Caucasus Business Week #215 by Caucasian Business Week

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November 6, 2017 #215

November 6, 2017, Issue 215 - www.cbw.ge

Irakli Kilauridze: Retail market Shifting From Outdated Buildings to Modern Shopping Centers Pg. 9

Maryna Chayka National Tourism Awards – Competition Aiming To Develop Tourism Sector Pg. 6

Nutsa Gedevanishvili: 21st century offers news constantly, while PR is being developed simultaneously Pg. 8

Commercial Banks Rather Harm Economy than Benefit

Elimination of the management weaknesses of the Georgian transport industry In order to make Georgian transport industry challenges more tangible, lets draw a parallel to the music art organization, that most Georgians are familiar with. To illustrate nature of problem, let’s see the following example: The concert hall aims to have a high quality and harmonious musical sound that the audience will enjoy. The following components are required for this: 1. Musicians 2. Instruments 3. Technical staff and Sound engineer. Sound engineer is responsible to provide to the listener a pleasant polyphony, and ensures that, all the instruments and musician’s voice, is connected in its mixing board, after which the sound engineer performs synthesis and balance, depending on the timbre function of voices and significance of the instruments.

Pg. 11

Internal Passenger Transportation Sector Remains beyond Control

Photo/ László Horváth

Pg. Pg. 44

The private sector has been long complaining about uncontrolled situation in internal passenger transportation field. In May 2017 Aleksandre Ianvarashvili, head of passenger transportation department of the Land Transport Agency, noted that an active job is being carried out for making amendments to several laws that would improve the uncontrolled situation in the sector. «In 2005 the system was reformed and internal passenger, taxi transportation service was excluded from the licensable regime. The practice has showed that this decision has brought no result in any direction. The field remains out of order. Today, the number of road accidents has increased, because safety norms are violated. Neither passengers nor transportation companies are content. Therefore, the time has come to regulate the situation due to international norms, Ianvarashvili was saying.

Pg. 7

Newsroom

2 Government

Pension on 1000-GEL Salary will Be 500 GEL on Average

There are also several limited cases, for example, if a person in his/her 63 years old decides to join saving pension system and saves money for only 2 years, he/she is able to fully withdraw the money.

Adjara’s 2018 Budget to Increase by 44.88 mln GEL

Forecast revenues of the Adjara Autonomous Republic’s budget was determined by 351mln GEL, up 44.800mln GEL as compared to the 2017 revenues.

economy

Georgia’s Economy Grows by 4.7%

According to Geostat, national statistics service of Georgia, in September 2017 real GDP growth pace constituted 5% in September 2017, 4.4% – in the 3rd quarter of 20167 and 4.7% – in January-September 2017.

Georgia Takes 9th Place in Doing Business Rating

The rating score of the country in the World Bank is 82.04. The rating covers various criteria and the best result is Georgia’s minority shareholders protection criterion and occupies second place in the world.

banking

Liberty Bank’s Profitability Coefficient Rises

According to January-September indicators, return on assets (ROA) made up 2.75%, while return on equity (ROE) constituted 23.04%. Liberty Bank has recorded the highest Larization coefficient of the portfolio on the market.

TBC’s Capitalization has Increased by 50 Million

The price of TBC share (TBCB LI) increased by 17.33 pounds sterling (GBP). The last sessions week closed by GBP 17.22 (+ 1.18% w.w; + 5.8% m.m). In total, 99,000 shares are purchased.

business

Racha Origin Fir-Trees are Being Sold in Europe

Every year in Europe, 45 million Christmas trees trees are sold, 90% of these trees are from Racha. Fair Trees performs this activity in the legal framework, as the company has obtained the license to collect and export cones from the state.

Wind Power Station Generates 85 million kw/h Electricity

Kartli wind power plant generated electricity 6 893 600 kilowatt hours in October, while the resource utilization rate is 46.71%. In July the station generated more than 6 million kw/h electricity.

company

Galeria Tbilisi to Open on November 30

The multifunctional shopping center will feature up to 100 international and local brand stores, cinema ”Cavea”, bowling club, children’s entertainment center, foodstuffs, supermarket goodwill and other services.

November 6, 2017 #215

Azerbaijan, Georgia, Turkey launch ‘Silk Road’ rail link

he leaders of Azerbaijan, Turkey and Georgia launched an 826-km (500-mile) rail link connecting the three countries on Monday, establishing a freight and passenger link between Europe and China that bypasses Russia. The line, which includes 105 km of new track, will have the capacity to transport one million passengers and 5 million tonnes of freight. The three countries are linked by the BP-led Baku-Tbilisi-Ceyhan oil pipeline and the Baku-TbilisiErzurum gas line, but trade links between Turkey and the Caucasus region are limited. The new Baku–Tbilisi–Kars railway (BTK) promises to provide an economic boost to the region. “Baku-Tbilisi-Kars is part of a big Silk Road and it’s important that we have implemented this project using our own funds,” Turkish President Tayyip Erdogan said at the railway’s inauguration ceremony attended by Azeri President Ilham Aliyev and Georgian Prime Minister Giorgi Kvirikashvili. Starting in Baku, the capital of Azerbaijan, trains will stop in the Georgian capital Tbilisi, pass through gauge-changing facilities in the Georgian town of Akhalkalaki and end their journey in the Turkish town of Kars. The project’s total cost rose to more than $1 billion from an initial estimate of about $400 million. The bulk of that financing came from Azerbaijan’s state oil fund. The rail link between Azerbaijan

and Georgia was modernised under the project, which was launched in 2007. Its completion had been postponed several times since 2011. “Several European countries have expressed an interest in this project and Azerbaijan is in talks with them,” Aliyev said, adding Kazakhstan and other countries in Central Asia were interested in transporting their goods via the BTK. The new link will reduce journey times between China and Europe to around 15 days, which is more than twice as fast as the sea route at less than half the price of flying. Trains can depart from cities in China, cross into Kazakhstan at the Khorgos Gateway, be transported across the Caspian Sea by ferry to the New Port of Baku and then be loaded directly onto the BTK and head to Europe. BTK to change existing economic realities The opening of the Baku-TbilisiKars railway is the best example of successful implementation of joint strategic projects, said Georgian Prime Minister Georgi Kvirikashvili addressing the official opening ceremony of the BTK railway in Baku Oct. 30. He said that the participation of high-level officials from different countries in this ceremony indicates the special strategic importance of this project. “I am sure that the new railway will change the existing economic realities and create new opportunities for development not only in

our region but also beyond its borders,” noted the prime minister. It can be noted that today the foundation of the new Eurasian bridge is being laid, said Kvirikashvili adding that the BTK railway will connect not only economies but also the peoples of the participating countries and will serve their wellbeing. “Along with freight traffic, the BTK railway will serve one million passengers per year. The commissioning of the new railway will strengthen the transport and trade status of the region,” added the Georgian prime minister. Kvirikashvili noted that after the commissioning of the new railway, infrastructure work will be carried out, new markets will be developed and the development of tourism and manufacturing will be provided, new jobs will be created, which is an important factor for the economic development of the region. “We want Georgia and the region to be fully integrated with the Trans-European transportation network and I am confident that the BTK will play a significant role in achieving this goal,” said the prime minister. He noted that an international high-level forum on the Silk Road project will be held in Tbilisi on November 28-29. “This is the second meeting in Georgia,” he said adding that representatives of private and public sectors from more than 40 countries will participate in the event.

What is the accumulated pension program Gov’t plans to launch?

he Government of Georgia plans to launch a new type of pension system known as the accumulated pension program starting from the next year. The Ministry of Economy says that a relevant bill has already been drafted and will be sent to parliament for discussions at the end of this year. “Changes will come into play allegedly from the third quarter of 2018,” the Ministry reports. The essence of the accumulated pension is that the state cuts certain amount of money from the employed people’s monthly salaries and puts the sum on their pension accounts. When the people reach pension age, 65 for males and 60 for females, they will have an opportunity to use the accumulated money together with the state pension, which currently equals 180 GEL ($69).

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Details about the accumulated pension People up to 40-years-old and who are employed will be involved in the program, no matter whether they wish it or not. People over 40 will have a choice whether to be involved or not. The pension program covers citizens of Georgia, foreign citizens permanently residing in Georgia or those having no citizenship but are employed or self-employed and having income. The monthly input of an employed person, both in private and public sectors, will equal 2 percent of their untaxed monthly salary. Self-employed people can use the program or not; it is up to them to decide. If a self-employed person decides to accumulate the pension they will have to put 4 percent of their monthly incomes. The state will provide 2 percent of the employed person’s taxed salary on their pension account.

The state will invest the money accumulated as pension and the people involved in the program will also enjoy the benefit provided through the investment. It is very important that the program is both for the public and private sectors. This is a type of sharing of social responsibilities,” Deputy Minister of Economy Nino Javakhadze said. The state contribution in the process is very high and unprecedented. The state share is 2 percent and the benefit provided through the investment. Withdrawing of money from the account will be free of income tax,” she added. The pension reform bill was drafted by the Ministry of Economy together with the Ministry of Finance and the National Bank. Donors such as the Work Bank, Asian Development Bank, USAID G4G, International Monetary Fund, and the French Development Agency were actively involved in drafting the bill.

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

November 6, 2017 #215

publicity

econo-mix

November 6, 2017 #215

Commercial Banks Rather Harm Economy than Benefit

Gia Arabidze energy department dean of GTU

Georgia’s Energy Independence: the outlook

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Merab Janiashvili Economic Analyst

Our country strives for European family and Georgia aspires for upgrading democratic level. Therefore, politicians are to show more responsibility before their electors. They are to take efforts and write detailed programs what and how they plan to implement for the country development.

‘‘

Energy independence and energy efficiency represent one of the crucial challenges for Georgia. Gia Arabidze, energy department dean of Georgia Technical University talks on energy independence to “Business Morning”. - Gia, it has become common knowledge that energy independence is of utmost importance. How can we react to this challenge so that the population is not turned against investment projects? - Our country aspires to become energy independent which is very important. We face, however, certain issues with natural gas and oil. We are in a better position in terms of energy self-sufficiency and gaining energy independence from other countries looks feasible. Winter months though are challenging for us. I was in on the displeasing case of Khaishi. Unless we change certain things, all this can turn into the same outcome we obtained after we stopped construction of Khudoni HPP back in 90s. If Enguri HPP supplied Georgia with an annual 1.5 billion kWh energy at two tetri per 1 kWh, we would have a totally different situation and tariffs now, and we would take on construction of new hydro power plants more confidently. Unfortunately, whatever happened, has happened. Another issue is that we fall behind on hydropower plants – this particularly concerns Khudoni HPP. As an energy engineer, I consider Khudoni HPP necessary for Georgia. The more we delay, the worse will be the problems we will consequently face. I think we have two key lines in hydropower industry. Certainly, Nenskra HPP construction is on, but Khudoni HPP has to be finished. Besides, we have to think of construction of a pumped storage unit at the Inguri. This unit will politically matter in terms of Abkhazia and benefit the Georgian, the Abkhaz, the Inguri and the population as well. - As a consequence we won’t have to consume the energy generated by thermal stations, will we? - For a certain period of time we release water from the Inguri. Therefore, a pumped storage unit will pump the generated water back up to the dam and dam processing modes will be entirely changed. The country will benefit from this as pumping water up to the dam doesn’t need as much energy as we potentially may get from its generation. The Inguri dam must be processed to select modes. -The infrastructure minister states that the government attaches special importance to Nenskra project. What will be the contribution of the project when finished? -The specific share of Nenskra out of our total output is about 5%-7%. The importance of the project is that the energy generated during May, June and July is different with the energy generated during December. Nenskra is equipped with storage and we use the storage whenever we need it, that is, those 5-7% cost a lot higher in December compared to summer months. The unique character of the project is that we can regulate the storage. For example, when we are short of energy, we can replenish it from the storage. We, energy engineers, think that the construction of Nenskra is somewhat expensive as the hard-to-access location makes the project hard to execute. In total, the memorandums and agreements concluded in Georgia are worth about 5 000 MW. We are far from thinking that we will construct hydropower plants with 5 000 MW capacity. However, even the half or the two third would greatly benefit us. Most importantly, the project envisages installation of the most up-to-date facilities. This is planned to be a technically top-level station. This is important in terms of safety and reliability. All this added up to the project costs. - How much of our hydropower resources have we utilized? - If we utilized at least the two third of our existing potential, we would be happy as Georgia has differently determined its policy. We are familiar with our hydro and heating power. Consequently, we are more focused on renewable energy sources. Georgia plans to start step-by-step hard work on renewable energy, that is, solar and wind renewable power. Naturally, hydropower is renewable as well, but dam-based plants are challenging environmentally, especially on account of flooding of agricultural land. Small-scale generation is quite beneficial in general, but in Georgia its potential equals about 5 billion kWh. - Can we benefit from small-scale hydropower plants just like we may from large-scale ones? - No one has ever calculated which one is more detrimental to the environment: one 100 MW power plant or one hundred 1 MW power plants. Therefore, we can’t say specifically that 3-5 MW plants will be less or more detrimental than 30 MW plants. This is debatable. Globally speaking, if we construct all those small-scale feasible power plants, seasonally we will generate 5 billion kWh during April, May and June. That is, when we have energy surplus. We adjust this issue through use of the storage. Therefore, we say that Khudoni, Nenskra and Enguri are necessary. For electrical and energy independence we need an adjustable station. - Does it all hold export potential? - We were in a very favorable position about 2-3 years ago when the Turkish economy would beg us to supply them with electric power at the price of 7 cents per one kWh. Today they don’t pay even 3.5 cents. So, regional issues, GEL and USD ratio have had all a substantial impact on energy and electricity sectors. Despite this, the potential is still there as we have very good electricity transmission lines. Source: www.bm.ge

hen appointed as the National Bank President, Giorgi Kadagidze sharply criticized commercial banks and blamed them for frustrating economic development. However, the time passed and Kadagidze has never dared anymore to make sharp statements in relation to commercial banks. We have not heard sharp statements from the current president of the NBG, despite the fact no positive tendencies are recorded in the banking sector over the past 9 years. Meanwhile, Georgia-based commercial banks multiply their profits at high paces, while the state economy has not exceeded 5% upturn over the past 4 years. Leading commercial banks grow their profits even by 60%-80% a year. For example, in January-September 2017 net profits of the banking sector hit the historical high. In the reporting period, the sector recorded 631 815 000 GEL profits, up 30.4% year on year. It should be noted that commercial banks have never made such high profits in the JanuarySeptember period. If the banking sector maintains such a high pace of profits growth, by the end of 2017 the sector’s net profits will exceed 800 million GEL. It is worth noting that over the past years, net profits of commercial banks keep rising and beat new records almost every year. The year of 2012 -134.2mln GEL; The year of 2013 - 389.1mln GEL; The year of 2014 – 474.8mln GEL; The year of 2015 – 537.3mln GEL; The year of 2016 - 631.8mln GEL. As to January to September indicators: in JanuarySeptember 2016 commercial banks’ profits hit 484 277 000 GEL, 2015 – 377 077 000 GEL, 2014 – 303 710 000 GEL, 2013 – 274 951 000 GEL. This signifies profits of commercial banks over the past 5 years rose by 129.7%. Despite similar growth, the banking sector’s budget payments are insignificant. According to the NBG report, in 2016 all commercial banks paid only 79.317 million GEL, 2015 – 67.252 million GEL, 2014 – 79.894 million GEL, 2013 – 44.534 million GEL. This year commercial banks paid 65.122 million GEL over the past 9 months. Despite the banking sector is one of the profitable segments in the country, the state budget receives only insignificant revenues, because commercial banks enjoy preferential tax regime. In the times of Kakha Bendukidze it was decided to promote the banking sector. As a result, the banking sector is exempted from many taxes. A special taxation regime is applied in relation to the whole banking sector. At the same time, the Authorities and the central bank try to ensure all kinds of preferential conditions to boost the crediting of the economy. However, commercial banks mainly finance imports and avoid financing the real sector because of insufficient resources and high profits. Banking sector specialists note that taxation of commercial banks is a bit different from the taxation regime of other sectors. For example, the reserve amount is included in the part of expenditures. Therefore, commercial banks always have the opportunity for maneuvering to cut their taxation base. Thus, the Georgian banking sector makes record profits every year and the current year cannot be

an exception either. As a rule, in developed countries the banking sector’s revenues grow along with economic growth, however, in Georgia, the banking sector’s profits growth exceeds the economic upturn several times. Non-interest incomes represent a main source of revenues for commercial banks, such as fines, commission fees, seized property and so on. Benefits from physical bodies also make considerable contribution to the banking sector’s revenues, while the ratio of corporate loans, that are to drive economic activity, is small in the banking sector’s crediting portfolio. If we add the benefits at the expense of the state budget, that is securities taken for internal debts, 4/5 of which is owned by commercial banks, it is clear how commercial banks grow profits at cosmic paces. When the most profitable bank grows its annual profits by 80%, this signifies something is wrong in the system. Despite absolute mismatch between the banking sector’s profits growth and the economic growth paces, heads of the NBG and commercial bank stubbornly repeat the same that the Georgian banking sector is the most successful sector in the Region. However, it is unclear what they mean under the word of “successful”. They are genuinely successful in terms of profits growth, not only in our region, because Georgian banking sector is among the world’s top 10 commercial banks in terms of profits growth. However, we should not forget that the banking is the field of services and its efficiency should be appraised due to the level of satisfaction of its clients. For example, nobody appraises the success of a restaurant or a hotel (classification) due to their profits margin, but they are appraised due to the services supplied to the clients. If we make accent on clients of Georgia-based commercial banks, it will be difficult to find content ones. The major business sector has been asking the Authorities for many years to deprive the banking sector of holding non-core business companies, because commercial banks have already penetrated various economic sectors and it is very difficult to compete with companies supported by the leading commercial banks. For example, businessman Temur Chkonia has decided to abandon the beer production business, because of plans of Bank of Georgia to enter this segment. When such an influential businessman as Temur Chkonia avoids competing with major commercial banks, what small entrepreneurs can do or will foreign investors enter the low-solvent market with only 3.5 million consumers to take part in similar heavy competition with one of the major commercial banks?! Small and medium business sectors mainly complain about unattainable finances and sharply criticize commercial banks. Meanwhile, physical bodies are so overtired by relations with commercial banks that pre-election promises for extending credit’s maturity period is the most working promise. The question arises: if both major and small business are discontent with commercial banks, if ordinary citizens criticize crediting institutions, why do we think this sector is successful? Regretfully, the NBG lobbies commercial banks rather than protects the interests of Georgian citizens. The current banking sector harms the economy rather than benefits.

“Regretfully, today many citizens of Georgia are unaware of DCFTA opportunities. EU and its delegation, jointly with Government of Georgia, implement very important activities and we spread this knowledge stage by stage. DCFTA provides huge opportunities for agriculture sector exporters and it will change the situation in the future. Regretfully, many citizens of Georgia today stay unaware of the mentioned opportunities and the more citizens know about these chances, the better. Naturally, we have corresponding projects and finances and now we should take the next steps and raise interest in more people and we ask everybody to assist us in these efforts, because it is of crucial importance of promote the agriculture sector.”

Janos Herman

EU ambassador in Georgia

November 6, 2017 #215

publicity

Welcome to Georgia! National Tourism Awards is the Annual Awards Ceremony, which is held in Georgia for the field of tourism and hospitality since 2015. The main mission of the project is to encourage tourism and hospitality industry in Georgia and promote the awareness of the high-achieving tourism business and brands that create a positive image of the country worldwide. Awards Ceremony is an opportunity to bring together national and local authorities, hotels, restaurants, tour operators, travel agencies, wine companies and more. It is a kind of “Oscar” for Georgian tourism and hospitality industry and the reason to celebrate Georgian heritage, culture, traditions and modern achievements.

Tourism

November 6, 2017 #215

National Tourism Awards – Competition Aiming To Develop Tourism Sector Maryna Chayka Co-Founder/CEO of the Welcome to Georgia! National Tourism Awards - Tell us about National Tourism Awards; how it started and who initiated the project? Welcome to Georgia! National Tourism Awards is the Annual Awards Ceremony, which is held in Georgia for the field of tourism and hospitality since 2015. We came with our project to Georgia on April 2015 and the first what we did - presented it to the Government of Georgia. I had a chance to present the project to Mr. Dimitry Kumsishvili personally (that time Mr. Kumsishvili was a Ministry of Economy and Sustainable Development of Georgia) and since that times the Award is supported by the Ministry of Economy and GNTA is a co-organizer of the project 3d year already. The main mission of our project is to encourage tourism and hospitality industry in Georgia and also to promote the awareness of the high-achieving tourism businesses and brands that create a positive image of the country worldwide. - What are the consequences of the past two awards? How did it change the market? We are a little team and have been preparing for the first Award Ceremony for several months and the preparation process was a really hard work, also it was not easy to convince different companies to take part into this event. Some representatives of companies were skeptical from the beginning, but after the two awarding ceremony they are enthusiastic, happy and have totally changed their mind and are looking forward to taking part in the next ceremony. The Award project first of all it is a kind of motivation for all market players to develop and improve themselves. After the first two Ceremonies we received a lot of positive feedbacks and thankful letters from the participants (not winners or finalists only) that we took such initiative to ourselves and organized this really open and transparent competition for Georgian tourism & hospitality market players. Based on our global aim – to promote Georgia as the tourism destination – the Award project has quite wide advertising campaign worldwide within which we are telling and opening Georgia to the world more and more. And if we can reach someone to visit Georgia, they will be back here for sure again and again. And our participants should understand and work hard for this.

- How would you asses Georgia’s tourism sector, what are the main challenges and opportunities for Georgia? Tourism and hospitality is one of the main developing sectors in Georgia. We believe that our project is very important from a global point of view. We see great potential for further development of this industry in the country - very promising, with a deep history, and most importantly with untouched nature to the end. There are many places that have yet to be discovered, improved, developed and promoted at the global level. As a result, the influx of foreign visitors will reach a record number. In Georgia, there are all conditions for the development of many spheres, including the sphere of services. And you know, a lot of work should be done to improve the service sector in Georgia. Hospitality is deeply rooted in Georgia. The guest is the first person for any resident of this country, as they themselves say. And everyone who has ever visited Georgia felt this on himself. Nevertheless, there are global standards of service. Thus, they should be implemented in Georgia, but necessarily combined with unique Georgian hospitality. By combining international standards and deep-seated hospitality of Georgia, we will come to something truly unique. - National Tourism Awards is getting bigger and bigger every year, how do you plan to raise awareness about it? How other people will be encouraged to take part in the development in the tourism sector in the country with this award? Independence and impeccable reputation are the core values of the Award. All processes are being truly according the judges decisions, so that it is the real arena for true competitiveness and award ceremony is excellent possibility for each participant to demonstrate their service and capabilities. From another side – the Award Project is not only the glamor Ceremony, it is a business platform for our partners and participants. In addition, the list of Media Partners of the Welcome to Georgia! Award’s project coverage not only Georgian media, but also foreign, touristic and travel magazines, logbooks in Ukraine, Azerbaijan, Armenia, Kazakhstan. And during the whole year, we are integrating project’s finalist and winners in our marketing campaigns. - Will this year’s awards be different from previous events? What are your plans? We are keeping doing our best to develop and improve the project every year as the Award is annual, and it needs to continue to motivate all players in the tourism and hospitality market to continue developing themselves and Georgia tourism in general. This year the process of nominees assessment was new, nominees were assessed only by an independent Jury Expert Board which consists most of all local experts and also internationals once. Jury Expert Board was separated according to categories depending on the kind of their main professional activities. And as every year, an Independent Auditor of the Award BDO Georgia calculates the number of points awarded by the Jury Expert Board to each nominee and determines the finalists and the winner in each nomination. Award project by itself every year is developing and moving to another level. For our team it is big challenge, responsible and trust to hold Award Ceremony third time. So, for the Third Official Ceremony of the Welcome to Georgia! National Tourism Awards we chose one of the landmark venue with immense national and cultural value for Georgia and will take place in December 6th 2017 at Rustaveli Theatre. In advance, I can say that Third Award Ceremony will be full of surprise and one of the unforgettable day for our guests.

Bank of Georgia Initiating Nomination - The Most Successful Woman in the Tourism Sector Zurab Masurashvili Head of Micro and Small Business Banking Department, Bank of Georgia - Why did you decide to cooperate with the National Tourism Awards and what benefits will this partnership bring to you? The National Tourism Awards and other similar events that are intensively conducted in our country for the promotion of the sector are very important. They facilitate the development of the sector and stimulate companies to improve the quality of service offered to customers, to introduce and develop more diverse and interesting concepts. The main aim of Bank of Georgia is to support and encourage small and medium size businesses engaged in the tourism industry. - What are your forecasts about tourism sector in Georgia in following years? As a citizen of this country, I believe in the tourism potential of Georgia. Recent figures show an annual growth in flows of tourists to our country. New tourism facilities have been developed, both hotel chains and relatively smaller boutique hotels. New, diverse services have been introduced. I think this trend will be maintained and Georgia will see more tangible results in this sector in the coming years. I am happy that we can be part of this development. - Tourism has great impact on overall economy, is Bank of Georgia involved in the tourism development process? Yes, Bank of Georgia is involved in the tourism development process. As you know, we have been an official partner of the Award for the second year now. Last year we were represented with only one nomination – the fastest growing small and medium business in the tourism sector. This year, we have offered a new interesting nomination to the industry – the most successful woman in the tourism sector. Let me note, that due to objective or subjective reasons, the second nomination has caused special interest. (Smiling) I think, the prize will be equally as interesting as the nomination itself. Apart from stimulating measures, Bank of Georgia plays an important role in the financial support of this sector. Our loan portfolio exceeds GEL 1.6 billion. Quite a substantial share of this portfolio accounts for the funding of organizations operating in the tourism sector. - What are your expectations from awards in short and long term perspectives? I expect increase in the number of interesting ideas, interesting companies, successful women in business; a desire to offer improved, innovative products or services to the market. If we succeed in stimulating all this, we will declare that the result is achieved. - In your opinion, how will the National Awards affect the tourism sector? It will motivate the sector, stimulate and support new ideas. Facilitating the emergence of new actors in the market, inspiring some, or merely motivating others - these are the main objective of such events. You would agree that this is a key development factor of not only the tourism industry but any sector.

November 6, 2017 #215

Transport

«In 2005 the system was reformed and internal passenger, taxi transportation service was excluded from the licensable regime. The practice has showed that this decision has brought no result in any direction. The field remains out of order. Today, the number of road accidents has increased, because safety norms are violated. Neither passengers nor transportation companies are content. Therefore, the time has come to regulate the situation due to international norms, Ianvarashvili was saying. As reported, amendments will be made to the law on transport vehicle, the law on licenses and permits and the code of administrative offenses, the law on control of entrepreneurial activities. Several months ago the Land Transport Agency explained that a package of due legislative amendments were being developed to include internal passenger transportation direction in the licensable regime, under corresponding long-term licensable conditions. “Licensable conditions will include key demands and conditions determined by European regulations. They set the obligation for transporting passengers in safe environment and under corresponding schedule. This process will satisfy the general standards, transport stations will be also arranged and obligatory requirements for their operation will be determined”, the Land Transport Agency explained. At this stage, technical requirements for vehicles are determined by Georgian government’s resolution - “On Approval of Technical Regulations on Periodicity of Testing Various Categories of Vehicles”. A transportation company is responsible for conducting obligatory recurrent testing of buses on domestic routes, admitting of tested buses to the bus fleet – bus station, while the Interior Ministry departments are responsible for administering the mentioned requirements. At the same time, the cor-

responding department of Interior Ministry is to control excessive speed on motorways and set due sanctions on law-breakers. According to the Land Transport Agency, the Georgian legislation does not restrict the year of production for exploited vehicles. Their efficiency is examined by recurrent obligatory testings for compliance with motorway conditions. According to the same information, the government’s resolution determines the periodicity of testing transport vehicles, which are in exploitation and registered under established regulations. Namely, buses of M2 and M3 categories (with more than 8 seats, excluding the driver’s seat) st be tested every year after the first driving, but frequency of testing doubles a year in four years after the first driving. “In case of positive testing results, a special sign plate is issued for vehicles, which indicate the testing date and its validity period. It must be attached to the front glass of a vehicle throughout the validity period and these requirements are controlled by the corresponding office of Ministry of Interior Affairs”, the Land Transport Agency explained. -Which phase has the working process reached and when the legal amendments will come into force? -Today the Land Transport Agency says that the amendments are being prepared and details will be unveiled after the working process completion, however, the agency cannot name the process completion deadlines. Vaso Urushadze, executive director for EcoTransport Center (ETC), noted that the bill is being developed for 2 years, but the process has not been finished yet and the document has not been submitted to the parliament. The working process is protracted because the country lacks for transport policy and the goodwill to regulate the situation in this field. “I think the problems consist in the policy,

because today transport policy is very fragile in the country and moreover, the country does not have transport policy. We receive only insignificant investments. We need that the country have a transport policy with due regulations and mechanisms. Today we lack for similar actions. Today the state transport policy management style is very bad and therefore, many reforms and initiatives are inefficient”, Urushadze noted. At this stage the transport sector remains beyond control and therefore, neither business nor transport system make advancements in this segment, he added. Mikheil Doborjginidze, founder of Metro Georgia company, states that private transportation companies are in unfavorable business environment. The Sector cannot be regulated without improvement of legislative basis, he said. The private sector welcomes a package of amendments prepared by the transport agency and the private sector hopes that in the near future these amendments will be adopted and come into force, Doborjginidze said. In response to the question, what specific amendments will come into force, what benefits will they bring and whether government-prepared package of amendments are acceptable for the private sector, Doborjginidze said that the bill prepared by joint efforts is acceptable for the private sector and it should be adopted as soon as possible. As known, the mentioned bill will first of all regulate the safety issues, licensing and permitting issues. The bill also includes bus stations regulation issues. As reported, private transportation companies were talking about unfavorable business environment and field in 2016 too and a part of the company was saying that appearance of low-cost airlines on Georgian market was related to huge risks without improvement of legislative basis.

Internal Passenger Transportation Sector Remains beyond Control According to the same information, the government’s resolution determines the periodicity of testing transport vehicles, which are in exploitation and registered under established regulations.

PR Person

November 6, 2017 #215

Interview with Public Relations Manager of Insurance State Supervision Service, Nutsa Gedevanishvili

“In our technologically advanced era finding information is not diffucult. Personal contacts are helpful too”.

’21st century offers news constantly, while PR is being developed simultaneously - Why did you decide to enter this field, and what kind of opportunities does it give? International Relations is my major education. Entering Public Relations was spontaneous by that moment. I studied simultaneously with job to get Media Communication Master degree. This sphere is very interesting for me. - What is it necessary to have successful communication with public? First of all, planning activity, during which I take into account - existing reality, attitude of society and I try my best to share positive and important news to people. - What three tips would you offer someone just starting out in PR? First- You should love your job and be excited of what you do. Second- Be aware of all information around the topic. Third- take into account public mind set and their interests. - What do you wish you would

“

Direct communication and relations are irreplaceable by any technology.

have known before starting your career in PR? If I was starting now, I would prefer to know Marketing basis. - What’s your typical working day? Our Service “LEPL Georgian Insurance State Supervision Service” was founded several years ago, we work hard to bring the country closer to European standards. There are so many novelties, that each week is very interesting and different from one another. - How would you go about finding relevant contacts and sources? In our technologically advanced era finding information is not diffucult. Personal contacts are helpful too. - How would you prioritize and start your work day? Looking through news, as in my field, also in the country through news agencies. - What are the required skills to be a successful PR Manager?

Communication skill, being open and able to access any kind of category of people. Meaning Media, as well as customers based on one’s job specifics and meeting their interests. - What trait do you value the most in your co-workers? Team player, responsibility, aspiration to mutual aim and success of our business. - What is the best PR practice technology can’t change? Direct communication and relations are irreplaceable by any technology. - What are some of the growing trends in the public relations industry? There are numerous innovations in last few years - a lot of PR activities are being held through social networks, blogs, online videos and forums. It’s being developed very fast, as 21st century is interesting with its offered news, PR catches up with it.

November 6, 2017 #215

real estate

Retail market Shifting From Outdated Buildings to Modern Shopping Centers EEA Real Estate Forum & Project Awards 2017 — the Forum and the Award for projects in the real estate to countries of Eastern Europe is going to be held on November 23 in Kyiv, Ukraine. Caucasus Business Week has talked with Irakli Kilauridze managing Director of Colliers International Georgia who is invited as an expert jury member for the Forum and Awards organized by Ukrainian Real Estate Club. - What are the top trends in the real estate market in CIS countries and how different practices do we have compared to US and EU? Despite the uncertainties in the markets of CIS countries investors are interested in the value retention in the long-term. For commercial real estate sector in CIS countries, the volatility of the exchange rate remains the key risk factor. Recently, investors seem particularly interested in the retail sector. In Q1-Q3 2017, retail assets amounted to 37% of the total investment value in the Russian real estate market. Three retail centers are announced to open in Q4 2017 in Kiev, Ukraine. Environment is more attractive and safe in the CEE. Although Poland and Czech Republic remain the leaders, capital flow is directed to secondary cities rather than the capital cities. Sentiment towards Hungary, Romania and Slovakia is also favorable. - What does it mean for Colliers International Georgia, and for you personally, to participate at the EEA Real Estate Forum for the second time? Colliers International Georgia regularly participates in the influential real estate forums, conferences and exhibitions such as: MIPIM, MAPIC, ExpoReal, EEA Forum. Joining such a large real estate business forum is extremely important for us in terms of networking opportunities with investors and potential business partners. The EEA Real Estate Forum is a platform where real estate professionals and decision makers have the possibility to gain valuable contacts and discuss ongoing projects and trends on local markets. - What was your experience from the last year’s forum? Did Georgian real estate market attract attention from foreign investors and started negotiations to invest in Georgia? We had a good chance to exchange contacts with some foreign investors from different

countries. We still have ongoing negotiations with some of them. - What are your expectations this year? And how will Georgia be represented on the event? Traditionally, I have an honor to be invited as an expert jury member for Eastern European Real Estate Forum and Awards organized by Ukrainian Real Estate Club. In addition, this year Colliers International Georgia took a challenge to participate in the Awards as a nominee for “Consulting Company of the Year”. - How important it is for Georgian companies to take part in such international events? As I have mentioned above, real estate forums and international events create ideal conditions for networking, exchanging experiences, sharing current trends, innovations and best practices in the real estate market. - What is the Georgia’s development potential in the real estate sector and how is Colliers International Georgia contributing in it? Real estate market in Georgia has a stable development course. Residential market is one of the most active sectors of real estate market. On average, 75% of total transactions represent the residential sector. Retail market is shifting from outdated buildings to modern shopping centres. Since 2012, 10 new modern shopping centers have opened and few more are un-

der the construction. The Hospitality market in Georgia is fueled by a consistent growth of tourism sector. In 2016, the number of international arrivals exceeded 6 million. The government is supporting the hospitality market by improving infrastructure, and implementing policies to support business growth and attract investment. Colliers International Georgia provides bespoke valuation, development, and brokerage real estate services which are based on the research, and local and international market expertise. Our valuation team can provide a reliable assessment of property value which will ease the client’s decision-making process. Our development consultancy team can resolve complex real estate challenges and offer comprehensive development plans for mixed use developments. Our brokerage team helps clients to lease or sale real estate to advance their business goals. - Along with housing finance, what kind of opportunities do you see in rentals? Apartment rental Industry is still in the early stage of development in Georgia. Homeownership rate is around 93% in Georgia, which is higher compared to countries in the Western Europe. It’s important to note that there is a rapid growth in Airbnb listings in Tbilisi. As tourism sector continuous to grow Airbnb market is expected to expand.

business

10 WIZZ AIR Introduces New Cabin Luggage Policy

King David Wins at the European Property Awards for the Second Time

Wizz Air, the largest low-cost airline announces about the new hand luggage policy. However, passengers will no longer be charged an additional fee to bring a large item of hand baggage into the aircraft cabin on all Wizz Air flights. According to the management, Passengers will be entitled to bring on board one item of hand luggage which meets the dimensions of 55x40x23cm and which weight does not exceed 10 kg . This bag is included in the ticket price. The airline also announces a new service option for passengers called WIZZ Priority. Valid on all flights from today, WIZZ Priority now includes: priority boarding; passengers able to bring an additional small bag (maximum dimensions of 40x30x18cm) into the cabin; a guarantee that hand luggage will be placed in the cabin (also available for passengers when purchasing WIZZ Go, WIZZ Plus and the WIZZ Privilege Pass).

Georgian Tatara on the United Kingdom Market Georgian Tatara has appeared on the UK market. Georgian sweets producing company has already sent products to the United Kingdom. Davit Ramazashvili, the head of the company told the Business Course that the trial party was sent a few weeks ago in the UK and received a relatively large number of orders. The company has also sent experimental parties to Austria and Germany. Davit Ramazashvili presumes that the continuous exports of products will start in Austria, as far as the product has been greatly appreciated. “Tatara” has being sold in Israel for several months already. According to Davit Ramazashvili, he wants to export products to Russia too, but it requires a large number of products that can not be managed without the expansion of the enterprise. The businessman assumes that the expansion of the enterprise needs 200 thousand dollars.

Innovative and Unique Premium Class Eco-Friendly Showroom Opens in Tbilisi An innovative and unique premium Eco-Friendly showroom will open on November 1, Beliashvili 110 in Tbilisi where customers will be able to choose the desired products with high quality and wide range of designs. The company “Thermo industria” is the leading importer of heating, water supply, conditioning and ventilation systems, which is an exclusive representative of many leading brands in Georgia. From the day of its foundation ”Thermo industria” successfully works on the Georgian market. The main value of the company is a team of highly qualified specialists. Quality products are guaranteed by the company’s constant growth. Georgian businessmen and representatives of foreign partner companies will be invited to the opening of the Eco-Friendly Showroom.

November 6, 2017 #215

King David is celebrating success on international stage for the second year running. The complex took part in one of the most prestigious annual real estate competitions – the European Property Awards, which are held as part of the International Property Awards – for the second time, and emerged victorious in the “Residential High-Rise Development Georgia” category. In 2016, King David had won the award for the “Best Multifunctional Complex in Georgia.” One of Tbilisi’s newest landmarks, King David is a multifunctional complex which unites residential properties, a class-A business center, a hotel, a five-star restaurant and a recreational zone under the same roof. The 32-storey complex also includes a spa, a fitness center, a swimming pool, an open terrace, and event hall, and everything else that is required for a five-star lifestyle. The modern design, the panoramic view over the city, the harmonious fusion between old and new parts of Tbilisi and the stunning architecture have turned the two towers built on top of a rock into one of the most attractive landmarks of the capital. The Austrian company Rezid Holding GmbH invested $70 million in the construction of the complex. The King David complex began operating on 27 June, and will welcome its first tenants in December.

Citycom – Georgian Card System Simplifies Manage Expenses for the Residence Citycom is a startup that offers homeowners’ partnerships card systems. By ussing cards made in Georgia, the inhabitants collect money to cover the current expenses of the doorway and other needs. System is thoroughly transparent, check and dispose of the accumulated amount is available on the Citycom website. Davit Pirvelashvili, Levan Sharangia, Vasil Jalabadze, Guram Gachechialdze and David Nadaria are the founders of Citycom. Marketer had an interview with one of the founder – David Pirvelashvili: Tell us about the card system. What needs does it satisfy? Citycom is a startup that allows inhabitants collect money through a simple and transparent card system that is installed in their lifts. Our company was created based on the problems of homeowners’ partners and the residents of the corps. They have a monthly expenditure such as: lift service, cleaning of the entrance, e-energy, and

others, for which they try to collect money from door to door or iron boxes, trying to get money. These methods often fail to collect enough money and the existing problems remain unsolved. This adds to the discomfort that the population has been searching for money or collecting them later. What does it simplify the use of Citycom for housing partners and what opportunities do you offer? The Citycom card reads the balance sheet by touching the reader, which belongs to the partnership. In this principle, the partnership collects money for monthly needs. No need to collect lift money from door to door, our reader does. The accumulation process is transparent and any resident of the corps can verify how much money is collected on the partnership account and what is spent on it. It is also easy to add money to the card, which can be done by fast transfer machines, mobile banking and our website.

Business started by two students scholarship Two students, Tina Osadze and Mariam Siordia decided to start their own business in 2016, while studying in ”Iliauni”. It was the period when they received scholarship and started to implement their idea by GEL 400. That’s how well-known brand ”Populus” has established. Tina and Mariami met each other at ”IliaUni”, they got friends and found out hidden talents of one another, both of them liked embroidering. They used to embroider various accessorizes for their friends and family members in their spare time. Later, during one of the ”startup” they matched their talents and decided to realize innovative business idea. ”Populus” is a popular handmade wood bags and accessorizes brand nowadays among people. Their customers are attracted to brand’s uniqueness and design. It’s been many years that laboratory ”FabLab” gives young people chance to create innovative product, among is Populus.

Tina and Mariam hold exhibitions in Georgia and are willing to do so outside the borders. A customer is able to choose the design, as through internet, also purchase it on location. Girls want to introduce Georgia to the world, that’s why each product has inscription: ”Made in Georgia”. bags and accessorizes preparing process takes a lot of effort and time resource. First three is cultivated, then they shape it by using laser cut, they polish, paint, make it dry and add some more ornaments. It takes one day to make one handmade bag, which makes it that unique. Tina says that she remembers their first customer very well, he was African-American tourist, who couldn’t help expressing how he liked. Tina and Mariam have plenty of plans, they would like to cooperate with several designers and represent their work at fashion weeks, festivals and exhibition in Georgia, as well as abroad.

analytics

November 6, 2017 #215

Jaba Tarimanashvili

- Business Administration Doctoral Student, of Batumi Shota Rustaveli State University - Business Analytics - Director of Maritime services and Transportation company – Trans Logistic

o illustrate nature of problem, let’s see the following example: The concert hall aims to have a high quality and harmonious musical sound that the audience will enjoy. The following components are required for this: 1. Musicians 2. Instruments 3. Technical staff and Sound engineer. Sound engineer is responsible to provide to the listener a pleasant polyphony, and ensures that, all the instruments and musician’s voice, is connected in its mixing board, after which the sound engineer performs synthesis and balance, depending on the timbre function of voices and significance of the instruments. The harmonious work of these components creates high quality music, which is pleasing to the ear and heart. But let’s present a similar event so that these components are separately acting, as well as in the Georgian transport industry. For example: the musicians are separately, instruments and the technical personnel are separate. As a result, chaos is created and the concert hall would loose audience and listeners annually. Despite this, what if the hall managment does not make any changes, and loses 50% of viewers over the years. Such inactivity would have negative impact on the economy of the concert hall and the staff. The Chinese wisdom says that “muddy water makes it easier to catch fish”. Perhaps certain persons, in order to “warm their hands,” arrange such chaos and ambiguity. Over the years, a large number of fish are caught by certain groups on account of society. That is why it is time for the government to implement reforms and begin thinking about consolidation and development. It is important to define the nature of challenges and problems in the transport industry of Georgia. In general, transport industry, is divided into 3 main components: 1. Infrastructure (road, railway, ports, terminals, airports);

2. Vehicles (bus, car, train, aircraft, ship); 3. Management (finances, politics, forming legislative base, creation of systems, project planning and coordination); Two components: infrastructure and vehicles somehow exist in Georgia nowadays. But the main component that creates, regulates and coordinates these two components – Management, is not well formulated and established. We know that there is a department in the Ministry of Economy that should focus on the development of transport and logistics, but there is a question, on how the organization of industry and the competencies of the departments staff can ensure efficiency. In Georgia, transport and logistics industry, in fact does not have a single responsible person. There are scarce number of independent institutions working on analytics to observe global and regional trends. Who makes decisions not to make any reform, despite the development of creeping and downward trends over the years? Where is the strategy and vision from transport and logistics policy development department? What do we want to do in the future? Having no responses on those questions, and being in uncertainty, automatically leads country and sector to reap negative results. Business can successfully work only on smooth, strong, and trouble free platform. Business cannot develop if the government has not created free area and systems to act. Therefore, it is important to pay attention to the third major, and main component of the transport industry – The Management, that is problem of a organizational system in Georgia. The Ministry of Infrastructure, Roads Department, Railway, Department of Transport and Logistics policy development, are separate units, in a small country like Georgia. Because of this, it is likely, that there are problems in coordination, communication, institutional planning, united vision and action. The result is

that Georgia does not responsible person for transport industry, with ability to negotiate and optimal solutions in cooperation with the countries of corridors passing through Georgia. Person who would be able to negotiate with railways, ports, governments, terminals and ferry carriers to create a unified policy, that would create barrier free and smooth basement for business development. This would ultimately lead Georgia in comparison with our rival corridors to become more effective and competitive. Adam Smith in his magnum opus - “The Wealth of Nations” argues, that: “The invisible hand works only if the government can contribute to the implementation of the laws of the market

Business can successfully work only on smooth, strong, and trouble free platform. Business cannot develop if the government has not created free area and systems to act. Therefore, it is important to pay attention to the third major, and main component of the transport industry – The Management, that is problem of a organizational system in Georgia. economy and the retention of institutions, which is one of the main reasons for the existence of the government. Intervention in economy should be based only on promoting efficiency and equality”. To ensure optimal solution of regional, international issues, and form efficient vision and action plan - it is important to consolidate all components of the transport industry within the country. As for elimination of barriers - the number of intermediate companies, personal interests, the abuse of administrative power, should be excluded. These actiona would create business friendly environment, basis and impulse for development. Such a reform would automatically attract freight movement, increase trade and create wealth. The elimination of monopolies, duopolies or preferences to certain groups, and efficient distribution of wealth created by the society, will make the Georgian people rich and happy.

11 bank

PASHA Bank Sponsored Second CEO Lunch Tbilisi On October 27th the second CEO Lunch Tbilisi took place in Courtyard by Marriott Hotel. About 80 business and government representatives from Azerbaijan and Georgia took part in the event. CEO Lunch Tbilisi is a series of meetings for CEOs of Georgian and Azerbaijani companies, it is initiated and organized by Caspian European Club, Caspian American Club and Georgian Company Caspian Energy Georgia. The series of events are supported by PASHA Bank. Addressing the event, Mr. Giorgi Tabuashvili, First Deputy Minister of Finance of Georgia, talked about the latest economic trends in the Georgian economy, as well as about the ongoing projects on rapid economic development. Head of the Department of Macroeconomic Analysis and Fiscal Policy Planning Ekaterine Mikabadze made a thorough presentation about tax advantages, additional opportunities and macro economic trends for all participants of CEO Lunch Tbilisi and companies operating in Georgia. Mr. Chingiz Abdullayev, Chief Financial Officer and Member of the Board of Directors of PASHA Bank gave a presentation about the Bank’s activities and underlined the importance of CEO Lunch Tbilisi in

bringing together the business circles of Azerbaijan and Georgia. Having greeted all the guests, Ambassador Extraordinary and Plenipotentiary of the Republic of Azerbaijan to Georgia Dursun Hasanov stated that the organization of such events serves as an impetus to further development of the bilateral trade and economic ties between the two countries, and will help to attract investments and establish business contacts between the companies of Azerbaijan and Georgia. Telman Aliyev, First Deputy Chairman and Chief Executive Officer of the Caspian European Club and Caspian American Club, announced that the 5th International Caspian Energy Forum will take place in March 2018 with the support of the Governments of Georgia and the Republic of Azerbaijan, as well as the organizational support of the Caspian European Club, Caspian American Club and Georgian Company Caspian Energy Georgia. The third CEO Lunch Tbilisi is scheduled on November 24th. For more information, please contact: E-mail: info@caspianenergy.net; info@caspenergy.com URL: www.caspianenergy.net; www.caspianenergy.org; www.caspianenergyforum.com

publicity

November 6, 2017 #215

world

Payment Firms Caught Up in U.S. Probes of Russia Political Ads

Azerbaijan alternative source to ensure EU energy security Azerbaijan is an alternative source to ensure energy security of the European Union (EU), said Vusal Gasimli, Executive Director at Azerbaijani Center for Economic Reforms and Communication. He made the remarks on behalf of Azerbaijan delegation during the panel discussions held as part of the 4th Eastern Partnership Business Forum Digital Economy: Innovative Platform for Transparent Borderless Business in Tallinn. “Azerbaijan switched to new economic model. We started our main economic reforms agenda. Our first direction is of course institutional reforms. Within the last one year Azerbaijan has established a lot of new institutions like financial stability council, center for analysis of economic reforms and communication and other institutional setups to run, to accelerate economic reforms in Azerbaijan,” said Gasimli. He went on to add that the second direction is the improvement of business environment. “Over the last one year, Azerbaijan provided more than 200 amendments to Tax Code, as well as to the Customs Code. For our efforts in this field, World Economic Forum ranked Azerbaijan 35th country among 140 countries. According to Global Competitiveness Report, Azerbaijan is the best among CIS countries as well,” he added.

Armenia to receive €70 million from different European organizations in 2018 Armenia will receive €70 million from different European organizations in 2018, Atom Janjughazyan, Armenian deputy finance minister, said Thursday in the National Assembly at the discussion of draft government budget for 2018 by parliamentary committees. «Around €11.5 million will be used for supporting the budget, €30 million will be earmarked for lending and €28 million for grants,» he said. In his words, the money provided for supporting the budget will not add any burden for Armenia – they will give from European organizations as assistance in implementation of the mentioned projects. Janjughazyan said that the received financial resources is planned to be used for implementing 15 lending and 14 grant projects. Possible expenses relating to the signing of the Comprehensive and Extended Partnership Agreement with the European Union were discussed as well. On March 21, 2017, Armenia and the European Union initialed the Comprehensive and Extended Agreement, which is expected to be signed at an Eastern Partnership Summit in November. Before the signing, all the 28 EU member countries should uphold the document. The agreement will come into force after the member countries and Armenia ratify it. «It is difficult to separate expenses indirectly connected with this process, since this event will take place later than the composition of the draft budget.»

Payments providers have long been aware of financial risks from cyber attacks and money laundering, but U.S. authorities have added something new to worry about: Doing business with dubious social media advertisers. Over the past few days, top lawyers from Facebook Inc., Twitter Inc., and Alphabet Inc.’s Google have been grilled over how their platforms were used by Russian actors to influence the 2016 U.S. presidential election. As part of the U.S. House Intelligence Committee hearing, legislators released images of some of the ads, along with information on how much they cost, when they ran and how audiences were targeted. Among the sample of inflammatory Facebook ads highlighted by U.S. authorities, a wellfunded Dutch startup and a Russian-listed payments provider were consistently identified as the companies that helped process payments for the posts. In total, the committee released 14 ads. In the thirteen where payments data was made

available, all were made using an online platform provided by QIWI Plc, a Russian operator listed in Moscow. These payments were then processed by Adyen BV, a fast-growing technology provider based in Amsterdam, and backed by Singapore’s state-owned investment firm Temasek Holdings Pte, which counts high-profile companies such as Airbnb Inc. and Uber Technologies Inc. as customers. Adyen is also backed by Iconiq Capital, a multifamily wealth management firm that represents Facebook Chief Executive Officer Mark Zuckerberg as a client. Qiwi spokesman Alexander Dzhabarov said the company didn’t “actively track payments on Facebook” and couldn’t “confirm or deny whether its payment services were used with respect to any specific publications.” He also said the company’s service terms prohibited payments made for political purposes. Facebook and Adyen didn’t respond to requests for comment.

Turkcell named ‘Sustainable Development Goal’ pioneer by UN platform over app for refugees SES Communications Satellite Company Announced Financial Results SES S.A. announced financial results for the nine and three months ended 30 September 2017. Executing differentiated strategy to deliver return to sustained and profitable growth Revenue EUR 1,527.2 million, up 2.5% over prior period EBITDA margin 65.1% and operating profit margin 29.4% (YTD 20161: 66.4% and 32.1% respectively) Net profit[1] EUR 394.5 million (YTD 2016: 328.8 million excluding one-off gain related to the consolidation of O3b; and EUR 824.0 million including this gain) Net debt to EBITDA ratio[2]29 times (YTD 2016: 3.30 times), in line with SES’s financial framework Enabling customers’ success with the most flexible and scalable satellitebased solutions Substantial contract backlog of EUR 7.5 billion, including contribution from long-term Sky Deutschland renewal Total TV channels +6% (YOY) and HDTV channels +7% (YOY) with growth in both developed and developing markets Focus on differentiated managed services delivering 2.2% (YOY) growth in SES Networks’ revenue

Improving future business mix and growth across network-centric verticals with new contract wins Significantly expanding future addressable markets in network-centric verticals with O3b mPOWER investment Karim Michel Sabbagh, President and CEO, commented: “SES has continued to make steady progress in executing its strategy and investing for the future in growth markets where we have a competitive advantage. SES Video’s underlying business remains stable with attractive long-term contracts in prime neighbourhoods, and additional growth potential in integrated platforms and services. This is demonstrated by the recently announced multi-year capacity renewal with Sky Deutschland and the addition of exclusive Eurosport content to our HD+ platform in Germany. SES remains on track to deliver sustained and profitable medium-term growth. The recent announcement of O3b mPOWER builds on capabilities of the only successful non-geostationary broadband system to deliver the first global, multi-terabit satellite network and reinforces our position as the world’s leading satellite enabled solutions provider.”

The U.N. Global Compact platform has named leading Turkish mobile phone operator Turkcell’s CEO Kaan Terzioğlu as one of the 10 Sustainable Development Goal pioneers over the company’s Hello Hope mobile app for Syrian refugees, Turkcell announced on Sept. 22. Turkcell is the only Turkish company awarded by the world’s largest corporate sustainability initiative for supporting refugees through mobile technology, a statement said. Terzioğlu said the Hello Hope mobile app “aims to break the communication barrier more than 3 million Syrian refugees living in Turkey are facing.”. Noting the “vital” importance of smartphones for “our Syrian guests,” Terzioğlu said Turkcell is seeking to “make the refugees’ lives easier” with their digital services. Launched on Sept. 20, 2016, the app aims to address the challenge of integration for Syrian refugees through developing language skills, providing instant speech translation, guidance on registration and other essential services. Since then, the app has reached more than 500,000 users, with 350 million Turkishlanguage card views and more than 8 million uses of the speech translation feature to date, demonstrating the need for and the potential of such solutions, according to Turkcell. Total’s CEO Patrick Pouyanne, Microsoft’s Managing Director Sonia Bashir Kabir and Schneider Electric South America’s President Tania Conte Cosentino are among the other business leaders recognized by the U.N. Global Compact for their “exceptional work” to advance 17 Sustainable Development Goals of the U.N.

publicity

November 6, 2017 #215

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 Kingdom of Spain Embassy Rustaveli Ave. 24, I floor, Tbilisi Tel: 230-54-64 E-mail: emb.tiflis@maec.esRomania Embassy 7 Kushitashvili St., Tbilisi Tel: 38-53-10; 25-00-98/97 E-mail: ambasada@caucasus.net Republic of Poland Embassy

Tbilisi Guide 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 European Investment Bank Regional Representation for the South Caucasus Address: 1,G.Tabidze Street, Freedom Square Phone: +995 322 006284

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

75 Agmashenebeli Ave. Tbilisi Tel: 577 18 27 87 Email: hostelmtevnebi@yahoo.com

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

Limelight Travel info Center 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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November 6, 2017 #215