Caucasian Business Week #80 by Caucasian Business Week

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December 15, 2014 #80

December 15, 2014, Issue 80 GEORGIA FDI INFLOWS HIT RECORD 508 MILLION USD

oreign direct investments in Georgia took a sharp increase and amounted to 508 USD million in Q3 2014,which is 99% higher than ajdusted data of Q3 2013. Pg. 7

REGARDING THE START OF MINING OPERATIONS ON THE SAKDRISSIKACHAGIANI

caucasian1

BE INFORMED, DO BUSINESS

BUDGET

George Kvirikashvili: We will not lobby interests of certain companies on the expense of tourism reduction Pg. 8

2015

he decisions were based on part of the site being fully archeologically studied in accordance to law. Pg. 4

Nodar Khadouri: 2014 budget will be completely fulfilled

NEW FURNITURE SHOP INSOLITO OFFERING VARIOUS STYLES AND DESIGN PIECES

nsolito shop opened its door on December 1st. It offers carefully curated and eccentric collection of furniture and accessories that are represented at their showroom in Tbilisi,Georgia. Pg. 11

WHO SHOULD BUILD KHUDONI HPP?!

hudoni HPP is located in Georgia which enjoys a huge and currently to large extent underutilized hydro energy potential, which creates a unique investment opportunity in hydro sector. Pg. 6

NEIGHBORHOOD SOCAR CONTINUES STRENGTHENING POSITIONS ON UKRAINE’S OIL PRODUCT MARKET

Pg. 2

GEORGIA’S OMBUDSMAN SPEAKS OUT AGAINST BANK OF GEORGIA’S SEXIST ADD

Pg. 7

GEORGIAN TOURISM RATE AMONG FASTEST GROWING IN EMEA EMERGING COUNTRIES Pg. 10

OCAR (State Oil Company of Azerbaijan) has commissioned the 43rd filling station in Ukraine, the company said Dec. 11. Pg. 13

WORLD NEWS DOLLAR INDEX HITS HIGHEST LEVEL SINCE MARCH 2006

Currency

Pg. 12

EXCHANGE RATE MONITORING GEL Exchange Rate Strengthens after Sharp Downturn

GOLD MARKET UPDATE

TAC OFFICIAL STORE OPENS IN TBILISI PASHA BANK AWARDED THE WINNER OF THE GEORGIAN PANORAMA Pg. 9

GEORGIA TURNS INTO DIGITAL TERRESTRIAL BROADCASTIG Pg. 5 ON JUNE 17, 2015

MINICREDIT RECEIVES INTERNATIONAL QUALITY CROWN’S PLATINUM Pg. 9 AWARD IN LONDON

TBC BANK AND BANK CONSTANTA MERGER TO TAKE PLACE Pg. 9 IN JANUARY

GEORGIA’S NET EXPORTS – REALITY BEYOND STATISTICS Pg. 8

Pg. 8

Kakha kaladze: The Khudoni HPP might be built by the state instead of a private company

Pg. 6

Mamuka Khazaradze: A pension reform should be carried out in order the so-called “long money” to appear Pg. 13

Pg. 8

Research

WHERE DO GEORGIANS OBTAIN SMALL LOANS?

2 MAIN EVENTS GEORGIAN PEACEKEEPERS RETURN HOME AFTER AFRICAN MISSION

GOVERNMENT NEWS caucasian business week

EU FOCUSES ON GAS TRANSPORTATION THROUGH SOUTH CORRIDOR VIA GEORGIA Austria, Bulgaria, Croatia, Greece, Italy, Romania and Slovenia. Sefcovic believed the first energy supplies to Europe from the Caspian region via the Southern Gas Corridor would begin by 2019. The Southern Gas Corridor was an initiative of the European Commission to ensure a gas supply from the Caspian and Middle Eastern regions to Europe. In the current geo-political conditions of Eastern Europe, this project was expected to reduce the dependency of the EU and Eastern European countries on Russian gas.

ore than hundred Georgian military peacekeepers have returned home after spending six months serving in the Central African Republic.

THE EUROPEAN UNION ALLOCATES €46M TO GEORGIA

eorgia can count on continuing support from the European Union (EU), who this week announced it would allocate €46 million to Georgia as macro-financial assistance in 2015.

EUROPEAN PARLIAMENT WILL RATIFY AA ON DECEMBER 17

he European Parliament will ratify the Association Agreement (AA) between Georgia and the European Union (EU) next week.

US PLEDGES $30M TO BOOST GEORGIA’S MILITARY SUPPORT

he United States (US) is offering Georgia $30 million USD in financial aid and a further $57 million to Moldova, Georgia and Ukraine collectively in a bid to increase US military deployments in Eastern European ally countries and offer more support to its partners.

GEORGIA, TURKEY, AZERBAIJAN ENVOYS VOW TO STRENGTHEN REGIONAL STABILITY

he Foreign Ministers of Georgia, Azerbaijan and Turkey have pledged to enhance bilateral and trilateral cooperation among their countries for the common purpose of strengthening stability in the region.

$108M LOAN APPROVED TO IMPROVE WATER SUPPLY, SANITATION IN GEORGIA

ultilateral finance institution, the Asian Development Bank (ADB), has approved a $108 million USD loan to allow Georgia to finance major improvements of the water supply and sewage systems in western Georgian towns, benefiting about 350,000 people.

PRODUCE IN GEORGIA PROJECT CALLED AS PRE-ELECTION PR CAMPAIGN

hairman of “Farmer of Future” Association Rusudan Gigashvili is skeptical about the government’s new project “Produce in Georgia” and considers it as the pre-election PR campaign.

ARMENIAN PRIME MINISTER VISITS GEORGIA

n 11th of December, the Armenian official is scheduled to meet Georgia’s President Giorgi Margvelashvili and lay a wreath at the memorial of heroes fallen in the fight for Georgia’s territorial integrity. He is also set to visit the Gregorian Church.

uropean Union (EU) states who were due to have hosted Russia’s South Stream gas pipeline have begun looking for alternative ways to improve their energy security after the Russian project was halted by President Vladimir Putin. One of the options being discussed was the Southern Gas Corridor, which will ensure a constant gas supply from the Caspian and Middle Eastern regions to Europe via Georgia. Eight countries’ Energy Ministers held talks in Brussels on Tuesday, December 9, with EU Energy Commissioner Maros Sefcovic as they looked for diversifying gas suppliers, sources

eorgia’s Ministry of Agriculture has presented more than 100 new enterprises funded by various Government programs to enhance and develop the country’s agricul-

tural sector. A total of 105 new businesses including five large-scale factories have been established within the ‘Preferential Agro Loan’, ‘Produce in Georgia’ and ‘Co-funding enterprises processing agricultural products’ Government-led programs. Furthermore, 580 enterprises were extended and re-equipped, 35 projects were funded in the agricultural sector and 670 million GEL was issued in the form of 25,241 loans. The Prime Minister of Georgia Irakli Garibashvili spoke about the new business ventures in Georgia’s developing agricultural sector at today’s presentation, which was attended by Government representatives, diplomatic corps and representatives from international organisations. He highlighted that Georgia had all the resources for agriculture to play the most important

eorgia’s Foreign Direct Investments (FDI) took a sharp increase in the third quarter of the year, latest figures show.

role in strengthening the economy of the country. “Our goal is to strengthen entrepreneurs, farmers and peasants through proper state policy and to make them able to respond to new economic challenges that the country faces, to produce environmentally friendly production of European standards that will be competitive and have a steady place in local and international markets,” Garibashvili said. Looking ahead the PM further noted the Government had several plans in place, including offering further support to establishing new busi-

nesses, development of local production and increasing the country’s exports. “I [believe] that in this way our country’s reforms will be strengthen and the state of the local population will improve.”

MIA REFORM: SECURITY SERVICE WILL BE SEPARATE FROM INTERIOR MINISTRY

FOREIGN INVESTMENTS ON THE RISE IN GEORGIA, FIGURES SHOW

and routes. The EU was committed to integrate Central and South-Eastern European gas markets and diversifying gas suppliers, sources and routes. However, the Energy Ministers believed that could be achieved by implementing key regional projects including the Southern Gas Corridor, LNG terminals with corresponding pipeline systems and the development of East Mediterranean and Black Sea offshore gas reserves. “We need to explore alternative options to South Stream to ensure energy supply. The most important projects to be completed as soon as possible,” said Sefcovic at the meeting in Brussels attended by the Energy Ministers and Representatives of

GERMAN MP: GEORGIA PLAYS VITAL ROLE IN ENSURING ENERGY SECURITY In this method gas will be shipped from Azerbaijan via the upgraded South Caucasus Pipeline through Georgia and along the TANAP, a completely new 2000km-long-pipeline through Turkey, until it reaches its Western borders. “The Southern Corridor looks most promising, especially after planned projects like Nabucco and South Stream have not panned out,” said Agnia Grigas, a senior fellow at the McKinnon Center for Global Affairs at Occidental College in Los Angeles in an interview with Bloomberg. However, another alternative discussed by the Ministers was the development of East Mediterranean and Black Sea offshore gas reserves which also outlined establishing a gas terminal in Georgia’s Black Sea Kulevi Oil Terminal.

GEORGIAN GOV’T PRESENTS 105 NEW ENTERPRISES TO BOOST AGRICULTURAL SECTOR

GEORGIA AND ARMENIA VOW TO ENHANCE COOPERATION rime Minister of Armenia Hovik Abrahamyan met Georgia’s Prime Minister Irakli Garibashvili at the Government Administration on the 11th of December, where the parties discussed readiness to enhance cooperation across the board. The enduring Georgia-Armenia friendship was also reaffirmed by both leaders.

December 15, 2014 #80

ajor changes are ahead for Georgia’s Ministry of Foreign Affairs (MIA). Prime Minister Irakli Garibashvili announced the MIA would undergo the reform process, with one aspect of the reforms enabling the Security Service to be separated from the Ministry.

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Garibashvili instructed Secretary of the State Security and Crisis Management Council Davit Sujashvili to create a working group to deal with this process today. The working group was said to be consisted of Cabinet and Parliament Members, non-governmental organisation representatives, as well as foreign and local experts. The group will be tasked with evaluating risks that could occur during the separation process. “Security block’s separation from the MIA and reformation of the Ministry was the Georgian Dream’s promise,” PM Garibashvili said. “For the last two years we have deliberately not discussed this issue, as it was a transitional period. Today is the time that we have begun to discuss this, to create a working group, which will be absolutely transparent [and] open,” he said. “Maybe the security block will be separated from the Interior Ministry where special services will

be included and police will be separate. This is only an idea at this stage but in what form it will be implemented will be discussed by the working group.” Eventually, proposals submitted by the working group will be discussed by the Government first and then a draft law will be presented to Parliament for final approval. The new initiative was positively assessed by the country’s Public Defender. Ucha Nanuashvili believed this would make the MIA more balanced. “The MIA was a big agency and it was a problem for many years,” Nanuashvili said. “Dividing it into several small parts would make it more efficient.” Last week Georgia’s Parliament Speaker David Usupashvili spoke about the need of carrying out major changes within the MIA. He said the Ministry must not be “militarised” and police should be a completely separate and independent entity.

The weekly is distributed to top companies, banks, embassies, state sector, Tbilisi and Batumi hotels, Tbilisi, Batumi and Kutaisi Airports, as well as in the town of Marneuli. The newspaper will also penetrate Azerbaijan in the near future

Editor-in-Chief: Evgeni Mikeladze Reporters: Nutsa Galumashvili; Nino Gojiashvili, Tamar Kakabadze

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

PUBLICITY December 15, 2014 #80

According to the GOEuroâ&#x20AC;&#x2122;s 2014 research, Georgia ranks second worldwide in terms of cheapest train tickets. Only South Africa is recorded ahead of Georgia. GOEuro is one of the major multifunctional research companies in the travel sector. The company compares and calculates prices for travel by train, bus and airplanes. GOEuro published the report in August 2014.

caucasian business week

4 HEADLINES GEORGIAN AIRWAYS RESUMES FLIGHTS TO MOSCOW

BUDGET 2015 caucasian business week

PARLIAMENT APPROVES 2015 STATE BUDGET

eorgian Airways will resume Dec. 12 flights between Tbilisi and Moscow. The airline told reporters that talks were held with the Georgian government, after which it was decided to resume flights. The airline’s requirements were partially met. The representatives of the Georgian Airways have been for several days holding protests.

GEORGIA TO PREPARE RANSPORT DEVELOPMENT STRATEGY

he project provides for in-depth assessment of the transport sector of Georgia and identification of the existing challenges. Elaboration of the document contributes to the development of transport infrastructure, increase of the transit potential of Georgia, the development of the logistics sector, which will ensure the country’s integration into the global logistics network.

RUSSIA EXPORTS ELECTRICITY TO TURKEY VIA GEORGIA

TBILISI MAYOR TO UNLOAD TRAFFIC JAMS IN TBILISI

bilisi City Hall wants to borrow Dublin’s experience in environmental and traffic jams management. The aforementioned is provided in the Memorandum of Cooperation signed between Tbilisi and Dublin City Halls.

GEORGIA - NEW EXPORT MARKET FOR FINNISH PORK

ew export markets to replace Russia have been found for Finnish pork. Pork is now being exported to Georgia, and exports to Armenia are awaiting confirmation from the country’s authorities.

OVER 10 HYDROPOWER PLANTS WILL BE BUILT ON RIVER MTKVARI

n Mtkvari River is planned to be built 16 hydropower cascade. Total capacity of 2.5 billion kilowatt / hour , which is equal to 25% of the achieved level.

EU FOCUSES ON GAS DELIVERY VIA GEORGIA BY SOUTHERN CORRIDOR

NIKORA BOUGHT “SUNDAYS,” “HOMEMART” AND “KI BATONO”

ikora” franchise acquired several stores that are currently active on the Georgian market. Among these are 7 “Sundays” stores in Zugdidi; 3 “Ki Batono” stores and 2 “Homemart” supermarkets in Tbilisi.

GASA’S 10% STAKE GOES FOR 139 840 GEL

he National Bureau of Enforcement (NBE) put out the company stake owned by Merab Shengelia. Information on the new stakeholder of the company will be revealed later.

ARDI AMONG LEADERS BY VOLUME OF LOSS PAYMENTS AND PREMIUMS

he success and stability of insurance companies is determined not only by raised premiums, but the amount of loss payments. This criterion is often ignored while evaluating the insurance companies and the main emphasis is done on premiums, while one of the major determinants of the company’s credibility and strength is the amount paid by insurance company for losses.

December 15, 2014 #80

arliament endorsed with 82 votes the 2015 state budget, which sets revenues at GEL 8.09 billion and spending at GEL 8 billion. UNM parliamentary minority group criticized the budget for “not being oriented towards growth”, which is “not focused on attracting investments” and “will not create new jobs”. UNM MPs were also criticizing the draft budget for increased government debt. Government’s debt-to-GDP ratio is set at 37.2% in 2015. Lawmakers from the opposition Free Democrats (FD) party also refused to support next year’s budget. FD MP Irakli Chikovani said that his party cannot take responsibility for this budget as FDs are no longer represented in the executive government after the party quit GD ruling coalition in November. He also criticized the government for budget underspending. The budget, approved by the Parliament, sets tax revenues at GEL 7.6 billion next year, up by GEL 780 million from this year’s target. UNM lawmakers said it’s not a realistic to meet this target next year. The increase, according to budgetary figures, is expected mainly at the expense of forecasted growth in revenues from personal income, value added and excise taxes. Revenues from value added tax are set at GEL 3.529 billion in 2015, up from GEL 3.27 billion this year; personal income tax target is set at GEL 2.085 billion, up from 2014 target of GEL 1.77 billion; revenues from corporate profit tax – GEL 900 million, down from 2014 target of GEL 912 million, and revenues from excise tax are expected at GEL 947 million, up from GEL 739 million this year. Government’s forecast for GDP growth in 2015 stands at 5%, the same as in 2014. According to the preliminary data of Geostat, economic growth in the first ten months of this year was 5.6% y/y. 2015 budget sets revenues from foreign grants at GEL 215 million. “Social and healthcare funding remains the priority,” Finance Minister, Nodar Khaduri, told lawmakers on December 12. Funding of the Healthcare Ministry will be increased by GEL 127 million to GEL 2.785 billion next year.

GEL 1.39 billion of that funding, or 17.3% of total budgetary spending next year, is allocated for covering age pensions. Starting from September 1, 2015 monthly minimum pension will increase for all categories of pensioners by GEL 10 to GEL 160. Initially government was planning to increase minimum monthly pension by GEL 25 only for those pensioners who are in the list of the most socially vulnerable citizens, but eventually opted in favor of increasing allowance for all age pensioners by GEL 10. Breakdown of funding per ministry in 2015 budget is as follows: Ministry of Healthcare and Social Protection – GEL 2.785 billion (GEL 2.658 billion is allocated for the ministry in 2014); Ministry of Regional Development and Infrastructure – GEL 1 billion (2014 – GEL 875 million); Defense Ministry – GEL 640 million (in 2014 MoD’s initial funding was set at GEL 660 million, but it was cut to GEL 615.9 million, which was mainly attributed to transfer of Delta military industrial complex from MoD to the Ministry of Economy; in 2013 MoD’s funding was set at GEL 660 million, but actual spending amounted to GEL 610.4 million; 2012 - figure stood at GEL 730.6 million and at GEL 711 million in 2011); Interior Ministry – GEL 638.7 million (2014 – GEL 600 million; 2013 – GEL 570 million); Ministry of Education and Science – GEL 853.9 million (2014 – GEL 754.3 million); Ministry of Agriculture - GEL 292.9 million (2014 – GEL 263.5 million); Finance Ministry – GEL 100 million (2014 – GEL 96 million); Ministry of Economy and Sustainable Development – GEL 120 million (GEL 87 million was initially planned in 2014, but it was then revised upwards to GEL 131 million); Ministry of Energy – GEL 125 million (2014 – GEL 114.6 million); Justice Ministry – GEL 68.5 million (2014 – GEL 60.5 million); Prison system ministry – GEL 155 million (2014 – GEL 154 mln);

Foreign Ministry - GEL 100 million (2014 – GEL 90 mln); Ministry of Culture and Protection of Monuments – GEL 95 million (2014 - GEL 80 million); Ministry of Sport and Youth Affairs – GEL 70 million (2014 – GEL 53.9 million); Ministry of Environment Protection – GEL 39 million (2014 – GEL 31 million); Ministry for IDPs from the Occupied Territories, Accommodation and Refugees – GEL 70 million (2014 - GEL 48 million); State Ministry for Reconciliation and Civic Equality Office of the State Minister for Reintegration – GEL 1.35 million (2014 - GEL 1.35 million); Office of the State Minister for European and Euro-Atlantic Integration – GEL 3.1 million (2014 – 2.8 million); Office of the State Minister for Diaspora Issues – GEL 1.2 million (2014 – GEL 900 thousand). 2015 funding of the Parliament will remain unchanged for third consecutive year at slightly over GEL 52 million. Initial draft of 2015 budget envisaged increase in the government’s discretionary reserve fund by GEL 20 million to GEL 70 million. But the final draft, endorsed by the Parliament on December 12, keeps its funding unchanged at GEL 50 million as it is in 2014. The President’s discretionary reserve fund will also remain unchanged at GEL 5 million next year. Funding of government’s and president’s administrations will increase to GEL 32.5 million and GEL 9.8 million, respectively. In 2014 the government’s and President’s administrations received funding of GEL 20 million and GEL 9 million, respectively. Transfers from the central budget to the local municipalities and regional authorities will increase by GEL 58.1 million to GEL 854 million next year. Public Defender’s Office (PDO) will receive GEL 4 million next year, up from GEL 2.3 million in 2014. Funding of the Office of Personal Data Protection Inspector will more than double in 2015 to GEL 1.45 million. Funding of common courts will increase from this year’s GEL 47.4 million to GEL 50 million in 2015 to cover increase of salaries. Funding of the Georgian Public Broadcaster (GPB) will also increase from current GEL 38 million to GEL 40.8 million in 2015. As no elections are planned next year, funding of the Central Election Commission will decrease almost 2.5-fold to GEL 22.5 million next year. Like in 2014, next year the Georgian Patriarchate will again receive GEL 25 million from the state budget. Civil.ge

TAC OFFICIAL STORE OPENS IN TBILISI Sopo Maisuradze, a TAC Marketing and PR Manager -TAC has unveiled an official store in Tbilisi. Which brands will be represented at the store? Will your showroom offer various brands to the Georgian customer? - TAC provides immediate reaction to modern challenges in the fashion industry in terms of quality and modern design of collections. The company names these collections twice a year. Besides the quality and reasonable prices, TAC is also famous for its wide assortments of textile. Only TAC official showroom will trade in the newest collections, as well as in certain models that are created specially in Georgia the for Georgia based showroom and Georgian citizens. The showroom at Vazha-Pshavela 15 also offers premium brands of various textiles that are united in the TAC concern: Valeron, Pierre Cardin, Linens, Kristal, CASABEL, Brielle. - What products do you precisely offer to Georgian customers? - We offer high-quality winter and summer bedroom blankets, towels, various bathroom textiles, kitchen and bedroom textile, New Year gifts collection, children linen with children favorite illustrations, family accessories and so on. - No compromise at the expense of quality – this

is your slogan. Do you think Georgian customers will find affordable your prices along with the quality? - No Compromise at the expense of Quality is the TAC management’s motto and the whole team follows this motto to create competitive products for the global market. Consequently, TAC showroom will introduce all high-quality products with modern design despite prices. Tariffs on family linen ranges from 58 GEL to 1500 GEL. Kitchen textile prices starts from 6 GEL and this proves TAC is a brand of all of us and the brand cares for all categories of customers despite incomes, taste and age. -Besides Georgia, in which other countries have you opened presentations, including our region? - TAC showrooms operate in Georgia, Russia, Iran, Kazakhstan, Azerbaijan, Moldova, Tunis, Libya, Bulgaria and so on. -What is the current situation on the Georgian market in this respect? - The Georgian market lacks for branded textile showrooms. I would boldly note at this stage there is no branded textile shop in Georgia that would compete with TAC.

TECHNOLOGIES December 15, 2014 #80

caucasian business week

GEORGIA TURNS INTO DIGITAL TERRESTRIAL BROADCASTIG ON JUNE 17, 2015

n 2015 Georgia will turns into a new format for broadcasting. The existing terrestrial broadcasting will be replaced by digital technologies. All member countries of the International Telecommunications Association, including Georgia, are obliged to implement the project. The Georgian government provides active job in various directions for the project implementation. Subsidization of socially vulnerable families is one of the priorities. The reformation process also takes into account the interests of ethnic minorities – multilingual information bulletins have been prepared for each family. Preparatory works for moving to a new format will be finished soon. The government has taken many important steps under the action plan. Nino Qubinidze, head of the Digital Broadcasting Agency, talks about the achieved results in the 2014 final report. The company for building a state multiplex platform for the Public Broadcaster programs has been selected, the so-called Set-Top Boxes for reception of terrestrial digital signals have

triall signal reception technologies, have been already purchased. Thanks to the Agency efforts, we have purchased the appliances at far lower prices than planned in the primary strategy, Ucha Seturi said. The Digital Broadcasting Agency head has held another important meeting with consumer appliances importer companies. About 20 interested companies submitted applications, including Alta, Beco, ElitElectronics, Vestel, MetroMart, Megatechnica, Elektronika, 7 Channel, cshop. ge, Orient Logic, TechnoBoom, Okey, Itechnic, UGT, LGL, AGM and so on. The meeting made focus on the reformation process, technical peculiarities of the consumer appliances, alternative models, the importance of the quality of products, subscribers market, the process of preparatory works related to purchase of ST-TOP Boxes and the current situation. “This is a complex process. The developed countries started this project several years ago. Under the ITU data, the switchover took 14 years in England, 13 years in the USA, 6 to 8 Nino Qubinidze

been purchased, all projects for information campaign inauguration have been finished (including organizing a hotline, preparation of video clips and print materials and so on). The active phase of the information campaign will start in January 2015, Qubinidze noted. “It is important that advisors of the European Bank for Reconstruction and Development (EBRD) assist our domestic experts in the reformation process. We have taken all necessary steps to prevent a reception of lowquality products with the aim to ensure reasonable spending of the state budget funds”, Qubinidze said. Foreign partners ROHDE-SCHWARZ, ALCATEL-LUCENT, ELTI, IMAGINE, GATESAIR and representatives of other companies have positively appraised the reformation process. The Digital Broadcasting Agency head has also talked about a contract agreement with Chinese KONKA company. “We have already concluded agreement with KONKA, a Chinese technologies supplier company. Under the agreement, the government will purchase 210 858 SET-TOP Boxes for vulnerable families. The mentioned company is one of the strongest and it is reported among China’s top three manufacturers of consumer appliances”. An expert of the Institute for Development of Freedom of Information (IDFI) and the founder of the commercial network constructor company have also positively appraised the performed job and the results achieved by the Digital Broadcasting Agency. “The so-called SET-TOP Boxes, digital terres-

years in Germany, Sweden, France and other developed countries. Georgia preserves enough time for the reformation process completion and the market must be timely prepared for the changes. It is also important that the process protect the rights of both subscribers and suppliers”, Qubinidze noted. Consumer appliances supplier stores should also start preparation works so as they sell digital signal reception special devices and TV Sets starting the New Year, she noted and continued about the construction of terrestrial digital

Nino Qubinidze, Dito Qumsiashvili and Vakhtang Abashidze

television platforms and the obligations of the commercial networks constructor company and the Authorities: “The state must provide one multiplex platform that includes terrestrial digital radio broadcasting, microwave transmission networks and place all programs of the Public Broadcaster, including the first and second channels and the Achara Public Broadcaster channel. And the commercial operator has assumed the obligation to construct 3 multiplex platforms and broadcast all live air national programs, including the content of Rustavi 2, Imedi TV, First Stereo and other broadcasters”, Qubinidze pointed out. At the meeting representatives of trade networks made focus on their own business interests and showed interest whether the government is expected to set certain kind of restrictions. The business sector is independent and in this process the government only acts as a recommender, Qubinidze explained. At the meeting representatives of the companies were also interested in competitive capacity of cable televisions. David Zilphimiani said analog and digital terrestrial broadcasting cannot be considered as a competitor to satellite, cable and other television platforms. “The national practice has showed after the digital terrestrial aboveground broadcasting introduction instead of the analog broadcasting, satellite and cable televisions maintain the same quantity of subscribers as they served before the reformation process. Therefore, this process will not make negative affect on their business interests. They are not competitors to each other”, the Stereo Plus founder said. Transparency of the process and comprehensive public awareness are one of the priorities of the agency. To this end on December 9 to December 10 the Digital Broadcasting Agency of the Georgian Ministry of Economy and Sustainable Development held a workshop for broadcasters, nongovernmental organizations and mass media at Old Tbilisi hotel. The event with the participation of about 70 representatives of regional media outlets was held as part of the information campaign on moving to digital terrestrialbroadcasting in Georgia.

Digital Broadcasting Agency Workshop for Media

After delivering reports and making presentations Eka Kubusidze, a head for the Info Communications Management of the Economy Ministry Department for Communications, Information Technologies and Innovations, as well as Nino Qubinidzae, the Digital Broadcasting Agency Chief, Tiko Tkeshelashvili, a head for the Strategic Department of the Georgian National Communications Commission (GNCC), Georgian Technical University professor Niko Bazianidze, Stereo+ founder David Zilphimiani (the commercial network constructing company), Natia Kuprashvili, a head for the Association of Regional Broadcasters and IDFI expert Ucha Seturi answered the questions of reporters. The meeting was held in interactive regime on the reformation process, including legislative regulations, state subsidization policy, technological standards, multiplex platforms, the issues related with admission of broadcasters to the market and placement in live air. Legislative regulations will change after moving to digital broadcasting. The bill of amendments abolishes broadcasters licensing regulations and it will be replaced by authorization, a simplified form for admission to the market. At the workshop, reporters asked many questions on perspectives of local broadcasters. David Zilphimiani, Ucha Seturi and Natia Kupreisvhili provided comprehensive answers to these questions. They explained the reform will not result in disappearance of local broadcasters. Moreover, the reform will boost media pluralism and new players will appear on the market. It should be also noted the government has permitted local broadcasters to own frequency resources in decimeter and metric diapasons. The government has also allowed them to become national broadcasters. As reported, digital swichover will beon June 17, 2015 in Georgia. Starting the same day live air TV programs will be broadcast through only digital terrestrial signals. Digital broadcasting has got many advantages compared to the existing analog broadcasting. Digital broadcasting promotes the establishment of European standards in the telecommunications field and draws investments, develops media pluralism and TV broadcasting.

OPINION caucasian business week

December 15, 2014 #80

WHO SHOULD BUILD KHUDONI HPP?! Khudoni HPP is located in Georgia which enjoys a huge and currently to large extent underutilized hydro energy potential, which creates a unique investment opportunity in hydro sector. There are 26000 rivers in Georgia with total annual potential capacity equivalent to 15000 MW and annual generation potential of 80 Billion KWh. The three major Rivers in Georgia are Enguri, Rioni and Mtkvari. The company Transelectrica, which plans to invest in the construction of a giant Khudoni Hydro Power Plant, will fulfill one of the conditions set by the Government of Georgia – to refuse registration in the offshore zone. Despite the fact that the Indian company Transelectrica Limited owns a branch Transelectrica Georgia registered in Georgia, it is going to fulfill this condition, and refuse registration in the offshore. According to the Technical Director David Mirtskhulava, Transelectrica is currently waiting for a response from the government, which must submit for consideration its own version of a Memorandum between the company and the Ministry of Energy. Under one of the conditions, electricity that will be produced by KhudoniHPP might not be exported and be completely consumed inside the country for 15 years. “The state requires financial guarantees for USD 5 and 10 million on the 1st and 2nd stages of the project. We are willing to provide such guarantees; the only question is the timing. The state requires obtaining 5 000 000 guarantee after registering the land on which it is planned to build a hydroelectric power station, while we believe that it is better to do it after environment impact

LEVAN KALANDADZE Economic Analyst, Chairman of Georgian Infrastructure Projects Initiative Since the energy minister announced government’s intention to participate in the construction of the giant Khudoni HPP project, the subject of Khudoni gained fresh momentum in the Georgian politics and society. Below is economic analyst Levan Kalandaze’s insight regarding topic: Why is it not feasible to build a state-HPP? 1. The activity arena of government institutions should not be economic activities and business

projects. Economically active ministries and state agencies are typical in such a centralized powersate as the Soviet Union. A democratic government’s function is to create a favorable environment to business development and investment in the country, to establish and implement an effective economic and investment policy, which would allow us to attract major foreign direct investment (FDI). Business must be doing what it does and government - what it must do. 2. The investment cost of the project is USD 1.2 billion (approximately GEL 2,3 billion), this is 28,7% of state budget revenues. In accordance with the current budget problems and in the next few years of the forecast budget revenues, it’s impossible to investment resources from the state. 3. Investment by foreign investors in the project will significantly increase the country’s foreign direct investment (FDI), including the possibility of increasing the foreign monetary sources. If the government implements this project, this benefit will be virtually lost. Why should the government provide commercial risk with budget funds, when the investor assumes the risk of this project?! State and state institutions are always bad business managers and business administrators. State officials have no motivation to provide success-

assessment study of the project is completed – this is due to the fact that conclusions about the environmental issues are crucial. If the conclusion is positive, it will mean that the project is given the green light as well asforeign banks that participate in financing the construction. As for the second, 10 million guarantee, it must be provided after permission to start construction work is given,”- said David Mirtskhulava. With regard to long-term rates, then in his words, it will be possible after financial and investment side of the issue will be calculated together with the banks. Ministry of Energy of Georgia will be also involved in the process. “In this regard, we offer the maximum flexibility and forward proposals from the Ministry of Energy” – he notes. According to him, as soon as the work on the harmonization of all the documents is over, Transelectrica founders will arrive in Georgia to sign all contracts with the government. It is assumed that this could happen before the end of the year. The company’s founders visited Georgia in March 2014. According to them, the company has extensive experience with implementing such large projects. “We can all assure that the project will be implemented with all the international standards. Work is proceeding on the standards established by the World Bank, so many well-known international organizations are involved in it, “- Mirtskhulava adds. The company plans to invest USD 1.2 billion in the construction of a giant KhudoniHPP.

ful and efficient business projects, when the investor is interested in the effective implementation of the investment project. So, the decision – who should build Kudoni HPP – should be based on rational and pragmatic considerations and calculations, not on populism and useless PR. KAKHA KALADZE The Khudoni HPP might be built by the state instead of a private company, Energy Minister Kakha Kaladze said at the meeting with students at the hotel “Radisson”. “We are well aware of the importance of the Khudoni HPP project for our country. At the present time we are negotiating with the Indian company Trans Electric. We demanded completely transparent process from them. This company was registered in the offshore, while we believe that everything must be open, because our population’s interest is too high in relation to this project and nothing must be covered. We asked them to present information about the founders are and we also asked them to show us their ability to implement this project”, said the Minister. According to him, it was very bad that under the previous government some companies were given land for 1 GEL without asking anything to people.

KAKHA KALADZE Minister of Energy of Georgia ‘’We asked this company to give back land to local population. At this moment we are in the negotiation process and later we will make a decision regarding the construction. I will not hide, we have also considered the possibility of building the power plant by the state, given the strategic importance of the project. This issue is being discussed in the government and in the near future everything will become clear”, said Kaladze.

STATEMENT BY THE RMG COMPANY – REGARDING THE START OF MINING OPERATIONS ON THE SAKDRISSI-KACHAGIANI – LICENSE SITE #1

n December 12th, 2014, as per order №03/266 issued by Georgia’s Minister of Culture and Monument Protection and per order №2/271 issued by the general director of Georgia’s National Agency of Cultural Heritage

Protection, the company “RMG” has renewed mining operations on the Sakdrissi-Kachagiani license site N1. The decisions were based on part of the site being fully archeologically studied in accordance to law. Conducting further studies on the remainder was rendered impossible due to the critical state and danger of collapse on the site, which is confirmed by the respective geological survey. Additionally, as per conclusions drawn by international experts, no expectations existed of finding further new artifacts on the site. The company’s position in the ongoing scientific discussions and law disputes around the Sakdrissi-Kachagiani site was that we wouldn’t participate in the scientific discussions. We considered the site’s historic importance and the matter of its status to be the prerogative of scientists and respective state agencies, and we fully conformed to the court and the decisions of Georgia’s government when it came to carrying out works on

the license site. Because of the Sakdrissi-Kachagiani archeological site being given the cultural heritage monument status in 2006 without sufficient scientific argumentation and procedures dictated by law, “RMG” was unable to carry out mining operations on the owned license site, which forced the company to work on minimal load. Because of this, the central and local budget did not receive tens of millions of lari in income, the export rates experienced a drop, and the company employee numbers, as well as the working conditions and the possibility to improve the social state in the Kazreti population in general, was decreased. In a state of lowered workload, the company was necessitated to decrease its currently employed staff by 55% in order to avoid production becoming unprofitable. However, the company decided to take the bulk of the financial load on itself and retained virtually all job positions, by which it

helped the government and the Kazreti, Bolnisi and Dmanisi municipalities avoid dire economic problems and a risk of social implosion. In the given situation, delaying the start of operations each day resulted in tens of thousands of laris of loss to the company. A threat of the company closing down entirely became real, which, apart from massive employee firing rates, would create dire ecological risks. The company confirms that protecting cultural heritages represents a priority for it. Regardless of what verdict the scientists arrive to regarding the historic value of the Sakdrissi-Kachagiani hill, we consider it of important to protect and duly present the artifacts discovered by the expedition. As a result, the company intends to finance and, in conjunction with the national museum, construct a new archeological museum in the Bolnisi municipality, as well as continue to further help the defense and studies of cultural heritages.

ECONOMIX December 15, 2014 #80

caucasian business week

GOVERNMENT TO NAME ANAKLIA SEAPORT DEVELOPMENT INVESTOR IN MID-2015

he Georgian Government will reveal the investor that will be involved in the development of Anaklia Port in western Georgia in mid-2015. The deadline for submitting expressions of interest to develop the mixed-cargo port on a build, operate and transfer basis finished and the Government revealed seven companies out of 12 had moved on to the next stage. The progressing companies must now submit a

development concept plan and funding proposals before the four-month deadline. The technical and financial side of the proposals will be assessed by a German company hired by the Georgian Government. The port will be located on the Black Sea coast of Georgia, near Anaklia resort in western Georgia, and will spread over 1,000 hectares and have access to a deep sea canyon. Proposals submitted by 12 companies at the in-

terest expression stage to construct and operate the deep-water port were discussed by the Government commission at today’s meeting, which was held at the Government Administration. Official documents noted the successful investor would be responsible for providing equity and attract debt financing for the project. Furthermore, the investor must attract appropriate cargo volumes for the new port. The wider area in western Georgia is earmarked for development, the Government noted. As well as construction of Anaklia Port, development of logistics and industry zones and construction of an airport and liquid gas terminal are also planned for the region. Authorities also expected to announce a free economic zone on the Anaklia Port territory however further details are yet to be finalized prior to execution of the investment agreement. The Government believed the new port would become one of the main attractions of Georgia and it expected this project would gain historical importance.

AGRI PROJECT FEASIBILITY STUDIES INTRODUCED TO STAKEHOLDERS

he AGRI (Azerbaijan-Georgia-Romania interconnector) project may become one of the infrastructure projects that will allow Azerbaijan to transport its large reserves of gas on the markets, the head of SOCAR (State Oil Company of Azerbaijan) Rovnag Abdullayev told reporters Dec.8. “All projects have a right to exist,” he said. “Azerbaijan has large reserves of natural gas. And there should be an infrastructure in order to transport these reserves to the markets, the role of which can belong to AGRI in the future as well.” Also, Abdullayev said that first of all, work on projects under the Southern Gas Corridor, which has great potential for expansion, is currently underway. He said that if the market demands it, each of the projects can be considered anew. British engineering company Penspen presented to shareholders of AGRI (Azerbaijan-GeorgiaRomanian Interconnector) the final version of the feasibility study (FS) of the project. The final version of the feasibility study was reviewed by the Board of Directors, and then recommended to the General Meeting of Shareholders, which is scheduled for January-February 2015. AGRI project envisages the transportation of Azerbaijani gas to the Black Sea coast of Georgia via the gas pipelines. Azerbaijani gas delivered

to Georgia’s Black Sea coast will be liquefied at a special terminal and following this, it will be delivered to a terminal at Romanian port of Constanta with tankers. Further, it will be brought to the gaseous state and sent via the country’s gas infrastructure for meeting the demands of Romania and other European countries. The cost of the project will vary from 1.2 billion euros to 4.5 billion euros, according to the pre-

liminary estimations. The project’s cost will depend on the capacity of terminals that could be equal to 2-8 billion cubic meters of gas per year. The participants of the AGRI project are the State Oil Company of Azerbaijan (SOCAR), Georgia’s Oil and Gas Corporation, as well as MVM (Hungary) and Romgaz (Romania) companies. In February 2011, the parties established a joint venture for the implementation of the SC AGRI LNG Project Company SRL project.

GEORGIA’S OMBUDSMAN SPEAKS OUT AGAINST BANK OF GEORGIA’S SEXIST ADD

eorgia’s ombudsman Ucha Nanuashvili addressed Bank of Georgia with his concern regarding the institution’s recent advertisement which was sexist in its content. Mr Nanuashvili made general recommendations as to how the bank should avoid such instances

in the future. The provoking add in question is a caricature drawing of a married couple, in which a woman is asking her husband for money and the man is portrayed as an ATM. The husband on the add was named “kmarkomati,” literally translated from Georgian as “Husband-ATM.”

“The add’s title ‘Husband-ATM’ stems from a very materialistic notion, since ATM’s are used in order to make financial transactions easier,” — the ombudsman commented. Mr Nanuashvili stated that the add was sexist in nature and in its form strengthened the existing gender stereotypes in the Georgian society, according to which the females are believed to be financially dependent on the men. “Advertising possesses the power to play a positive role in destroying stereotypes and strengthening the gender balance in Georgia. Advertising, when used correctly, has the potential to lessen the cases of violence against women and can propagate the economic independence of women, rather than limit it.” The ombudsman advised Bank of Georgia which has a high rating in Georgia, to restrain from producing and popularizing such sexist advertising in the future. “On the contrary, the advertising team should stimulate women’s social empowerment. Adds should show respect toward women and portray them as on the equal footing with men,” reads the ombudsman’s statement. Mr Nanuashvili also suggested that Bank of Georgia’s PR and marketing team should be given trainings in gender studies.

TOP STORY

FDI INFLOWS HIT RECORD 508 MILLION USD

oreign direct investments in Georgia took a sharp increase and amounted to 508 USD million in Q3 2014,which is 99% higher than ajdusted data of Q3 2013. The preliminary figures released today showed Georgia’s FDIs equalled $508 million USD (974 million GEL) in the reported period Based on the data, the sectors that gained the most offshore investments were construction, transport and communication, manufacturing, finance, energy, hotels and restaurants. FDIs in these sectors amounted to $499 million in the third quarter of 2014, which was a 69 percent increase year-on-year (y/y). The largest share of FDIs was allocated in the construction field, reaching $181 million in Q3 2014. This was followed by the transport and communication sector which saw $109 million in investments. The next industries to attract investments were real estate ($61 million), manufacturing ($48 million), financial ($38 million), energy ($36 million), hotels and restaurants ($10 million), and agriculture ($8 million). China invested the most money in Georgia in the third quarter, with its investment of slightly less than $149 million, noted Geostat. In the same period $95 million came from Azerbaijan and about $90 million came from the Netherlands. In addition, Panama invested $44 million in Georgia and Malta spent $34 million here. Investments in the energy sector have decreased again, however, in the wake of the construction of power plants, most of the investments should take be geared toward this sector. Ministry of Energy has invested $36 million in the third quarter, that was less than $9 million in the 2nd quarter. Overall, the energy sector in 2014 was $93 million, which is lower than the 104 million dollars in 2013 Q3 and 41 million in the 2012 period. Investments in agriculture slightly increased. In this sector, foreign investors invested $ 14 million, 6 million more than last year, but less than $ 1 million compared to 2013. Expert, Avtandil Silagadze said that 500 million investment in the third quarter was not a surprise. He pointed out that the investment in construction means that investors are interested in longterm cooperation. Georgia’s PM devoted special briefing on the theme of icreasing investments, he noted that growing investments reflects economy as well. If you look at the long-term dynamics of this figure, we see that the second quarter of 2008, foreign direct investment in any one quarter does not display such a high rate. It is worth re-investment level, which amounted to 26%, while the share of new capital in the index is 73% “, - the Prime Minister said, adding that this year’s economic growth will exceed 5%; The country will have similar economic growth like other stronger economies, for example, Kazakhstan, the USA, Turkey, Russia, Azerbaijan.

FINANCES caucasian business week

QUOTES

“We will not lobby interests of certain companies on the expense of tourism reduction”

GEORGE KVIRIKASHVILI, Minister of Economy and Sustainable Development: We will not lobby interests of certain companies on the expense of tourism reduction,” – Kvirikash-

vili commented on the recent Airzena strike. “There are two sides to the Airzena issue. One is interest of the company, second – interests of the consumers and tourists. Among the former there are citizens of Georgia as well as other countries. We are holding negotiations with the Russian side. Due to the fact that we do not have diplomatic relations, these negotiations are held on a technical level. We have to keep a balance between these two sides,” he said. “As for separation of Civil Aviation Agency from the Ministry, government is entitled to solve the issue. But I see no reason, even if it happens this way, it will not cause our lobbying interests of the certain companies on expense of tourism reduction. Meanwhile, I stress once again, that I can understand the concern of these people, but the problem is very complex”, --Kvirikashvili added.

“2014 budget will be completely fulfilled”

NODAR KHADOURI, Finance Minister: We are ahead of time in terms of tax revenue – 70 million GEL more than planned have been mobi-

lized and this year’s budget will be fulfilled with surplus,” Khaduri commented. “We had a lag in terms of grants and loans but the funds have already been transferred. In December funds will be transferred from the International Monetary Fund, World Bank and Asian Development Bank. Therefore, this year’s budget will be fulfilled with 100 percent and we have a hope of even more,” he noted. “As for the spending of the budget, we have a better situation in this direction compared to last periods as well. Throughout the last period, infrastructural works have become very active – the institution spends about 125-130 million GEL per month,” the Finance Minister said.

“A pension reform should be carried out in order the so-called “long money” to appear”

MAMUKA KHAZARADZE, Chairman of the Supervisory Board of TBC Bank: The domestic environment is the most stable I’ve seen in the last 22-24 years. In his words, outside investors should be encouraged to make money in Georgia.

According to him, a lack of a stock exchange in Georgia is a big barrier today. “A pension reform should be carried out in order the so-called “long money” to appear. I think that this should have been done much earlier, because time is lost and we do not have the luxury of wasting time. Richer countries of our region are developing at the expense of natural resources, and we have to occupy a niche that will make Georgia attractive for investors, “- Mamuka Khazaradze notes. The businessman believes that the attraction of Georgians living abroad to the country’s development is very promising. “The government should talk to them directly, call them back, whether businessmen or professionals working in large international corporations. Intellect is the only thing due to what Georgia can become competitive, much of which is scattered all over the world “- said the banker.

December 15, 2014 #80

GEORGIA’S NET EXPORTS – REALITY BEYOND STATISTICS

Report by the Caucasus University Economic Research Center (Dynamics of net exports, major partner countries, exports in EU Countries, Influence on Economic Growth)

n 2013 Georgia’s foreign trade turnover (excluding unorganized trades) marked 10 793million USD, up 5% compared to 2012, including exports constituted 2 908 million USD, up 22.4% year on year and the imports equaled 7885 million USD, up 1% year on year. Georgia’s negative trade balance made up 4 977 million USD in 2013, that is 46.1% in the foreign trade turnover”, says GeoStat, the National Statistics Office of Georgia. It is interesting whether Georgia’s exports activities in 2013 were successful? Why could not the fruitful foreign trade to sufficiently stimulate growth in economy? Why GDP has increased by only 3.2%, the lowest rate since 2010? These questions may be answered through valuable exploration of the exports structure. Last year the ratio of re-exports in Georgia’s total exports marked 36% (1.55 billion USD). The figure is an absolute record in Georgia’s re-exports. For comparison, the 2012 re-exports marked about 763 million USD ($763,042,679), the 2011 figure equaled 488 million USD and the 2010 report fixed 298 million USD ($297,808,372). To outline a real picture of Georgia’s exports, we should make focus on net exports without re-exports. In 2013 net real exports constituted 1.855 billion USD (1854725276), in 2012 – 1.614 billion USD ($1 614 411 306), in 2011 – 1.701 billion USD ($1 700 987 001), in 2010 – 1.286 billion USD ($1 285 528 658) and in 2009 – 990 million USD ($990 096 305). The last 5 years’ highest upturn in net exports of 32.3% was recorded in. A high rate was also registered in 2010 (29.8%). The trend worsened in the following years. The year of 2012 turned out the worst for Georgian exports, as the real exports shrunk by 5.1%. As to 2013, real exports rose by 14.9% in 2013, up 9% compared to 2011. The last year recorded a formation of interesting exports trend with EU countries too. According to the GeoStat calculations, in 2013 Georgia’s total exports with EU countries marked 608 million USD, up 73% compared to 2012. At the same time, the 2012 exports with EU considerably shrank by 16.7% compared to 2011. The real picture will become more evident if the exports are appraised without re-exports. In 2013 Georgia’s net exports with EU marked 430 million USD, up 52% compared to 2012 and up 8.5% compared to 2011 (Net Exports of over 10 million USD in RED, from 1 million USD to 10 million USD in BLUE and under 1 million USD in GREEN) NET Exports with EU (in USD)

“Lari’s tumble is not result of Georgia’s weak economy” HANS TIMMER, Chief economist if World Bank for the Europe and Central Asia region. What has happened to the Georgian Lari in recent days has nothing to do with the weakness of the currency; it has nothing to do with the weakness of the Georgian economy. It is a real reflection of the changes of prices we see in all countries worldwide,” Timmer said. He noted the price changes have crated challenges for the Georgian economy because “the Georgian economy was still part of dollarized economies”. “But it also creates lots of opportunities. And this opportunity is to [help the] Georgian economy go forward so that can become much more competitive in the exports sector,” Timmer said.

The net exports dynamics makes significant influence on formation of the total economic growth rate. Annual economic growth rate largely depends on the previous year’s growth rate in net exports. For example, a 6% economic growth in 2012 was preceded by a 32% upturn in net exports in 2011. The 2011 net exports revenues could not fully affect the economy in the same year and its effect turned out particularly strong in 2012 for growth in GDP. At the same time, a 5% downturn in the 2012 net exports considerably retarded the upturn in the 2013 GDP, while a 15% upturn in 2013 net exports will make more influence on the 2014 economic growth than this was reflected on the 2013 GDP.

BANKING NEWS December 15, 2014 #80

caucasian business week

MINICREDIT RECEIVES INTERNATIONAL QUALITY CROWN’S PLATINUM AWARD IN LONDON

n November 30, 2014 Minicredit Georgia received the International Quality Crown award in the category of Platinum. B.I.D president José E. Prieto handed over the platinum award to Minicredit that had been selected as a winner among 51 countries. In 2013 the Golden Star was handed over to Minicredit in Paris. In 2014, for the second time, the company received the award from the international quality convention in the category of leadership, technological development and quality management. The company director Nino Buzhgulashvili says Minicredit provides permanent efforts to ensure satisfactory environment and improve the service quality for loyal clients. “We permanently introduce innovations, cam-

paigns and target products to Minicredit clients and the satisfactory attitude from over 100 000 clients proves this”, she said. www.MiniCredit.ge is a Europe’s leader brand in non-bank credits – Latvia, Poland, Estonia. In 2011 the company was the first to offer online credits to Georgian customers. Minicredit is the most innovative and fastest online credit institution in Georgia and the company plans to offer more innovations to the customers.

PASHA BANK AWARDED THE WINNER OF THE GEORGIAN PANORAMA

ASHA Bank, a full service corporate bank , sponsor of Georgian Panorama, on 15th Tbilisi International Film Festival, awarded “I am Beso” by Lasha Tskhvitinidze as the winner of the Georgian National Competition. The 15th TIFF took place during the first week of December. Supporting the development of film industry in Georgia was the main motivator for the bank for sponsoring one of the most important cultural events in Tbilisi. TIFF awards were distributed in two categories – International Competition and Georgian Panorama. The producer and director of the best Georgian film received special gifts from PASHA Bank a trip to the Berlin International Film Festival. “We are glad that we had the opportunity to support Georgian cinematography via Tbilisi

International Film Festival, specifically Georgian Panorama. We look forward to witnessing development of this industry in your country,” said Shahin Mammadov, CEO at PASHA Bank Georgia. “Georgian cinematography has a long history. In Soviet times Georgian cinema was known across as being vibrant and creative. The Italian director Federico Fellini once described it as “a strange phenomenon, special, philosophically light, sophisticated, and at the same time, childishly pure.” But the economic breakdown which followed Georgian independence has made it very difficult to make films, although recently, the quality and frequency of Georgian filmmaking is becoming more and more promising and the films that we saw on this festival is one more proof of that,” Mammadov told.

ADB PROVIDES $108 MILLION TO IMPROVE WATER, SANITATION SERVICES IN ZUGDIDI, POTI

he Asian Development Bank (ADB) has approved a $108 million loan to support further upgrades to water and sanitation services in secondary towns under an ongoing Urban Services Improvement Investment Program (USIIP). The loan, which is the fourth under a $500 million multitranche financing facility, will help finance a water supply system in Zugdidi and sewerage system in Poti. It will also support the implementation of a public awareness program including information on hygiene and sanitation through service centers of the United Water Supply Company of Georgia LLC, which is responsible for water supply and sanitation services. ADB has previously approved three tranches of the program totaling $218 million. “Providing reliable, quality water and sanitation services to meet growing demand and to prevent health and environmental problems, is a high priority of the government,” said Kathie Julian, Country Director in ADB’s Georgia Resident

Mission. “USIIP supports the Government of Georgia’s long-term sector development plan to invest around $1.6 billion to deliver safe water and sanitation services to all urban residents by 2020.” Currently, 84% of people in Zugdidi have no access to piped water and the new system will result in round the clock supplies. In Poti, a comprehensive sewage collection and treatment facility will be built, serving the entire town. Nearly 34,000 households in both towns will benefit from the improvements. Water supplies in Poti were upgraded during earlier stages of the program. ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2013, ADB assistance totaled $21.0 billion, including co-financing of $6.6 billion. Since 2007, it has approved more than $1.4 billion in financing operations for Georgia.

TBC BANK AND BANK CONSTANTA MERGER TO TAKE PLACE IN JANUARY

BC Bank/Bank Constanta merger process has begun. The merger will be legally registered in January of 2015. This decision was made at the TBC Bank shareholders’ general meeting because of the new challenges that exist on the microfinance market and the high potential for growth in this business. Bank Constanta, 100% owned by TBC Bank, is the leading financial institution on the microfinance market, and will continue its operations through January. The merger will take place in January, after which, Bank Constanta and TBC Bank will operate as one legal entity. Following the merger, the Constanta brand will gradually be replaced by the TBC brand. The name, colors and logo of Constanta will be changed. Bank Constanta branches will continue to work under the name TBC Bank-Constanta. Consumers will still be able to use Constanta products. However, the variety of products available will be increased via particular offers from TBC Bank. Bank Constanta has operated as a commercial bank since 2008. Its strategic are of operations is providing financial services to micro and small enterprises. TBC Bank became the owner of Bank Constanta in 2011. Since then, TBC Bank has invested almost GEL 226 million in the development of Bank Constanta. As a result of this

investment, the bank’s total portfolio increased by 400%. This enabled Bank Constanta customers from other cities and regions to receive the necessary financial support for the development of their micro or small businesses. Currently, Bank Constanta provides financial services to micro and small enterprises through 60 branches located throughout Georgia. The majority of its credit portfolio consists of micro business and agro loans. “After the merger, micro financing will become a priority for TBC Bank. We believe that we will be able to effectively use our experience to develop the microfinance segment and strengthen our leading position on this market. For Georgia’s financial sector, this means more competition in the microfinance sector, and more competition leads to the development of the country’s economy. For the clients of Constanta, it brings more opportunities, technological progress, a wider variety of products, and stable cooperation. As for the employees of Constanta, for them the merger will create an opportunity for professional development,” stated TBC Bank’s CEO, Vakhtang Butskhrikidze. In order to carry out the merger smoothly, quickly and effectively, Bank Constanta customers will be informed on a timely basis about the formal procedures related to the merger, in particular, regarding the renewal of the agreements.

TOURISM caucasian business week

December 15, 2014 #80

GEORGIAN TOURISM RATE AMONG FASTEST GROWING IN EMEA EMERGING COUNTRIES

EMEA HOTEL MARKET Hotel markets across the EMEA differ and are highly dependent on macro-economic prosperity and, at a local level, on tourism arrivals. Eurostat - yearly recording the number of overnight stays â&#x20AC;&#x201C; saw arrival numbers between 2007 and 2009 fall by an average of 2.2% in the European Union. Although there were countries that saw increases in hotel tourism, this was dominated in the nights spent by domestic visitors, reflecting the substitution of trips abroad for holidays in their own country. Between 2009 and 2011 there was an overall increase of 4.0% of hotel nights per year with Eastern Europe regions showing the greatest increases. Colliers International forecasts this trend of increasing hotel nights to continue across Europe due to the growth of world tourism as international tourist arrivals are expected to increase by more than 50% until 2030 (UNWTO). Middle East and Africa are expected to double their arrivals by 2030 Following the World Tourism Organisation, arrivals in emerging countries in the EMEA region are forecast to grow 4.4% a year until 2030. This is double the pace predicted for advanced economy destinations. Investors in hotels are advised to also focus on these regions as arrivals are expected to exceed those in advanced economies by as soon as 2015. In 2030, 57% (compared to 30% in 1980) of international arrivals are expected to be in emerging economy destinations. ARRIVALS OF NON-RESIDENT VISITORS IN GEORGIA Arrivals of non-resident visitors in Georgia have been growing since 2005, during last eight years number of visitor has increased about ten times reaching its maximum - 5,392,303 in 2013. About 40% of total visitors have stayed for 24 hours or more and can be accounted as tourists. In the first eight months of 2014, total number of visitors increased by 3% compared to the same period last year. According to the UNWTO Georgia has one of the highest growth rates of international tourist arrivals during the last three years among European countries. Georgia was the fourth country in Europe by the growth rate of international tourist

arrivals in 2013 after Iceland, Bosnia & Herzegovina and Greece. In 2012, Georgia occupied the first position in the region with 35.7% annual growth. 2011 and 2012 years showed dramatic yo-y increase of international visitors, who stayed in Georgia 24 hours and more - 24% and 36% respectively. In 2013 the growth rate declined to 15% and total the number of travelers amounted just over two million. During the first eight months of 2014, almost 1.6 million non-resident travelers arrived in Georgia (12% more than same figure in 2013). Stabilized 8-10% growth of international tourists is expected during next five years. ACCOMMODATION OBJECTS IN GEORGIA Around 53% of tourists in Georgia in 2013 stayed in hotels and hostels, which accounts for about 1,100,000. To meet this demand supply has been growing for several years, but despite increased number of supplied rooms and beds, occupancy rates have increased due to bigger rise in demand compared to rise in supply. For now supplied number of rooms and beds are 16,786 and 39,108 respectively. Number of rooms and beds in accommodation units has increased by 6% compared to the same figure in the previous year. Based on announced future project further rise is expected in next few years. MOST VISITED DESTINATIONS IN GEORGIA Most visited cities are Tbilisi and Batumi, 45.8% and 40.8% of total tourists go to above-mentioned cities respectively. To fulfil the demand supply of accommodation units has increased in Tbilisi by 17 from 2013 to 2014 and reached 147 to date, further increase is projected in upcoming year. Several international hotel brands are presented in Tbilisi, their number is expected to increase. Number of accommodation units in Batumi has increased by 40 from 2013 to 2014 reaching 102, to meet increased demand. There are several announced project, including international brand hotels, which will be complete in next few year, increasing supply of accommodation units.

2ND ANNUAL SOUTH CAUCASUS INFRASTRUCTURE & NEW ENERGY INVESTMENT SUMMIT

BW is pleased to announce that it is participating as a Media Partner to the 2nd Annual South Caucasus Infrastructure & New Energy Investment Summit organized by Euroconvention Global. The Summit will be held on 5-6 February 2015 in Tbilisi, Georgia, and will be hosted under the Auspices of the Ministry of Regional Development and Infrastructure of Georgia and the Ministry of Energy and Natural Resources of Georgia. Building on the success of the 2014 edition, this regional event will again provide a high-level platform for senior representatives from the private sector, government officials and agencies as well as multilateral International Financial Institutions to network and to learn about new business development and investment opportunities in the South Caucasus. Infrastructure sub-sectors and new energy markets will be at centre focus, notably environmental infrastructure and construction, roads and railways, public transport and urban utilities, cleaning and waste recycling

as well as water supply and management. The role of peripheral industries such as financial services and related advisory services will be addressed as well. Some of the key topics to be discussed will include: 1. Cross-border transport infrastructure, TRACECA, EU transport cooperation, South Caucasus railways 2. Logistics, freight transport, warehousing, shipping, supply chain optimization 3. Land management, housing, urban transport modernizing, traffic issue solutions, water supply, sanitation, solid waste management, e-Gov 4. Energy transport in the South Caucasus and corridors 5. Renewable Energy - New energy production, domestic distribution and export, energy efficiency technologies 6. Focus on Hydro Power generation technology potential and other alternative energy diversification sources

AGENDA AND REGISTRATION The detailed agenda and registration form are available upon your written inquiry to Michel Masquelier - administration@euroconventionglobal.com, or by phone at +32 2 662 16 12. Kindly be advised that multi-booking discounts are available for delegates registering from the same company. BRANDING, BUSINESS DEVELOPMENT, SPEAKING AND SPONSORING OPPORTUNITIES If you wish to upgrade your presence, this flagship event will provide you with an excellent opportunity to raise your company profile, to highlight your expertise and to boost your business development objectives in this dynamic regional economy. Please ask Michel (email address indicated above) for the various corporate packages available or to tailor one in line with your needs. As readers of CBW, you are benefiting from a 20% discount on the fee for delegate registration and for any corporate package or sponsorship.

BUSINESS December 15, 2014 #80

caucasian business week

NEW FURNITURE SHOP INSOLITO OFFERING VARIOUS STYLES AND DESIGN PIECES

nsolito shop opened its door on December 1st. It offers carefully curated and eccentric collection of furniture and accessories that are represented at their showroom in Tbilisi,Georgia. At a first glance shop looks like a modern,stylish house where you will definatly feel like a home. This is because Insolito furniture is distinguished with beautiful and at the same time practical furniture for everyone. The shop tarrgets every socio-economic segment in Georgia and provides 100 percent natural product that is durable and has high quality. Founder of Insolito told CBW that he came up with the idea of opening a furniture shop with his 2 collegues after thoroughly researching Georgian market and having seen that there was not a wide variaty of high class brands, so they decided

to enter the market. Vakhtang Khaburdzania said of the furniture shop, adding that the goal is to offer a shop that can cater more towards younger homeowners and furniture shoppers. He and his partners have already attended various exibitions in Europe and Asia and are planning to visit more in the future. This exibitions help the owners to keep up with the global trends on the furniture market. Shop management cooperates with famous furniture,trendmaker designers and companies from Europe. Insolito has developed its logistics in a way that consumers can order materials abroad and redesign their furniture colors themselves. Concepts and criterion are planned so insolito will always live up to its name which itself means â&#x20AC;&#x153;unusualâ&#x20AC;? in Italian.

CURRENCY caucasian business week

December 15, 2014 #80

EXCHANGE RATE MONITORING 12.01.2014-12.12.2014

GEL Exchange Rate Strengthens after Sharp Downturn

fter the sharp devaluation the GEL exchange rate against USD rose by 6% to 1.8421 point from 1.9527 point from December 8 to Decem-

ber 12. In the reporting week, the GEL exchange rate against EUR rose by 5% to 2.2938 point from 2.4118 point. The Georgian national currency stood at 3.0605 point against GBP on December 8, but the rate strengthened to 2.8858 point by December 12. GEL also strengthened against Ruble by 9% and 100 Rubles cost 3.3619 GEL instead of the reporting week’s initial 3.6768 point. At the same time, the GEL exchange rate has depreciated by 6% against USD YTD, risen by 4% against EUR and fallen by 1% against GBP and strengthened by 37% against Ruble. As to the same reporting week for the last 10 years, the highest GEL exchange rate against USD was fixed at 1.6575 point in 2011, the lowest rate of 1.7859 was registered on December 12, 2005. The highest GEL exchange rate against EUR stood at 2.1029 on December 12, 2005 and the lowest rate of 2.4737 was fixed in December 2009. The highest GEL exchange rate against GBP of 2.4654 was registered on December 12, 2008 and the lowest marked 3.3790 on December 12, 2004. The GEL exchange rate changes against various currencies YTD are as follows:

aving registered third straight month of decline, the Gold prices rallied heavily on the start of the December mainly because of the profit booking that reimbursed the decline after Swiss referendum got rejection. Moreover, the news of Japan’s credit rating being downgraded by Moody’s and a rebound in overall commodity basket supported the northward move of the yellow metal prices. However, the gold prices, even after rallying nearly 3.5% since the start of the month, are trading near $1200 since last couple of days as strength in the US Dollar, together with the inability on the part of the metal to break $1215 technical resistance, curbed the upward movement of the gold prices. The US Dollar, which is generally considered as an opposite of Gold prices, has been gaining momentum off-late. The US Dollar Index (I.USDX), that tracks the strength of the greenback against the basket of six currencies, secured consecutive fifth monthly gain during November as the Federal Reserve shun its monthly asset purchase program on the back of improved labor market statistics. Market focus is now towards the timings as to when would the central bank of the world’s largest economy will announce the interest rate hike. The FOMC members continue spreading the words that the interest rate hike is totally dependent upon the incoming economic signals and they are unsure about the timings. However, recent data points have become somewhat weaker than their previous releases and are currently creating uncertainty into the market relating to the Fed Rate hike. On Wednesday, the ADP Non-farm Payroll change lagged behind its consensus and prior releases and spurred speculations that the Friday’s release of monthly NFP number, which is a key labor market detail, will

EUR/GEL

GBP/GEL

USD/GEL

GOLD MARKET UPDATE be lower than it is forecasted to be. On the Geo-political front, the Ukrainian crisis is still continuing as the authorities kept mentioning the presence of pro-Russian troops in rebel areas. However, this hasn’t much of the market attention and isn’t likely to affect the Gold prices any time soon unless there are harsh measures from the international leaders. Recently, India, world’s now largest consumer of Gold, abolished the rule that required importers to sell 20% of their gold to jewelers for re-export which is known as a good sign for the gold prices as the upcoming wedding season can fuel the yellow metal demand from the nation. However, speculation concerning the cut in the excise duty, which is at 10%, aren’t being supported by the government authorities and is likely to continue pressurizing the cost of gold for Indian consumers. On the other hand, China, the second largest consumer, recently introduced additional monetary easing measures that are likely to support the yellow metal demand from the dragon nation. However, the economics from China are also losing their strength and is likely to become a deterrent factor for Chinese gold buying. On the ETF front, the recent rally in gold prices supported the demand after continued witnessing weaker numbers in November. The Gold holdings by SPDR, world’s largest bullion backed ETF, rose 2.4 tons on Tuesday. To sum up, the recent upsurge into the yellow metal prices isn’t more likely to change the bearish outlook for the yellow metal. However, should the Indian government announce additional measures to promote gold imports and the china supports more of the gold buying by adding more stimulus, the yellow metal prices can rally. Moreover, the US labor market numbers, on Friday are also likely to be catalyst for the

FOMC meeting on December 17. Should the NFP and the Unemployment Rate reveal weakness in US labor market, the speculations relating to rate hike is likely to be wiped out in the meeting. Alternatively, an optimistic number can give support the expectations of rate hike in early 2015 and can boost the US Dollar demand which in turn will be negative for the gold prices. On the technical side, the yellow metal, even after reversing from near $1143, hasn’t been able to break the $1215 level, encompassing descending trend-line resistance, stretched from August. On the close above $1215, the 100-day EMA and the 38.2% Fibonacci Retracement of its March – November decline, near $1230, can cap the near-

term up-move of the gold prices before its tests another descending trend-line resistance, also encompassing 50% Fibo. near $1260. On the sustained break of $1260, the yellow metal becomes likely to rally towards $1300 level by negating chances of near-term decline. However, a reversal from the current level seems supported by the $1192 support, including 23.6% Fibo. level, breaking which $1175 and $1148 are consecutive supports for gold prices. On the break of $1148, gold prices can become vulnerable to extend its decline towards the yearly low of $1130 and the $1080 support levels. ANILPANCHAL Marketnalyst Admiral Markets

RESEARCH December 15, 2014 #80

caucasian business week

WHERE DO GEORGIANS OBTAIN SMALL LOANS?

umber of microfinance and fast loan consumers has increased in Georgia recently. ARC decided to survey the possibilities used by the population to obtain small amounts of money. The survey was conducted in the cities of Georgia (8 cities, 1800 respondents) in summer 2014. Besides banks and friends, respondents consider microfinance organizations as the most active possibility for borrowing money, contrary to private lenders.

NEIGHBORHOOD Russian electric power transited to Turkey through Georgia

German Loan To Strengthen Georgian-Armenian Energy Ties

round 300 megawatts of electric power will be transited from Russia to Turkey through Georgia, Georgian Minister of Energy Kakha Kaladze said Dec. 11. He said that Georgia obtained this opportunity after the construction of a new 500-kilovolt substation in Akhaltsikhe. “We negotiated with Azerbaijan to use this possibility,” he said. “But at this stage, 300 megawatts are transited from Russia. This is an additional source of income for our country.”

SOCAR continues strengthening positions on Ukraine’s oil product market

As it appeared, if a small amount of money is needed, respondents firsty apply to their friends and family members and only afterwards they try to take a fast loan, get money at a pawnshop or borrow

OCAR (State Oil Company of Azerbaijan) has commissioned the 43rd filling station in Ukraine, the company said Dec. 11. A new filling station was commissioned in Odessa. This is the 11th filling station in Odessa region, a statement says. The fuel purchased in Belarus, Poland and Lithuania is sold at a SOCAR filling station in Ukraine, a statement says. SOCAR is the only oil producer in Azerbaijan (it has two refineries on its balance), and also owns petrol stations in Azerbaijan, Georgia, Ukraine, Romania and Switzerland. SOCAR exported around 1.04 million metric tons of petroleum products from its own refineries in 2013 compared to more than 1.24 million metric tons in 2012. In total Azerbaijan produced 5.09 million metric tons of the main petroleum products in 2013.

Azerbaijan oil to work market via Turkey

Young people (aged 18-35) apply for fast loans more actively (30%) than older people (aged 36-65-12%). The attitude of urban population towards fast loans is positive. Over one half of respondents (54%) evaluate the possibility of obtaining fast loans rather positively or very positively. 30% of respondents have a negative attitude towards fast loans and 16% find it difficult to answer.

zerbaijani oil is supplied to the world market through Turkey, Turkish President Recep Tayyip Erdogan said. While speaking about the signing of the agreement with Azerbaijan, envisaging the transportation of 6 billion cubic meters per year to Turkey, President Erdogan said that the negotiations about the Trans Gas Pipeline project (TANAP), passing through Turkey to Europe, are underway. “Turkey rapidly strives for possessing the energy base in the region,” President Erdogan said. The president said that the Iraq-Turkey and the Baku-Tbilisi-Ceyhan oil pipelines supply Iraqi and Azerbaijani oil to the world market. Moreover, the president said that the Turkmen and Kazakh oil is also transported via the BakuTbilisi-Ceyhan gas pipeline. The president said that the contract with Iraq was extended for 20 years and the volume of oil supplied through this route will increase in the future.

Minister: New customs code will not take Armenian business by surprise

C Respondents mostly obtain information on small loans from TV and Internet.

WORLD NEWS

ustoms code of the Eurasian Union will not take Armenian business by surprise, Economy Minister Karen Chshmarityan said after the Cabinet’s meeting on Thursday. He stated the entrepreneurs had time to prepare for new edition of the Customs Code that will come into effect on January 1, 2015 with Armenia’s joining Eurasian Economic Union. “The customs legislation will not undergo dramatic changes. The representatives of Eurasian Economic Commission and we have briefed the entrepreneurs on changes many times,” he said.

he Armenian government secured a 85.2 million euro (105.6 million USD) loan from Germany aimed at facilitating a new transmission line between the national power grids of Georgia and Armenia. Germany’s KfW bank disbursed the loan through an agreement which was signed by one of its executives in Yerevan, along with Finance Minister Garik Khachatrian and the head of Armenia’s national electricity transmission network, Aram Ananian. Armenian Ministry of Finance issued a statement saying a high-voltage line and a substation will be constructed on the Armenian-Georgian border. The funding was the first step at a longterm plan to help Armenian and Georgian power grids “operate in the same regime”, as noted in the statement. The Armenian Ministry of Energy and Natural Resources has said that the two neighboring countries will be able to triple mutual electricity supplies once the new transmission line becomes fully operational in 2018.

Dollar index hits highest level since March 2006

he ICE U.S. dollar index rose Wednesday to its highest level since March 2006 as the dollar rally gained momentum, spurred in part by a strong gauge of service-sector growth in the U.S. economy, ahead of a policy statement from the European Central Bank. The dollar index DXY, -0.36% which measures the greenback’s value against a basket of six currencies, was up 0.34% to 88.94. “The general trend of dollar strength has continued. Pullbacks in this rally have been short lived for the most part,” said Brian Daingerfield, a foreign-exchange strategist at RBS. “The appetite to be long dollars is still strong, and ahead of the much-anticipated ECB decision tomorrow we have the euro now at new multiyear lows.”

Inside The $3 Billion Business Of Formula One

ormula One has no shortage of controversy. CEO Bernie Ecclestone may be on his way out and last monthhe said the most prestigious auto racing circuit is in deep financial crisis and he doesn’t know how to repair it. Formula One is burdened by $4.1 billion in debt, according to Moody’s Investor Services. There were also rumors of a threatened boycott of the U.S. Grand Prix by a trio of Formula One teams (Lotus,Force India and Sauber) in Austin, Texas in late October to protest the the sport’s financial mess. The Formula One racing team valuations compiled by my colleague Chris Smith last month showed the average Formula One team is now worth $494 million, up from $337 million two years ago. But while a few teams like Ferrari and McLaren make money, the average operating result (earnings before interest, taxes, depreciation and amortization) in 2013 of the nine current teams was a loss of $28 million. Yet, despite its problems, some believe that should Formula One go public, it would be valued at $8 billion, or roughly 17 times this year’s projected operating income of $456 million.

Inside The $3 Billion Business Of Formula One

PUBLICITY December 15, 2014 #80

caucasian business week

APARTMENT

Every Saturday At 21:00

On GDS TV Full of humor Anchors â&#x20AC;&#x201C; Temo Mzhavia, Levan Gogoreliani will offier refined humor, provide good mood and invite interesting guests for the program audience. The program consists of three parts: the first block offers humor and apolitical monologue with funny video clips, pictures and so on. The second and third blocks are dedicated to famous public figures that will be invited as guests. The show will start Wednesdays at 21 oâ&#x20AC;&#x2122;clock and it will cover all interesting issues excluding politics to guarantee good mood for the audience.

TBILISI GUIDE December 15, 2014 #80

Embassy United States of America Embassy 11 Balanchivadze S St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 5353-23-34 -23-34 tbilisivisa@state.gov; E-mail: tbilisivisa@ @state.gov; askconsultbilisi@state.gov askconsultbilisi@st tate.gov United Kingdom of o Great Britain and Northern Ireland Embassy E Tbilisi, 51 Krtsanisi Str., Tb bilisi, Tel: 227-47-47 british.embassy.tbilisi@fco.gov.uk E-mail: british.emb bassy.tbilisi@fco.gov.uk Republic of France Francce Embassy 49, Krtsanisi Str. Tbilisi, T Tel: 272 14 90 ambafrance@access.sanet.ge E-mail: ambafrance e@access.sanet.ge www.ambafrance-ge.org Web-site: www.amb bafrance-ge.org Federal Republic of o Germany Embassy 20 Telavi St. Tbilisii Tel: 44 73 00, Fax: 44 73 64 RepublicEmbassy Italian RepublicEm mbassy Tbilisi, 3a Chitadze St, Tbi ilisi, 292-14-62, Tel: 299-64-18, 29 2-14-62, 292-18-54 embassy.tbilisi@esteri.it E-mail: embassy.tb ilisi@esteri.it Estonia Republic of Estoni ia 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 75, Oniashvili St., Tbilisi Tel: 231-11-61, 231-12-02, 231-14-54 E-mail: ukraina_pu@wanex.net; 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 Av., Tbilisi Tel: 225-20-72/73/74/76 E-mail: turkemb.tbilisi@mfa.gov.tr Address: 8, M. Abashidze str. Batumi, Georgia; tel: (8-88-222) 7 47 90 Republic of Azerbaijan Embassy Kipshidze II-bl . N1., Tbilisi Tel: 225-26-39, 225-35-26/27/28 E-mail: tbilisi@mission.mfa.gov.az Address: Dumbadze str. 14, Batumi Tel: 222-7-67-00 Fax: 222-7-34-43 Republic of Armenia Embassy 4 Tetelashvili St. Tbilisi Tel: 95-94-43, 95-17-23, 95-44-08 E-mail: armemb@caucasus.net Web: www.armenianembassy.ge Consulate General, Batumi Address: Batumi, Gogebashvili str. 32, Apt. 16 Kingdom of Spain Embassy Rustaveli Ave. 24, I floor, Tbilisi Tel: 230-54-64 E-mail: emb.tiflis@maec.es Romania Embassy

caucasian business week 7 Kushitashvili St., Tbilisi Tel: 38-53-10; 25-00-98/97 E-mail: ambasada@caucasus.net Republic of Poland Embassy 19 Brothers Zubalashvili St., Tbilisi Tel: 292-03-98 Email:tbilisi.amb.sekretariat@msz.gov.pl Web-site: www.tbilisi.polemb.net Republic of Iraq Embassy Kobuleti str. 16, Tbilisi Tel: 291 35 96; 229 07 93 E-mail: iraqiageoemb@yahoo.com Federative Republic of Brazil Embassy Chanturia street 6/2, Tbilisi Tel.: +995-32-293-2419 Fax.: +995-32-293-2416 Islamic Republic of Iran Embassy 80, I.Chavchavadze St. Tbilisi, Tel: 291-36-56, 291-36-58, 291-36-59, 291-36-60; Fax: 291-36-28 E-mail: iranemb@geo.net.ge United Nations Office Address: 9 Eristavi St. Tbilisi Tel: 225-11-26/28, 225-11-29/31 Fax: 225-02-71/72 E-mail: registry.geo@undp.org Web-site: www.undp.org International Monetary Fund Office Address : 4 Freedom Sq., GMT Plaza, Tbilisi Tel: 292-04-32/33/34 E-mail: kdanelia@imf.org Web-site: www.imf.ge Asian Development Bank Georgian Resident Mission Address: 1, G. Tabidze Street

Freedom Square 0114 Tbilisi, Georgia Tel: +995 32 225 06 19 E-mail: adbgrm@adb.org; Web-site: www.adb.org World Bank Office Address : 5a Chavchavadze Av., lane-I, Tbilisi, Georgia ; Tel: 291-30-96, 291-26-89/59 Web-site: www.worldbank.org.ge Regional Office of European Bank for Reconstruction and Development Address: 6 Marjanishvili St. Tbilisi Tel: 244 74 00, 292 05 13, 292 05 14 Web-site: www.ebrd.com Representation of the Council of Europe in Georgia Address : 26 Br. Kakabadze, Tbilisi Tel: 995 32 291 38 70/71/72/73 Fax: 995 32 291 38 74 Web-site: www.coe.ge Embassy of the Slovak Republic Address: Chancery: 85 Irakli Abashidze St. Tbilisi, 0162 Georgia Consular Office: 38 Nino Chkheidze St. Tbilisi, 0102 Georgia Phone: 2 222 4437, 2 296 1913 e-mail: emb.tbilisi@mzv.sk

Hotels in Georgia TBILISI MARRIOTT Tbilisi , 13 Rustaveli Ave. Tel: 77 92 00, www.marriott.com COURTYARD MARRIOTT Tbilisi , 4 Freedom Sq. Tel: 77 91 00 www.marriott.com RADISSON BLU HOTEL, TBILISI Rose Revolution Square 1 0108, Tbilisi Tel: +995 32 402200 radissonblu.com/hotel-tbilisi RADISSON BLU HOTEL, BATUMI Ninoshvili Str. 1, 6000 Bat’umi, Georgia Tel: 8 422255555 http://radissonblu.com/hotel-batumi SHERATON METECHI PALACE Tbilisi , 20 Telavi St. Tel: 77 20 20, www.starwoodhotels.com SHERATON BATUMI 28 Rustaveli Street • Batumi Tel: (995)(422) 229000 www.sheratonbatumi.com HOLIDAY INN TBILISI Business hotel Addr: 1, 26 May Square Tel: +995 32 230 00 99 E-mail: info@hi-tbilisi.com Website: http://www.hi-tbilisi.com BETSY’S HOTEL With Marvellous Tbilisi Views Addr: 32/34 Makashvili St. Tbilisi Tel: +995 32 293 14 04; +995 32 292 39 96 Fax: +995 32 99 93 11 E-mail: info@betsyshotel.com Website: http://www.betsyshotel.com

Restaurants 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 PICASSO Tbilisi , 4 Miminoshvili St. , Tel: 98 90 86 SAKURA - JAPANESE RESTAURANT Tbilisi , 29 I. Abashidze St. , Tel: 29 31 08, Fax: 29 31 08 SIANGAN - CHINESE RESTAURANT Tbilisi , 41 Peking St , Tel: 37 96 88 VERA STEAK HOUSE Tbilisi , 37a Kostava St , Tel: 98 37 67 BELLE DE JOUR 29 I. Abashidze str, Tbilisi; Tel: (+995 32) 230 30 30 VONG 31 I. Abashidze str, Tbilisi Tel: (+995 32) 230 30 30 BRASSERIE L’EXPRESS 14 Chardin str, Tbilisi Tel: (+995 32) 230 30 30 TWO SIDE PARTY CLUB 7 Bambis Rigi, Tbilisi Tel: (+995 32) 230 30 30

SH. RUSTAVELI STATE THEATRE Tbilisi. 17 Rustaveli Ave. Tel: 93 65 83, Fax: 99 63 73 TBILISI STATE MARIONETTE THEATRE Tbilisi. 26 Shavteli St. Tel: 98 65 89, Fax: 98 65 89 THEATRE OF PANTOMIME Tbilisi. 37 Rustaveli Ave. Tel: 99 63 14, (77) 41 41 50 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

Akhvledianis Khevi N13, Tbilisi, GE. +995322958377; +995599265432

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,

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

PUBLICITY caucasian business week

December 15, 2014 #80