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February 2, 2015 #85

February 2, 2015, Issue 85

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GEORGIA

TBC BANK SUMMARIZES RESULTS FOR 2014

BC Bank held a press conference, where TBC Bank’s CEO Vakhtang Butshkhrikidze summarized the results of the year 2014. Pg. 5

GLOBAL ECONOMIC FORUM GEORGIAN CONTEXT

TEST TRAIN RUNS ON BAKUTBILISI-KARS RAILROAD

Giorgi Kadagidze: The National Bank has Decided to Tighten Monetary Policy Starting This week Pg. 8

Davit Sergeenko: GEL Depreciation Grows Prices on Some Medicines

first test train will be launched on one of the sections of the BTK railway project today, which will cover a distance between two South Georgian towns of Akhalkalaki and Kartsakhi. Pg. 2

ENTERTAINMENT INDUSTRY OVERVIEW

Pg. 6-7

he entertainment Industry in Georgia can be divided into four main categories: gambling, cultural entertainment, active entertainment, gastronomy & wine tourism. Pg. 8

GEORGIA’S TRADE IN 2014: DOES EXPORT DECLINE SUGGEST A LOSS OF COMPETITIVENESS?

ccording to the latest GEOSTAT figures, merchandize exports from Georgia decreased by 1.63% between 2013 and 2014. Pg. 11

NEIGHBORHOOD RUSSIA TO SPEND $35BN ON ECONOMY PLAN

WHICH FOREIGN COMPANIES ARE INTERESTED IN NVESTING IN GEORGIA?

Pg. 8

Pg. 11

NOW MANGO: WHY INTERNATIONAL BRANDS LEAVE GEORGIAN MARKET

he Russian government is to spend at least 2.34 trillion roubles ($35bn, £23bn) to try to stave off an economic crisis, following a collapse in oil prices and the value of the rouble. Pg. 13

Nodar Kereselidze: We Were not Informed of Any Obstacles in the Export of Georgian Wine in Russia Pg. 12

Pg. 8

Currency

EXCHANGE RATE MONITORING

GEL against USD in the World

WORLD NEWS MCDONALD’S CEO RESIGNS, STOCK IMMEDIATELY RISES

officer.

cDonald’s CEO has resigned after almost 25 years at the fast-food chain and will be replaced by its chief brand Pg. 13

Pg. 5

CRUCIAL EVENTS ON CARDS TO CONTINUE STEMMING FOREX MARKET VOLATILITY

KSB MOST EXPENSIVE CREDIT CARD

154,36% INTEREST RATE Pg. 9

The 9th of February Special Issue, Georgia’s Investments Potential, Specially for the Wealth Pro Conference, Introduce Your Company to the World’s Wealthiest Investors. For Additional Information, please, contact the CBW editorial board.

GOVERNMENT NEWS

2 MAIN EVENTS

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GEORGIAN GOVERNMENT DISCUSSES ECONOMIC ISSUES

GEORGIA SUSPENDS TRADE TALKS WITH RUSSIA

eorgia is suspending trade talks with Russia as they do not make any sense, Georgian Foreign Minister Tamar Beruchashvili told reporters Jan. 30. Beruchashvili is on an official visit to the US. She said that the Russian market is unpredictable.

GEORGIA APPROVES ACTION PLAN IN YOUTH POLICY

eorgia’s government approved an action plan for the state youth policy for 2015-2020, the Sport and Youth Affairs Ministry of Georgia told Trend Jan. 30. The plan is aimed at implementing the goals and objectives included to a document on state youth policy adopted in 2014.

NATO TO HELP GEORGIA ACHIEVE ITS GOALS

ATO will assist Georgia in achieving its goals, NATO Deputy Secretary General Alexander Vershbow said at a joint press conference with Georgian Prime Minister Irakli Garibashvili.

GEORGIA, TURKEY AGREE TO INTENSIFY CUSTOMS COOPERATION

eorgia and Turkey reached an agreement on intensifying the development of the coordinated and mutually beneficial customs cooperation. The agreement was reached during Turkish Customs and Trade Minister Nurettin Canikli’s visit to Georgia. The purpose is to discuss the trade-economic and customs issues, existing in the format of bilateral and multilateral cooperation.

NATO SECRETARY GENERAL UNDERLINES GEORGIA’S CONTRIBUTION IN ANNUAL REPORT

eorgia made significant contributions to NATO-led operations, as well as to deepening relations with the Alliance, NATO Secretary General Jens Stoltenberg noted in his annual report.

NATO TOP OFFICIAL: ‘GEORGIAN ARMY IS ONE OF THE BEST’

eorgia has one of the best armies, NATO Deputy Secretary General Alexander Vershbow said in the military base of Vasiani today, where he attended a demonstrative training of Georgian armed forces.

COUNCIL OF EUROPE URGES RUSSIA TO FULFILL RESOLUTION ON GEORGIA-RUSSIA WAR

he Parliamentary Assembly of the Council of Europe (PACE) has renewed sanctions against Russian delegation and adopted resolution, contained issues related to Georgia

IRELAND RATIFIES EU-GEORGIA ASSOCIATION AGREEMENT

reland is the latest country to ratify the Georgia-European Union (EU) Association Agreement (AA), that was signed in June last year.

REGIONAL SECURITY ISSUES DISCUSSED AT GEORGIAN DEFENSE MINISTRY

he head of the General Staff of the Georgian Armed Forces Major-General Vakhtang Kapanadze met with the military attaches accredited in the country and NATO representatives.

GEORGIA, TURKMENISTAN AGREE ON INCREASING TRADE OPERATIONS

eorgian Minister of Agriculture Otar Danelia met with ambassador of Turkmenistan Dovletmurat Muratov. The sides discussed bilateral relations and prospects of their development, the Georgian Ministry of Agriculture.

February 2, 2015 #85

n case the funds allocated for the state agencies are not spent effectively, they will be transferred to the Government’s reserve fund, Georgian Prime Minister Irakli Garibashvili said on a Government meeting today. Garibashvili talked about the negative processes ongoing in the world and called on Georgian Government for more mobilisation. In addition, the PM assigned the economic team to present a report on fulfillment of the budget at the end of every month. “We have communication at the end of each

month, but I would like to once again stress this issue. I know that with the leadership of Giorgi Kvirikashvili working groups have been created, and you are discussing the expenditures. We have to spend fund everywhere effectively and mobilise our ministries. This year will not be an easy one, given the fact that some negative processes are taking place in the world and that is why we have to meet our challenges with even more mobilisation,” he said. Garibashvili also noted that in case any institution was not able to effectively spend the full amount

of money, he had an initiative to direct these finances to the reserve fund and use this money for other institutions and fields. The Prime Minister also received information about the fulfillment of this year’s budget from the Finance Minister Nodar Khaduri. Khaduri noted that in January the tax revenue plan amounted in 540 million GEL and by the data of yesterday evening, 519 million GEL was already mobilised in the budget. “So, we need 21 million GEL within two days to fulfill the plan. The average income of taxes per day is 30 million GEL, which means that our result will exceed the data from previous year,” he said. In addition, Garibashvili also got informed about the Baku-Tbilisi-Kars (BTK) railway project, within which a first test train was launched on the Akhalkalaki-Kartsakhi section yesterday. The ceremony of launching was attended by Economy Minister Giorgi Kvirikashvili, who said that the railway would be fully operation by the end of 2015.

GOVERNMENT TO IMPLEMENT OVER 10 PROJECTS

he government of Georgia intends to implement more than 10 major projects in the current year. Minister of Economy and Sustainable Development told The Financial that in 2015 artificial lakes would be constructed together with a biathlon track in line with ski resorts. Together with private investors the Government will be developing the KokhtaMitarbi Alpine village. The introduction of artificial snow will be carried out in Svaneti. This requires advance and accurate study and will start in 2015. George Kvirikashvili says that the selection process at Anaklia port will be completed this year.

The selected investors will then begin work from the spring or summer of 2016. Works on the Baku-Tbilisi-Kars railway will continue. The main works are to be completed by the end of 2015.The remaining large-scale projects will be in infrastructure. Competitions will be announced for the construction of a controlled-access highway at Rikoti Pass. It will be a shared project between the Government and private sector. Feasibility of the Mleta-Kobi tunnel will also be announced. In the words of the Minister, there will be additional projects in the tourism and public transportation fields. The Government plans to represent a minority of

the projects invested by the Partnership Fund. In addition to ‘Produce in Georgia’ we will develop the second direction which includes development of large-scale enterprises together with the private sector . Kvirikashvili speaks about a big activity and interest from Kazakh, Azerbaijani, Chinese, and Turkish investors towards Georgia. “Georgia should have a European political system and institutions toneutralize the existing foreign risks. However, unlike a typical European country we should have more flexibility and less bureaucracy in order to attract Eastern investments. This will be our strategy and model on which we will work,” – stresses Kvirikashvili.

GOVERNMENT TO IMPOSE TOP MARGIN PRICE ON MEDICINES

he government will possibly intervene in pricing in a case of catastrophic price hikes for drugs. According to Deputy Minister of Health Valery Kvaratskhelia, medications from the dollar zone as well as from Russia and Belarus have risen in price. And if the price of medicines increases dramatically and the availability reduces, the government will be able to intervene. “If prices continue to increase, we’ll take certain measures to stop growth, but a lot depends on the dollar rate. Maybe subsidies will be carried out

or an upper limit on important medicines will be imposed. If the dollar drops, the prices will be regulated. 10% of drugs have become expensive at this stage”, - says Kvaratskhelia. Is it acceptable to interfere in the process of establishing prices of medicines under market economy conditions? Tina Turdziladze, Chairwoman of the Healthcare Experts’ Club , believes that drugs subsidizing is the only way to ensure affordability for medicines, but at the same time it contains a lot of critical risks and, in her opinion, mistakes and omissions in this way will further aggravate the problems.

As for the price ceiling, she thinks this is one of the types of price regulation which is irrelevant to our system, and vice versa will create a problem of physical access to the drugs. An expert Levan Kalandadze expresses a sharper position stating that the establishment of a ceiling is not justified in any circumstances, because the government will clearly show that private companies should work at a loss. As for the issue of subsidies, the expert opposes this approach, but notes that if we are talking about the government’s short-term social action for certain social groups, it has some justification.

FIRST TEST TRAIN LAUNCHES WITHIN THE BAKUTBILISI-KARS PROJECT

first test train will be launched on one of the sections of the BakuTbilisi-Kars (BTK) railway project today, which will cover a distance between two South Georgian towns of Akhalkalaki and Kartsakhi. This topic was high on the agenda of the today’s meeting between Georgian Prime Minister Irakli Garibashvili and the Azerbaijani Minister of Transportation Ziya Mammadov. The sides talked about cooperation between two countries in the field of transportation and stressed the importance of the BTK project. The Baku-Tbilisi-Kars railroad links Azerbaijan with Turkey via Georgia. Its construction has been made pos-

sible thanks to an intergovernmental agreement between the three countries. The railway will increase the flow of containers and other types of cargo from Asia to Europe. Experts estimated that its overall capacity will peak at 17 million tons of cargo per year. Initially, the capacity will reach 6.5 million tons of cargo and one million passengers. The project aims to improve trade and economic relations between the countries, as well as to attract foreign direct investment through connecting Europe and Asia. The Azerbaijani Transportation Minister will attend the ceremony of launching the test train along with the Georgian Minister of Economy and Sustainable Development Giorgi Kvirikashvili in Kartsakhi today.

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February 2, 2015 #85

BUSINESS

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INTERVIEW

4 HEADLINES GEORGIAN NATIONAL BANK TO TIGHTEN MONETARY POLICY

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PM ACCUSES OIL COMPANIES OF ANTITRUST LAW VIOLATION

rime Minister of Georgia Irakli Garibashvili accused the oil companies operating in the country of breaching competition law. “We all know that in recent times the world price of oil fell sharply, and judging from the current trend, continue to fall. On this basis, in our country everyone is interested in how adequately prices for oil products are lowering in Georgia. Accordingly, the Competition Agency is exploring the market of petroleum products. About a month ago I made a statement on this issue and instructed the agency to study in detail the issue and it is currently working in this direction, “- said the Prime Minister. In his words, the first findings of the study already exist. “In the second half of 2014, world oil prices have fallen by 60%, and it certainly should have been adequately reflected in the Georgian market in about 1-2 months. Unfortunately, this did not happen, and our society has every reason to

eorgia’s National Bank will tighten the monetary policy as of Feb. 2 due to the depreciation of the national currency – GEL, head of the country’s National Bank Giorgi Kadagidze told reporters Jan.30. “The depreciation of the exchange rate of GEL,can lead to price hikes and inflation,” he said.

10 PERCENT OF MEDICINE RISES IN PRICE IN GEORGIA

ome 10 percent of medicine rose in price in Georgia, Georgian Deputy Health Minister Valeri Kvaratskhelia told the Georgian media. He said that the medicine obtained from the dollar area, as well as from Russia and Belarus, rose in price.

GEORGIA, LITHUANIA EXPANDING CO-OP IN ECONOMY

eorgia and Lithuania signed an intergovernmental agreement on economic cooperation. The document was signed by Georgia’s Prime Minister Irakli Garibashvili and Lithuania’s Prime Minister Algirdas Butkevicius as part of the Georgian-Lithuanian business forum being held in Tbilisi.

GEORGIAN ECONOMY SEES 4, 7% GROWTH IN 2014

GOV’T ALLOCATES 50M GEL TO SUPPORT SMALL FARMERS

he Government of Georgia is allocating 50 million GEL to support 800,000 small farmers conduct agricultural works in spring 2015.

GEORGIA RANKED 22ND IN WORLD IN ECONOMIC FREEDOM SURVEY

eorgia is listed in 22nd place with 73, 0 points on the Index of Economic Freedom, a ranking which includes 178 countries worldwide, says the report by the Heritage Foundation.

PRICE ON CARS AND CAR SERVICE IN GEORGIA TO RISE BY 15-20%

ue to the depreciation of the national currency, the car market has lost customers because the cost of cars increased. Car dealers talk of passivity of buyers from among the citizens of Georgia and try to balance the situation by re-export.

ormer PM also talked about his plans in the field of economy and stressed importance of social development. In an hour-long interview with Tbilisi-based TV, aired on January 28,Former PM Bidzina Ivanishvili said that “We should learn to be patient and wait for our time to come, but meantime we should not waste time; we should build economy, democratic institutions, establish European values and I assure you that we will have a result… Sometimes we are treated humiliatingly, but we should endure it.” “We should persistently continue moving towards Europe, towards the European values,” Ivanishvili said. Ivanishvili denied again allegations of ruling the

GEORGIA TO HOST PRESTIGIOUS U19 FOOTBALL TOURNAMENT IN 2017

he UEFA executive committee announced their decision to hold the European Under 19 Championship final tournament for the year 2016/2017 in Georgia yesterday. “This is great news! I think that holding this championship in Georgia will be a very important occasion for our football,” Georgian Football Federation’s Zviad Sichinava.

country from backstage, but also said that no one can ban him from giving advices, publicly or privately, to the government. He also said: “I have no lever whatsoever to rule anyone or to force someone to share my advices or to impose my advices.” He said that opposition UNM party and its “propaganda”, “lie machine” Rustavi 2 TV were “seeding nihilism”, trying to portray the government as “feeble” and “incapable.” He said that the UNM wants to “destabilize” the country, “but they have no ability whatsoever to do that.” “We should get used to it that such people, like members of the United National Movement, can be part of our society; they have the right to lie, but we should not swallow this lie,” Ivanishvili said. The ex-PM said that UNM and Rustavi 2 TV were trying to stir hype out of recent depreciation of the Georgian national currency, Lari, against U.S. dollar. Ivanishvili claimed that GEL depreciation “is no burden at all for the population” as it has not caused price hikes. “Nothing special; on the contrary, it’s good; Lari demonstrates that it is healthy; what is happening in global economy, it is of course being reflected on Georgia too,” Ivanishvili said. Ivanishvili said that a new TV program on GDS, a television station run by his son, Bera, will help people to “make right analysis”; he said he will be “actively involved” in the program.

Plans about the TV program were first announced last year, but its launch was delayed for number of times. Ivanishvili now said that the program will start either in late February or early March. With this small TV project I will try, without harming media landscape, to shift accents and focus not on those issues, which the lie machine wants, but what the society needs for development,” Ivanishvili said. He said that GDS TV is also planning TV series of more than 200 episodes about “entire activities” of UNM throughout its nine years in power. The TV series, called “9+1”, will be launched from autumn, Ivanishvili said. He also said that his organization, 2030, will prepare analysis of achievements of the GD government and will also look into work of some of the “most active” civil society activists to whom he has “questions”. He specifically mentioned head of the International Society for Fair Elections and Democracy Nino Lomjaria; head of the Transparency International Georgia Eka Gigauri, and former head of Georgian Young Lawyers’ Association Kakha Kozhoridze, who is now President Giorgi Margvelashvili’s human rights adviser. “We will put an interesting research about them,” Ivanishvili said without elaborating details. “We have lots of questions about them.

GEORGIA IS THE REGIONAL LEADER IN GOVERNMENT EFFECTIVENESS

FRENCH COMPANY SHOWED INTEREST IN TSKALTUBO DEVELOPMENT PROJECT rench company Compagnie de Vichy has shown its interest in the Tskaltubo resort development project worked out by the Partnership Fund (PF). Jean-Luc Suarez, an advisor of the Compagnie de Vichy President, held the first working meeting at the fund. The Partnership Fund management briefed the French company on the resort development concept and details of the project.

be dissatisfied. It’s obviously, the operating expenses of oil companies have not grown, and international oil prices decreased, respectively, it is unclear why it is not enough reflected in the Georgian market,”- said the Prime Minister. According to him, in this situation the oil companies reduce fuel prices slightly, in any case, inadequately to the global trend. “For this reason, the Competition Agency continues to deeper study the situation on the fuel market. I want to assure all that on the basis of the data the government will carry out all legal norms against violations of the competition law. We will firmly protect the interests of consumers and the public, “- said the head of government. Prime Minister announced about the need to study the situation in the fuel market of the country in mid-December. The reason for this was the public outrage over the fact that the international price of oil fell by 60% and fuel in Georgia has fallen in price by no more than 25-30%.

BIDZINA IVANISHVILI: GEL SHOWS HEALTHY IMPULSES; GLOBAL ECONOMIC TRENDS, INDEED, AFFECT GEORGIA TOO

nstead of five percent growth, Georgian economy has seen 4, 7 percent growth in 2014, shows the preliminary data published by the National Statistics Office of Georgia (Geostat). The country’s economy increased by 1, 9 percent in December 2014 compared to the same period of 2013. Georgian economy increased by 7, 2 percent in the first quarter of 2014, followed by 5, 2 percent growth in the second quarter and 5, 6 percent growth in the third quarter.

February 2, 2015 #85

he Center of Health and Economic Research of the Caucasian University is actively researching relevant Georgian economic issues, especially the economic policies of the state in the global context. At the first stage, it was vital for us to pinpoint what international organizations think of Georgia’s present reality, and how international experts assess such important issues, as effectiveness of the government, the quality of government-regulated economy, anticorruption activity, sector policies and etc. We have started analyzing the mega-project of The World Bank, Worldwide Governance Indicators (WGI) annual rate of worldwide govern-

ments, in detail. For the record, the project Worldwide Governance Indicator’s report refers to the years 1996-2013 and combines government monitoring among the world’s 200 countries and territories. The Worldwide Governance Indicators report is based on expertise of nearly 30 leading international organizations, such as: European Bank for Reconstruction & Development Transition Report; World Economic Forum Global Competitiveness Survey; World Bank Country Policy and Institutional Assessments ; The International Fund for Agricultural Development (IFAD); Economist Intelligence Unit; Freedom House; Global Integrity Index; World Justice Project; Institute for management & development World Competitiveness Yearbook; Global Insight Business Conditions and Risk Indicators; Asian Development Bank Country Policy and Institutional Assessments ; and etc. At this stage we studied examinations about Georgia from two international organizations: the international fund of Agriculture (IFAD) and Economist Intelligence Unit. According to the assessment of Economist Intelligence Unit – Georgia’s government of 2013 is a leader in effectiveness and is ahead of all neighboring states. Apart from this, Georgia is

also ahead of 11 out of 27 EU countries --The Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Greece, Croatia, Italy, Romania and Bulgaria. In addition, Georgia is on the same position with countries such as Spain, Ireland, Luxembourg, Slovenia and Slovakia. Recently, the government’s emphasis of economic aspects in agriculture pushed us to study the main international appraiser in this field, The International Fund for Agricultural Development (IFAD), and its view of Georgia’s government effectiveness. Under the World Bank mega-project (WGI), IFAD estimates effectiveness of world governments in terms of “public resource allocation and management for agricultural development” since 2004. According to the examination of IFAD, the level of effectiveness of the 2013’s Georgian Government’s annual calculation has dramatically increased with the 10 percent points and constituted to 75%, respectively. Additionally, interesting results are surfacing regarding the evaluation of the conditions of corruption control and the investment environment, the results of which will be publicly disclosed soon. MIKHEIL DUNDUA The head of the Center of Health and Economic Research of the Caucasian University

February 2, 2015 #85

ECONOMIX

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TOP STORY

NOW MANGO: WHY INTERNATIONAL BRANDS LEAVE GEORGIAN MARKET

eorgian consumers have recently observed a clear trend of big international brands, such as the Spanish retail giant Mango, and the British multi-national franchise store Debenhams leaving the local market. Emerging markets have long proved attractive to big international brands. These companies have in many cases exhausted the opportunities available in the developed world and are seeking for expanding their business and facing new challenges. Developing economies, such as Georgia have a lot of untapped potential for such internationally renown brands as Benetton, Zara, Debenhams and Lacoste. However, every potential gain in revenue or market share has a corresponding Risk of failed product launches or underestimation of the competition. CBW decided to ask marketing specialists what prompts big international companies to leave the Georgian market as swiftly as they enter them. Marketing and PR specialist ELDAR PIRMISASHVILI thinks big brands are clearly missing something when assessing the Georgian market. In his view, the companies leave the market because of misjudgment in marketing analysis they perform. In his interview with newspaper Banking and Finances, Mr Pirmisashvili names failure to undertake consistent marketing research as one of the main reasons big brands often end up packing up their belongings and returning home: “These companies usually conduct research and

evaluate the market before starting their business in Georgia, however, they often fail to make this research consistent.” A one-time evaluation is not nearly enough for seeing the big picture. Mr Pirmisashvili’s point leads to the need of establishing a culture of Research and Development in the Georgian retail business. Mr Pirmisashvili also names shortcomings of marketing strategy by international brands in Georgia: “Marketing tools that brands use here are not sophisticated enough. Most of the brands only limit themselves to mere advertising and sales system of marketing, which is often not systematic and also not in accordance with the way the sales are set up in the developed European economies.” “What I have in mind is the type of marketing sophistication that sells, so to speak, “emotions” and status together with its brand. This type of marketing is much more persuasive and powerful. Unfortunately, international brands in Georgia fail to undergo this type of marketing here.” Associate professor of marketing at Tbilisi State University, NANA OKRUASHVILI thinks that one of the reasons that large international brands can’t make it in Georgia is the instability of the national currency. “The country becomes unattractive for large investors, as they cannot predict the course their business will take. The volatility is too high,” Ms Okruashvili commented to CBW. This comes as no surprise to anyone who follows the news in the country and is aware of the most

pressing economic matter -- the quick depreciation of lari over the past couple of months. One may think that in the country where unemployment rate is as high as 14% and the average wage does not exceed 780 laris, middle class clothing brands often fall into as an upper-class good, turning into a luxury item. However, some experts disagree with this proposition and think that companies like Mango have justified their international status in Georgia and were marketed to the right consumers. PR and marketing specialist OTAR KIRIA comments on Mango’s decision to leave the Georgian market: “It would be unfair at best and wrong at worst to say that Mango’s marketing strategy in Georgia has failed. The brand operated successfully since 2008 and even opened a second store in the city, which only indicates that the business was doing very well.” Mr Kiria names a big fine that Mango was charged with by the Revenue Service of Georgia as the reason behind the company’s decision to leave the market. PR specialist commented to CBW that this has been a long-circulating news in the retail business in Georgia. Indeed, after Novo Group, the company that operated Mango in Georgia, announced the store’s exit from the local market it became known through grapevine that Mango will re-enter, but now “officially,” selling women’s, men’s and children’s clothes.Perhaps, one can only hope that this is a sign for the better future of the brand, since it will present itself to the Georgian consumers in its full colors.

TBC BANK SUMMARIZES RESULTS FOR 2014

BC Bank held a press conference, where TBC Bank’s CEO Vakhtang Butshkhrikidze summarized the results of the year 2014. TBC Bank’s main achievements in 2014 were as follows: • TBC Bank became the #1 bank on the Georgian retail market according to individual deposits and loans (TBC Bank had a 33.7% share on the individual deposits market and a 29.7% share on the loans market). • TBC bank made the largest public offering among Georgian companies on the London Stock Exchange. • TBC Bank successfully finalized the merger of Bank Constanta and increased its microfinance portfolio by up to 40 million laris. TBC Bank’s major financial indicators grew dynamically in 2014. In particular, total assets grew to GEL 5.43 billion; loans disbursed to clients totaled GEL 3.7 billion, the balance on client accounts was GEL 3.22 billion and shareholder equity was recorded at nearly GEL 2 billion In 2014 loans to individuals grew by 38.5%, retail deposits by 22.8%. Additionally, the growth of corporate loans was 6.5%, and corporate deposits – 1.6%. Loans to SMEs grew by 36% and the deposits of SMEs grew by 12.4%. As for the micro-segment, after the merger of Bank Constanta, micro financing became one of the top priorities of the bank. As a result, TBC Bank decided to purchase ProCredit Bank’s loan

portfolio with a volume of up to 40 million. This will enable the bank to develop its activities in the region and increase its market share within the micro-segment. In 2014, TBC Bank made the largest initial public offering among Georgian companies on the London Stock Exchange. As a result of this IPO, TBC Bank raised USD $259 million and increased the company’s value to USD $640 million. 2014 was also marked by changes in the management of TBC Bank. The bank invited the top managers of the world’s leading banks (Barclays, Deutsche Bank, and Unicredit Group) to lead in various directions: Giorgi Tkhelidze was invited as a Risk Management Director, Nikoloz Kurdiani as Microfinance Director, and David Tsiklauri as Corporate Banking Director. In 2014, TBC Bank gained several aknowledgements from various prestigious publications such as Global Finance, Euromoney, EMEA Finance , The Banker and PWM. TBC Bank was the first Georgian bank to receive the awards in the categories of Best Personal Banking (The Banker and PWM) and The Bank with The Best Corporate Social Responsibility (EMEA Finance Europe Banking Awards). In 2014, TBC Bank was active in its CSR. The bank implemented several large projects. TBC Bank traditionally supports arts and culture. As such, for the annual Saba Literary competition, TBC bank implemented an exclusive project called The Voices of The Époque, which was based on the archive

records of Georgian poets and writers. Georgian artists created musical pieces, choreography and photography especially for this project. This year’s awards ceremony was the most large-scale in the history of the Saba competition. In 2014, TBC Bank continued to finance several culturally and socially significant projects. Among these projects include the Saba Electronic Book-house and the Artarea Culture Channel. The bank also financed several initiatives on promoting Georgian artists abroad. In addition, it created free art space for contemporary artists, the first ‘Art Wall’ in the city. For the first time in Georgia, TBC bank as a private business, got involved in financing cinema and implemented a joint project with the Cinema Centre.

EU PROVIDES GEORGIA WITH FIRST TRANCHE AS PART OF MACROFINANCIAL ASSISTANCE

he European Commission, on behalf of the EU, disbursed €13 million in grants to Georgia. This represents the grant part of the first tranche of the EU’s €46 million Macro-Financial Assistance programme (MFA) for Georgia. This tranche also includes €10 million in loans. The second tranche, amounting to €23 million, is planned to be disbursed in mid2015. Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxations and Customs, said: “Europe is living up to its commitment. The EU is helping Georgia ease its financing constraints while supporting the government’s economic reform agenda. We support Georgia’s efforts to maintain macroeconomic stability while implementing growth-enhancing reforms and facilitating closer economic integration with the EU.” The Macro-Financial Assistance programme is intended to strengthen Georgia’s balance of payments and budgetary position and to support reforms aimed at reinforcing economic governance, increasing social inclusiveness and promoting closer economic integration with the EU. Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxations and Customs, said: “Europe is living up to its commitment. The EU is helping Georgia ease its financing constraints while supporting the government’s economic reform agenda. We support Georgia’s efforts to maintain macroeconomic stability while implementing growth-enhancing reforms and facilitating closer economic integration with the EU.” The MFA programme is intended to strengthen Georgia’s balance of payments and budgetary position and to support reforms aimed at reinforcing economic governance, increasing social inclusiveness and promoting closer economic integration with the EU. Specifically, the MFA supports reforms in the areas of public finance management, social policy, banking supervision and trade and competition policy to help the implementation of the Deep and Comprehensive Free Trade Area with the EU. MFA is an exceptional EU crisis-response instrument available to EU neighbouring partner countries experiencing severe balance of payments problems. It is complementary to the assistance provided by the International Monetary Fund (IMF). This MFA to Georgia is the second of two operations pledged by the EU at the International Donor Conference in Brussels in October 2008, in the aftermath of that year’s military conflict with Russia. It was approved by the European Parliament and the EU Council of Ministers on 12 August 2013. A previous MFA, amounting to EUR 46 million, all in grants, was successfully implemented in 2009-2010.

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THE FUTURE OF AGRICULTURE

chieving food and nutrition security today and for a world population that will number more than 9 billion and be 70% urbanized by 2050 is a key global challenge. According to the Food and Agricultural Organization, current global trends in incomes, diets and population growth suggest that 60% more food will be needed in 2050. The evidence points to this being achievable, but there are some increasingly urgent pressure points in the system that must be addressed, including depleting water tables, climate change, inadequate infrastructure and reductions in land availability, largely as a result of soil degradation. In the last 150 years, changes in this system have enabled us to feed a population that has grown from just over 1 billion in 1850 to 2.2 billion in 1940 and 7.2 billion in 2013. Food production soared during this period while the supply of edible food to the consumer underwent significant technological and distributional advances. But there are still huge challenges, most notably the persistence of hunger and the scale of food that is wasted. Post-harvest losses and waste account for up to 50% of total calories available from farm to fork. Nonetheless, I am confident that the required solutions to address the food and nutrition security challenge can be found.

Sustainable agriculture The sustainable development of agriculture has to be a central pillar in this endeavor. All actors in the food value chain, starting with farmers, must be involved. For its part, the food industry can play a significant role. After all, the industry depends for its very existence on the reliable and sustainable provision of high-quality agricultural raw materials. While not directly involved in agriculture per se, the Nestlé approach is to seek to provide a robust framework for farmer livelihood and community development. In this respect, the importance of generating higher and

more reliable incomes for farmers, notably smallholder farmers cannot be overemphasized. We need to ensure that farming remains attractive for the next generation and thus that it is a sustainable and profitable activity. We need likewise to ensure that the rural communities in which farmers live remain vibrant and provide the necessary opportunities for economic and social development. Investing in rural education and focusing on the creation of job opportunities for rural populations through, for example, a decentralized manufacturing strategy, are some key elements.

Working together to achieve food security Finally, we must remember that there are several dimensions to food security. Producing the necessary quantity of food is just one; the quality of food, in terms of nutrition, matters greatly, as does affordability, access and safety, while sustainability must underlie all these. Governments must take the lead in creating the enabling environment within which farmers and other actors can deliver. They must ensure that all policy areas, including trade, education, finance and health, are involved and aligned. Market-based approaches must be prioritized as the only proven way to ensure long-term viability. The private sector must focus on bringing in investment and developing new technologies and other innovations, as well as delivering greater efficiencies where possible. And farmers must be front and centre of the picture.

A new vision for agriculture The kind of multi stakeholder approach that is needed is exemplified in the World Economic Forum’s New Vision for Agriculture initiative. This is helping crystallize common goals and interests across all the actors in the agricultural space and driving the establishment of coherent and action-oriented partnerships and commitments that are already yielding results. In many ways, it is putting agriculture back on policy agendas as a priority issue. This is vital.

French Louis Dreyfus Group Shows Interest in Georgia’s Agriculture One of the largest French companies Louis Dreyfus Group has expressed interest in the Georgian agriculture. Within the framework of the Davos World Economic Forum, the Prime Minister of Georgia met today with the company’s chairperson Margarita Louis-Dreyfus. The parties agreed that in the near future the Louis Dreyfus Group will send a work group to Georgia, which will observe the situation on the ground. The meeting focused on the business environment of Georgia. The Georgian side briefed the Louis Dreyfus Group of the Co-investment Fund. They also touched upon the liberal terms offered by the Georgian government to investors.

The Louis Dreyfus Group The Louis Dreyfus Group has businesses in more than 100 countries worldwide, employs more than 22 000 people. In 2014, the company’s profit reached 640 million, while the company’s budget is 9 billion. They are present in 6 regions where we operate 13 different business lines. We call these business lines our platforms. Louis Dreyfus Commodities is a global merchandiser of commodities and processor of agricultural goods, operating a significant network of assets around the world. Over the last decade Louis Dreyfus Commodities has significantly expanded and diversified as a business by broadening our portfolio and making investments in strategically located origination and logistic assets. As a result the company is now hold several leading positions in major commodities and have delivered substantial year-on-year growth for a number of years.

FOUR THEMES FOR THE FUTURE OF BANKING

ix years after the global financial crisis, a new global environment is on the horizon. oderate but robust growth has resumed in the US, while China has decelerated. The stronger US economy means that the Fed will probably start a monetary tightening cycle soon, mopping up the abundant liquidity currently available to emerging economies. The lower growth in China is likely to bring the commodities boom cycle to an end. With this background, the banking industry must adapt to the additional constraints imposed on financial institutions by the new post-2008 regulatory environment.

What does a US recovery mean for the rest of the world? The US economy has recovered from its post-2008 slowdown. It has been able to achieve moderate but robust growth rates and reduce unemployment in a sustained way. That is good news for the rest of the world, which will benefit from a growing demand for goods and services by the world’s largest economy. However, there is a flip side. With the economic recovery, the Fed has started to gradually remove the monetary stimulus and is likely to raise interest rates in the coming months. The yield on US Treasuries – so far still at historically low levels – has the potential to rise much faster than it is already priced at by the market. If that happens, financial conditions for emerging economies will suddenly tighten. Emerging market currencies are likely to depreciate further, and their domestic interest rates – both the short- and long-end – will rise, dragging down internal demand. For those emerging markets more reliant on foreign funding, drastic balance sheet adjustments may ensue.

The end of the commodities boom China’s economy has decelerated and is not likely to grow as fast as it did in the recent past. The deceleration is widely perceived as structural and permanent. Hence policy-makers are unwilling to introduce aggressive policies to lift growth back to the levels seen over the past decade. Instead, policy now aims to improve the quality of growth, rebalancing demand away from investment and towards consumption, and reducing the damage to the environment. In our view, demand growth from China will not support commodity prices as much as it did in the past. The maturation of investment in natural resource sectors adds further downward pressures on commodity prices. That is particularly evident in the oil

market – which over the past months has been the worst performer among the major commodities – but the prices of other key commodities such as iron ore and soy have also plunged. Even though it is still too soon for definitive conclusions, we believe the decline in commodity prices is at least partly permanent. Commodity exporters will thus lose export income, in a permanent way. While currency depreciation may cushion the shock for those with floating exchange rate regimes, the decline in investment in the commodity producing sector is likely to have a negative impact on domestic demand. On the other hand, commodity importers will benefit – especially those running high energy import bills – and cheaper raw materials will exert downward pressure on global inflation.

Tougher global conditions Those economies that built buffers during the good years now stand ready for a more challenging global environment. In these countries, public debt as a proportion of GDP fell significantly and its profile improved considerably: the maturity of debt increased and the share of dollar-denominated debt fell. When current accounts were in deficit, financing came mostly through foreign direct investment, and central banks accumulated international reserves, so net external indebtedness is now much lower. Finally, the adoption of floating currencies and credible inflation targets increased the resiliency of monetary policy frameworks. Besides macroeconomic fundamentals, we also see an important role for microeconomics driving country differentiation: those economies with more business- and market-friendly frameworks are likely to be rewarded as foreign capital becomes more scarce and “selective”.

A stronger banking sector The banking industry faces important challenges on the regulatory field in this new global environment. The additional regulations imposed on the industry after 2008 implied important constraints to the banking business in general. The impact ranged from a heterogeneous reduction of profitability affecting some business lines to activities being completely outlawed. This called for a reassessment of all lines of businesses (LoBs), with many LoBs being rethought and transformed to fit under the new set of constraints while maintaining profitability. In this new environment, bank profits, liquidity in securities markets and the scope of the banking sector will be reduced. However, we expect the banking industry

to come out of this process more resilient. It will also be more capitalized and adhere to better liquidity standards. The coming years will bring challenges, but also opportunities for business in general, and the banking industry in particular. It is important to be prepared for volatility and risk, but also to keep eyes and minds open for new trends and good investment prospects.

Central banks can’t solve all problems With the extraordinary measures from the European Central Bank this week, the world is once again looking to monetary policy to provide a source of stability. It is necessary to look back only a week to the causes of the current currency volatility and it will be clear that central bankers’ best efforts will not be enough if all the major stakeholders in this crisis do not act together. The world is now beset with interconnected, complex challenges driven by unprecedented global forces. These forces are well known, if not well understood, and have been much discussed this week in Davos – not only in the economic sphere, but equally in the geopolitical, technological, and social dimensions.

From the breakdown of nationstates to the burnout of leaders They include the breakdown of nation-states as citizens redefine their identities through the forces of technology and globalization, the changing nature of work and a critical employment crisis in both developed and developing countries, long-term shifts in growth levels across the developed world, a “mid-life crisis” in emerging economies, a “burnout” syndrome in leaders who are stretched to their limits, and the re-emergence of strategic competition between countries and regions as the realities of resource limits take effect. These and many other global trends are multiplying the number and complexity of challenges which reach beyond traditional spheres of governance and the formal frameworks of our international system. Challenges such as these demand a new kind of global institution. While we may not entirely know what the institutions of tomorrow will look like, we do know that the environment in which they operate will not be any easier than the one we currently live in. We know that the institutions of tomorrow will need to be informal, flexible, and agile, because challenges are emerging faster than ever and institutions need to be responsive above all. We know that they will

need to be networked, because challenges cannot be addressed without the most relevant leaders and insightful expertise in the room. We also know that institutions must be able to bring people together online as well as in person, as progress is made through continuous interaction, face to face and virtually. Importantly, we know that institutions, to be effective, need to be trusted and impartial.

ZURAB GVASALIA President of the Association of Banks of Georgia The Davos Forum discussed current and future activities on the international market, which are related to global economic development trends. As for reduction in profitability of the bank sector in 2015, the process is being derived by the Eurozone trends and slowdown in China’s economy. All these factors are reflected in contraction of oil prices. These factors are expected to make less affect on Georgia, because the country development is less integrated into the international and securities markets. In addition, the bank sector has got much higher impact on the European and US economies due to the nature of their sector and the development and its scales. Market segments of the economy are actually utilized, when the reserve in Georgia is still high. The ratio of bank assets to GDP is 70 per cent, when the same index is 250 percent higher in the United States and the figure is 150% in Euro zone countries. The development in recent years is showing that the ratio of the monetary aggregates of bank sector in GDP and profitability are increasing every year. Even in the last year it increased by 390 million to 475 million GEL, that indicates the development potential of economic.

DAVOS 2015

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INTERNATIONAL CONFLICT IS TOP GLOBAL RISK Such conflict is seen as more likely than extreme weather events, failure of national governance systems, state collapse or crisis, and high structural unemployment or underemployment. But in terms of impact, water crises are the greatest risk facing the world. Other top risks include rapid and massive spread of infectious diseases, weapons of mass destruction, and failure of climate change adaptation. What is striking about this year’s report is the extent to which geopolitical risks, having had a low profile in recent years, are again looming large. The risk landscape also shows concern over the world’s ability to solve its most pressing societal issues, as societies are under threat from economic, environmental and geopolitical risks. The Forum’s annual risk report does more than just catalogue what ails society. It also examines the interconnections between risks, as well as how they interplay with trends shaping the short- to mediumterm risk landscape. With respect to urbanization, for example, the report considers how best to build sufficient resilience to mitigate the challenges associated with managing the world’s rapid and historical transition from predominantly rural to urban living. Of course, cataloguing the world’s risks is a bit of a moving target. Since the survey was conducted, many unexpected events have occurred. The price of oil has plunged, and the euro’s health has become less certain. Top of mind is Greece, with the leftist anti-austerity Syriza party leading in polls running up to this weekend’s national elections. These and many other factors will make for interesting discussions.

Poroshenko in Davos: We need help

here is much discussion of global risks at the World Economic Forum Annual Meeting this week, and illustrating today’s volatility is the fact that the biggest threat to the stability of the world -- international conflict -- was not even on last year’s list. That is the conclusion of the World Economic Forum’s 10th edition of the Global Risks report, released in conjunction with the annual Davos gathering. But don’t just think of Russian troops in Ukraine. Think also of North Korean hackers pillaging the Sony computer systems. In 2015 conflict can take many forms. “Twenty-five years after the fall of the Berlin Wall, the world again faces the risk of major conflict be-

tween states,” said Margareta Drzeniek-Hanouz, the Forum’s lead economist. “However, today the means to wage such conflict, whether through cyber attack, competition for resources or sanctions and other economic tools, is broader than ever. Addressing all these possible triggers and seeking to return the world to a path of partnership, rather than competition, should be a priority for leaders as we enter 2015.” The Forum assesses the top global risks in terms of likelihood and potential impact over the coming 10 years. This year the experts found that interstate conflict with regional consequences is the numberone global risk in terms of likelihood, and the fourth most serious risk in terms of impact.

Ukrainian President Petro Poroshenko delivered an emotional speech here Wednesday and forcefully restated his government’s view that Russia is the aggressor in a conflict that has raged for months and killed almost 5,000 people. “We are not only fighting for our territorial integrity and independence, we are fighting for European values,” Poroshenko said during a packed address to the World Economic Forum, which is holding its annual meeting in this Swiss ski town. Poroshenko said that last year was “the most difficult” in Ukraine’s history. He said that more than 9,000 Russian soldiers and several hundred tanks are now on active duty in Ukraine and that 7% of its territory is effectively occupied. “If this is not aggression, what is aggression?” he said.

Ukraine asks IMF for new bailout funds The Ukrainian government just released a statement, confirming it has asked the IMF for more support. In

it, Ukraine Minister of Finance Natalie Jaresko argues that investors should welcome it (even though Ukraine is also planning to restructure its debt). “The markets were expecting this step and should welcome it as it will provide the financial support Ukraine requires to jumpstart its economic recovery while yielding acceptable outcomes for all of our stakeholders. Today’s decision gives international financial partners and creditors’ reassurance of the Ukrainian Government’s continued commitment to its ambitious reform program and macro-economic stability.”

IRAKLI LEKVINADZE Economic Analyst The Davos Forum discussed the main challenges in the world and this is very important for Georgia amid the Russian-Ukrainian war and the ISIS activities. These factors affect the investments environment in the region. The processes in Georgian economy and the result – depreciation of GEL is the result of these processes. Because of war between Russia and Ukraine, remittances were reduced, especially from Russia (30%) and from Ukraine (50%), Georgia’s exports to Ukraine has also dropped. Aggression threats from Russia are significant and this factor hinders the investors’ interests, who consider political stability to be very important. Noteworthy, the continuation of crisis processes poses a threat to the increased exports indicator in Russia. Activities on alternative markets, especially in Asia, and the infrastructure development are also very important. We are talking about energy, logistics and housing projects. We can even think about the benefits of this crisis – there is an outflow of capital from Russia and Ukraine. They may be interesting in Georgia. I think it’s pretty serious challenges in the economy for 2015 and that needs special concentration.

CHEAP OIL AND THE FUTURE OF ENERGY

he oil price has plummeted, while shale gas has made the US increasingly energy self-sufficient. What does this mean for the world’s shift to renewable, and the role played by fossil fuels in our energy mix? Will nuclear energy disappear because of concerns over the safe storage of nuclear waste? After over four years as the United States Secretary of Energy, Nobel laureate Steven Chu, Stanford University professor of physics and molecular and cellular physiology, discusses the current energy landscape and the outlook for the future. - What do you think is the biggest energy problem today? - It’s a combination of things. As renewable energy and electrical storage become less expensive, one has to design the grid system to take full advantage of lower-cost energy. As renewable energy becomes an increasingly larger fraction of the total energy, the cost of stand-by electricity and storage becomes part of the cost of renewable. Sometimes, the wind does not blow and the sun does not shine. There are countries that have about 25% intermittent energy integrated over the year. One of the challenges is how do you go from 25 to 50% and higher. It means you have to balance loads over wider areas, because the larger the area you collect energy, the more you can even things out. But at the 50% level you’ll need energy storage as well. - Germans call it the “Energiewende”, the switch from fossil fuel and nuclear to renewable: Is the world really on this path? - Countries are going to take different paths. I wish that Germany would continue to operate their nuclear reactors for the duration of their useable lifetime to allow for a more orderly progression. In Germany, about 30% of their electricity comes from

renewable – 10% befouls and the rest wind and solar. Virtually all of the wind is in the northern part of Germany and electricity has to be transported to heavy industrial areas in the southern part, and some people don’t want the transmission lines in their line of sight. Germany has to figure out how to deal with this issue. China also is moving – it has now set goals to cap carbon emissions and coal use, and be 20% renewable by 2030 or earlier. It is a very good sign when a developing country like China says that clean energy is an important goal, regardless of whether there’s a UN agreement or not. For them to say, “We’re going to go ahead and do this” is a very big deal. - What are the most interesting scientific advances right now that have the potential to transform clean energy? - In the solar photovoltaic field there are new compound materials called perovskites, which have increased efficiency in laboratory tests from 3.8% in 2009 to over 20% by 2014. If we can use these materials in tandem with silicon, photovoltaic generation could increase to produce 50% more energy. There are also new battery and “super-capacitor” chemistries and structures. A super capacitor can accept and deliver much more power per unit volume than a battery, and a modest-sized super-capacitor will allow full energy recovery during the braking of vehicles. I am particularly excited about nano structured batteries and grapheme-based supercapacitors. Energy efficiency technologies are also improving: cars of equal performance are able to go twice as far on a gallon of gas as automobiles of 40 years ago, and a Boeing 787 uses only 30% of the fuel of a Boing 707 per passenger mile. Efficiency improvements are part of the transformation. - Electric cars are hailed by some as an important contribution to our energy problems – do you agree? - Yes. The cost of electric vehicle batteries has come

Integration into the world’s major markets is the priority of our foreign policy Irakli Garibashvili Prime Minister of Georgia

down to about 40% of what it used to be in 2008. According to the projection of the Tesla Giga factory, a lithium ion battery factory, electric cars’ battery costs will go down another two fold from today. Within five years, we may be able to buy a car that goes 200 miles for $25,000. The energy density of batteries is getting better – today there are batteries about 60% higher in energy density – i.e., with more energy for a given weight and volume – than the batteries of 15 – 20 years ago. Within this decade, the energy density is likely to double.

Irakli Garibashvili met with the Executive Director of RWE AG Georgian side introduced to representatives of the company and investors about Business environment and conditions in Georgia. It was decided that a working group of RWE AG will visit Georgia in the near future. It is Europe’s leading electricity company, which profit amounted to 68 billion dollars in

2014. More than 66 thousand people are employed in the company.

RWE AG RWE is one of Europe’s five leading electricity and gas companies. Through expertise in lignite production, in electricity generation from gas, coal, nuclear and renewable, and in energy trading as well as electricity and gas distribution and supply, they are active at all stages of the energy value chain. Around 60,000 employees supply over 16 million electricity customers and nearly eight million gas customers with energy, both reliably and at fair prices. In fiscal 2013, the company recorded approximately €54 billion in revenue. Europe is their market: in terms of sales, they are No. 3 in electricity and No. 5 in gas. In Germany, the Netherlands and the United Kingdom, they are among the largest suppliers of both fuels. In the Czech Republic, they are No. 1 in the gas business. The company also has leading positions in other markets in Central Eastern Europe.

ANALYTICS

8 QUOTES

ENTERTAINMENT INDUSTRY OVERVIEW

“We are Doing Our Best to Integrate With European Structures”

Ilia II, Catholicos-Patriarch of All Georgia. “We hope, Lithuania will support us in terms of restoring Georgia’s territorial integrity,”- stated Catholicos-Patriarch of All Georgia Ilia II during a meeting with Lithuania’s PM Algirdas But-

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kevicius.The Patriarch mentioned a traditionally friendly relationship between Georgia and Lithuania, stressing that Georgia does its best to improve it. “We do our best to integrate with European structures. That’s why your visit is of great significance for us. You know we have territorial problems in Abkhazia and Tskhinvali region. I served as Abkhazia’s metropolitan for 11 years and there were no problems or conflicts at all. All these conflicts were created deliberately and artificially. We hope Lithuania will support us in restoring Georgia’s territorial integrity,”- Ilia II remarked. Algirdas Butkevicious thanked Ilia II for the warm reception, claiming this was an honor for him. “By means of this visit I would like to stress that we should maintain our excellent relations in the future,”- he said.

“GEL Depreciation Grows Prices on Some Medicines”

DAVIT SERGEENKO, Minister of Health, Labor and Social Affairs of Georgia. Mr Sergeenko links the increasing prices on some medicine to the depreciation of Lari. According to him, Ministry of Health, Labor and

Social Affairs is currently working on a project, which is aimed at reducing prices of the primary use or “essential” medicine group. “Prices on a number of drugs have certainly increased, although the increase percentages are different. Basically, I think this is connected with the changes that lari has ben experiencing. As for the raising the reach on use of essential medicines -- we are currently working on this. I think the project will be in full swing starting this spring.” For the record, former Georgian PM, Bidzina Ivanishvili said in a recent TV interview that the depreciation of lari has not affected any prices. “Due to the depreciation of the GEL, one should not expect a significant increase in prices, especially against the background of a significant decrease of oil prices in the world,” in his turn, said Irakli Garibashvili, Georgian active PM.

“The National Bank has Decided to Tighten Monetary Policy Starting This week”

GIORGI KADAGIDZE, President of the National Bank of Georgia The head of the NBG says the process of devaluation of the GEL has reached a dangerous point, which can lead to inflation and rising prices. “The depreciation of the national currency inflicts significant damage to those citizens who have loans

in dollars and incomes in the GEL. Further devaluation of the national currency will worsen the economic situation of citizens, and ultimately will affect the economy as a whole. On this basis, the National Bank has decided to tighten monetary policy next week. For this purpose, all the mechanisms available to the National Bank will be used - such as consistent and gradual intervention of the dose which will be necessary to ensure macroeconomic stability,”- the head of the National Bank states. According to him, the National Bank will hold intensive talks in order for the expenditure budget to be balanced or profit, in a better case. “At the same time, taking into consideration the economic situation, 5% economic growth forecast should be reconsidered. The financial and macroeconomic indicators should be planned so that the economic policies adequately reflect the challenges the country faces,”- said the head of the National Bank.

“We Were not Informed of Any Obstacles in the Export of Georgian Wine in Russia”

NODAR KERESELIDZE, Deputy Minister of Agriculture of Georgia On the official level, we did not receive any information about the presence of any obstacles in the export of Georgian wine in Russia. If specific companies have any difficulties associated with fluctuations in the ruble exchange rate, unfortunately, our govern-

ment agencies will not be able to affect them. Everyone knows Russia’s current difficult economic situation, accordingly, we use all our capabilities in order to help our winemakers to diversify markets. For example, we recently took part in a very big wine exhibition in Berlin. Our goal is to bring our producers closer to European markets. We support producers that they participate in such exhibitions. We are active in China, Poland, and other countries, and this is done in order to minimize the dependence of our exporters from Russia. Currently our main task is to bring legislation to the European standards, and while this is not done, the export of certain goods to Europe will be impossible, since they do not meet EU standards. This work has already begun. When all conditions are met, believe me that all our businessmen will focus on the European market as it is stable and profitable. Business goes where incomes are higher, and the Russian market will not be a hindrance.

he entertainment Industry in Georgia can be divided into four main categories: gambling, cultural entertainment, active entertainment, gastronomy & wine tourism. The main entertainment destinations are Tbilisi and Batumi, but several other locations throughout the country offer various entertainment activities. The government is actively supporting the development of the gambling industry in the county, which gives Georgia a competitive advantage in the region. The gambling industry accounts for about 70% of the entertainment industry’s total turnover, which equalled 1.2 billion GEL in 2013. Several international hotel brands are going to open casinos during the next three years. Georgia – country of ancient culture – offers visitors a wide variety of museums and theatres, concentrated mainly in Tbilisi (Georgian National Museum, Ethnographic Museum, Tbilisi Concert Hall, Rustaveli and Marjanishvili Theatres). The main cultural attractions in Batumi include Ilia Chavchavadze State Drama Theatre and the recently opened Art and Music Centre of Batumi. The Opera House of Kutaisi and the Lado Meskhishvili Drama Theatre are important cultural destinations in Kutaisi. The only cinema operator in the county is the Georgian company Rustaveli Cinema JSC, which manages three cinemas (Rustaveli and Amirani in Tbilisi and Apolo in Batumi) and plans to expand further in 2015 by opening two new movie theatres in modern shopping centres in Tbilisi totalling 15 screens. During the next two years several new projects will be completed around the country. The Natanebi Concert Hall, Tbilisi Fine Art Museum and the refurbishment of the Tbilisi Opera house are the major planned projects. The Government of Georgia is actively seeking to hold international sports tournaments in the country and some of them are already planned, such as The Youth Olympic Games 2015 and the UEFA Super Cup 2015. The country’s main stadiums and sports complexes are concentrated in the capital Tbilisi (Boris Paichadze Tbilisi Dinamo Arena, Mikheil Meskhi Stadium and Tbilisi Sports Palace) which will see the development of new sport facilities, such as the new rugby sta-

dium and a new tennis complex. A new football stadium in Batumi and a rugby stadium in Kutaisi were recently announced. The water entertainment industry (Aqua Park and swimming pools) is actively developing in Georgia. The recently opened Gino Paradise and the Euro Park are main players in the country. Completion of a new swimming pool for the Youth Olympic Games 2015 is planned next year. Health and well-being becomes more popular in Georgia, especially in Tbilisi. Aspria Fitness is actively expanding its chain. The major amusement parks in Georgia are Tsitsinatela and Mtatsminda Park. The country also offers three botanical gardens (Tbilisi, Kutaisi and Batumi), two zoos (Tbilisi and Batumi) and several recreation parks. The relocation/expansion of the Tbilisi Zoo and renovation of Park Mziuri are the major planned projects in the near future. The three main winter resorts - Bakuriani, Gudauri and Mestia - include 40 ski runs with a total length of 81 km. From the 2014-2015 winter season artificial snow machines have been installed in Gudauri and Bakuriani. This will significantly help to increase occupancy of Georgia’s winter resorts compared with the previous year. The Government of Georgia is actively promoting the development of the new ski runs on the mountain Tetnuldi in Svaneti and the territory of Goderdzi Pass on the border of Adjara and Samtskhe –Javakheti regions. The restaurant market is the most developed sector of the Gastronomic industry in Georgia. The Modern Café-Bars and international cuisine market is growing fast, mainly in major tourism destinations – Tbilisi and Batumi. Night clubs are concentrated mainly in Tbilisi and Batumi. Georgia is one of the oldest wine producing countries in the world. Up to 500 indigenous grape varieties are still cultivated in Georgia. UNESCO added the ancient traditional Georgian winemaking method using the Kvevri clay jars to the UNESCO Intangible Cultural Heritage Lists. Kakheti – the main wine producing region of Georgia – is becoming more and more attractive for international visitors. Several recently developed high class hotels offer customer wine tours and the sector has further potential for development.

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BANKING SECTOR: 498 MLN GEL NET PROFIT Top seven banks listed below

16 out of 21 banks have finished 2014 with a net profit, while the total volume has been up to 498 million lari. To note, 16 banks had a profit in the same period of the previous year, total profit – 400 million lari.

PARTNERSHIP FUND AND HUNGARIAN EXIM BANK SIGNED COOPERATION MEMORANDUM

anagement of Partnership Fund met with leadership of Exim Bank during their visit in Hungary. The parties talked about cooperation perspectives, made presentation of the projects of Hungarian bank and the fund, discussed priorities and ongoing projects. “The visit was productive. Hungarian side listened to the ongoing economic processes of Georgia with great interest”, - executive director of Partnership Fund Irakli Kovzanadze stated. Irakli Kovzanadze and executive director of Exim Bank Zoltan Urban discussed bilateral cooperation issues, among them funding opportunities for the joint projects of Exim Bank and Partnership Fund in Georgia. The parties also shared experience in export promotions, such as export funding, insurance and guarantees.

Executive director of Exim Bank Zoltan Urban mentioned that after 2013 the bank started investment in various equity funds in several countries. On the meeting establishment of a joint GeorgianHungarian fund for support of the investments in Georgian economy was discussed. After the meeting Partnership Fund and Exim Bank signed Cooperation Memorandum.

KSB MOST EXPENSIVE CREDIT CARD: 154,36% INTEREST RATE Source : commercial banks The net profit of the sector has been 474, 8 million GEL by January 1, 2015, the data includes the indexes of 21 banks. There are already 20 banks on the market by now – legal process of TBC and Constanta merging is completed. However, the same process of Privat Bank and Bank of Georgia will be finished soon.

GOVN’T TO ENCOURAGE EXPORT, WHILE NATIONAL BANK PLANS INCREASE IN REFINANCING RATE

eorgian government will encourage export and import to support national currency, which has reached a new multi-year minimum towards US Dollar 1 USD/2, 0144 lari on January 28. However, National Bank of Georgia does not exclude to strengthen monetary policy, if GEL’s current devaluation will overgrow in inflation. On Tuesday evening, government’s economic team and the president of National Bank have assembled with the Prime Minister Garibashvili in the government administration. The meeting has been attended by Giorgi Bachiashvili, head of “Co-investment Fund”, founded by the intuitive of Bidzina Ivanishvili, former Prime Minister. The government links lari devaluation to the external factors – strengthening of US dollar towards the world’s currencies, including GEL, reduced export with Georgian trade partners due to the current conditions, decline of remittances in the main contributors, due to the sharp devaluation of ruble in Russia and also decreased rev-

enues from tourism. Giorgi Kadagidze, president of National Bank of Georgia declares, that his institution observes consumer price dynamic and expects to January inflation, data of export-import of the first month. He will take the decision based on this statistic at the meeting of Monetary Policy Committee on February 11. Kadagidze has declared, that his institution will increase the main refinancing rate in the case of inflation growth, now the rate totals to 4% and it has been increased by 0,25% in February, 2014 for the last time. It should be noted, that National Bank has written in the press-release after the Committee secession, held on December 17: “according to the current forecast, inflation will reach 5% targeted rate in the second half of 2015. Therefore, National Bank still discusses possibility of gradual release from the expansionary policy. However, the Bank estimates the negative impact of the complicated situation on external demand, its influence on the economic growth and keeps monetary policy rate at 4.0% level on this stage”.

COMMERCIAL BANKS LOAN PORTFOLIO: 13.0 BLN GEL

ccording to the National Bank of Georgia, the volume of lending by commercial banks (including loans to non-residents) in December 2014 increased by 629.9 million GEL (5.1 percent) compared to the previous month, constituting 13.0 billion GEL by January 1, 2015. The volume of loans provided in the national currency increased by 276.1 million GEL (5.8 percent) and the volume of loans in foreign currencies increased by 353.8 million GEL (4.7 percent). By the end of December 2014, commercial banks issued 1.5 billion GEL worth of national currencydenominated loans (9.8 percent, or 136.7 million GEL, more than in the previous month) to resident legal entities and 4.8 billion GEL worth of loans in foreign currencies (5.2 percent, or 238.2 million GEL, more than the previous month). Of the total volume of lending to legal entities,

the biggest share falls on trade - 30.7 percent. Compared with the previous month, in December 2014 the volume of loans provided for trade increased by 12.2 percent, or 212.2 million GEL, and reached 2.0 billion GEL by January 1, 2015. The share of loans provided to the industrial sector constituted 25.0 percent of all loans to legal entities, amounting to 1.6 billion GEL by January 1, 2015 (9.3 percent, or 135.6 million GEL, more than in December 1, 2014); 6.7 percent falls on construction, amounting to 423.3 million GEL (an increase of 2.6 percent, or 10.9 million GEL). Therefore, 62.3 percent of the total volume of lending to legal entities falls on only three sectors - industry, construction and trade. The volume of lending to resident individuals increased by 5.4 percent, or 311.1 million GEL, during December 2014 and exceeded 6.1 billion GEL by January 1, 2015.

redit cards are reported to be one of the most important bank products in Georgia. Georgian citizens have to spend considerable funds to serve credit cards, but the products still remain in high demand. At the same time, commercial banks also provide active AD campaigns to draw clients by various efficient marketing tricks. The Banks&Finances plans to cast light on how much Georgian citizens have to pay to serve credit cards and whether it is worth to take credits, in general. Today we make focus on KSB’s credit card Next. The card’s terms on the bank’s official website are as follows: Like all other credit cards, Next card also offers a 55 day grace period and consumers are able to use the card funds without interest rates during this period. Nominal interest rate is 29% (in GEL); Credit Card Limits: 200 GEL to 5000 GEL; Commission Fee for Annual Service: 35 GEL; Monthly minimum instalment portion: 5% of the withdrawn amount;

Withdrawal Commission Fee at KSB ATM: 3%; We should discuss a concrete sample on the ground of these terms. The bank approves a 2000 GEL credit limit on Next card and we have decided to pay back this sum in a year. In this case, we will have to serve the following financial obligations: The borrower has to pay monthly 5% of the withdrawn amount (100 GEL a month) and this amount is not deducted from the principal sum. This expenditure grows by an annual 29% interest rate that is 48 GEL a month, plus a commission fee of 25 EL and cash withdrawal fee of 3% (60 GEL). To outline the real picture and determine real costs to serve the credit, we should use effective interest rate calculator of the National Bank of Georgia (NBG). The calculator demonstrates the annual effective interest rate of the Next credit card makes up 154.3%. At the same time, the borrower must strictly follow the payment schedule, because even one delayed day of payment costs 15$. Thus, taking into account all the abovementioned, it is upon the client to decide whether to take KSB credit card Next.

BUSINESS

caucasian business week

FOODPANDA PARTNER “PITA FRESH” OPENS NEW BRANCH present only in Tbilisi so far, but we do have plans for expanding in the regions.”

s the demand for ordering fast food online kept rising, the German brand foodpanda showed up on the Georgian market answering this demand. Foodpanda’s business model is unparalleled in Georgia, and their roster of partners and range of choice keeps growing daily. This time, foodpanda partner “Pita Fresh” opened a new dining point in one of Tbilisi’s central districts. The tasty and, more importantly, high-quality pitas of Pita Fresh are now available at 108/110 Aghmashenebeli St. The opening ceremony was attended by journalists and consumers alike, along with directors of foodpanda Georgia and Pita Fresh, Giga Kerkadze and Jaba Siamashvili, respectively. Guests attending were treated with free pitas, and children got foodpanda memorabilia and balloons from a friendly panda. JABA SIAMASHVILI, “Pita Fresh” director: “We entered the Georgian market fairly recently and this is already the second rbanch of our fast food service, which is quite a good result. We have admirable service and, what’s most important, we offer healthy products to our customers. “foodpanda” is our partner and we’ve reached quite the success by working together. We’re

GIGA KERKADZE, “foodpanda Georgia’s” director: “It’s joyous that by working together with us, this company is progressively branching out and achieving success. We support our partner restaurants, and we can definitely say that Pita Fresh is the company of the future and we wish the best to them. We do good work together and make each other stronger. This is already a welcome development!” The partnership memorandum between Pita Fresh and foodpanda Georgia is based on specific services, which make foodpanda customers free to make complex orders on all Pita Fresh products from the website www.foodpanda.ge, or the smartphone application available for their mobile devices. The “Pita Fresh” brand was founded in December 2013. As of now, this network unifies two fast food points in Tbilisi and the company plans to add two more points by the end of 2015, including one in Batumi. Foodpanda is a consumer-oriented company. Using contemporary technological means like mobile applications, it makes food ordering much more simple and fun, ensuring user comfort. Over 50 restaurants in Tbilisi, Mtskheta and Rustavi are ready to deliver food to your doorstep when you order froom foodpanda’s website (www.foodpanda.ge ) or its mobile application available for free on iOS, Android and Windows Mobile. foodpanda together with its affiliated brands hellofood and Delivery Club, is the leading global online food delivery marketplace, active in more than 45 countries on five continents. The company enables restaurants to become visible in the online and mobile world and provides them with a constantly evolving online technology.

February 2, 2015 #85

ECONOMY

caucasian business week

GEORGIA’S TRADE IN 2014: DOES EXPORT DECLINE SUGGEST A LOSS OF COMPETITIVENESS?

ccording to the latest GEOSTAT figures, merchandize exports from Georgia decreased by 1.63% between 2013 and 2014. This is certainly not great news for the country, but does it imply that Georgian goods have become less competitive on the world market? Recent trade data suggest that this is not necessarily the case. The first thing to note is that much of the decline in exports is related to one particular activity – the re-exports of Georgian cars to Azerbaijan and Armenia. Beginning in 2009, this business has become a “cash cow”, capitalizing on the country’s geographic location, the efficiency of its newly reformed customs and registration services, and low import duties. Car re-exports were for a few years a blessing for Georgia’s low-skilled, unemployed or underemployed workers. While essentially a dead-end activity – contributing nothing to productivity improvements in other sectors and future growth, – growth in car re-exports was also a major contributor to general export growth from 2009 till 2013 (see Chart 1). Not any more. The good fortunes of Georgia’s car re-export business changed in 2014 when the main destination country, Azerbaijan, pulled the plug on the lucrative second-hand car trade by passing strict environmental regulations on car imports. Within just a year, Georgia’s total car exports decreased by 26.4%, contributing 6.4 percentage points to the total export decline in 2014. The loss of this particular market is certainly bad new for Georgia, considering the abruptness of the change, and the fact that motor car exports accounted for nearly a quarter of Georgia’s total exports in 2013. Furthermore, car exporters invested large amounts of money into the purchase of car pools, and the value of their investment has now deteriorated. (For example, the gap between the value of exported vs. imported cars was approximately -$197.3mln in 2014 while it was only -$7mln in 2013).

export growth in 2014 (2.9 percentage points), the United States was close on its heals with a contribution of 2.4 percentage points. This suggests that Georgia is faring some success in hedging its bets in the geopolitical trade game – balancing its trade exposure between East and West. Overall, Georgia’s export growth in 2014 heavily gravitated towards the East. The East, including Russia, contributed 8.1 percentage points to export growth in 2014; the West, including the US, contributed only 3.9 percentage points. As discussed above, Ukraine and Azerbaijan contributed the most to the fall in Georgian exports. Another interesting development of note, however, is the significant decrease in Georgia’s exports to other CIS nations such as Kazakhstan, Armenia, and Moldova. This may suggest that at least some of these countries served as conduits for indirect Georgian-Russian trade prior to July 2013, when the Russian embargo on Georgian wine has been finally lifted. Overall, Georgia’s exports to CIS nations dropped 9.6% in 2014.

Otherwise, 2014 was not a bad year for Georgia’s exports and the country’s competitiveness. Ignoring car re-exports, total Georgian merchandise exports actually added nearly 8% in 2014 (see Chart 1). This growth in Georgian exports is particularly impressive given that it was achieved in the presence of another external shock – the economic and political crisis in Ukraine. One of Georgia’s top trade partners, Ukraine accounted for 6.6% of total Georgian exports in 2013. In 2014, the crisis year in Ukraine, Georgian exports to Ukraine dropped 27%, contributing 1.8 percentage points to the total export decline. Taking out these two “external shocks”, namely the trade in motor cars and exports to Ukraine, Georgia’s exports in 2014 actually grew by as much as 9.5%! RUSSIA AND THE US IN NECK AND NECK COMPETITION FOR GEORGIAN EXPORTS? Rather than signifying a competitiveness crisis, 2014 trade figures reflect changes in the structure of Georgian exports, both in terms of composition and destination markets. The two tables below make sense of these changes by providing a ranking of countries in terms of their contribution to Georgian export growth in 2014. The first thing to note is that while Russia made the highest contribution to Georgia’s merchandise

2014 data suggest that Georgia has been able to balance its trade exposure and expand exports in several important directions. The hope is that the country will continue to do so in the future. As an old Chinese adage teaches us, every challenge brings about new opportunities for the future. One just needs to be able to recognize the opportunities and learn from the challenges. By: Florian Biermann and Saba Devdariani Source: ISET Economist

WHICH FOREIGN COMPANIES ARE INTERESTED IN NVESTING IN GEORGIA?

regular World Economic Forum in Davos has finished. What will it bring to Georgia and what companies are interested in investing in the country’s economy? Representatives of the Government of Georgia held meetings with the leaders of companies such as the investment fund “CVC Capital Partners”, investment management company “Ebay Asset Management”, a European provider of electronics “R –Double- U”, software company “HCL Technologies”, an Indian manufacturer of network technologies “Tech Ma hindra”, the Korean Corporation “Hanwha Group”, the French corporation “Louis Dreyfus Group” “, which has interests in areas such as agriculture, energy, and oil refining. According to official reports, in 2015 the delegation of these companies will visit Georgia in order to study the investment climate and the specific possible areas for investment. In particular, the French “Louis Dreyfus” is considering the possibility of investing in agriculture in Georgia. Prime Minister of Georgia Irakli Garibashvili said in an interview with a French TV channel

that in the last two years the country proved to be a reliable partner for investors. “We have created a stable and friendly environment for investors. Of course, many people fear when they see what is happening in our region, but they are carefully studying the situation and see how much progress the country has achieved. Georgia is a young democratic state with young leaders, but we have a very big motivation to succeed, “- said the head of government. In general, the Davos Forum this year is characterized by a large degree of pessimism than last year, although at a meeting on the prospects of economic growth accents were made on a more or less positive prospects of incentives for growth - for example as a decline in oil prices, structural changes in Brazil, China, Japan, the significant growth of the US economy and the decision of the Central Bank of Europe on the so-called quantitative easing, under which more than $ 1 trillion will be thrown into the international financial market in 2016. Euro - it is assumed that this will contribute to overcome the eurozone crisis and economic growth in the EU. “We decided to buy up assets, and did what we were supposed to do. But at the same time the

central bank will not be able to increase productivity and encourage investors. We can make investment cheaper, but people must be willing to invest. This requires a different type of reforms, and they have to be carried out by governments, “- said a member of the Executive Board of the European Central Bank. It should be noted that the ECB’s monetary changes were approved by the head of the Central Bank of the UK Mark Tierney, who said that there were threats of serious turmoil in the financial markets, as low interest rates might encourage investors to more risky steps. One of the topical issues discussed in Davos

was the inequality of income distribution in the world. “The ever-growing inequality is not conducive to sustainable economic growth. Income distribution is very significant - if we succeed to increase the income of the poorest part of the population of the world, we’ll obtain a positive effect on the world economy. But this cannot be done if the share of income of the rich grows again,”- said the Executive Director of the International Monetary Fund (IMF) Christine Lagarde. The current World Economic Forum in Davos was attended by 2 500 businessmen and leaders of 40 states, including Georgia.

CURRENCY

EXCHANGE RATE MONITORING Georgian Paradox: GEL against USD in the World

any versions and factors have been named behind the GEL exchange rate depreciation against USD. The argument as if the USD rate has been strengthened on the level has turned out the most disputable one. The Authorities stress

February 2, 2015 #85

caucasian business week

the latter consideration as one of the main factors, while the opposition parties and a part of economic experts assert the government refers to this argument to swerve from the responsibility. To avoid biased interpretations, we should look into the statistics. The Banks & Finances has explored the change of the USD exchange rate against various currencies for the last year. Our society would be surprised and irritated to learn the GEL exchange rate against USD has showed the least depreciation worldwide.

We refer to the change of various currencies against USD from January 25, 2014 to January 25, 2015. The statistics has been taken from the website www.xe.com. The statistics shows the GEL exchange rate against USD has showed the least decline compared to EURO, Yen, Swedish Krona, Norwegian Krone, Polish Zloty, Moldovan Leu, Hungarian Forint, Bulgarian Lev, Croatian Kuna, Czech Koruna, Armenian Dram, Canadian USD and so on. The below table demonstrates the change in currency rates:

EUR/USD FORECAST: BEARISH BELOW 1.1440

fter setting a new 11year low at 1.1097 following Greek elections result last Monday, the EUR/USD pair spent the week in consolidative mode, finding finally sellers in the 1.1422 level, slightly below the 61.8% retracement of the post ECBQE-announcement slide. As the week fades, the pair trades right below the 1.1300 mark, under pressure as dollar strengthens across the board, closing in the green for the first time in eight weeks. The weekly chart shows that technical indicators maintain a strong bearish momentum in extreme oversold levels, which suggest there’s still room for further gains in correction mode, but are in no way confirming a bottom. In the daily chart, indicators have bounced from extreme oversold readings but remain deep

in the red, whilst moving averages maintain their bearish slope well above current price, being the shortest, and the closest, 20 SMA around 1.1520. Price has been consolidating for most of these last days in a quite tight range, but as long as capped below 1.1440, 61.8% retracement of the above mentioned rally, the upside will likely remain limited. It will take some steady follow through above the mentioned 1.1520 to see the corrective movement extending over the upcoming days, eyeing tops early January lows in the 1.1750 price zone. The immediate support comes at 1.1200, as if the level gives up, so will bulls and stops will likely get triggered, anticipating a retest of the multiyear low, in route to the critical 1.1000 figure. View Live Chart for EUR/USD

CRUCIAL EVENTS ON CARDS TO CONTINUE STEMMING FOREX MARKET VOLATILITY

ith the ECB announcing its much awaited QE details, €60 billion per month of bond purchases starting from March to September 2016, and an unexpected interest rate cut by the Bank of Canada (BoC), global central bankers kept fueling volatility into the largest financial market, Forex. The broadly weaker Euro dropped to fresh 11-year low against its US counterpart while the USDCAD rallied to near six year high. The Bank of Japan (BoJ) and the BoC lowered their forecast for inflation and growth numbers while the minutes of recent BoE meeting revealed that two MPC members, previously supporting the interest rate change, rolled back their vote in favor of no change into the benchmark interest rate. Further, the Greece election favored expectations supporting victory of the Syriza party; however, the antibailout party fell short of gaining absolute majority in the parliament and need to form a coalition government to remain in power. Moreover, the Russian economy faced another difficulty after the S&P downgraded their credit rating to junk. On Tuesday, Preliminary reading of UK Q4 2014 GDP fell below its estimation, to 0.5% against the 0.7% previous number, and continued supporting the GBP weakness. Having witnessed considerable moves, mainly driven by the central bankers, forex market is likely to continue facing volatile trading sessions as the FOMC and the RBNZ are scheduled for their monetary policy meetings during the week. Moreover, Flash reading of EU CPI and the Advance GDP number from the US are also important in determining the near-term moves of the forex market.

US ECONOMIC RELEASES FOMC meeting and Advance estimation of Q4 2014 GDP, are likely to become the headlines for the US economic readings during the week. Even though the current FOMC meeting isn’t followed by the Press Conference of the Fed Chair, and there are lesser chances of any change into the existing monetary policy, market players are likely to deeply examine the FOMC statement in search of any signal for the interest rate hike. Should there be a hint for the near-term interest rate hike, the USD can rally considerably while continuous talk of “Patient” approach, is less likely to affect the on-going strength of the greenback. Further, GDP numbers are favoring a tick-down from the previous 5.0% growth rate to 3.0% reading and can cause a pullback into the USD strength; however, a reading higher than the previous figure is more likely to confirm that the US economy is less vulnerable to downside risk and can continue fueling the USD strength. Other than the FOMC and the GDP number, the CB Consumer Confidence, New Home Sales and the Durable Goods Orders m/m and the Pending Home Sales, Unemployment Claims, are some other important details that can help determine near-term USD moves. A successive high of the Consumer Confidence index, coupled with the rising New Home Sales and a reversal into the Durable Goods Orders into the positive territory is more expected to help the FOMC deriving cues that the economy is well into their determined direction for increasing benchmark interest rates. However, the Chicago PMI and the Pending Home Sales are likely registering a bit lower than previous readings, 57.7 and 0.6% respectively,

that can trigger a mild pullback of the US Dollar strength. In addition to the US releases, news from the Greece and Russia are likely to support safe-haven demands of the greenback. RBNZ AND JAPANESE DETAILS After witnessing surprise actions by the SNB, BoC and the much awaiting QE by the ECB, speculations concerning the extended halt to the interest rate hike by the RBNZ have gained momentum; moreover, should there be any signal, into the rate statement on Thursday, for the interest rate cut, the NZD can weaken considerably. Moreover, the increment in trade deficit, than the expected -48M, scheduled for Thursday, can cause additional downside of the NZD. Details relating to Japanese Industrial Produc-

tion, CPI and the Household Spending, becomes important in forecasting near-term JPY moves. The BoJ have already cut down their expectations of inflation and growth numbers and the actual reading of the CPI below forecast can provide one more reason for the central bank to announce additional measures. Moreover, the Industrial production is likely to register gains and can provide support to the on-going JPY strength. Other than the economic numbers, uncertainty into the forex market, mainly driven by the global central bankers and the geo-political crisis in Ukraine, are likely to prevail for a bit more time and can support the safe haven demand of the JPY. Admiralmarkets.ge/analytics/ facebook.com/adimralmarketsgeorgia/

February 2, 2015 #85

WORLD

caucasian business week

30 TOP CITIES FOR REAL ESTATE INVESTMENT

lobal direct real estate investment returned to pre-recession levels in 2014 and should reach about $1 trillion annually within five years. Driven by a strengthening global economic environment, last year’s total direct investment in real estate is estimated at $700 billion – a level not seen since 2006, before the financial crisis. Research we carried out indicates a further increase of 10%-15% in 2015 and $1 trillion in annual direct real estate investing by 2020. We expect investments to continue to grow because the market is on a sounder, more sustainable footing than it was before the recession and has more robust controls and scrutiny on investments. The improved controls include reduced reliance on leverage and greater use of equity, along with stricter underwriting standards and increased scrutiny by investment committees. Other reasons for optimism include new sources of capital from Asia and other emerging markets, and greater focus on direct real estate investment from institutional investors lured by low interest rates and an evolving regulatory environment. Our research identifies 30 cities that, together, received half of the total $5 trillion directly invested in commercial real estate over the past decade. What does the research on top investment cities say about current real estate markets?

NEIGHBORHOOD Armenia Saw 3.9% Rise of Economic Activity Last Year

rmenia’s economic activity indicator between January and December of last year exceeded the indicator of the same period in 2013 by 3.9 percent. As “Armenpress” reports, the National Statistical Service of the Republic of Armenia has presented the preliminary major macroeconomic indicators based on a current and operative summary that shows the socioeconomic situation in the country. There has only been downfall in construction, which had begun to rise following the financial-economic crisis, but later started going downhill. Compared to the same period in 2013, construction has dropped by 4.3 percent. Energy production has increased by 0.5 percent. Compared to January-December 2013, in 2014, services (without trade) rose by 7.8 percent and made up AMD 110 billion 200.4 million, and the gross product for agriculture rose by 7.2 percent, making up AMD 993 billion 369.5 million.

Azerbaijan’s President Says the Rate of Manat is Stable

zerbaijan’s economy should continue to grow as the export-oriented economy”. “The rate of manat is stable. No negative impact is felt on the rate of manat in connection with the fall in oil prices in the world. On the contrary, AZN is even stronger”, - Azerbaijani President Ilham Aliyev said at the conference on outcomes of the first year of implementation of the “State Program on socio-economic development of districts of the Republic of Azerbaijan in 2014-2018” at the Heydar Aliyev Center, APA reports.

Megadeals helped four elite “supercities” retain their places at the top, where they have been for the past few years. Those deals involved large single assets, such as the Gherkin and HSBC office towers in London, the Pacific Century Place office tower in Tokyo, the Waldorf Astoria Hotel in New York and the Marriott Champs-Élysées Hotel in Paris. Two of the transactions were made by high-net-worth individuals, an emerging class of investors able to compete with institutions for trophy assets. An overall shift in investments to second-tier cities spiked in 2014. This was most apparent in Europe; for example, the number of transactions in London and Paris dropped 17% year on year, but increased 37% in the next 20 cities.

Putin says Russia to remain part of global economy

resident Vladimir Putin said on Thursday Russia will remain a part of the global economy but needs to strengthen its financial and economic sovereignty. Addressing Russian regional leaders, Putin said regional chiefs must track food inflation to prevent any price “speculation”. Russia’s economy has been hit by Western sanctions over the Ukraine crisis and by the fall in global oil prices.

Russia to spend $35bn on economy plan

In northern Europe, mid-size cities experienced particularly high levels of investment as a proportion of GDP. Municipalities like Dusseldorf, Hamburg and Munich, Amsterdam, and the Nordic capitals of Oslo and Copenhagen attracted corporate tenants and investors with transparent and stable real estate markets that boast strong technology and environmental credentials. Investment growth also extended to such cities as Dublin and Madrid, almost untouchable just a few years ago. Dublin, which jumped to 24th in the global investment hierarchy (from 93rd in 2013), also had the world’s fastest growth in office rents over the past year. In the United States, commercial real estate investment volumes in primary cities (New York, Los Angeles, Chicago, San Francisco, Washington and Boston) increased 66% year on year, compared with 37% for the overall US market. Some secondary markets, such as Philadelphia, Miami and Charlotte, experienced increased interest from domestic institutional buyers. Outside of trophy core-plus deals, foreign buyers were not as active in most secondary cities last year. Transaction volumes in secondary cities are expected to increase in 2015 as more assets come up for sale. Most pan-Asian investment in 2014 focused on the major markets of Tokyo, Sydney, Melbourne, Hong Kong, Singapore, Seoul, Shanghai and Beijing. With lower volumes and lower transparency across the region, there was less appetite for secondarycity opportunities outside of trophy or core properties. Interest in multifamily assets, a focus of investor activity in the US, spread to countries including the United Kingdom and Australia. Additionally, Chinese residential developers have expanded aggressively into overseas markets in recent years, with a focus on London, New York, San Francisco, Toronto and Sydney.

he Russian government is to spend at least 2.34 trillion roubles ($35bn, £23bn) to try to stave off an economic crisis, following a collapse in oil prices and the value of the rouble. The country has also been subject to economic sanctions by the West over its involvement in the crisis in Ukraine. Russia will spend most of the cash on federal loans, pensions and recapitalising its banks. The country will also make public spending cuts. Over the next three years most spending, apart military and social programmes, will be hit. Earlier this month, the International Monetary Fund forecast that Russia’s economy will contract by 3% this year and 1% in 2016. MEASURES Russia’s government will spend about one trillion roubles to recapitalise banks through the issue of government bonds. The plan includes a separate scheme to help recapitalise some banks with 250bn roubles, while 300bn roubles will be provided to Vnesheconombank, the state development bank. There will be an extra 200bn roubles in state guarantees to finance investment projects, and regional governments will get 160bn roubles in federal loans. Meanwhile, the government has proposed public spending cuts of 10% this year and 5% over the next two years. The cuts have yet to be approved by the Russian parliament.

WORLD NEWS Turkey “Nears Italy” as Popular Tourism Destination

urkey managed to attract 5.5 percent more tourists in 2014 despite the challenges in the region, says minister. The number of people visiting Turkey as tourists reached an all-time high of 37 million in 2014, pushing Turkey near Italy in most visited destinations chart, a cabinet minister said on Thursday. Speaking in an exclusive interview, Minister of Culture and Tourism Omer Celik said that Turkey managed to attract 5.5 percent more tourists in 2014 compared to previous year despite the political and geopolitical crises around the region. “In 2014 the number of foreigners visiting our country rose to 36.8 million from 34.9 million with a 5.5 percent increase compared to previous year.” Pointing out that there are Turkish citizens who are resident in Europe and visiting Turkey each year, Celik said that this year their numbers are roughly expected to reach 5 million. “If we add this, the number of Turkey’s visitors will come close to 42 million. This is a significant record. We progress toward becoming fifth most visited country from the sixth rank,” Celik said. According to a World Tourism Organization 2014 report Turkey ranks as the sixth most popular destination after Italy which ranks fifth with over 47 million visitors.

Nobel Winner Shiller Joins Pimco in Saying Buy Greek Assets

nvestors who have wiped 15 percent off the value of Greek stocks since voters elected a government determined to renegotiate the country’s debts may be overreacting, according to Nobel Prize-winning economist Robert Shiller. “Investing in Greece right now just might not feel right,” the Yale University economist said Tuesday in London. The price of Greek stocks is “below anything I’ve seen in the U.S. and suggests a spectacular investment,” he said. Shiller, who won the Nobel Prize in Economics in 2013 for his modeling of asset-price fluctuations, said that while the situation in Greece is challenging for investors, the stock price of Greek companies failed to reflect their earnings potential. That view echoes the outlook of Pacific Investment Management Co. and hedge fund Greylock Capital Management, which said this week a Syriza-led government hasn’t dimmed their appetite for the country’s bonds. Yields on Greece’s 10-year securities have risen to 10.4 percent since the government was formed on Monday, compared with Germany’s 0.37 percent. Lorenzo Pagani, a Munich-based money manager at Pimco, which oversees $1.68 trillion of assets, said bond markets overestimate the likelihood of Greece leaving the euro area. That implies favorable opportunities to buy Greek debt in the coming weeks, he said in an interview Tuesday.

McDonald’s CEO Resigns, Stock Immediately Rises

c D o n a l d ’s CEO has resigned after almost 25 years at the fast-food chain and will be replaced by its chief brand officer. Don Thompson will step down from his position at the top of the iconic restaurant business effective March 1, according to a press release from the company. He will be replaced by Steve Easterbrook, who will also serve as president of McDonald’s and sit on the company’s board of directors. “It’s tough to say goodbye to the McFamily, but there is a time and season for everything. I am truly confident as I pass the reins over to Steve, that he will continue to move our business and brand forward,” Thompson said in the press release. McDonald’s stock was trading about 2% higher in after-hours trading. Thompson had been under pressure to rehab the restaurant’s business, which struggled recently. In 2014, the company posted its first decline in global same-store sales since 2002.

PUBLICITY

caucasian business week

February 2, 2015 #85

Embassy United States of America Embassy 11 Balanchivadze St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 53-23-34 E-mail: tbilisivisa@state.gov; askconsultbilisi@state.gov United Kingdom of Great Britain and Northern Ireland Embassy 51 Krtsanisi Str., Tbilisi, Tel: 227-47-47 E-mail: british.embassy.tbilisi@fco.gov.uk Republic of France Embassy 49, Krtsanisi Str. Tbilisi, Tel: 272 14 90 E-mail: ambafrance@access.sanet.ge Web-site: www.ambafrance-ge.org Federal Republic of Germany Embassy 20 Telavi St. Tbilisi Tel: 44 73 00, Fax: 44 73 64 Italian RepublicEmbassy 3a Chitadze St, Tbilisi, Tel: 299-64-18, 292-14-62, 292-18-54 E-mail: embassy.tbilisi@esteri.it Republic of Estonia Embassy 4 Likhauri St., Tbilisi, Tel: 236-51-40 E-mail: tbilisisaatkond@mfa.ee Republic of Lithuania Embassy 25 Tengiz Abuladze St, Tbilisi Tel: 291-29-33 E-mail: amb.ge@urm.lt Republic of Latvia Embassy 16 Akhmeta Str., Avlabari, 0144 Tbilisi. E-mail: embassy.georgia@mfa.gov.lv Greece Republic Embassy 37. Tabidze St. Tbilisi Tel: 91 49 70, 91 49 71, 91 49 72 Czech RepublicEmbassy 37 Chavchavadze St. Tbilisi ;Tel: 291-67-40/41/42 E-mail: czechembassy@gol.ge Web-sait: www.mzv.cz Japan Embassy 7 Krtsanisi St. Tbilisi Tel: +995 32 2 75 21 11, Fax: +995 32 2 75 21 20 Kingdom of Sweden Embassy 15 Kipshidze St. Tbilisi Tel: +995 32 2 55 03 20 , Fax: +995 32 2 22 48 90 Kingdom of the Netherlands Embassy 20 Telavi St. Tbilisi Tel: 27 62 00, Fax: 27 62 32 People’s Republic of China Embassy 52 Barnov St. Tbilisi Tel: 225-22-86, 225-21-75, 225-26-70 E-mail: zhangling@access.sanet.ge Republic of Bulgaria Embassy 15 Gorgasali Exit, 0105 Tbilisi, Georgia Tel: +995 32 291 01 94; +995 32 291 01 95 Fax: +99 532 291 02 70 Republic of Hungary Embassy 83 Lvovi Street, Tbilisi Tel: 39 90 08; E-mail: hunembtbs@gmail.com State of Israel Embassy 61 Agmashenebeli Ave. Tbilisi Tel: 95 17 09, 94 27 05 Embassy of Swiss Confederation’s Russian Federation Interests Section Embassy 51 Chavchavadze Av., Tbilisi Tel: 291-26-45, 291-24-06, 225-28-03 E-mail: RussianEmbassy@Caucasus.net Ukraine Embassy 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

TBILISI GUIDE

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 CORNER HOUSE Tbilisi, I. Chavchavadze ave. 10, Tel: 0322 47 00 49; Email: contact@cornerhouse.ge RESTAURANT BARAKONI Restaurant with healthy food. Georgian-European Cuisine Agmashenebeli Alley 13th Phone: 555 77 33 77 www.barakoni.com CHARDIN 12 Tbilisi , 12 Chardin St. , Tel: 92 32 38 CAFE 78 Best of the East and the West Lado Asatiani 33, SOLOLAKI 032 2305785; 574736290 BREAD HOUSE Tbilisi , 7 Gorgasali St. , Tel: 30 30 30 BUFETTI - ITALIAN RESTAURANT Tbilisi , 31 I. Abashidze St. , Tel: 22 49 61 DZVELI SAKHLI Tbilisi , 3 Right embankment , Tel: 92 34 97, 36 53 65, Fax: 98 27 81 IN THE SHADOW OF METEKHI Tbilisi , 29a Tsamebuli Ave. , Tel: 77 93 83, Fax: 77 93 83 SAKURA - JAPANESE RESTAURANT Tbilisi , 29 I. Abashidze St. , Tel: 29 31 08, Fax: 29 31 08 SIANGAN - CHINESE RESTAURANT Tbilisi , 41 Peking St , Tel: 37 96 88 VERA STEAK HOUSE Tbilisi , 37a Kostava St , Tel: 98 37 67 BELLE DE JOUR 29 I. Abashidze str, Tbilisi; Tel: (+995 32) 230 30 30 VONG 31 I. Abashidze str, Tbilisi Tel: (+995 32) 230 30 30 BRASSERIE L’EXPRESS 14 Chardin str, Tbilisi Tel: (+995 32) 230 30 30 TWO SIDE PARTY CLUB 7 Bambis Rigi, Tbilisi Tel: (+995 32) 230 30 30

SH. RUSTAVELI STATE THEATRE Tbilisi. 17 Rustaveli Ave. Tel: 93 65 83, Fax: 99 63 73 TBILISI STATE MARIONETTE THEATRE Tbilisi. 26 Shavteli St. Tel: 98 65 89, Fax: 98 65 89 Z. PALIASHVILI TBILISI STATE THEATRE OF OPERA AND BALLET Tbilisi. 25 Rustaveli Ave. Tel: 98 32 49, Fax: 98 32 50

Galleries ART GALLERY LINE Tbilisi. 44 Leselidze St. BAIA GALLERY Tbilisi. 10 Chardin St. Tel: 75 45 10 GALLERY Tbilisi. 12 Erekle II St. Tel: 93 12 89

GSS Car rental offers a convenient service for those who are interested in renting car in Georgia. Rental fleet mainly consist of Japanese made SUV’s, the company has various models of cars including sedans and minivans which are in good technical condition. Contact information: Email: info@gsservices.ge. Address: Shalva Dadiani 10

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

February 2, 2015 #85