s special guests are from Spain – La Moneta & Flamenco, presenting passionate Flamenco,-”said Ana Kavlelishvili, Director of Black Sea Arena. On the list of participant countries are: Georgia, Spain, Italy, Poland, Ukraine, Armenia and Turkey. Embassies support official and contribute in implementing the project. ”We are actively involved in the process which makes region more famous and in-

creases number of visitors. Ozurgeti became Folklore city, we opened a Folklore Center and house-museums, consequently we continue to implement numerous important projects in this field. ”- said Merab Chanukvadze, Guria State Governor. According to him, organizers intend to hold more conferences, invite researches and involve some other fields of folklore for the next time. In order to increase directions and scale, other regions will join the festival when they are ready to host in terms of infrastructure. Conference was also attended by an Ethnomusicologist, one of the outstanding researcher in the world, who researches Georgian polyphony since twenty years. ”I traveled to Africa to collect folklore works, then I came to Georgia which caught my interest with its culture, cuisine and most importantly folk music. I stayed in touch with Polyphonists twenty years ago and felt deep connection. The idea was born in front of me, they trusted my experience and I became an advisor,”-said Polo Vallejo. This is the second year for the festival, number of participants has increased, although countries represented their culture as much as possible in constrained time. One could receive information of their culture, temperament or what they were passionate about. The culmination of the concert was a joint performance of Georgian ensemble Rustavi and Spanish Flamenco, that showed a resemblance of two cultures temperament. ”We would like Africa to join folk festival next year, as this is one of the luminous example of folklore. We face some difficulties so far, but we are working hard to accomplish this idea,”said Ana Kavlelishvili.

September 28 St. Petersburg Masterskaya Theatre, Russia About Performance:

Program New Mikhail Bulgakov

A Young Doctor’s Notebook Directed by Grigory Kozlov

Duration: 90 minutes, without intermission Tickets: Parterre – 30 GEL; Balcony – 20 GEL; Beginning: 20:00

A Young Doctor’s Notebook is a show based on the early stories of Mikhail Bulgakov. A year in the life of a recent medical school graduate who was just appointed as the main and only doctor in a provincial hospital. He is tested by fate on a daily basis and, overcoming his fear and doubt, he accepts the challenge.

publicity

September 11, 2017 #207

world

Turkey’s Pegasus may add European flights as security concerns ease

Russia’s inflation drops to its lowest level since the collapse of the Soviet Union Russia’s inflation dropped to a post-communist low. Inflation fell to 3.3% year-over-year in August, according to the country’s state statistics service. That’s the lowest reading in the post-USSR era, according to data from Trading Economics. Economists surveyed by Bloomberg expected a reading of 3.7%, following up on July’s 3.9%. “[W]e expect the headline rate to remain below the central bank’s 4% target over our forecast horizon,” according to William Jackson, senior emerging markets economist at Capital Economics, in a note to clients. Looking under the hood of the data, food inflation fell to 2.6% year-over-year from the prior month’s 3.8%. Non-food goods inflation dropped as well. “Against this backdrop, we remain confident with our forecast that the central bank will cut the policy interest rate to 8.0% by the end of this year and to 6.0% by end-2018, from 9.0% now,” Jackson added. “This is more easing than the markets are currently pricing in.” His team forecasts that the central bank will cut rates by 50 basis points at its next meeting, which will be next week on September 15.

Armenian shoemaking companies secure 300 million drams worth orders With the support of the Development Foundation of Armenia (DFA), 8 shoemaking companies are jointly representing Armenia at MosShoes-2017 fair, taking place in Moscow 5-8 September. Following the previous fair in March Armenian companies received export orders worth more than 300 million drams (around $627,000), DFA said in a press release today. MosShoes, the biggest exhibition of footwear and leather accessories in Russia and Eastern Europe, is conducted four times a year, engaging more than 10-12 thousand visitors, such as wholesale buyers, specialists and distributors. The DFA representatives assist the Armenian producers in finding partners and holding meetings with potential buyers and costumers during the exhibition. “The Foundation represents Armenia and its competitive products at their best at various international platforms. It also creates all the necessary conditions enabling the attending companies to hold meetings with international buyers and suppliers. I am hopeful that Armenian companies will seize this opportunity to the maximum and will conclude new export contracts”, noted the event manager of the Marketing team of DFA Lusine Hovhannisyan. The Armenian “Zenni”, “Babinni”, “K&K Shoes”, “Simar”, “Arma Leather” companies and Arsen Badikyan, Karen Tarverdyan, Tigran Simonyan independent entrepreneurs have received assistance for attending the 73rd MosShoes exhibition within the scope of the export promotion policy aimed at enhancing recognizability of the Armenian products.

Turkish budget airline Pegasus (PGSUS.IS) is looking to boost its flights between Europe and Turkey following a recovery in demand this year as the security situation improved, its chief commercial officer said. After a torrid 2016 which saw Pegasus make a loss after a series of attacks in the country, tourists are returning to Turkey. Pegasus’s passenger numbers increased 14.1 percent between January and July from a year earlier and the carrier returned to profit in the second quarter. “For European destinations, with our fleet increasing and due to the market demand, we will be looking at increasing flight frequencies to Italy, to Spain, to Germany, to the UK,” Pegasus CCO Guliz Ozturk told Reuters at an industry conference in London on Thursday. “If the market demand is there, because of the perception of an improvement in the situation in Turkey, we will utilise that demand.” Pegasus expects delivery of more

Airbus a320 neo aircraft between December 2017 and May 2018 as part of a bigger 2012 order. Provided the security situation in Turkey remains stable, Ozturk said business this year could return to levels seen in 2015. “There is a significant improvement compared to last year’s figures in European tourist traffic to Turkey,” Ozturk said. “Those security concerns are not there anymore, and if it stays as it is, we will also capture the pre-crisis figures (of 2015).” Foreign nationals were among those killed last year in separate attacks in Istanbul’s historic centre, its Ataturk airport and near a football stadium, while an attempted coup in the country also deterred visitors to Turkey. British tour operator Thomas Cook (TCG.L) said in March that tourists were returning to Turkey, though many European tour operators had already switched capacity towards Spain and the Western Mediterranean for this summer.

World’s second longest tunnel Ovit to open year-end in eastern Turkey

Azerbaijan creating formula for maximum limit use of oil revenues The State Oil Fund of Azerbaijan (SOFAZ) together with the government of the country is developing a special formula, in line with which the upper limit of the use of oil revenues will be calculated, said the Fund’s Executive Director Shahmar Movsumov in his interview with Kazinform news agency. Movsumov noted that SOFAZ was established in Azerbaijan in 1999 and the Fund’s main source is revenues from the sale of oil and gas that account for the state share. The fund has received more than $130 billion since its establishment, and about 75 percent of this amount was used for infrastructure projects, development projects, and nearly 25 percent are saved, said Movsumov. “Today, the fund has $35 billion. Under the legislation, the Fund has no right to invest inside Azerbaijan. All our investments are international, global, we have a quite diversified portfolio; we invest around the world, in different types of assets,” added the executive director. According to him, the Fund doesn’t have a limit of funds, which is annually used for the development of the economy. Movsumov went on to say that under the mandate, SOFAZ is a national welfare fund and, accordingly, it doesn’t invest in specific projects and as a financial inves-

tor, does it through funds, shares. “A major part of our funds is invested in fixed income instruments, in shares of the world’s biggest companies; we invest in real estate and have buildings in London, Paris, Tokyo, Seoul, and various cities around the world. Accordingly, there is a very wide field for investments,” said the executive director. Specifically, in recent years, funds were invested in the Global Infrastructure Fund that puts investments in large infrastructure projects around the world, and in the Climate Change Fund, added Movsumov. According to him, such a policy is not unprofitable. “As you know, there are so many projects, the so-called “green economy”, which brings real income. This is the production of electricity in an alternative way. Yes, in many countries they, of course, are subsidized, but it is still profitable for an investor,” he added. He also noted that for investors, it is profitable to invest in all spheres in Azerbaijan. “But, of course, in the traditional – this is agriculture. It is highly developed in our country; information technologies, and of course, tourism. In recent years, it has become one of the fastest growing sectors. I think that there are so many good opportunities,” said Movsumov.

Currently under construction at an altitude of 2,640 meters, the 14.346-kilometer-long Mount Ovit Tunnel will be opened to traffic by the end of the year. Once completed, the tunnel will be the second longest twin tube road tunnel in the world and will connect İspir in northeastern Turkey’s Erzurum to İkizdere in the Black Sea province of Rize. Recently, Erzurum Governor Seyfettin Azizoğlu, accompanied by Erzurum Provincial Deputy Chief of Police Cahit Şahin and Provincial Gendarmerie Commander Col. Bekir Uzun drove through the tunnel as they conducted on-site inspections. The governor received information from officials and offered baklava to the workers. Speaking to the media, Azizoğlu said that with the completion of Mount Ovit Tunnel, the Black Sea region will be connected to Erzurum via İspir and eventually with Iran, Azerbaijan, Georgia and all of Central Asia. He added that after over four years of hard labor, work at the 14-kilometer-long tunnel was at its final stages and it will be opened to traffic at the end of this year. With the addition of the tunnel, this route will become the shortest and fastest between the Black Sea and eastern Anatolia and from there to Central Asia, he said. The Erzurum governor also noted that the tunnel will bring rapid improvement and development to the region’s economy, industry and tourism. The Ovit Tunnel is located in a key location of eastern Turkey and will be linked to ports from which goods are exported to neighboring countries. Moreover, the tunnel will ease transportation to the Baku-Tiflis-Kars Railway. The highway tunnel, which will connect Rize’s İkizdere district and Erzurum’s İspir district in northeastern Turkey, is also expected to reinvigorate the historic Silk Road.

September 11, 2017 #207

Brand History - DIO

LC DIO was founded in 1996. Seeking to satisfy consumer interests, improve production processes and products and services, starting 2004 LLC DIO started introducing ISO 9001:2008 quality management system; while in 2017 the company obtained quality management certificate in compliance with ISO 9001:2015 international standards. The company’s quality management system was certified by TUV Management Service Gmbh. Starting 2011 DIO company obtained the sign of Georgian Quality. Key objective of the company is as follows: “Our key objective is to satisfy the consumer demands. We are eager to justify expectations and requirements of our consumers in terms of quality of products and services, flexibility, affordable prices and meeting deadlines. We aspire for permanent improvement of product quality and make our contribution to the success

of our company and our clients”, DIO representatives noted. Main mission of DIO is to develop high-quality products and services for population of both Georgia and neighboring countries, expand the existing segment and cover all strata of the society thanks to high quality and diverse products. DIO products are designed for a wide range of consumers, both physical bodies and various leading organizations in Georgia. DIO has representatives in various districts of Georgia: Batumi, Telavi, Kutaisi, Khashuri and Gori. DIO owns a new plant equipped with modern technologies. The plant enables the company to make products of high-quality European materials and ensure stability of prices. Idea of Establishment of DIO arose thanks to the free niche on the market. In that period there was no Georgian production in this segment. Tamaz Daushvili, one of the found-

ers of DIO company, noted that DIO became successful very quickly thanks to very active marketing campaign. At the same time, quality of the product was also very important. One of the founders noted that the main objective was to make the company associated with quality and reliability. Today the company produces about 50 various products (windows, tents and so on) and it is positioned as a reliable company offering high-quality and best products and services. Initially, the company launched production of two varieties of products. «DIO has achieved a success thanks

to meeting consumer interests and demands. We have been caring for our reputation from the very beginning till today. We believe that the more content consumers we have today, the more clients we will acquire in the future. It is also our motivation to expand an assortment of products», Tamaz Daushvili, one of the founders of DIO company, said. History of Name and Logo – this is the abbreviation of one of the founders – Daushvili Irma Family. And the logo was developed by a designer. Why DIO? - Because it offers guaranteed high-quality products and services. This is a reliable company.

September 11, 2017 #207

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 River Side Hotel With incredible service and views Addr: Mari Brosse street turn, Old Tbilisi. Tel: +995 32 2242244; +995 32 2242288 Fax: +995 32 2 242277 Email: info@riverside.ge Website: www.riverside.ge

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

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,

15 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

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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