Caucasus Business Week #289

caucasus

DISTRIBUTED FREE OF CHARGE

BUSINESS

July 1, 2019 - www.cbw.ge

#289

WEEK

p.4 p.5

p.6

p.7

p.10

Threats from Russia and Response

Russia applies Significant Economic Instruments to stage Political Pressure

International Trade in Figures – Georgia and the World

What to expect from the Russian Tourism Embargo

Everlasting GeorgiaRussia Deja-vu

2 July 1, 2019 #289

IMF: Georgia’s Economic Performance remains Robust with Resilient Growth

Spend Your Summer in Georgia! – Message to Georgian and Foreign Citizens

The Executive Board of the International Monetary Fund (IMF) completed the Fourth Review of Georgia’s economic reform program supported by a three-year extended arrangement under the Extended Fund Facility (EFF).

Spend Your Summer in Georgia – #spendyoursummeringeorgia is an active social campaign for maintaining and improving Georgia’s tourism reputation.

The Ambassador of Lithuania invites his Citizens to spend Holiday in Georgia Bank of Georgia to allocate 1 million GEL for Tourism Sector Development Bank of Georgia keeps developing tourism sector and plans to allocate 1 million GEL for summer season.

Lithuanian Ambassador Giedrius Puodžiūnas invites Lithuania citizens to spend the holiday in Georgia and thus offers to support tourism of the country.

Ruling Georgian Dream to hold 2020 Parliamentary Elections with Proportional Election System Itsik Moshe - 200 thousand Tourists visit Georgia from Israel This year about 200 thousand tourists will come from Israel creating $ 200 million in revenue to Georgia’s budget, - the founder and chair of Israeli House says.

The ruling Georgian Dream party has decided to reform the election system and hold the 2020 parliamentary elections with the proportional system.

Land and Sea Transport to carry Georgian and Russian Passenger after Flight Ban

Georgian Diplomatic Missions invite Foreign Visitors to spend Vacation in Georgia Since the decision of Russian President to suspend flights in direction of Georgia, diplomatic missions of Georgia invite foreign guests to Georgia.

Georgia Image Campaign on Bloomberg Georgian National Tourism Administration of the Ministry of Economy and Sustainable Development has started a new image campaign on Bloomberg. Bloomberg is the portal which connects decision makers to a dynamic network of information, people and ideas. It has created a new platform for Georgia, which involves a video, article and photo gallery. These are aiming to develop its tourism potential.

Despite Russian Authorities banned flights to Georgia, land and sea transportation service remains in force anyway.

Georgian Airways offers Simple Route to Passengers after Suspension of Direct Flights - Tbilisi-Yerevan-Moscow Following the restriction of Georgian airlines on the Russian market, Georgian Airways offers passengers a simple way to fly - Tbilisi-Yerevan-Moscow route.

The Editorial Board Follows Press Freedom Principles Publisher: LLC Caucasian Business Week - CBW Director: Levan Beglarishvili WWW.CBW.GE Address: Aleksidze Street 1 Sales: Mob: +995 591 01 39 36 Email: caucasianbusiness@gmail.com Editor: Nutsa Galumashvili. Mobile phone: 595 380382 Copy Editor: Ellie Rambo Reporters: Nina Gomarteli; Mariam Kopaliani; Merab Janiashvili, Economic columnist: Andria Gvidiani; Technical Assistant: Giorgi Kheladze;

12 New European Destinations from Kutaisi International Airport Hungarian low-cost airline Wizz Air will add new routes from Georgia’s Kutaisi International Airport to 12 cities, announces the United Airports of Georgia.

Wizz Air will launch flights to Frankfurt (Germany), Hamburg (Germany), BadenBaden (Germany), Poznan (Poland), Venice (Italy), Naples (Italy), Pisa (Italy), Nice (France), Stockholm (Sweden), Nuremberg (Germany), Heraklion (Greece) and Turku (Finland).

Of these new routes seven will be launched by the end of 2019 (Poznan, Hamburg, Naples, Venice, Pisa, Frankfurt and Baden-Baden), while the rest of the routes will be added in summer 2020.

Georgian Economy Minister Natia Turnava said that several months of intense negotiations has been successfully completed. The agreement has signed CEO of UAG George Chogovadze and Anras Sebok Chief Supply Chain Officer signed the agreement at Wizz air.

“This is a unique opportunity to receive more European tourists. For the first time in our history we will have direct flights to Finland and Sweden. As you know, there is a high interest towards Georgia from the Scandinavian countries and now we will be able to receive tourists from these countries”, Turnava said.

In addition, Wizz Air will base 4th and 5th AIRBUS A 320 aircrafts. The 4th

3 July 1, 2019 #289

aircraft will offer 7 new routes to Europe from the end of 2019, while the 5th aircraft will launch flights to 5 destinations from summer of 2020.

“Today, we signed a decree with the Wizz Air Airline regarding the launch of flights to 12 new destinations, adding that the frequency of flights to Rome,

Milano, Prague, Athens and Larnaca is also to be increased,” stated George Chogovadze, CEO of United Airports of Georgia.

There will be 34 European destinations and four aircraft based in the Kutaisi International Airport in 2019, while the figures will be increased to 40 routes and 5 aircraft in 2020.

4 July 1, 2019 #289

Russian President Vladimir Putin has banned Russian airlines from performing flights to Georgia, starting July 8th, including commercial flights, under the pretext of ensuring national security and protecting Russian citizens.

At the same time, tour operators and travel agencies were advised to abstain from selling tourism packages to Georgia.

This decision was made following mass protests and rallies that broke out regarding Russian parliament member Sergey Gavrilov, who addressed the participants of the International Orthodox Assembly, from the chair of the Georgian Parliament’s chairman. Anti-government and anti-occupation rallies broke out in Tbilisi, immediately.

According to Putin’s decision, direct flights between Russia and Georgia will be banned starting July 8th, 2019.

According to the statistics, more than 40,000 passengers would have used this channel of transportation in July 2018.

Shalva Alaverdashvili, head of the Georgian Federation of Hotels and Restaurants, has prepared a report about expected outcomes after July 8, 2019 if no Russian tourist enters the country. The Georgian tourist industry will lose 2.1 billion GEL, he said.

A total of 539,432 Russian visitors arrived in Georgia in January-May 2019, which is 21.6% of the total number of visits, of which 429,179 visitors stayed in Georgia for more than 24 hours. This category is regarded as international tourists, and this is a 25.9% share of the total number of international tourists.

According to a report by Shalva Alaverdashvili, Russian tourists were expected to spend 1.1 billion USD in 2019, however, if tourist inflows stop by the end of 2019, and incomes will decline by 750 million USD. Both the business sector and government officials have appraised the Russian President’s decision. Everybody agrees that financial inflows are declining from Russian visitors, but the scale of this slowdown and expected negative effects will be outlined later. Anyway, both parties have pessimistic forecasts.

“Our country hosted 8.7 million international visitors in 2018, and they spent 3.2 billion USD. As for Russia’s role in this statistics: more than 1.4 million Russian citizens visited Georgia in 2018, and they spent 2 billion GEL in the country.

Naturally, we should not be populist by saying that the Russian president’s decision will not affect Georgia. Our government didn’t spend a penny on marketing campaigns in Russia in 2018, because the Russian market was stable, with a growing inflow of visitors.

This year, Georgia is expected to host more than 1.7 million Russian visitors, and they would spend 2.5 billion GEL. Naturally, today, we face challenges.

Our role and function is to alleviate these shocks and losses. We should provide huge numbers of jobs to help the economy recover as soon as possible, and prevent people from losing their jobs, so they could host visitors and tourists.

t c e p x e n o a t i t s a s h W Ru e h t m

fro

Touris

m

Emba

rgo

ut lose abo my will rnal o te n x o e c e is rgian l ia. Th o s e s fu e G u s R e u ever, th e m w mak tions, its fro te. Ho n ossible to primary calcula of declining vis cy exchange ra p 07 millio n 2 im (+ is bled, rren sult ve g to u e e u r o in , c stage it e d d a e r v is t s o o s th a r th c o , c d t p “A ill im as alm ever, a nts, an of 2019 h w e t w d e o n m n c h u y e n , a o e la c p ts a th f ac forecas alance o xternal b USD by current million on the b rs of 1Q19, the ns, the e io it d n o 200-300 place influence c to ica ual ill ount ind other, eq ads. shock w rrent acc eans that, in all re u t c n e to m g state ’s k accordin on year. This m n a B l ar ationa USD) ye volume”, the N ll a m by a s

“The Russian tourism embargo will mainly hit small and medium hotels”, businessman Lasha Papashvili noted. Russia has banned direct flights, but visitors will find alternative routes, he said. This is a small shock for Georgia, even more so as the country had a similar experience.

“The first test came in 2006, and I believe we will overcome this challenge easily.

Naturally, we will have little inconveniences in the tourism sector, especially in small hotels, but we will survive”, Papashvili said.

By Merab Janiashvili

5 July 1, 2019 #289

Everlasting Georgia-Russia Deja-vu No ordinary words such as “I have warned you” can valuably express the current developments in Georgia, because more categorical and radical appraisals are required.

Finally, this has happened and similar scenario was evident for any reasonable person, but remained unclear for the Georgian Authorities and the self-proclaimed businessmen with the mindset of street sellers.

Thus, Putin has disliked something in Georgia and set economic sanctions again.

And this scenario is repeated every 5-6 years – Moscow takes measures to cause economic crisis in Georgia and Georgia manages to somehow get adapted to the new realities after the war of nerves and crisis.

Russia alleviates burden after 5-6 years and drags naïve and covetous Georgians into marshland and sets new sanctions after 5-6 years again.

And this vicious circle does not end for 30 years and these years turned out insufficient for Georgia to realize the truth by Kakha Bendukidze: “Imagine there is an ocean instead of Russia”.

In 2012 Georgia’s exports to Russia was zero. About 300 000 tourists used to visit Georgia from Russia.

This was a quite big figure, but not critical.

In 2012 Georgia’s dependence on Russia and Russian market was zero. And Georgian economy did not collapse. On the contrary, Georgian economy was demonstrating very good growth paces.

In the 2012 the ruling party was replaced and Bidzina Ivanishvili came to power with the motto for resolving problems with Russia and opening Russian market.

For the initial 2 years Georgian party was demonstrating caution in terms of establishing economic relations with Russia. Namely,

winemakers were not taking bank loans for entering Russian market.

However, this caution disappeared stage by stage and Russia became a key basis for growth in Georgian economy.

“Tourist inflows and tourism sector revenues started rising!” Georgian officials were boasting, but this growth was preconditioned by economic dependence on Russia.

“Friends, Georgian exports have beaten all records, congratulations”, Georgian Dream leaders assure, but they do not specify that 99% ratio in this growth is related to Russia.

The first signs of hazardous economic dependence on Russia appeared in 2014, when Russian Ruble devaluation automatically caused GEL exchange rate volatility.

Reasonable officials would realize in 2014 that they had to stop the growing dependence on Russian economy.

And it would not be difficult to do this – it was sufficient to stop advertising tourism packages in Russia and not to increase frequency of flights, to adopt a special law that would restrict sales of strategic products to the same country and this correlation could be less than 40% in total exports.

Is this interference in business sector? Sure, this is intervention, but we should realize that Russia is not an ordinary business partner.

Well, this has happened anyway and in the future nobody would be naïve to forget – insatiable pays the double price.

What is the solution? We should get rid of illusions and useless assertions that Russian tourists spend less money. This may be true, but they rank first in terms of quantity.

Georgia is expected to face sharp economic challenges in several weeks, including GEL exchange

rate devaluation as the Georgian market will lose hundreds of millions of USD. The country needs new sources of USD inflows as soon as possible, in huge amounts. Diversification, igniting economy and so on… This narrative is wonderful, but these efforts require time and we do not have much time.

The first steps that the Authorities should take are of political character. In the end, the Authorities should stop succumbing to xenophobes, nationalists, fair sellers and taxi drivers. The last developments have showed that nationalists, followers of the Asaval-Dasavali edition, and anti-LGBT rhetoric have not real influence on our society. They have supporters, but mainly useless lumpen-proletarians, who cannot ever play decisive role in Georgian politics.

Therefore the Authorities should finally reject their harmful considerations – namely, the current negative attitude towards such important tourism countries as Iran, India and China.

Today, following the xenophobes narrative, Georgian Authorities block Iranian and Indian tourists to enter the country, humiliate them on the border and do not let them enter Georgia.

Sure, they give preference to our northern neighbor – we do not want Iranians, but we have an intense inflow of Russian tourists…. Iran is the country of ancient culture, which today manufactures vehicles and operates nuclear power stations.

All of us welcome European tourists, but indispensable projects should be carried out to attract them and this process will take several years.

What should be done in addition?!

The Georgian Authorities should

realize that it is necessary to develop domestic production, including agriculture sector to reduce shameful indicators of agriculture products imports.

And this objective cannot be achieved by giving subsidies to peasants – we should forget the concept of a peasant – today Georgia needs not miserable peasantry that sells 2 boxes of apple at Tbilisi underground stations, but strong business companies and agribusiness holdings and in this context foreign citizens should be able to buy agriculture lands in Georgia, under corresponding regulations, ruling out speculations and keeping land uncultivated.

The Government should also take real steps for constructing major hydro power plants for injecting major investments in Georgian economy.

And finally, the Authorities should ask foreign donors to assist in replenishing currency reserves of the National Bank of Georgia (NBG), otherwise GEL rate devaluation will be continued endlessly.

The Time is ticking away and all these measures should be implemented as soon as possible.

This year will show what Georgia is worth – whether it is the society with strong principles and dignity or the former nation seeking sustenance.

By Tengiz Ablotia

6 July 1, 2019 #289

Threats from Russia and Response Having banned air flights to Georgia and introduced a tourism embargo, the Russian Federation plans to set up sanctions against Georgian wines, too.

RosPotrebNadzor plans to implement tight control over strong drinks from Georgia.

According to the January-May 2019 indicators, Georgia exported 218.6 million USD of products to Russia, up 28% year on year. The country mainly exports ferroalloys, mineral waters, and wines of natural grapes. If Russia sanctions a certain category of Georgian products, these specific items will face problems with sales. As for our trade with the EU, during the reporting period Georgia exported products worth more than 360 million USD to EU. In 2018, Georgia sold more than 56 million bottles of wine to Russia, which are more than 62% of total exports. This year, the country has already sold 21 million bottles.

The Caucasus Business Week has inquired as to how the Georgian business sector appraises the current situation, and what they expect in terms of national economic development.

Shalva Alaverdashvili, founder of the Georgian Federation of Hotels and Restaurants, explains that the Georgian economy will lose about 750 million USD from the tourism embargo, and the effect will be particularly dramatic in Adjara.

All challenges will be overcome over the long-term. Free shuttles will run from Baku, Yerevan and Trabzon, and tourists entrance procedures will also be simplified, he said. These measures are determined in a 10-clause document that Shalva Alaverdashvili submitted to the Minister of the Economy, Natia Turnava, and tourism sector representatives.

Both the Economy Ministry and Foreign Ministry will work on surviving these challenges, he added.

“One of the key requirements is to simplify border-crossing procedures in order to attract tourists from other countries, as this segment will bear serious losses, especially in the Black Sea region, where dramatic effects are reported. Another clause of the document calls for arranging shuttles from Baku, Yerevan and Trabzon to convey Russian tourists to Georgia more easily. Today, the representatives of more than 100 hotels assembled. They express their intention to arrive in Georgia, and they ask for assistance in finding alternative routes”, Alaverdashvili said.

Additional charter flights should be also scheduled from other countries, he added.

“We should think of appointing additional charter flights. Many countries have expressed readiness, including Baltic countries, Ukraine, Kazakhstan, from where inflows may increase in order to attract more tourists”, Shalva Alaverdashvili said.

Zurab Margvelashvili, founder of the TbilVino winemaking company noted: “At this stage we have a growing sale ratio based on stable and important markets.

Currently, it is too early to say when, and which markets will replace Russian Federation”.

Besik Tsertsvadze, head of the Sheri Hothouse Complex noted: “We will have to overcome problems, because the majority of our products are exported to Russia, where we have

to compete with Uzbek and Iranian greens. Therefore, European market as an alternative is of the utmost importance for our development”.

Levan Silagava, head of the Association of Entrepreneurs: “Both wines and other products are our of strategic value, and we can readdress them to EU markets. It is important to determine alternative paths, and form a legislative basis to orient us towards stable markets”.

Businessman David Begiashvili, founder of the Vake5 Holding Company, and the Albatros Group says that this specific case is a provocation, and the country will have a bad outcome.

“These restrictions will be reflected on the economy in proportion, including investors. Russia’s ban on air flights will significantly damage the economy.

Money transfers will decline, and the GEL exchange rate will be affected.

The Tourism sector will face serious challenges, as well as the agricultural sector”, Begiashvili said.

How will Georgia-Russian tensions affect the mood of international investors?

Begiashvili explains that FDI inflows may decline, and money transfers from Russia may also decrease. As a result, GEL exchange rates may plunge.

This reality will pause the implementation of investment projects, he added. “Some of my plans will be paused. I mean the tourism sector. I own both hotels and food outlets. I had plans for their development and expansion, but it seems these plans will face obstacles”, Begiashvili said.

Businessman Temur Chkonia appraised the latest developments. For 20 years, we have said that Russia is a hostile country, and Russia’s activities should mot be a surprise for us. We should always be cautious in terms of our businesseconomic relations with Russia.

From a strategic point of view, Russia is not a long-term and reliable partner.

Should we expect serious losses from the Russian embargo? Chkonia explains that the country will bear certain losses, but in the long-term, these challenges may bring positive outcomes, Chkonia said.

“Today, we learned that about 200,000 tourists will arrive from Israel in 2019, and the state budget will raise 200 million USD. Many other countries will take the same steps. There are a lot of hostile countries around Russia. Nobody likes this country in Europe. Only several countries respect Russia. Russia is not an exemplary country. Regretfully, these developments happen during the summer.

Therefore, it may be difficult to revise tourism sector plans, but the damage will be of a temporary nature”, Temur Chkonia noted.

In life, as well as in business, some things go wrong, and some things go better.

Therefore, our people should be ready for any challenges in terms of our mindset, knowledge, experience, Chkonia added.

“When a communist sits in the seat of the Parliament’s Chairperson and then you suffer from a tourism embargo, this means that you should not think of implementing a long-term project with this country”, Chkonia noted.

Darina Iakobidze, administrator of the Palma Hotel in Batumi, explains that Russian clients cancelled bookings.

This fact will further motivate hotel management to become stronger, and replenish these losses through attracting

visitors from other countries.

If Russian tourists decide to stay at our hotel, we will take all efforts to persuade them that their safety is guaranteed.

The share of Russian tourists in our hotel accounted for around 40%, Darina Iakobidze noted.

Mariana Paliani, owner of the Mariana Guesthouse in Mestia, says that the ratio of Russian tourists makes up 50%.

Consequently, the current situation will lower the income of hotels- however, resort season will not be frustrated.

The hospitality sector should prepare a joint strategy for offering discounts for domestic tourists, she noted.

“I offer a 40-50% discounts to Georgian tourists. The price of a one-bedroom, without breakfast, makes up 30 GEL, but I serve domestic tourists for 15 GEL. I will bear less losses in this way”, Paliani noted.

At this stage, clients have already made orders for July and August. Interest is growing from Europe, including from Poland, the Czech Republic. We will genuinely overcome the Russian embargo”, Paliani said.

Zaur Mughrashvili, head of the Tkupebi Hotel in Signaghi, told Commersant that 80-90% of tourists used to arrive from Russia, and the last developments made Russian visitors leave the hotel. All bookings were annulled. We hope the resort season will not be thwarted, and hotels will receive even minimal revenues, Mughrashvili said.

“Russians used to make orders from Booking.com. I used to host them, mostly.

The ratio of Georgians was insignificant, because they couldn’t pay… If Russians do not arrive, the hotel would be empty”, Mughrashvili noted.

The Georgian Business Association also appraises the current situation. “We absolutely agree with the frank and just protest of Georgian society that broke out after the Russian Duma’s representatives occupied the seat of the Chairman of the Georgia Parliament. At the same time, the association members, like our compatriots, worry about dramatic developments that took place on Rustaveli Avenue on June 20. Naturally, injured young people, abused and beaten journalists and policemen, have shaped a dramatic reality.

At the same time, we believe that amid developments in Tbilisi, the Russian authorities have provided an inadequate reaction, and the decision to ban flights to Georgia and introducing various artificial barriers to Russian tourists. We also suppose that the export of Georgian products may be restricted temporarily, including certain measures that may be taken against Georgian wines. Similar steps will create additional problems between our countries in terms of humanitarian and economic relations, and will bring bilateral losses for ordinary citizens.

Georgia and Georgian people are famous for their tolerance and hospitality, and we always welcome Russian citizens, and other citizens who respect our country and the Georgian people. It is clear that there is nothing threatening Russian tourists in Georgia, and I am sure the current developments will end peacefully, and tourists from the Russian Federation will be maintained”, the Business Association representatives noted.

7 July 1, 2019 #289

Russia applies Significant Economic Instruments to stage Political Pressure A PhD in Economics, Rati Abuladze, appraises the social, economic and political aspects of Georgia-Russia relations. Political mistakes have deepened the political confrontation, and Russia imposed a tourism embargo on Georgia. This sanction will have an economic effect on the incomes of Georgian citizens, business, and consumers. Marketing campaigns, political and economic activities carried out by private and public sectors, will become useless (in the tourism sector, regarding exports and investments). Incomes will shrink for accommodation, food outlets, transport (land, railway, aviation), travel companies and the Georgian economy, in general, Rati Abuladze said.

Political aspects - Political circles are responsible for society and economic and geopolitical situation. The international reputation of the country was damaged, international events became questionable, and the political orientation of the country and international partnerships were threatened (25 countries were represented in the assembly). At the same time, the economic and political outcomes of these developments are reflected in both long-term and short-term perspectives.

Russian authorities hold significant economic mechanisms for staging political pressure. The statistics prove that Russian business receive more benefits than Georgia business, but in small economies, the lost revenues have a more painful impact on Georgian citizens and business. Consequently, amid the current embargo, additional sanctions (media agencies are spreading reports regarding additional measures) and the scales of economic damage will bring unfavorable, but not catastrophic outcomes, Rati Abuladze said.

Today, Georgia-Russia economic relations demonstrate are as follows: • 1.4 million Russian citizens visited Georgia in 2018. The number of Russian visitors grows every year. In 2017, Georgia was visited by 1.12 million Russian tourists. It should be noted that each Russian visitor spends 88 USD a day on average. Consequently, marketing campaigns for attracting the Russian public should be reallocated to other markets, and revenues that were to raise Russian tourists should be compensated from other countries; • Russia emerged as a major export market, and Georgia exported 218.5 million USD products to Russia in January-May 2019. The figure made up 437.3 million USD in 2018 and 396.6 million USD in 2017. Therefore, this exports market should be replaced by other markets as soon as possible, to save Georgian businesses and the whole economy; • Russia is considered a major importer country. Georgia has imported products worth 349.5 million USD in January-May 2019 from Russia. The figure made up

935.6 million USD in 2018, and 786.8 million USD in 2017.

In the process of diversifying imports markets, the prices of products imported from other countries (as well as the quality) should be affordable for our citizens; • FDI inflows from the Russian Federation makes up 14.3 million USD (January-June 2019). The figure was at 60 million USD in 2018, and 43.7 million USD in 2017. This amount cannot be considered a major investment, but they play a certain role anyway; • We should also analyze the role of Russian capital in Georgian business, including in the power sector, transportation sector, telecommunications, industry, finance sector, development sector, oil products and food products market; • According to official statistics, 450,000 Georgian migrants work in the Russian Federation (2017).

According to unofficial statistics, more than 1 million Georgians work in Russia, and a lot of Georgian citizens depend on money transfers from this country; • Money transfers from Russia in the January-April period made up 128.9 million USD. The figure was at 457.1 million USD in 2018, and 455.5 million USD in 2017. Georgia will remain dependent on money transfers from other countries unless it sets about overcoming poverty and creating new job places; • The sum of these figures cannot outline the whole picture of economic losses. A slowdown in business and consumer activities, the suspension of contracts in the short-term and long-term, and the intensification of Russian aggression are expected to bring more economic losses.

Regretfully, Georgian political circles could not make the necessary conclusions from past experience, and failed to ensure market diversification to prevent negative consequences from Russian pressure.

As a result, the Georgian market and business suffer from negative economic effects that are expected to continue to increase, without urgent measures, Abuladze said.

We should also realize that the objective of the visit of Russian MPs was to strengthen their own political values and cultura

By Rati Abuladze

8 July 1, 2019 #289

Meko Abramia: "The Greatest Motivation is Competition, and that grows Daily in a World of Constant Changes" Interview with Marketing Projects Manager at the Insurance Company “Aldagi", Meko Abramia.

Tell us about how you got into the field of marketing, and what factors played an important role in choosing this profession?

One recommendation changed everything. My university recommended m3 to a company, followed by several hard tests and interviews, and that’s how I got into a field that has kept me excited for 10 years. My motivation is to defy the competitor, which played a great role at the initial stage. It was not an easy path, but each difficult stage brought me a lot of experience.

In regards to technological changes, what challenges do you face as the head of a marketing service?

Our competition grows daily in a world of constant changes. The biggest challenge is to keep up with the pace of development.

What has changed in the field in the last 5 years, and what changes are expected?

Almost everything has experienced a digital transformation over the last 5 years. It became more practical in the field of marketing communication.

Nowadays, video marketing is at its peak, and creating content takes lots of human and financial resources. Marketing content relies on the customers’ experience and emotions.

Storytelling has been added to creative work, which is a new trend, I think, and this direction will become more popular and sophisticated.

What important features should a marketing manager focus on, and what are their roles in an organization?

A Marketing Manager is a creative person who comprehends people, and communication is like breathing for them. This person manages an innovative process, where trends are created based on analysing the user’s experience and emotions towards products/services.

How do you help your organization keep up with new trends and innovations in the field of marketing?

We create products that are unique in the field of insurance.

Besides novelty, it’s adapted to any user’s experience. More

importantly, there’s a big and strong team standing behind our products, Aldagi.

One word that describes your work.

Diverse.

The most useful advice you’ve ever received in your life?

Only you are responsible for self-development.

Think of a person who inspires you, professionally.

I think day to day moments in life are a source of inspiration, professionally, and finding ways to use those inspirations correctly.

9 July 1, 2019 #289

Business News

PwC announces Admission of the Georgian Partner in Tax & Legal Services

The EU launches New Development Projects in Mestia Municipality

The professional services firm PwC Georgia (PricewaterhouseCoopers) announces that effective 1 July 2019, Sergi Kobakhidze has been promoted to a Partner within the Tax & Legal Services.

On June 22, Mestia Municipality hosted an official opening ceremony of two projects supporting local development in Zemo Svaneti.

Georgian Historical Museum to present Vakho Bughadze's Exhibition Vakho Bughadze's exhibition "Three, Four" will be presented in Georgian Historical Museum.

Georgian Actress, Salome Demuria was awarded as the Best Female Character Georgian Actress got an award for the best female character on 2019 Shanghai International Film Festival.

Natakhtari Beer wins Superior Taste Award Products were tested by a large panel (over 200 jury members) of professional taste-experts, members of the world’s most prestigious Chef & Sommelier associations. Their talents are recognized in Chef and Sommelier competitions and by renowned institutions such as Le guide Michelin and Gault & Millau.

The Georgian Museum of Fine Arts to present the Knights in the Panther's Skin's Graphic Novel On July 10, the museum’s temporary exhibition hall will host the artist’s solo show and a presentation of the graphic novel created by Davit Machavariani in the course of three years. It is a great opportunity to buy a copy of the limited inaugural edition.

GPI Holding to start New Ecoist Campaign GPI Holding has implemented a new campaign, which is based on a healthy way of living by the renewed application MyGPI. Uzbekistan Airways intends to transport Russian Tourists to Georgia Uzbekistan Airways is going to ensure transit of tourists from Russia to Georgia after the opening of direct flights scheduled for July, Trend reports with reference to RIA Novosti.

Italian Wine Festival to take Place in Georgia The Italian Wine Festival this year will open the first event in Tbilisi, in the capital of beautiful Georgia, a land of wine, centuries-old traditions and wonderful people who make the wine their very own existence. The event will be held on June 28-29.

Seedstars World is coming to Georgia The 20 best startups from Tbilisi will be invited for a training delivered by our own Seedstars team and external mentors!

International Trade in Figures – Georgia and the World According to Munich Economic Research Institute (IFO), in 2018 Germany, Japan and Russia recorded the best trading indicators on international markets. The positive trade balance of Germany made up 249 billion USD, Japanese’ exports exceeded imports by 173 billion USD, while Russia’s exports surpassed imports by 116 billion USD. According to IFO report, the EU and US markets record major demand for German products. At the same time, in 2018 the USA’s negative trade balance made up 621 billion USD. Despite trade war with China, the USA’s negative trade balance continues rising. The country sold products of 120 billion USD in China, while the Chinese imports to the USA constituted 487 billion USD. The USA has negative trade balance with EU with 169 billion USD exports and 487 billion USD imports.

As to Georgia, the country is reported to remain under negative trade balance effect; however, the gap between exports and imports gradually shrinks.

According to Geostat, the national statistics service of Georgia, Georgia’s foreign trade turnover in JanuaryMay 2019 (without undeclared trade) made up 4 959.4 million USD, up 1.1% compared to the same period of 2018.

In the reporting period, the negative trade balance marked 2 026.1 million USD and this is 40.9% ratio in foreign trade turnover. According to this report, the negative trade balance has fallen to the historical bottom.

Specialists explain that exports growth to the CIS and EU countries drive narrowing the negative trade balance.

In January-May 2019 net exports rose to both EU and CIS countries.

In January-May 2019 Georgia sold products of 360.9 million USD to EU countries, up 22.1% year on year. Our exports to the CIS countries increased by 28.3% with 748 million USD exports.

Starting 2019 Turkey, Russia and Azerbaijan are reported to be Georgia’s major trade partners. In general, turnover with these countries as of April 2019 made up 1.3 billion USD, which is 34.6% in total trade turnover.

As to separate countries. Russia remains major consumer market for Georgian products, where Georgia exported more than 218 million USD products in 2018.

Russia maintained major ratio in imports too with 349 million USD imports to Georgia in JanuaryMay 2019. The figure makes Russia Georgia’s second biggest imports countries after Turkey (595.7 million USD).

Analogically to Georgia, Armenia also has negative trade balance. In 2018 Armenia’s negative trade balance exceeded 7.375 billion USD, including exports made up 2.411 million USD and imports constituted 4.963 billion USD. Consequently, the negative trade balance in Armenia made up 2.552 million USD. Absolutely different situation is reported for Azerbaijan, as its foreign trade turnover in 2018 made up 30.924 billion USD. The country exported oil and oil products of 19.459 billion USD in 2018, while the imports constituted 11.465 billion USD. Consequently, the positive trade balance of Azerbaijan made up 7.994 billion USD.

By Zurab Khachapuridze

11 July 1, 2019 #289

The 4th Tourism & Hospitality Conference held within Welcome to Georgia!

National Tourism Awards On June 18, the Radisson Blu Iveria hotel hosted the 4th Tourism and Hospitality Conference, organized within the framework of the Welcome to Georgia! National Tourism Awards. It brought together nearly 400 representatives of the public and private sectors as participants and attendees.

Maryna Chayka, Founder of the Welcome to Georgia! National Tourism Awards, was the first to open the conference with a speech, followed by Genadi Arveladze, Deputy Minister of Economy and Sustainable Development of Georgia; Giorgi Danelia, Chief Investment Officer at Partnership Fund; and Anna Kekelia, Head of the Brand Development Department at the Georgian National Tourism Agency. All of the presenters spoke about the current situation in the tourism and hospitality industry in Georgia, outlined the challenges that are set to be overcome in the near future, and noted that holding this type of conference is vital

in terms of bringing different companies and services together and giving an opportunity to the sector for the further development.

“The tourism sector is one of the fastestgrowing industries in our economy, and contributes much to the country’s economic development,” stated Genadi Arveladze, adding, “This annual conference offers an important platform for discussion on issues related to the industry.”

The 4th Conference was divided into four panels: Governmental Presentations on Challenges and Perspectives / Statistics; Old and New rules of Hospitality; Responsible Tourism and Sustainability; Georgia and the World - Raising Awareness, seeing Georgian and foreign experts in the field and top market suppliers take to the stage to speak and participate in panel discussions about the challenges and perspectives of the hospitality industry in Georgia. Themes included safety and crisis management and relevant trainings for members of staff, strategies for sustainable and eco-friendly tourism, as well as problems related to overtourism.

Each panel was rounded off with a Q&A session, while the lunch and coffee breaks provided ample chance for guests to intermingle and acquire new contacts.

Along with the vital issues of the tourism and hospitality industry, a detailed presentation about the 5th Anniversary Welcome to Georgia! National Tourism Awards 2019 competition was launched,

seeing new nominations added to the list of awards.

The panels were followed by B2B meetings, giving all the major and minor companies operating in the industry a wonderful chance to present their businesses and obtain new contacts from among the key players of the field.

The 4th Tourism & Hospitality Conference represents a unique platform for information exchange, cooperating with potential partners and clientele and following the latest trends of the field.

The project is supported by: the Ministry of Economy and Sustainable Development of Georgia, Tbilisi City Hall and Partnership Fund, Co-organizers: Georgian National Tourism Administration and Bank of Georgia. Project’s Independent Auditor – “BDO in Georgia”, General Sponsor – Alliance Group.

12 July 1, 2019 #289