Caucasus Business Week #298

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October 7, 2019 - www.cbw.ge

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WEEK p.3

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OPIC commits USD 15 mln Loan to JSC Liberty Bank

GEL Exchange Rate, Tightened Monetary Policy and Currency Interventions

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Changes in Georgian National Energy and Water Supply Regulatory Commission

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Tbilisi to host Regional Event of Startup Grind

Disputable Labor Code

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Culture as Part of Economy

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ADB appoints New Country Director for Georgia

Tbilisi Budget to rise to 200 million GEL in 2020

The Asian Development Bank (ADB) has appointed Mr. Shane Rosenthal as its new Country Director for Georgia. He joined ADB’s Georgia Resident Mission on 25 September.

According to the 2020 budget bill, the capital city funding will essentially rise. The 2019 municipal budget constituted 1.79 billion GEL and this amount has created preconditions for implementing a lot of important projects.

Economy Minister explains why Abastumani is separated from Iliauni According to the government resolution N475, the independent research astrophysical observatory will be separated from Ilia State University and the observatory will be transformed into independent legal entity of public law.

Madeleine Albright: Poti Seaport Expansion Project shows what Georgia and USA can Jointly achieve Madeleine Albright, ex US Secretary of State and head of Albright Stonebridge Group, has published her letter regarding Poti Seaport expansion project.

Government to collect at least 120 million GEL from Privatization in 2020

EBRD approves $60 Million for Kvesheti-Kobi Project The European Bank for Reconstruction and Development (EBRD) approved $ 60 million financial resources to co-finance the construction of a 9km tunnel located on the Jinvali-Larsi Road (North-South Corridor).

“We have realistic plans to collect 100 million GEL proceeds by the end of 2019 (from privatization).

Consequently, we expect to collect 120-150 million GEL in 2020”, Minister of Economy Natia Turnava told the Business Course TV program.

Charter Flights might start between Tbilisi and Madrid

Pension Contributions exceeded GEL 387 Million

Head of the Administration of National Tourism Agency, Mariam Kvrivishvili and Ambassador Plenipotentiary Ilia Giorgadze of Georgia in Spain have visited representatives of Swiftair in Madrid.

As of September 30, the amount of pension contributions exceeded GEL 387 million.

IndiGo to start operating in Georgia IndiGo (InterGlobe Aviation Limited) is an Indian low-cost airline headquartered at Gurgaon, Haryana, India.

Gurjaani Recreational Park and Square Rehabilitation Works have begun The Municipal Development Fund of the Ministry of Regional Development and Infrastructure of Georgia has commenced Gurjaani recreational park and square rehabilitation works.

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;

OPIC commits USD 15 mln Loan to JSC Liberty Bank

The Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, signed a Commitment Letter to provide USD 15 mln in financing to JSC Liberty Bank.

The financing will be used to upgrade Liberty Bank’s infrastructure, including the roll-out of approximately 500 stateof-the-art ATMs. This project is part of Liberty Bank’s ongoing strategy to become a leading full-service Bank in Georgia.

Following the change of ownership in Liberty Bank in 2017, the new management have embarked on an aggressive business transformation strategy. Key pillars of Liberty Bank’s new targets include: • Investing in the training of people to

provide the best possible client services; • Promoting a customer focused business model to improve retail, MSME and Corporate customer needs; • Building strong international partnerships to promote best business practices in Georgia.

The new management believes that Liberty Bank is well positioned to promote financial inclusion across the country, given its unparalleled coverage of Georgia that extends to even the most remote locations of the country.

Levan Lekishvili, acting CEO of Liberty Bank said: “We are delighted to have an opportunity of working with Overseas Private Investment Corporation. This is a major milestone in the development of Liberty Bank and a very strong incentive for the management team to deliver on our stated business objectives. Roll out of these ATM’s will give our customers access to digital banking experience to address their daily banking needs on 24/7 basis, 365 days’ a year.”

Irakli Rukhadze, Chairman of the Board of Liberty Bank said: “I would like to thank OPIC for the confidence it has shown in Liberty Bank. I would also like to thank our management team for the effort they have exerted towards

making this transaction a success.

The successful implementation of this project will greatly contribute to the continuing development of modern and competitive financial systems in Georgia.”

Kenneth Angell, OPIC Managing Director, said: ”OPIC is proud to partner with Liberty Bank to advance financial inclusion in Georgia. By supporting the expansion of important financial infrastructure, OPIC’s loan will help make formal financial services more accessible for SMEs and underbanked populations.”

The signing ceremony was attended by Chargé d'affaires Elizabeth Rood which highlights the continued support of the Government of the United States for Georgia’s economic growth.

The Overseas Private Investment Corporation (OPIC) is a self-sustaining U.S. Government agency that helps American businesses invest in emerging markets. Established in 1971, OPIC provides businesses with the tools to manage the risks associated with foreign direct investment, fosters economic development in emerging market countries, and advances U.S. foreign policy and national security priorities.

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OPIC helps American businesses gain footholds in new markets, catalyzes new revenues and contributes to jobs and growth opportunities both at home and abroad. OPIC fulfills its mission by providing businesses with financing, political risk insurance, and advocacy and by partnering with private equity fund managers.

OPIC services are available to new and expanding businesses planning to invest in more than 160 countries worldwide. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers. All OPIC projects must adhere to best international practices and cannot cause job loss in the United States.Liberty Bank is one of the largest Banks in Georgia, with total Assets of over USD 2 bln. The Bank operates the largest branch network comprised of over 360 branches and 550 ATMs. The Bank is the exclusive agent of the Government of Georgia for the distribution of pensions and social benefits.

The Bank employs over 4 600 employees serving over 1.7 mln customers.

O L

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Tightened monetary policy, currency interventions and lowered reserve requirements; does the National Bank’s policy genuinely work in relation to the GEL, and what is the problem with the national currency?

Koba Gvenetadze, president of the National Bank of Georgia (NBG), has talked about inflation, GEL and NBG policy details for the BusinessPartner TV program.

The government and the central bank coordinate their efforts, and this format will continue, Gvenetadze said.

“There were certain statements regarding our measures. Naturally, we coordinate our steps with the government. In this case, we need more coordination and we will continue this format”, Gvenetadze said.

There is no ground for inflation panic in the country, because the NBG has consecutively applied all mechanisms to alleviate inflation pressure and the inflation will definitely decline, he said.

A greater than anticipated depreciation of the national currency put pressure on inflation after Russia set flight ban on Georgia in June 2019, Gvenetadze specified.

“We know that in the winter,the Russian flight ban raised expectations for such a slowdown. The mechanism of public expectations play an essential role in the floating regime. Later, tourist inflows declined in reality: by 13% in July, and by 11% in August. If we analyze the indicators for late August, the growth in incomes was around 0%, despite the fact that the number of visitors was growing. When we detected this trend, we clearly declared that such a depreciation of the effective exchange rate (of the national currency) could have a crucial impact on inflation. Therefore, this was a very important factor (currency exchange fluctuation). There was a period when the currency exchange devaluation had not depreciated, but now this trend is strengthening, and it is bringing real problems”, Gvenetadze said.

However, the NBG President believes that there are no grounds for panic, because the NBG holds enough mechanisms to curb inflation. The Central Bank is employing these mechanisms and consequently, inflation will definitely decline, he assured.

“We use all the mechanisms that the National Bank has. We have used the refinancing rate, and raised it by 0.5%, twice.

The last meeting was held ahead of schedule.

We sold currency reserves, twice, and several days ago, we lowered the foreign currency reserve requirements by 5%. In this case, the banking sector is allowed to supply more foreign currency liquid resources to the economy.

As a consequence, we used all the mechanisms that were available to alleviate inflationary pressures coming from the effective exchange rate’s devaluation”, Gvenetadze said. As for the considerations that in 2018 the NBG erroneously increased the foreign currency reserve requirement for commercial banks, Gvenetadze noted that this decision in 2018 was the correct step, as well as another decision in 2019.

“In due time, we tightened the rate to lower financial stability risks in the country that come from the high level of dollarization. Therefore, without foreign currency reserves, today, we would not be able to ensure foreign currency supply, when we sold foreign currency on August 1, as well as last week”, Gvenetadze said.

The so-called targeting regime of the target inflation indicator allows that the NBG employ convenient monetary policy instruments, and lower or increase it in compliance with the existing risks. External shocks may appear at any moment, but the country must be able to withstand it, Gvenetadze noted.

‘We control these mechanisms. We cannot forecast shocks, but we have all the mechanisms to neutralize these shocks. There are no grounds for panic. We take active steps. We take coordinated steps with the gove-

GEL Exchange Rate, Tightened Monetary Policy and Currency Interventions rnment because of financial stability issues, economic issues, inflation issues should be resolved jointly, and I’m sure that the correct macroeconomic approaches will bring efficient results”, Gvenetadze said.

Despite the fact that the monetary policy rate was tightened twice, and currency interventions were carried out twice on the market, the inflationary pressure has not been removed, and the newest statistics show that the prices on certain products have increased in two-digit figures. In this respect, Gvenetadze explains that the Central Bank uses all monetary policy instruments and inflation will definitely decline.

However, Gvenetadze noted that citizens ask whether the NBG has deliberately refused to use currency reserves, and this is not true.

“The sale of currency reserves was not delayed.There were some who believed that the NBG did not sell reserves, but this is false information. Reserves are sold at the appropriate time, and similar decisions should bring desirable effects. Our policy serves this objective: to make interventions at the appropriate time. Interventions must be efficient, otherwise the objective will not be achieved, and reserves may be spent in vain. Therefore, when making an analysis, we precisely determine the complex approaches and other measures that will work in specific situations.

In this case, initially, we carried out interventions, and then tightened the monetary policy rate.

Now, we are reducing the reserve requirements, and we are using all these mechanisms”, the NBG President noted.

Reduction in foreign currency reserve requirements will mainly refer to corporate loans; foreign currency denominated retail loans are not issued up to 200,000 GEL, and this mechanism will not change, Koba Gvenetadze said.

Based on reduction in foreign current reserve requirement, the question is whether this is a deviation from the Larization policy, but this is not accurate.

“Another question is whether this is a deviation from the Larization strategy that was coordinated by the NBG with the government of Georgia. This is not a deviation from Larization. When talking about Larization and vulnerability coming from foreign currency denominated loans, we should not forget that these are primarily physical bodies who cannot resolve these problems. And commercial banks are banned from issuing foreign currency denominated loans of up to 200,000 GEL. This mechanism remains unchanged. As for corporate loans, they can manage currency risks better. Therefore, even if the Larization process is delayed, this process will run at the expense of major corporate loans that can better manage the risks. At the same time, Larization is a long-term project; it may last 15-20 years, and this process does not imply annulling foreign currency denominated loans. The larization project has brought effective results, and the dollarization of physical loans has declined by 16% over the past few years”, Koba Gvenetadze said.

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Changes in Georgian National Energy and Water Supply Regulatory Commission Changes in the Georgian National Energy and Water Supply Regulatory Commission (GNERC) –how does David Narmania plan to increase efficiency and productivity of the internal management of GNERC? David Narmania, nominated for the GNERC chairman position has talked about the mentioned issues for the BusinessPartner TV program.

Parliament of Georgia will vote for the GNERC chairman in two weeks. Narmania supposes that procedures will be specified in 2 weeks and the voting will be held after that. As reported, on October 1 Parliament of Georgia suspended the voting process.

“The issue was postponed because of certain procedural disagreements. Seemingly, there is certain vacuum that should be revised and therefore, the issue may be postponed for a period of one week or more. Presentation has been held. I have passed committee hearings, where I introduced development program views to work for the next 4 years. As soon as the parliament specifies these procedural issues and the vacuum is corrected, the issue will be returned to voting. I think these procedures will take 2 weeks”, Narmania noted.

Natural gas consumer tariffs will be revised by the end of 2019, but analysis of due factors prove that, we should not expect essential growth, he said.

Electricity and water supply tariffs will not be revised in the near future, because longterm tariffs run in the mentioned sectors. As to natural gas, where short-term tariffs run, the tariff will be revised by the end of 2019, but essential changes are not expected. Tariffs revision is a natural process, this will happen definitely, and we will know later whether the tariff rises or declines, Narmania noted. „The regulatory commission analyzes all economic factors participating in tariff calculation process and based on this analysis it takes due decisions. There are factors that make negative effect and factors that bring positive effect. We will have full information by the end of 2019. Gas companies have submitted their applications. Some sectors set tariffs on annual basis and some sectors set long-term tariffs.

For example, electricity sector has moved to long-term tariffs. At the end of 2017, the sector determined the tariff for a period of 3 years.

Consequently, if no large-scale macroeconomic

instability takes place, in 2018, 2019 and 2020 the electricity tariff will not be revised. Water supply sector has also introduced long-term tariffs.

As to natural gas supply sector, tariffs will be revised in 2019, but we want to introduce longterm tariffs in this sector too, but not all factors have been analyzed in the natural gas sector and a final report on the issue will be submitted in late November or early December. However, based on analysis of the absolute majority of factors, we should not expect an essential growth in tariffs. Companies must submit tariff revision applications 180 days earlier.

Consequently, gas supply companies have not submitted such applications”, David Narmania said.

The energy market should move to the European model. Protection of consumer rights and provision of market competition will be one of the functions of GNERC, he said.

“Several years ago Georgia signed European Energy Pact and the country assumed the obligation to transform the energy sector through opening the market stage by stage.

This process has started, major users move to open market principles stage by stage.

Later this margin will be lowered step by step and like European countries we will have an electricity platform, where consumers will be able to buy electricity and natural gas.

Therefore, competition will enhance. Today we have one supplier in Tbilisi – TELASI and in regions – EnergoPro. We have monopolists in natural gas sector too. European model calls for opening the market stage by stage. On the open market, consumers are able to select the cheapest supplier and the environment generates competition elements. Jointly with the competition agency, we will make focus on protection of consumer rights and ensuring competitive environment on the market. As soon as the parliament adopts the law on energy and water supply, GNERC will have to issue about 20 various bylaws to regulate the system under new schemes. Including we have prepared the market monitoring and investment appraisal regulations. As soon as the GNERC chairman is appointed, we will adopt these rules. Other regulatory packages will be also prepared stage by stage and this system will be regulated under new mechanisms”, Narmania said.

Arranging the domestic power generation

is vitally important. Therefore, construction of the so-called suspended HPPs should be accelerated. In other case, we should endure that the country will have expensive electricity, Narmania noted.

Construction of new HPPs should be intensified and resumed. The country needs more power and more generation. This is vitally important, we need to expand domestic generation. The demand for electricity always grows jointly with economic growth in all normal countries, including European courtries, Narmania pointed out. „Over the past 3 years Georgia’s economic growth was around 5%, however the demand for electricity has been growing by 7%-8% a year. This signifies the demand for electricity is higher in Georgia because of three key factors: active governmental support for business sector, including many new businesses were launched as part of Enterprise Georgia and other programs; crypto industry is another factor.

Crypto currency mining needs huge volumes of electricity and the mining’s ratio in Georgia’s total consumption makes up 10%; and the third factor is related to moving to energy-efficient technologies. We have to accelerate the current paces. Combination of these factors grows the demand for electricity. Therefore, it is important to accelerate the construction of the so-called suspended HPPs”, Narmania noted.

Electricity tariffs will rise without construction of new HPPs, David Narmania noted.

“We have to import more expensive electricity from the region, especially in winter period with high deficit. We can generate cheaper power. Therefore, all of us should agree that we should resume a construction of such HPPs that does not make essential negative impact on environment. We should reject such projects that will make disastrous impact on environment, but today we have suspended several projects with very positive conclusions. Therefore, we should definitely implement these projects. We should build HPPs, otherwise we should endure that we will have expensive electricity. Foreign currency always leaves the country because of electricity imports and foreign currency outflow is a negative macroeconomic factor too”, David Narmania said.

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Tbilisi to host Regional Event of Startup Grind On November 8-10, 2019, the capital city of Georgia will host a regional event entitled Startup Grind, which is the biggest international network of startupers.

As part of this event, Georgia expects to attract investment to domestic startups, on the one hand, and develop Georgia’s startup ecosystem on the other, Startup Grind Tbilisi Director Giorgi Tukhashvili told the TV Program Business Partner.

The Startup Grind EuropeAsia Connect will be held with the partnership of the Innovation and Technology Agency, and more than 1,500 persons will participate in it.

The Startup Grind is the biggest international network of startups and beginner companies. It unites more than 600 representations and 2 million members.

The regional event Startup Grind, which is to be held in Georgia, will be the third biggest event after Silicon Valley (8,000 delegates ) and London ( 3,000 delegates).

The

conference unites more than 30 speechmakers from more than 20 countries. The regional event will assemble the world’s most successful startups, technology companies and experts to make the region attractive for the world’s most successful businesses, promote the development of innovations and technologies, and attract investments to the country.

Speakers from giant technology companies such as Google, 500 Startups Fintech Fund, Picsart, Garage Ventures, Shift and others will take part in the event, as well as entrepreneurs, trainers and investors from Europe and the USA. Any citizen is welcome to attend the Startup Grind Tbilisi technological summit.

As to what we should expect from similar large-scale international events in Georgia and for beginner entrepreneurs, Colin Donohue, head of the Startup Grind Tbilisi representation, noted that similar events, first of all, will assist Georgian startups in

establishing international contacts.

“International contacts are an important for Georgia startups, because beginner business start operation on the domestic level, and only after that will they reach the international level,'' Donohue said.

Giorgi Tukhashvili, The Director of the Startup Grind Tbilisi, says that similar events are important for Georgian beginner entrepreneurs, because Georgia has reached the phase where domestic companies manage to attain a certain stage of development, and after that they face problems penetrating to regional and international markets.

“The Startup Grind event attracts similar speakers, mentors and counselors to assist various companies in taking the necessary steps,'' Tukhashvili said.

Thanks to this event, Georgia will be able to attract investments and develop its own ecosystem. As a result, the country will be able to become a hub connecting countries other countries in the region, he explained.

“We have two expectations: on the one hand, startups will be able

to attract investments and on the other hand, Georgia will develop a real startup ecosystem.

In the first case, we will select 30 of the best startups that will introduce them to investors. We are waiting for about 30 investors, and we enable them to get acquainted with the region’s opportunities as part of a single visit. The forum unites the space from Central Asia to Eastern Europe. This is a market with 700 million consumers, and western investors, as a rule, do not pay attention to this space, because they think nothing interesting happens there. As to for other expectations, this will be the third biggest Startup Grind event in the world, and we plan to compete with the London format, and we plan to invite very interesting speakers in 2020 to foster Georgia’s formation as a hub connecting the region’s countries”, Giorgi Tukhashvili noted.

Disputable Labor Code In the coming amendments to the Labor Code, there are various considerations about why the business sector demands the opportunity to appraise the impact of regulations prior to enforcement of changes, and how the changes will change the state economy. Mariam Kuchuloria, deputy director general of European Business Association, and analyst Andria Gvidiani, have discussed these issues at length.

This package of amendments turned out to be very interesting for members of the European Business Association.

The Association received the package from the bill’s author in Summer 2019.

The association’s member companies follow the labor code’s requirements, and they believe that

it is acceptable to introduce similarly high standards in similar legislation.

However, during a discussion of the legislation, the companies named certain challenges that were filed and transmitted to the bill’s author.

“There were various responses.

The focus was placed on overtime work.

Companies have named specific, practical examples as to why these were challenges, and why they could hamper their business.

For example, companies, which operate in the outlying regions, including hotels, the major problem is how to select and find personnel.

The regions are empty; poverty overwhelms them, and if they seek staff, the problem of lowquality workforces arises. Frequently, companies train

staff themselves, and spend resources on this process.

Companies have expressed fears that, if they set certain overtime working standards, it may lead to the employees revolting”, Kuchuloria said.

Analyst Andria Gvidiani expresses skepticism regarding amendments to the Labor Code.

This will be a serious obstacle for business development. If we want to build a strong country, a strong country is based on a strong economy and strong business.

“Any step, any regulation and initiative that are not substantiated and analyzed hamper business development, and this is an absolutely unacceptable approach.

In general, I believe that some parliament

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members have an infantile attitude towards on this issue, and they have introduced this issue without due analysis of regulations”, Gvidiani said.

Nobody should interfere in the private sector and public affairs.

Moreover, the Georgian economy is not in a situation where we should start talking about introducing minimum salaries, Gvidiani said.

“If the minimum wage is introduced, companies would not be able to employ a lowpaid workforce.

These people will not be able to acquire working experience, and they will remain uncompetitive on the labor market.

Consequently, I categorically object to introducing minimum wages”, Gvidiani said.

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Nia Zotikishvili: "A Rating is a Symbol that shows Trust, and Trust is the same as a Guaranteed Customer" Interview with Marketing Manager at Twins Wine Cellar, Nia Zotikishvili.

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

what is changing in the internal or external market, timely planning, and delivering the right product or service.

I studied at the Faculty of Business Administration, with the specialty of Project Manager at Corvinus University of Budapest. During my studies, I planned social / technical projects, and it was during the information processing that I realized that what I enjoyed the most was coming up marketing schemes.

Consequently, I found this field more interesting, and gave it more attention. The project management profession has helped me to get involved in marketing, and pursue a career in this field. My job as a marketer includes the construction and wine production business.

What are you doing to help the organization keep up with new trends and use innovative approaches in the field of marketing?

What challenges do you face as a leader in marketing during a time of technological change?

Technological changes are very quickly influencing the behavior of people, so modern ways of delivering products are changing rapidly, and this is a huge marketing challenge, so we need to adapt quickly to the novelties, and identify the market. In the background of the accelerated pace, the important challenge of modern marketing is to not only attract customers and increase sales, but also to maintain customer and guarantee company stability. Nowadays, it is very important for the customer to never lose confidence in the brand, so the marketer has to deliver a new, creative, sophisticated and quality product or service in a timely manner.

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

This field is changing very fast, and acquiring more features. For example, nowadays, with digital marketing, content marketing has not become less important; it’s aimed at attracting and informing users, which means long-term, loyal customers. Content marketing uses search engine optimization (SEO) to make it easier for Google search engine products and users to find one. This also makes it easier to segment users and make the correct calculations. Nowadays, it is important for marketers to find the accurate and necessary keywords in an SEO search engine for brand ranking. A rating is an image that shows trust, and trust is the same as a guaranteed customer.

What do you think are the most important traits a marketing manager should have, and what is his or her role in the organization in general?

One must be curious, up-to-date, and easily adaptable to environmental conditions and market demands. It is necessary not only to attract customers, but to also maintain them.

The day-to-day work of a marketer involves creativity, keeping up-to-date with trends,

The effective use of digital and content marketing is important at this stage. We also use Direct Marketing, which is when offering a product that allows us to individually identify what our customers need most. We are actively working with our current customers, and periodically offer updated terms and different types of gift packages to our dedicated customers.

Along with our customers, we also have an employee who directly creates or participates in product creation. It is a united team that, together, makes the required product available.

What is your organization's business model of marketing, and how focused it is on the customer?

Our model is based on the well-known Canvas business model that includes: •Customer segmentation; •Control of offered prices; •PR; •Ways of delivering the product; •Control of the necessary resources;

•Revenue control; •Participation in social activities and searching for news; •B2B relationships; •Cost control.

•This approach is focused on effectively delivering what customers need, satisfying demand and increasing brand ratings.

This approach is focused on effectively delivering what customers need, satisfying demand and increasing brand ratings.

One word that describes your job.

Responsibility.

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

Overcome fear, notice the time, and do things intelligently. I'm still working on the first piece of advice.

Think of a person who inspires you, professionally.

My brother David Zotikishvili and my husband, Giorgi Kochoradze. They’re successful business people, and real examples of how you can create, manage, and grow your business from scratch. To this day, I learn a lot from my family, and thank them for everything.

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Business News

Student Businessman that revitalized Rachian Tetra into Ghvinuka

Writer Beqa Adamashvili received European Union Prize For Literature, becoming first ever Georgian to win the award.

Zuka Maisashvili is a student of Agrarian University in Tbilisi, but he has already managed to launch a production of rare dry wines of Racha, one of the most in-demand wines on the market. Zuka has arranged a wine production in his native region of Racha.

Lopota buys off Shares of 5.9 million USD from Partnership Fund Partnership Fund of Georgia signed an agreement with LLC Lopota Investment in 2017, under which the Fund paid 5.4 million USD to the jointly founded company (LLC Lopota).

Sulguni rrepared in Lagodekhi to sell in America Meama - The first Georgian coffee factory in partnership with BDO launches EPR system, SAP Business One. And Then We Danced is nominated for EUFA

Nona Mamulashvili, Chairwoman of CEPI has been selected as Rumsfeld Program Fellow Nona Mamulashvili – Founder and Chairwoman of Caucasus Economic Policy Institute has been selected as a Rumsfeld Fellow – Central Asia-Caucasus Program, Fall 2019.

The European Film Academy and Filmfest Hamburg announced five nominated films for the European University Film Award (EUFA).

Davit Bakradze and Giorgi Tsikolia meet Executive Director of Trammo

From 2020 Georgian cheese Sulguni will be sold in America. As a co-founder of "Hereti Global" and Georgian businessmen, Avtandil Chkheidze noted, together with importing Sulguni on American market, they also plan to promote Imerian cheese.

Jazz & Wine Kakheti Festival in Tsinandali on October 19

Georgian ambassador in the U.S.A, Davit Bakradze, and emissary, Giorgi Tsikolia paid an official visit with the Executive Director of Trammo, Edward G. Weiner in New York.

Georgian Writer Beqa Adamashvili receives European Union Prize For Literature Techno Park starts Testing Microsoft’s Revolutionary Technology HoloLens Presentation of HoloLens, the revolutionary technology of Microsoft, was held at TechnoPark, Technology Agency of Ministry of Economy and Sustainable Development.

The First Georgian Coffee Factory to launch SAP Business One in Partnership with BDO

On the 19th of October, Tsinandali Estate hosts Jazz & Wine Kakheti festival, which is musically performed by artists such as: Oz Noy Trio with Dennis Chambers and Jimmy Haslip; British group - MF Robots; and Italian music band - SugarPie & Candymen.

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Culture as Part of Economy

Culture is a part of the economy.

How does noncommercial art contribute to tourism and economic development? Is it possible to penetrate international markets through the valuable and proper usage of art? – Ekaterine Mazmishvili, director of Kote Marjanishvili State Drama Theater, has talked about this issue on the TV Program BusinessPartner.

Research work by economists have shown that the culture is the socalled driver, the power and charge without which no country can develop. Culture participates in all key economic theories. For example, according to 2014-2015 research, culture composes 0.56% of total GDP. This research was based on Geostat indicators, however, these indicators are not comprehensive and thorough, unlike European countries.

According to the same research, 5% of the employed work in the cultural field, she noted.

Noncommercial art is financed by the authorities in all countries, including in countries with more opportunities in international grants and private investments. Moreover, all countries ease their tax regime in this field, as part of charity measures, and remove

indirect taxes, Mazmishvili said.

“It depends on what we imply, commercially. If we mean the amount of incomes, we can see that culture organizations, including theaters and cinemas, are profitable today. These incomes constitute huge and important part of their development. It should be noted that the budget allocation are insufficient for their development”, Mazmishvili said.

How does the country employ this potential, and what accents should we make to popularize modern Georgian culture? The country works in this field, but inadequately and fitfully, she noted.

In the case of Check in Georgia project, the proper management is of crucial importance. Many similar major projects are run around the world, and it is important that the country competes with them, she noted.

“Tbilisi in Autumn. That is what happens in Tbilisi in this period, only several countries in the world have a similar opportunity, including France. We can employ the potential of festivals in Georgia effectively, and ensure the positioning of each of these brands.

What finances does the government spend on current festivals, and what benefits does it receive? 10 years ago, when we launched the Tbilisi International Theatrical Festival, there were only 2-3 hotels in Tbilisi.

We had to book them in September.

Today, the number of hotels has increased considerably, but clients have to make bookings in May to preserve places for September and October. This means that the interest in our country and city has been growing. Moreover, investments in human resources are also very important. The audience that attends our festivals today,and theater performances was different 10 years ago. The audience has grown, developed, become more open.

Today, they do not object to the thing they dislike. They pose a lot of questions”, Mazmishvili noted.

As for the export potential of modern culture, Mazmishvili noted that in 2018 at Frankfurt Book Festival, the Georgian Pavilion registered a record number of visitors. The same tendency is noticed at Georgian theaters. Over the past period, the stands are overcrowded at every performance, thanks to high-quality art. High quality jobs and products requires significant financial support, Mazmishvili concluded.

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