Caucasian Business Week #93

Page 1

DISTRIBUTED FREE OF CHARGE

BUSINESS WEEK WWW.CBW.GE caucasian business week www.facebook.com/CBW.ge Partner News Agency

March 30, 2015 #93

March 30, 2015, Issue 93

caucasian1

BE INFORMED, DO BUSINESS

GEORGIA

GEORGIAN WINE’S ASIAN ASPIRATIONS AMID RUSSIAN CRISIS

GEORGIA TO RECEIVE LOAN WORTH $250M FOR HYDROPOWER PLANT CONSTRUCTION he International Finance Corporation (IFC) allocated a loan worth $ 250 million for the construction and commissioning of the Shuakhevi hydropower plant to develop the energy sector of Georgia. Pg. 5

T

NATIONAL TOURISM ADMINISTRATION DOUBLES SPENDING ON MARKETING

I

n 2015 the National Tourism Administration will spend GEL 7.8 million on advertising campaign abroad, which is almost 2 times more than in 2014. Pg. 7

SEA RESORTS START PREPARATION FOR THE SUMMER SEASON

S

ea resorts have already started preparing for the upcoming summer season. Bidzina Imnaishvili, Ureki envoy, states “Commersant” that beach cleaning equipment of European standards have been bought as well as new garbage trucks. Pg. 7

Pg. 5

STATISTICS OFGEORGIA

TBILISI INTERNATIONAL AIRPORT AMONG BEST ONES IN EASTERN EUROPE

T

bilisi International Airport has been named as one of the best airports in Eastern Europe for the second time in a row by Skytrax World Airport Awards, the most prestigious accolades for the global airport industry. Pg. 9

Pg. 6

INTERNET PROVIDERS INCREASE SERVICE TARIFFS, CONSUMERS DEMAND EXPLANATION

BATUMI MCDONALD’S AMONG THE TOP 10 MOST INNOVATIVE BUILDINGS

T

he website Ideas.ted.com has published a list of 10 buildings that reflect the future of architecture. The list includes the McDonald’s building in Batumi, Georgia. Pg. 10

HYATT PLANS TO OPEN HOTELS IN REGIONS OF GEORGIA

A

fter Tbilisi, “Hyatt” plans to open hotels in other cities of Georgia. “Hyatt Hotels Corporation” signed a contract with “Rustaveli Property Ltd” regarding the construction of Hyatt Regency hotel. Pg. 10

Research

Pg. 10

75% OF TBC BANK CLIENTS MAKE ECOMMERCE Pg. 11 PAYMENTS ON GEORGIAN WEBSITES

PM’s plans and challenges for the Georgian economy in the following years Pg. 2 David Bakradze: Lifting the visa barrier for Georgians should be the EU response to Russia’s bullying tactics

Pg. 4

Giorgi Abashishvili: Georgia will Spend 2 billion USD on Trans-Anatolian Gas Pipeline Project Implementation

Pg. 4

Vasil Akhrakhadze: Unison Ranks Third in Insurance Sector with 19% Market RatioPg. 9 Itsik Moshe: I categorically oppose a severalmonth-long presence of the investigative agency in service companies Pg. 8

Pg. 12

Pg. 13

USAGE OF PAY BOX SERVICES

Currency

GOLD NEVER LOSES ITS LUSTRE; HOW TO BENEFIT FROM A FALLING GOLD MARKET

Only few years ago, Pay Boxes made appearance in Georgia and instantly became popular. Today, up to ten companies operate in the market and offer customers a convenient and fast way to make a variety of payments or money transfers.

US DOLLAR MIGHT EXTEND THE CORRECTIVE MOVE

“SABA CONSTRUCTION STARTED BUILDING OF CONTEMPORARY STUDENT HOUSING ON LISI LAKE SLOPE

Pg. 3


2 MAIN EVENTS GEORGIA RANKED FIRST COUNTRY IN REGION WITH OPEN GOVERNANCE

GOVERNMENT NEWS

March 30, 2015 #93

caucasian business week

PM’S PLANS AND CHALLENGES FOR THE GEORGIAN ECONOMY IN THE FOLLOWING YEARS noted about the increased revenues of wine men, which has been followed to Georgian wine export on the Russian market. The main criterion for the Prime Minister is assessments of the country’s strategic partners, the United States and Europe, so he feels their full support.

G

eorgia has been ranked first of 13 countries in Eastern Europe and Central Asia region and 29th in the world in terms of open governance, says an international organisation working to advance the rule of law around the world. The World Justice Project (WJP) has just published its Open Government Index 2015 report where Georgia gained a score of 0.61, outperforming Slovenia, Macedonia, Greece and Croatia. The highest score (0.81) was collectively awarded to Sweden, New Zealand and Norway. Scores ranged from 0 to 1, with 1 indicating greatest openness.

WHO IS GEORGIA’S NEW AMBASSADOR TO NATO?

SUCH COUNTRY AS GEORGIA, WHICH IS RICH WITH HYDRO RESOURCES, MUST NOT IMPORT ELECTRICITY If we do not start construction of new power stations in the nearest future, we will have to purchase electricity cost of 1 billion GEL soon,He has declared, that such country as Georgia, which is rich with hydro resources, must not import electricity.

eorgia has a new Ambassador to NATO. Georgia’s President Giorgi Margvelashvili today signed the appointment of diplomat Alexander Maisuradze, who will start his duties on May 1. From 2012 until now, the 41-year-old career diplomat has worked as the Minister Extraordinary and Plenipotentiary of Georgia to the Republic of Austria, Deputy Permanent Representative of Georgia to the OSCE and other international organizations in Vienna, Austria. Before this, Maisuradze worked at various positions at the Georgian Ministry of Foreign Affairs, including as the Attaché in Disarmament and Arms Control Division of the Ministry, which he started in 1998.

REDUCTION IN SOCIAL AND INFRASTRUCTURE COSTS IS NOT PLANNED SO FAR The government plans a major reduction in administrative costs, but it will not affect social and infrastructure projects - Prime Minister of Georgia Irakli Garibashvili said during his press conference. According to him, the government will have to solve the problems accumulated over the years, and there should be no illusions that this can be done quickly. The Prime Minister also focused on the growth of foreign direct investment in 2014. According to him, this is the highest rate on investments in Georgia since 2007.

G

GERMANY RATIFIES EU-GEORGIA ASSOCIATION AGREEMENT

T

he German Bundestag (parliament) has ratified the Association Agreement (AA) between Georgia and the European Union (EU). Today, the constitutional and legislative body of Germany’s parliament approved the Georgia- EU AA deal with support by the large majority,said German public broadcasting radio station Deutschlandfunk (DLF). As well as Georgia, the German Bundestag also ratified Moldova and Ukraine AA deals. “Ratification of the Association Agreement moves these countries to a new stage. I think more reforms and changes are still necessary,” German Foreign Minister Frank-Walter Steinmeier was quoted as saying.

GEORGIA’S PRESIDENT TO VISIT VATICAN, MEET POPE FRANCIS

G

eorgia’s President Giorgi Margvelashvili is preparing to visit Vatican City in Rome and meet Pope Francis, the world leader of the Catholic Church. This news was released by the President’s Administration after Margvelashvili met a Vatican representative today. Earlier today Margvelashvili met Marek Solchinski, Apostolic Nuncio of the Vatican in Georgia, and discussed details of the President’s upcoming Italy visit. It was decided President Margvelashvili will go to Vatican City, Rome, in April. The exact date of his visit was not announced.

EU RECOGNISES GEORGIA’S PROGRESS BEFORE RIGA SUMMIT

T

he six Eastern Partnership (EaP) countries are looking forward to the Riga Summit to see concrete steps taken that will get them closer to the European Union (EU), however the EU has not yet decided what to offer its partners. Today the EU presented the EaP states’ 2014 progress reports, where Georgia’s achievements were positively assessed. EU Ambassador to Georgia Janos Herman spoke to media in Tbilisi today and said the EU was currently working on the final communique for the Riga Summit. He did not specify what this document would envisage.

W

e must do everything to feel the society safe and tell them what plan we have to improve the economy, the Prime Minister Irakli Garibashvili declared at the meeting with reporters, held on Thursday. The Premier has focused on the depreciation of GEL rate and noted, that ongoing processes in the region and USD strengthening in the whole world had an impact on GEL devaluation. “There is a hard situation in the region and it concerned to our region as well. The developed hard processes had an impact on the economy. The primary goal of the government is to deal with problems as fast as possible at this stage. The circumstances linked to GEL rate has been developed adequately to external factors, which takes place in the economies of the region’s countries. However, USD strengthening in the whole world had an influence on the national currency rate, as well as other currencies including EUR. Hard economic conditions in the region has resulted our currency devaluation, but I want to say that we are not an exception. I want to name several examples, for instance our neighboring country Azerbaijan, which is 2-3 times richer than we, the country has spent 1,2 billion USD in December to keep the exchange rate. However, 1 billion USD - in January, but their national currency has been depreciated by 35% in a day in February”, Irakli Garibashvili has noted. The Premier has explained that Georgia has spent 160 million USD in this direction and “we have the same condition, as it is in the region”. The Premier sees a way out from the given situation by starting new projects. “That is why, we have started to initiate new economic projects. We have adopted a decision to save administrative expenditures, however re-

duction will not concern to any social or infrastructural projects”, - Garibashvili has explained. “We will do our maximum to stabilize the situation. However, NBG’s policy has become the subject of discussion, but mission of IMF has been visiting us… We do everything, that this process not to be hurtful”. NEW ECONOMIC RELATIONS BEGIN BETWEEN GEORGIA AND CHINA According to him, a historical agreement is already signed between Georgia and China on cooperation for development of “New Silk Road Economic Belt”, which envisages formation of our country as regional hub of trade and transit. Investment amount from China has doubled in 2014 comparing to 2013 – Irakli Gribashvili has declared. The Premier declares, that the first railway transporting of goods from China to Georgia has been implemented in February. The mentioned project will result additional stream of funds over $100-200 from the railway and ports in country’s economy. Tbilisi will host Silk Road Forum in Tbilisi, which will discuss the concept of Silk Road, transporting logistics and trade issues”, the Primer has noted. AS OF THE PREMIER’S ESTIMATION, DIRECT DIALOGUE WITH RUSSIA HAS DE-ESCALATED THE CONFLICT AND OPENED THE MARKET On the journalist’s question, the Premier answered, that the direct dialogue with Russia has de-escalated the conflict and opened the market, it has increased export by 468%. Garibashvili named IDS- Borgomi’s net profit growth by 400% as an example. He has also

PM PROMISES HIGH-SPEED INTERNET FOR GEORGIA By 2017 the entire country will have access to high-speed internet, promised Prime Minister Irakli Garibashvili. Georgian PM said the Government was actively working on a project titled High Speed Internet for Everyone, which envisaged connecting everyone in Georgia with high-speed internet. “This project aims for fiber-optic cables to be spread in all the villages and towns of Georgia,” Irakli Garibashvili told reporters at today’s press conference. “By 2017 Georgia should be provided with highspeed Internet. Implementing this project is important for a social and economic point of view,” he said. “Through our calculations, the whole of Georgia will be provided with high-speed Internet by the end of 2017.” In Georgia’s regions, access to internet was “uneven”, noted IDFI. Out of these regions, wired internet was least accessible in Racha-Lechkhumi and Kvemo Svaneti, Guria and Mtskheta-Mtianeti. By October 2013, a total of 4,928 wired internet subscriptions were recorded in these three regions.

GEORGIA STRENGTHENS FRIENDSHIP WITH ITS DONORS

M

ore than 500 projects valued at more than six billion GEL are being funded in Georgia by international organisations, donor countries and financial institutions, announced Prime Minister Irakli Garibashvili at the opening of a special event involving foreign investors. Garibashvili yesterday opened the Annual Coordination Forum of Donors, which is being held in Tbilisi for the first time. “I’m honored to lay a foundation for the annual donor coordination forum, which, I believe, will become an important platform for dialogue between Georgia and its partner states,” Garibashvili said. In his speech he underlined that the total amount of about 500 projects financed by donor countries, various international organisations and fi-

BUSINESS WEEK caucasian

The Editorial Board Follows Press Freedom Principles Publisher: LLC Caucasian Business Week - CBW Address: Shrosha Street 8/10 Director: Levan Beglarishvili Mobile phone: 591 013936; 577965577 Commercial Department: Irakli Lekvinadze Email: caucasianbusiness@gmail.com WWW.CBW.GE

nancial institutions exceeded six billion GEL. In his address, the PM told the representatives of donor countries that their support was “invaluable” for Georgia. “This support significantly helps Georgia to become a leading country without poverty, with strong democratic institutions and strong economy. And such forums help Georgia to have tighter relationship with its partner countries,” Garibashvili said. Furthermore, the PM said he believed the time would come when Georgia becomes a donor country as a member of the international community. At the same forum Georgia’s Economy Minister Giorgi Kvirikashvili said Foreign Direct Investments (FDIs) were extremely important for the country. In 2014 FDIs had increased by 35 percent compared to 2013. As for 2013, the number of FDIs had increased by 40 percent on 2012.

Kvirikashvili promised Georgia would continue its active cooperation with international investors and do its best to attract more FDIs to the country. Meanwhile Garibashvili continued speaking and noted the country tried to use foreign resources as efficiently as possible. “I want to share with you our view of the future in order to attain better results,” he said. The Prime Minister said he believed the Annual Coordination Forum of Donors will further deepen cooperation between participating counties. He thanked the forum participants for their involvement, cooperation and partnership. “Your support not only proves your friendship and trust towards Georgia, but it also gives us hope that the international community will make the world a better and a more secure place through joint efforts,” Garibashvili concluded.

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

Editor-in-Chief: Nino Gojiashvili. Mobile phone: 595 050404 Reporters: Nutsa Galumashvili; Tamar Kakabadze, Lazare Gvimradze

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


March 30, 2015 #93

PUBLICITY

caucasian business week

“SABA CONSTRUCTION STARTED BUILDING OF CONTEMPORARY STUDENT HOUSING ON LISI LAKE SLOPE

S

aba Construction” Started Building A Modern Student Housing On The Slope Of Lisi Lake In Tbilisi. The Building Will House 300 People And Was Surveyed Today By Tbilisi’s Mayor David Narmania, First Deputy Minister Of Regional Development And Infrastructure Giorgi Amashukeli, Ceo Of The Municipal Development Fund Ilia Darchiashvili And The Chairman Of The Parliament’s Economic Committee, Zurab Tkemaladze. The given project is being carried out by LTD “Saba Construction” on behalf of the Georgian government’s order, in cooperation with the municipal development fund for regional development and infrastructure. As the company director Levan Targamadze noted, their construction company has completed several large projects. Further according to him, the Lisi lake slope will see three four-story housing buildings constructed for students, along with an administrative building containing a cafeteria capable of serving 150 students at once. Mayor of the capitol, David Narmania, called the project incredibly relevant and noted that it’s being carried out by the Prime Minister’s decision. Further according to his information, the Tbilisi City Hall will be participating in equipping the housings with all necessary forms of communications. “Every European type of cities where education and learning to paid attention to have these sorts of centres. This helps Tbilisi become more like a European city,” stated David Narmania. According to the CEO of the Municipal Development Fund, Ilia Darchiashvili, the project

includes building sports playgrounds on the territory of the object, as well as a library and a cafeteria. According to the Ministry of Regional Development and Infrastructure of Georgia, the construction is carried out by the Ministry’s Municipal Development Fund on the order of the Georgian government. The works are financed from the government budget and the combined costs are GEL 5 250 227. The living blocks will include hotel-type flats, including several meant for disabled individuals. Accordingly, the infrastructure of the entire housing will fully be adapted to them. The construction is set to be finished in February next year and the built complex will be handed over to Georgia’s Ministry of Education and Sciences. The 300 place student housing is being built in accordance to international standards. Carrying out this project will benefit the betterment of educational and everyday life conditions of socially defenseless students living in occupied territories and various Georgian municipalities. The project includes plans for 3 apartments and an administrative building, along with a cafeteria, conference room, a medical checkpoint, a library, a computer room, a laundry and other helpful infrastructure, which will facilitate an environment of maximum comfort for the students. Planned outside the building are inner roads and pathways, as well as an open sports ground and outer training and exercise equipment along with lighting. The territory will be improved and made environmentally friendly.

3


INTERVIEW

4 HEADLINES GEORGIA HOPES THOMSONREUTERS WILL SUPPORT LAND DEVELOPMENT PROJECT

T

he head of Georgia’s National Agency of Public Registry (NAPR) is on an official visit to the United States (US) to discuss cooperation possibilities with leading media and market research company Thomson-Reuters regarding the country’s new multi-million dollar land management project.

caucasian business week

DAVID BAKRADZE: LIFTING THE VISA BARRIER FOR GEORGIANS SHOULD BE THE EU RESPONSE TO RUSSIA’S BULLYING TACTICS

FIRST UNIVERSITY CLINIC OPENS IN TBILISI

T

he new clinic is open in Sanzona district of Tbilisi on the base of XVIII clinic. The original clinic was built during the Soviet era however over time it was destroyed and became useless. Today, the clinic has 185 beds and is ready to provide high-level service to patients including diagnostic radiology. A total of 25 million GEL was spent on renovating clinic; out of which 5 million GEL was allocated by Georgia’s Ministry of Education.

OLYMPIC BIATHLON TRACK TO BE BUILT IN BAKURIANI

O

ne of Georgia’s forgotten sport’s is being brought back to life in the country’s winter wonderland resort town Bakuriani. A new, modern biathlon track will be built in Bakuriani on the territory of Iagora valley. This will be the first time in about 30 years that the country has enjoyed a proper biathlon track. Biathlon – a winter sport that combines crosscountry skiing and rifle shooting - was a popular sport in Soviet times. Now, with the introduction of the new biathlon track, enthusiasts will be able to rekindle their love for the sport.

GEORGIA DOESN’T FORECAST BUILDING KHUDONI HYDRO POWER PLANT IN 2015

G

eorgia doesn’t forecast the start of building of the Khudoni Hydro Power Plant, said the country’s Energy Minister Kakha Kaladze, Georgia-Online reported. Kaladze told journalists that following the governmental meeting, first the preparatory work must be carried out. “This is a very big project and some time is needed to prepare the Environmental Impact Assessment, as the normal countries do,” he said. “This process will be very transparent. There will be meetings in the ministry of Environmental Protection, with experts and population.”

EXPORT PROMOTION AGENCY WILL BE ESTABLISHED IN GEORGIA

S

tate-owned shareholding company the Partnership Fund is starting to support exportoriented local companies in Georgia as a way to increase the country’s export potential. For this purpose, the Partnership Fund has begun working on establishing Georgia’s Export Promotion Agency. The Agency will be established in three months and will be a daughter company of the Partnership Fund. Exports will be promoted in four main directions: export credit, investment protection, financial guarantees and factoring operations. For developing these areas, the Partnership Fund will work with export promotion Italian agency SACE.

TASTE GEORGIAN WINE AT CHINA FOOD AND DRINKS FAIR

T

en Georgian wineries are showcasing their products to the Chinese market at the 29th China Food and Drinks Fair, being held from March 26-28 in Chengdu, China’s southwest Sichuan province. The demand of Georgian wine is on the rise in China, said chairman of Georgia’s National Wine Agency Giorgi Samanishvili. “In China the interest towards Georgian wine is very high. After negotiations with Chinese importers, we found out that the number of Georgian wine importers in China will be increased,” he said.

March 30, 2015 #93

A

first and immediate step to respond to Russia’s objective to annex the territory of the former Soviet Union is visa liberalisation, writes David Bakradze. David Bakradze is State Minister of Georgia for European and Euro-Atlantic Integration The signature of last week’s “treaty” between Russia and South Ossetiawas only the last in a series of events showcasing an extremely alarming trend: the objective of Russia’s so called Near Abroad policy is to annex as much as possible of the territory of the former Soviet Union. To achieve this, Russia has no hesitation in using hard power – bullying its neighbours and undermining their territorial integrity. How should the West respond? Realize a new vision of regional relations that is based on freedom, and not the threat or use of force. A first and immediate step to this end is visa liberalization. In the case of Georgia, visa liberalization can help towards conflict resolution. The citizens of Georgia, including those of occupied Abkhazia and the Tskhinvali Regions, will be able to benefit from a “freedom” – that will be actually

and immediately perceptible. In addition this will also be a concrete manifestation of the “more for more” approach, which awards those partners who are willing and able to deliver on their commitments. For the people of the occupied regions, it will be a symbol of what stands to be gained from removing the barbed wires across our land. For other Eastern Partnership countries, it will offer a clear incentive for further reforms. Georgia has been recognized as a front runner and a success story of the Eastern Partnership Initiative. Benefiting from the EU’s principle of “more for more”, we negotiated and concluded the Association Agreement, including a Deep and Comprehensive Free Trade Agreement, in record time. We are determined to take full advantage of this agreement and implement fully our association agenda, because there is a strong belief in the EU”s transformative power and a political consensus that this is the objective worth pursuing against all odd. That is why Georgia stands out in the region as a stable and vibrant multi-party democracy, a reliable partner for the EU and NATO and contributor to international security, and an attractive and safe destination for foreign invest-

ment. Trade volumes are rising vis-à-vis EU partners. Reforms over recent years have completely overhauled every aspect of the Georgian political, economic, judicial and social landscapes. In this context, visa liberalization for Georgian citizens is the next logical step, facilitating tourism, business travel and academic mobility. Georgia is a country with transparent governance, low levels of corruption and crime, a trustworthy efficient justice system, a sound corporate tax system and a business friendly environment. The European Commission acknowledged our progress in 2014, concluding that we meet the first-phase requirements of the Visa Liberalization Action Plan (VLAP). We are currently in the second, implementation phase of the VLAP and we hope to be ready for the Riga Eastern Partnership Summit in May. Georgia, the EU and the wider region have much to gain by completing this process sooner rather than later. Visa-free travel will mean more tourism, more cultural and student exchanges, and more civil society partnerships. It will help further develop Georgia and anchor the next generation’s aspirations on the developing of a “European Neighbourhood.” And this is precisely why visa liberalization is so significant: it has a grassroots effect. As the shadow of a new Iron Curtain threatens Europe, it is crucial that we offer an alternative, qualitatively different, vision of the future to the people of the EU’s Eastern neighbourhood. By opening borders, promoting travel, trade, professional, student and cultural exchanges, we can drive real change at the level of communities. This course of actions responds to threats with tangible prospects for democratic, economic and cultural development in an environment of peace and stability. As Russia continues to hand out passports on the one hand and close borders on the other, it is no exaggeration to say that the future of a Europe that is truly free and whole depends upon it. Euractiv.com

GIORGI ABASHISHVILI: GEORGIA WILL SPEND 2 BILLION USD ON TRANS-ANATOLIAN GAS PIPELINE PROJECT IMPLEMENTATION An interview with the President’s Economic Advisor Giorgi Abashishvili - President of Georgia made an optimistic statement about $ 2 billion that will be attracted for the construction of the TANAP in the country’s territory. Can you specify the details? - Construction of the Trans-Anatolian Natural Gas Pipeline (TANAP) is an important project the opening of which was attended by the presidents of Turkey, Azerbaijan, and Georgia. This route will transport Caspian gas to Europe, which will increase the level of the EU’s energy independence. For Georgia, such projects are very important and our participation in them says a lot. In total $ 45 billion will be invested in the project, of which 2 billion will be invested in infrastructure construction in Georgia - it is also very important, as new jobs will be created, additional cargos will be transported through our ports and railway, and of course, the country will get a lot of experience in the implementation of major infrastructure projects. Implementation of such a mega-project will also stimulate the development of small and medium-sized businesses. During the opening ceremony the Georgian President said about the special role of the country in this project - Caspian energy carriers would not be able to get to Europe without transit through Georgia. We play the role of a bridge between the continents, and this function was once again reminded by the Georgian President. If we talk in general about the regional economy, Georgia may play a role of bridge for the transit of goods to Europe from China and Japan. In this regard, cooperation between the three countries is essential, and we are the natural allies of Turkey and Azerbaijan.

As for TANAP, Georgia will begin to get gas through the pipeline in 2018 and only then, in 2019 - Europe, that is our advantage is quite obvious. We are not talking about some very distant future. This is an ongoing project, the results of which we will see soon enough. - Another important issue concerns the relationship with the business. Office of the President often meets with representatives of business, and economic experts. How relevant is topic of insufficient communication between the government and business? - We see that today business is free from political pressure, communication with businessmen has improved, but its effectiveness is still low. It is good that the government then reacts to the comments of business, but it would be better if businessmen’s views were considered not after but before decision-making.

It is important to clearly define who makes decisions in all issues, especially in matters relating to the business. When businessmen complain of bureaucratic barriers, they of course, have some reason for it - in particular, the lack of coordination needed to ensure that decisions on specific matters to be taken in one place. This problem requires a good understanding and finding a right way out that will help us to avoid unnecessary complications. This applies to all government initiatives related to business. An illustrative example is the migration law project which limited the employment of foreign nationals in Georgia and created more threats to the investment climate. Thanks to the business activity, the limitations clause was removed from the project. This is not an isolated issue when business had its own vision.


March 30, 2015 #93

ECONOMIX

5

caucasian business week

TOP STORY

GEORGIA TO RECEIVE LOAN WORTH $250M FOR HYDROPOWER PLANT CONSTRUCTION

GEORGIAN WINE’S ASIAN ASPIRATIONS AMID RUSSIAN CRISIS

A

ccording to National Statistics Office of Georgia’s preliminary data, export of Georgian wine has fallen to constitute 3,1% of the country’s total GDP in January-February period. In comparison, the figure was 7,3% in the same period of last year. In monetary equivalent the fall is 22 mln USD, with this year’s wine exports having brought the country 10 mln USD, compared to the 32 mln in the same period of 2014. The Russian crisis – caused by the military meddling in Ukraine and the subsequent Western sanctions – is the obvious culprit behind the fall in the export of Georgian wine. At least, this is the consensus expressed by Georgian wine companies. Tbilvino told CBW that the Russian market represented 25% of the company’s total export last year. Whereas, the company’ objective this year is to complete half of that amount. Most of the wine companies in Georgia are experiencing this two-fold fall in exports to Russia and Ukraine. When asked how the business is coping with the drastic fall in exports, wine producers remain optimistic. Some of them even view the current crisis as an opportunity for Georgian wines to enter new markets. “With the current crisis wine producers witnessed once again that we cannot be dependent on one specific regional market only. Market diversification is a key direction for our business,” says Nutsa Abramishvili of Schuchmann Wines Georgia, a company whose Vinoterra Mtsvane of 2011 has been featured in the prestigious American Wine & Spirits Magazine’s annual buying guide, earn-

ing 93 points out of 100. As far as market diversification goes, Asia and Latin America are the new prospects for Georgian wine. China, Japan, Panama and Cuba are among countries named by Georgian wine companies as the potential export markets. “We have transported a couple of thousand of bottles to Panama and Cuba,” – Tbilvino’s general director Zurab Margvelashvili told CBW. “This is of course an exotic market for Georgian wine, because the product hasn’t been sold there previously.” Telavi Wine Cellar also named Panama and Cuba among its Latin American marketing destinations. Meanwhile, the National Wine Agency of Georgia, when asked about the decrees in exports, is quick to share that wines of ten different Georgian companies are represented at the ‘China Food & Drink Fair’ that started on March 26th. This annual exhibition, held in Chengu, Sichuan Province of Southwest China is regarded as one of the most influential conventions in Asia that is attended by 300,000 professionals each year. Giorgi Samanishvili, chairman of the National Wine Agency of Georgia is representing the country in Chengu this year, with brands of Georgian wine including Kakheti Wine Cellar, Chateau Mukhrani, Kindzmarauli Marani, Shalvino and others. “China is one of the most strategic export partners of Georgia,” Mr Samanishvili says. According to Geostat’s January-February data, China is the fourth export country for Georgia in terms of wine. 217,000 bottles have been exported to China this year, which is more by 64%

than last year’s figure. This increase in export of Georgian wine to China can be attributed to the active marketing that the wine sector has been pursuing in this regard. In spite of the alternative markets, such as Asia and Latin America, Georgian wine companies are fully aware that one cannot replace the Russian market’s role in the business overnight. “We should not harbor an illusion that in Tokyo people will all of a sudden abandon drinking Sake and will switch to our wine instead,” – says Zurab Ramazishvili, general director of Telavi Wine Cellar. “Wine is a very distinct product that need special packaging for purposes of export,” – says Nutsa Abramishvili of Schuchmann Wines Georgia. “It is a national product, first and foremost. It is not just some other alcoholic beverage. This is a product that unifies our country’s history and its 8,000 year-long culture of wine cultivation.” Take it or leave it, it is a product that is much more familiar to the Russian consumer, given our country’s Soviet history and its reputation as the “Sunny Georgia” with plentiful fruit and joyful people. This may be an outdated cliché, but in the wine exporting business it is definitely an image of value. Given that Barack Obama has prolonged the act of sanctions against Russia in the beginning of March for another year, the geopolitical situation in the region and its economic implications are not bound to change any time soon. It looks like Japanese will have to abandon that Sake after all and take up Kakhetian Saperavi, or Schuchmann Wines Vinoterra Mtsvane for that matter. By Nino Gojiashvili

GEORGIA TO COMPETE WITH TURKEY IN FILBERTS PRODUCTION

C

ourtyard Marriott hotel has hosted discussions over cooperation between the private sector (processing, customers, financial institutions, insurance companies) and small farmers. The event was organized by OXFAM international consortium, biological farming association ELKANA and the European Union office. Along with representatives of donor organizations, the discussions were also attended by representatives of the Agriculture Ministry and the National Food Agency. LLC AgriGeorgia is a representative of Ferrero Spa, the world’s famous chocolate manufacturing brand. AgriGeorgia owns filberts plantations in the Samegrelo Region. The company director Daniel Gonzalez Dellacha says Georgia’s filbert production has got much potential for development. “We arrived in Georgia in 2007, when the country lacked for filberts production technologies. Therefore, we decided to work with the domestic farmers. We founded the Association of Filberts Manufacturers and launched a training of farmers. In the course of time the farmers acquired due knowledge and skills, we also shared our experience and know-how to them. No one expected

Georgian farmers to make success, but they have done. We have organized filberts drying centers and now farmers sell their products at 20% higher prices. We provide information in filberts prices in everyday regime and clients cannot cheat farmers any more. As a result, farmers have become stronger. In terms of filberts production Georgia will soon compete with Turkey”. If the country misses the chance for the agriculture sector development, we will receive negative results, Deputy Agriculture Minister David Galegashvili says. “We have got the chance for making the Agriculture sector stronger and if we miss this chance, villages will be empted finally. This will also bring politically negative affects to the country. The agrarian sector development, first of all, is hindered by the fact local self-governments lack for knowledge and skills. There are consulting centers for farmers and farmers also exist in regions, but, in realty, none of them operate efficiently”, he added. Daniel Gonzalez Dellacha believes donors should coordinate their efforts to the benefit of the Georgian agriculture sector and they should not spend funds without purpose: “Many donors support the Georgian Agriculture sector, but these pro-

cesses are not coordinated. We should cast light whether they duplicate the processes. We should meet with government officials at least once a month to receive clear messages without ambiguities. Coordinated steps will ensure purposeful spending of the funds”. The government should play a decisive role in resolving the current problems before the farmers, Juan Jose Echanove, Attaché of Agriculture, Food Safety and Rural Development for EU Delegation to Georgia says. “A major part of the Georgian population receives incomes from the agriculture sector. The government should realize it should cooperate with farmers. EU will promote the development of the Georgian agriculture sector, but long-term projects should be implemented to reach success and all of us should realize this”, he noted. Tight cooperation between farmers and the government is of vital importance, Benia Trudel, a regional manager for the food safety project, said. “We assist farmers; cooperate with the government in developing a state strategy. There is high level of imports in Georgia. Therefore, bilateral relations between farmers and the Authorities are very important”.

T

he International Finance Corporation (IFC) allocated a loan worth $ 250 million for the construction and commissioning of the Shuakhevi hydropower plant to develop the energy sector of Georgia, the European Bank for Reconstruction and Development (EBRD) said. The Shuakhevi hydropower plant is expected to meet Georgia’s needs of electricity in winter, to reduce dependence on imported fuel and to increase the production of renewable energy sources. Moreover, new jobs will be created, the revenues of the municipalities will be increased and the road infrastructure will be improved as a result of the construction of the hydropower plant. The Shuakhevi hydropower plant will be the first plant of this kind in Georgia. It received the certificate of the UN Framework Convention on Climate Change to reduce carbon emissions. It is expected to generate

450 gigawatt / hour of energy per year and reduce greenhouse gas emissions by more than 200,000 metric tons per year. The work began in 2013. It is planned to begin production in 2016. The International Finance Corporation (IFC) is an international financial institution. The IFC is a member of the World Bank. The headquarters of the organization is located in Washington (USA). It was established in 1956 to ensure sustainable inflow of private investments in developing countries. In contrast Georgia doesn’t forecast the start of building of the Khudoni Hydro Power Plant, said the country’s Energy Minister Kakha Kaladze, Georgia-Online reported. Kaladze told journalists that following the governmental meeting, first the preparatory work must be carried out. “This is a very big project and some time is needed to prepare the Environmental Impact Assessment, as the normal countries do,” he said. “This process will be very transparent. There will be meetings in the ministry of Environmental Protection, with experts and population.” Regarding the construction itself, Kaladze said it is hard to say if it will begin this year, most likely after the preparatory work is done. Khudoni HPP is a projected power plant on Inguri River, in Samegrelo-Zemo Svaneti, Georgia that has 3 turbines with a nominal capacity of 233.3 MW each having a total capacity of 700 MW.


STATISTICS

6

caucasian business week

STATE EXTERNAL DEBTS GROW BY 448 MILLION IN GEL, BY 1 MILLION IN USD

G

eorgian state foreign debt has made up 4,073 billion USD in late February of this year. The figure exceeds by 1 million USD to the debt volume of late Janu-

ary of this year. According to the Ministry of Finance, the total foreign debt of Georgia has amounted to 8,371 billion GEL in late January, while - 8,819 billion GEL by the end of February. However, it turns out that Georgian foreign liabilities are grown by 448 million GEL through a month and it is conditioned due to GEL devaluation towards USD. To note, 4,035 billion USD (8,738 billion) out of the total debt of February is state foreign debt, while 37,437 million USD (81,065 million GEL) accounts for the National Bank.

POTATO IMPORTS LOWERS PRICE ON PRODUCT

A

ccording to Sakstat, totally potatoes of 1248 t have been imported through January - February in the country, the figure is increased by 28% comparing to the same period of the previous year. Import in January has made up 535 t, while 713 t – in February. Import is basically grown from European countries, which is conditioned due to its low cost. The wholesale price of the potato was 60 tetri in the last year, then increase started and the value ranged within 1 GEL before the end of the year. However, the price has begun to drop instead of seasonal growth. As specialists declare, cost reduction is conditioned by the import of cheap products from Europe. Wholesale price of 1 kg potato is reduced to 50-55 tetri. “Georgian potatoes are expensive. The quality is not good, but prices are still high. The factor that consumption of the product exceeds the production volume has an impact on the price as well. Reportedly, import of high quality potato with lower prices is increased from Europe in this year. Such amount of European potato has

been never imported in Georgia. European countries have surplus harvest of potato in this year. However, Russian market was closed and they started active research of the markets. Belgian and Dutch potatoes were imported in Georgia, which dropped prices on the local market”, - Guram Jinchveladze, director of “Akhaltsikhe Agricultural Advisory Service”. However, Prime Minister Irakli Gribashvili declared at the meeting with businessmen in Akhaltsikhe held in the previous week: “it has become clear that the potatoes are imported in Georgia, which is a shame. Our main aim is to make Georgian regions strong and produce local products”. Guram Jinchveladze declares, that potato deficit is mainly conditioned due to small harvest in Georgia. Potato of 60 t on 1 ha is grown on 1 ha in Holland, while the index totals to 15-16 t in Georgia. Several other factors have an influence on the harvest amount, including irrigation system malfunctions, the low knowledge of farmers in vegetable properly care, equipment deficit, lack of potato storage refrigeration equipment and etc.

March 30, 2015 #93

GEOSTAT: GEORGIA’S EXPORTS TO GERMANY EXPORTS TO RUSSIA

F

oreign trade turnover of Georgia with the EU countries has reduced by 2% in January – February compared to the same period of the previous year. Trade turnover with CIS countries has decreased by 23%. According to Geostat, the volume of Georgian foreign trade turnover has made up 385 million USD with the EU countries in January – February, 2015. At that, export (increased by 9%) has totaled to 108 million USD, while import – 277 million USD (less by 6%). The shares of these counties in Georgian foreign trade turnover have made up 27%, including 33% in the export and 25% in the import (respectively, 25%, 22% and 26% in January – February, 2014). However, trade deficit of 22% has accounted for the EU countries (28 % in January – February, 2014). It should be noted, that Georgian foreign trade turnover has made up 429 million USD with the CIS countries in January – February, 2015. At that, export has been 110 million USD (less by 53%), while import – 319 million USD (less by 1%). The

share of the CIS countries has been 30% in Georgian foreign trade turnover, including export - 34% and import 29% (respectively, 35%, 53% and 28% in January – February, 2014). To note, the trade deficit of 27% has accounted for the CIS countries (13% in January – February, 2014). It should be noted, that 4 countries of CIS and 2 counties from EU are among the top 10 of Georgia’s trade partners. The top 10 includes Azerbaijan (the 2nd trade partner), Russia (the 4th trade partner), Ukraine (the 6th trade partner) and Armenia (the 8th trade partner) from the CIS countries. However, the top ten includes merely two countries from the EU: Germany (the 5th trade partner) and Bulgaria (the 10th trade partner). To note, export from Georgia is higher in Germany though January - February of this year comparing to the export carried out in Russia: export (products and services) cost of 15,711 million USD has been made from Georgia to Germany in January - February of this year, while 15,627 million USD from Russia.

NUT EXPORT EQUALED TO CARS’ EXPORT

F

oreign trade turnover of goods (except unorganized trade) has made up 1,433 billion USD in January-February, 2015, the figure is less by 9% comparing to the previous year’s rate. According to Sakstat, export amounts to 324 million USD (less by 26%), while import – 1,109 billion (less by 2%). Negative trade balance of Georgia has totaled to 786 million USD in January-February, 2015 and foreign trade turnover – 55%. The share of 10 biggest trade partners has amounted to 67 % in foreign trade turnover of Georgia in JanuaryFebruary, 2015. The biggest trade partners are Turkey (224 million USD), Azerbaijan (147 million USD) and China (112 million USD).

However, cars have still occupied the 1st place among the exporting top 10 in January-February, 2015. The figure has amounted to 41 million USD and it has totaled to 13% of total export. Nut export is on the 2nd place and the volume has made up 41 million USD and respectively, the total export amounts to 13% of the total export. It should be noted, that export of cars has been 77,103 million USD in January-February of the previous year, while the total volume of nut export has been 15,677 million USD in 2 months of the previous year and the growth is significant. Ferro alley is on the 3rd place. Export of this goods amounts to 34 million USD and the figure is 11% of the total export.

GEORGIA’S NEGATIVE TRADE BALANCE GROWS WITH AZERBAIJAN EXTERNAL TRADE OF GEORGIA IN JANUARY-FEBRUARY 2015

I

n January-February of 2015 external merchandise trade (excluding non-organized trade) in Georgia amounted to USD 1433 million, 9 percent decreased year-on-year. The exports equaled USD 324 million (26 percent lower), while the imports stood at USD 1109 million (2 percent lower). The negative trade balance was USD 786 million in January-February 2015 and its share in external trade turnover constituted 55 percent. The charts below reflect basic trends of the external trade of Georgia for 2010-2015:

T

he negative trade balance is increased with Azerbaijan, as export is significantly reduced within a year, while import is declined slightly. The negative trade balance of two months exceeds 54 million USD, however the rate has exceeded to 43 million USD in the previous year. According to Sakstat, export of products and services cost of 45,919 million USD has been made in Azerbaijan through January – February of this year. Therefore, despite the fact that export is reduced by 38,4% comparing to the same period of the previous year, Azerbaijan still remains the number one exporting market for Georgia during two months of this year.

Cars have been number one exporting products in Azerbaijan, the trade volume has been reduced from 36,6332 million USD to 19,825 million USD; armature export is decreased from 7,875 million USD to 4,768 million USD, live stock export - from 5,87 to 2,05 million USD. However, metal pipe export is increased from 98 thousand USD to 1,6 million USD and export of calculating devices is grown from 3,2 thousand to 1,6 million USD. Therefore, import form Azerbaijan is reduced from 118,471 million USD to 100,698 million USD. Gas import is declined from 81,5 million USD to 67,4 million USD , while oil – from 26,95 million USD to 17,05 million USD.

WINES EXPORTS TO CHINA GROWS 2.4 TIMES, NONALCOHOLIC BEVERAGES EXPORTS INCREASE 7.6 TIMES

C

hina is the third big trade partner of Georgia. As of January - February, 2015, the volume of trade turnover with China has amounted to 112,226 million USD, it is 7,8% of the total turnover. According to Sakstat, export in China is grown by 271% comparing to January - February, 2014. Wine and non-alcohol beverages occupy significant place in the list of exporting products. Georgian wine export, cost of 1,023 million USD, has been exported in China, the figure is increased by 2,4 times (142%) comparing to the same period of the previous year. However, non-alcohol beverages cost of 29 thousand USD has been exported in China, the rate is 7,6 times higher comparing to the previous January – February.

It should be noted, that import from China is insignificantly reduced and it has made up 97,735 million USD. Flat-rolled products of non-alloy steel take the greatest part in the import, its import is grown by 12,5% (2 819,3 million USD). Import of paving and facing ceramic tiles is increased by 22% and the figure has totaled to 2 214,3 million USD.


ECONOMY

March 30, 2015 #93

7

caucasian business week

SECOND INDUSTRIAL ZONE TO LAUNCH EXPECTED FOREIGN CURRENCY OPERATION IN KUTAISI IN OCTOBER INFLOW THIS SUMMER WILL “Hualing Group” took an initiative on the industrial zone’s creation in Kutaisi at the end of last STABILISE GEORGIAN LARI year and applied to the Ministry of Economy. The

H

ualing Group” will launch a Free Industrial Zone (FIZ) in Kutaisi in October this year. According to the Government’s resolution, the period of operation of the industrial zone in the territory of the machine -building factory makes 30 years. According to the resolution, “Hualing” is obliged to ensure conditions specified by the Revenue Service till 30 May, to arrange the building facilities and special equipment in the territory of the customs checkpoints. The agreement on the Free Industrial Zone’s setting up, arrangement and operation should be signed with the Government of Georgia before May. While in July, the free industrial zone development plan must be submitted to the Ministry of Economy.

company’s representative claimed in a conversation with the media that an old machine-building plant located in the city of Kutaisi was bought by the company, renovated and prepared for setting up the industrial zone. As per 2014 data, “Hualng Group” is Georgia’s largest investor. Hualing is building the Olympic Village in the Tbilisi sea area. A free industrial zone has been already functioning in Kutaisi and is operated by the Egyptian “Fresh”. The Free Industrial Zone opereated by the Arabic company is functioning on the territory of Poti. Entrepreneurs are interested in FIZ for the following reasons: there is no income tax or it is insignificant; maximally simplified procedure of registration of the firm; there are no restrictions on the import andexport of currency; procedure of the firm’s management are simplified. Azerbaijani SOCAR plans to build an industrial zone in Kulevi. The government wants to create an industrial zone in Khelvachauri region, but has failed to interest investors in this project. Development of free industrial zones in Georgia was launched under the previous government in 2008.

NATIONAL TOURISM ADMINISTRATION DOUBLES SPENDING ON MARKETING

I

n 2015 the National Tourism Administration will spend GEL 7.8 million on advertising campaign abroad, which is almost 2 times more than in 2014. According to George Chogovadze, Director of the National Tourism Administration, despite the economic and political situation, Russia and Ukraine still remain the main target markets to attract tourists. “The advertising campaign is also planned in Azerbaijan, Turkey, Belarus, Israel, Kazakhstan, Hungary. These countries have been selected as a priority because of the availability of direct flights, “- said the head of the department. According to him, due to the currency crisis and other external factors influencing the situation in the region, the number of tourists in Georgia has decreased. “But at the same time in 2015 several major

events are scheduled in Georgia such as the European Youth Olympic Festival, UEFA Super Cup and the annual conference of the European Bank for Reconstruction and Development. They give grounds for optimism that the flow of tourists to Georgia will grow, “- George Chogovadze notes. According to him, in terms of the advertising campaign abroad, the emphasis will be placed on television, the Internet, outdoor advertising and print media. Director of the Tourism Administration urges officials, and not only them, to spend holidays in Georgia, as domestic tourism is one of the most important components for the sector development. “Georgia has a great potential – there are very few countries in the world where there is a tourist season throughout the year,” - George Chogovadze underlines.

SEA RESORTS START PREPARATION FOR THE SUMMER SEASON

S

ea resorts have already started preparing for the upcoming summer season. Bidzina Imnaishvili, Ureki envoy, states “Commersant” that beach cleaning equipment of European standards have been bought as well as new garbage trucks. It is planned to replace the old garbage bins. Imnaishivili says infrastructure works in Ureki began in January. By this time, the company won the tender has been revealed that will rehabilitate the water and sewerage system. The ongoing works within a 60 million infrastructure project should be completed until 2017. According to him, the season will officially open on May 15. Imnaishvili expects especially large number of tourists from neighboring countries, for this purpsoe an active advertising campaign

is planned. In total GEL 15 million will be allocated for infrastructural works from the 2015 budget. Deputy Governor Irakli Tsetskhladze says that 9 million from this amount will be spent on sewage system rehabilitation. In his words, all works will be completed before the start of the active season, ie until mid-July and the tourists will not have any problems in this regard. Tsetskhladze notes that benches, trash bins and other equipment will be replaced on the coastline. In Tsetskhladze’s words, a grand-scale sports complex is being built in Kobuleti. However, as reported, it will not be completed this season; the complex that will host a variety of sporting events will be operational since 2016.

T

he ongoing depreciation of Georgia’s national currency, the Lari, against the United States (US) Dollar is continuing to raise concern in Georgia, but the country’s Economy Minister has voiced a way to stabilise the depreciating currency. Georgia’s Economy Minister Giorgi Kvirikashvili told reporters yesterday that the Lari would stablilise soon as the country was expecting an inflow of foreign currency this summer. “I would like to say that it is possible to stabilise the Lari, as in summer we expect a lot of foreign currency to flow into Georgia. Then the National Bank [of Georgia] will determine how the GEL gains value. In April, we will start to see the increase,” Kvirikashvili said. The Lari has started to slightly depreciate again after briefly stabilising earlier this month. However the country is still affected by the current value of the currency, which experience about a 20 percent drop against the US dollar in the past six months.

Accordingly, the National Bank of Georgia (NBG) set a new exchange rate, where the official price of 1 USD reached 2.2287 GEL. The previous exchange rate was 2.2265 GEL. Correspondingly, the exchange rate has changed by 0.0022 GEL. The Lari has also depreciated against the Euro, noted NBG. From today, March 25, 1 EUR will cost 2.4478 GEL. The previous rate was 2.4182 GEL for every Euro. The official exchange rate depreciated by 0.0296 GEL.

GREENHOUSE WORTH SEVERAL MILLIONS OF GEL LAUNCHES OPERATION IN GEORGIA

A

multi-million dollar greenhouse has opened in the Kapanakhchi village in Georgia’s Gardabani region within the framework of the state program Produce in Georgia. The first part of the project is completed while work to continue developing the facility will continue this year. To date, about 10 million GEL has been spent on building the greenhouse in which local and international experts will work. It is expected the total cost of the project will reach 45 million GEL. The project was implemented by French company Richel Group and Georgia’s Co-Investment Fund. The greenhouse was built on 4.4 ha territory and employs 108 people from the Gardabani area. Together with Georgian agronomists, French and Ukrainian agro-engineers, biologists and technologists work in the greenhouse. The latest type of modern machinery and seed crops to be used in the greenhouse are being imported from Holland and France. The production will be sold initially in the local market and later produce will be exported. “This is the highest greenhouse in Georgia and

the second construction in the Caucasus region. The higher the greenhouse is, the easier is to control climate and dampness. This is an energy efficient automated greenhouse,” said Georgia’s Greenhouse Corporation director Dimitri Kolensikov. Within the Produce in Georgia program, in August 2014 the Co-Investment Fund was given 35 ha of land for the purpose of building a greenhouse. The greenhouse development project was designed to boost the country’s growing agriculture sector and reduce its reliance on imports. Construction of the facility started on September 19, 2014. Today the first stage of the project was officially completed. The second stage will begin in April 2015 and end in September 2015. An additional 85,000 sq.m. will be added to the existing greenhouse and a further 20 million GEL will be spent this. When fully complete, the facility will have the capacity to grow over 15,000 tonnes of produce annually and contribute 435,000 GEL per year to the local municipality. The project will also reduce the country’s reliance on tomato imports by 30 percent. A total of 45 million GEL will be invested in the project, officials said.

25KM ROAD CONSTRUCTION TO START IN KHEVSURETI

C

onstruction of a 25 km road connecting Khevsureti villages Roshka and Arkhoti ( a historical-ethnographic region in eastern Georgia) will begin in the summer. Commersant.ge was told at the Ministry of Infrastructure and Regional Development. They inform that the Ministry’s Municipal Development Fund will announce a tender for the construction of a 25-km road in the near future. “As you know, there has never been a road in Arkhoti, therefore it was necessary to study the situation on the ground, a preparatory work is completed. Currently the project, in accordance with the law, is undergoing expertise in Levan Samkharauli National Forensic Bureau, after its completion, the construction tender will be announced. The construction will begin in the sum-

mer of 2015, “- say in the Ministry. In their words, the construction of the Arkhoti road has a strategic importance. This is a border area where 33 families are planning to return and this region will be resurrected. The then Minister of Infrastructure Elguja Khokrishvili talked with “Commersant” about Arkhoti road construction. He said that the project’s idea was to give people the opportunity to travel. He also noted that along with the road, it was also planned to develop tourism infrastructure and promote the guesthouse business. As for the cost of the project, at this stage, the numbers are not specified, however, depending on the complexity of construction, most likely, we are talking about large amounts. The construction will be financed from the state budget. Recall that due to a lack of funds, construction of Sachkere-Shkmeri- Oni road has stopped.


ANALYTICS

8 QUOTES

CULTURAL ENTERTAINMENT

“We want president of ICC Georgia to define the reason of his concern”

GIORGI GAKHARIA Business Ombudsman Office of Business Ombudsman demands more clarity from Fady Asly, president of ICC Georgia, who has stated about business oppression by the Revenue Service. “We ask Prime Minister Irakli Garibashvili to do something and take urgent measures to stop the harassment and racketeering of business, which is carried out by Revenue Service, it has become the number one obstacle for business development in Georgia. You systematically ignore our messages and inaction would bring more damage. Once again, we demand to stop the harassment of

March 30, 2015 #93

caucasian business week

business and we sincerely hope that you will eventually take steps and do something. Thank you very much,”Fady Asly has written on his Facebook page. Office of Business Ombudsman has released a statement in response to the businessman’s report. According to the Office, it is not the first case when Fady Asly spreads this type of statement, which has the general nature and lacks clarity. “We want to note, that Office of Business Ombudsman has studied Fady Asly’s previous statement, concerning to harassment of business (which is also a general nature). A corresponding communication has been held with Fady Asly, head of International Chamber of Commerce. It has been revealed, while studding the issue, that administrative processing has been completed in favor of the taxpayer, while the other taxpayers’ requirements have been satisfied later and in one case, violation fact by the taxpayer has not been revealed. We are ready to study each problem of business sphere and to make reaction on it. Respectively, we demand Fady Asly to provide us with concrete cases of business “racketeering” and “harassment” by the state institutions. If it is not grounded, we can assume that the application does not serve business interests”, - Office of Business Ombudsman has stated.

“I categorically oppose a several-month-long presence of the investigative agency in service companies”

ITSIK MOSHE Georgia-Israel Business Wing President Georgia’s Prime Minister Irakli Gharibashvili has commissioned the business ombudsman of Georgia to research the liaison issue of Israeli investors.

According to the governmental administration’s press service, the Prime Minister responded to the initiative of Itsik Moshe, President of the Israeli-Georgia Chamber of Business, on appointing a contact in the government of Georgia for promoting communication between the Israeli investors and all necessary agencies. “I would like to say that I have already given the order to study the issue of the Israeli investors and a decision regarding this will be made in the near future,” said the Prime Minister. Itsik Moshe has proposed appointing a liaison for Israeli investors to the government of Georgia. “I want to make a comment on the case of Israeli investor Meir Shavit and his companies. It is not my aim to interfere in the competence of the investigation agencies, though I categorically oppose a several-month-long presence of the investigative agency in these companies, since it will look too much like exertion of pressure on business,” Itsik Moshe said in his statement.

“We need more free money in the country”

BIDZINA IVANISHVILI Businessman and former PM of Georgia “Free’ is not an economic term in this context, of course. The United National Movement uses that argument to belittle the concept,” – said Mr Ivanishvili on air of GDS TV. During the elections I promised the Georgian

population that we would help the agriculture of the country. We promised one-year long and seven-year long agro-credits. We promised these credits would be beneficial. 800 mln GEL were invested in this regard – the money that no one talks about today. I was most actively pursuing activities that were beneficial for the country’s economy. I also have significant knowledge in this regard. There is currently a project being prepared by the government, which will induce much more money in the economy than any other project has. I don’t want to disclose too much details, because the work is still under way. However, this will create much more free money in the economy. ‘Free money’ is not an economic term in this context ant the UNM tries to use it this way to belittle the concept. With regard of consumer loans as well there has been a significant improvement. This was a sphere that was most challenging for agricultural business. Take a look at this sphere and analyze how much improvement has been made.

“Consumption decline will strengthen GEL in shortterm period and many investments – from longstanding prospect”

ARCHIL GACHECHILADZE Chairman of Investment Management Company “Galt & Taggart” Mr Gachechiladze, sees a way out from GEL devaluation in the decline of consumption and import for the short-term period. According to him, the long-term stabilization of the exchange rate will depend on the government’s investment policy. However, Gachechiladze does not consider reasonable frequent interventions of the National Bank. “I do not see any prospects, that GEL

will be returned on the old rate, on the contrary, there is more chance of its depreciation. GEL still remains the most hard currency in the region, even Turkish lira is more devaluated, so strengthening of GEL would be fallen out from reality. Import reduction can stabilize GEL in a short-term period, it might be caused by the reduced consumption i.e. population should spend less. However, there are no such signs yet. Revenues should be significantly increased from the tourism for the stabilization of GEL, currency inflow must be increased and investments should be streamed. GEL stabilization will be dependent on the correct economic policy of the government for the long-term period. It means, how actively the government will work for the business assistance and if they mproves relations with the investors. However, we have seen incorrect relations with the investors before. Now, there are already signs that these attitudes are changing. If this trend continues and the government gets active, investments might be streamed in the country, so it will cause strengthening of GEL. Therefore, governed must work actively to this direction. However, I do not regard reasonable frequent interventions of the National Bank of Georgia and merely point interventions should be made”, - Gachechiladze notes.

CINEMAS In the cinema industry of Tbilisi international operators are not represented and the market is submitted by three local operators: Rustaveli Cinema, Amirani Cinema and Cinema House accommodating up to 1,600 people. The vast majority of visitors are locals and resident Georgians. Rustaveli Cinema is the largest movie theatre in Tbilisi, consisting of five screens of various sizes and one VIP cinema hall offering customers additional facilities. The largest hall of the cinema has a capacity of up to 400 seats. Rustaveli Cinema is operated by Rustaveli Cinema JSC, which also operates Amirani Cinema in Tbilisi and Apolo in Batumi. The supply of movie theatres in Tbilisi will grow sharply in early 2015. A new branch of Rustaveli Cinema will be opened in Tbilisi Mall in 2015. Rustaveli Cinema also plans to open another branch in new shopping center Tbilisi East Point. This movie theatre will consist of 10 screens. Small scale cinema houses are becoming increasingly popular in Tbilisi offering flexibility and more comfort to the Georgian audience. Several such movie houses are operating in the city, such as Cache and Cinema City. The cinema market outside Tbilisi is less developed. Apolo is only movie theatre in Batumi. As regards Kutaisi, it is planned to open an entertainment center, including cinema and bowling club near the city hall of the city. There are no movie theatres in the vast majority of Georgian cities. The turnover of cinemas, theatres and museums amounted to GEL 48.4 mln in 2013. In the first half of 2014, the turnover of the sector amounted to GEL 21.8 mln. THEATRES & CONCERT HALL The total capacity of theatres in the three main Georgian cities (Tbilisi, Batumi, Kutaisi) amounts to 7,000 seats. Tbilisi dominates supply with 16 theatres and 4,500 seats. The major theatres in the county are Rustaveli State Drama Theatre, Marjanishvili State Drama Theatre, Tumanishvili Cinema Actors Theatre, Art and Music Centre in Batumi and Opera House in Kutaisi. Tbilisi Concert Hall, with a capacity of 2,200 seats, is the largest hall in Georgia. It generally hosts important cultural events of Tbilisi. The Refurbished Tbilisi Opera and Ballet Theatre is planned to open in the spring of 2015. Reconstruction has been underway since 2010. A new concert hall is being constructed in Guria, near the beach of Natanebi. Apart from the con-

cert hall, the project will comprise a cinema, hotel and entertainment centre. The concert hall is planned to a have capacity of 10,000. The project will launch in May of 2015. MUSEUMS The vast majority of Georgian museums are concentrated in Tbilisi. The recently refurbished Georgian National Museum and Ethnographic Museum, occupying 52 hectares of land, are the most visited places of the country. In the near future the Fine Art Museum of Tbilisi will be opened on the central avenue of the city. The museum will launch in 2016. The first and second floors of the building will be assigned to an exposition center and offices for administration. The museum will occupy the upper three floors of the complex.

Cinemas in Georgia

Theatres and Concert Halls in Georgia

Existing Museums in Georgia


March 30, 2015 #93

BUSINESS

9

caucasian business week

TBILISI INTERNATIONAL AIRPORT AMONG BEST ONES IN EASTERN EUROPE

T

bilisi International Airport has been named as one of the best airports in Eastern Europe for the second time in a row by Skytrax World Airport Awards, the most prestigious accolades for the global airport industry. Results of a survey of air travellers revealed Tbilisi International Airport was ranked among the top ten airports in Eastern Europe in 2015. The other nine international airports named in this category were: Budapest, Tallinn, Kiev, Riga, Belgrade, Sofia, Bratislava, Skopje and Varna. TAV general manager Mete Erkal believed under the operation of TAV Georgia, Tbilisi International Airport had turned into “one of the most important hubs in Eastern Europe in a very short time”. In 2014 Tbilisi International Airport provided services to more than 1.5 million passengers. “It was in the result of passenger surveys that Tbilisi International Airport was named as one of the best airports in Eastern Europe,” Erkal said. The airport was named as one of the best airports in Eastern Europe last year too.

The World Airport Awards are based on 13 million customer nominations across 112 nationalities of air travellers and include 550 airports worldwide. The survey evaluated customer satisfaction across 39 key performance indicators for airport service and product - from check-in, arrivals, transfers, shopping, security and immigration, through to departure at the gate. TAV Georgia is the daughter company of TAV Airports Holding. It started operating in Georgia in 2005 and will continue operating until 2027, as stated in its agreement. Meanwhile Tbilisi International Airport was awarded the Best Developing Airport title among former Commonwealth of Independent States (CIS) in the Dubai awards in 2010, while the following year the airport was named the Best Airport among former CIS countries. In 2011, Tbilisi International Airport also won the Golden Brand 2011 in the category of Public Transport and Service. In 2013, Tbilisi International Airport won the Routes Airport Marketing Award.

GEORGIA’S NEW SPORTS PALACE WILL HOST 2016 JUDO GRAND PRIX

A

prestigious international judo competition is coming to Georgia next year. Georgia has been named hosts of the Judo Grand Prix 2016, involving a series of events and athletes from all over the world. Today it was decided the International Judo Federation (IJF) World Judo Tour will take place in Georgia’s capital city next year during the Judo Grand Prix 2016. The competition will be held at the country’s new Sports Palace, which is currently under construction. This decision was made today by IJF representatives after they viewed the construction of the new Sports Palace in Tbilisi. After learning about the final plan of the new sports complex, IJF head sports director Vladimir Barta and sport manager Lisa Alan said they were

impressed with the new facility. The new Sports Palace is being built on the territory of the 10th building of Tbilisi State University – the so-called Maglivi building. Specifically, the Sports Palace is being built for the purpose of the European Youth Olympic Games 2015. After the Youth Olympics finishes, the new sport facility will host high level international tournament in handball, volleyball, basketball, judo and other events. When complete, the new Sports Palace will have two halls: one which can hold up to 800 spectators and the other with a larger capacity of 3,000 spectators. There complex will offer a range of facilities including restrooms and fitting rooms for athletes, a media room, press conference hall, cafeteria and more. The new sports complex will also be fitted out to cater for people with disabilities.

EXPECTED ECONOMIC BENEFITS FROM LOWER TAX ON RENTAL

T

ax on rental apartments is reduced from 20% to 5% - the government’s initiative is positively evaluated both by representatives of the real estate sector and experts. In their view, this will create a full official statistics of what is happening in real estate, and in addition, this decision will encourage investment in real estate. According to the expert Emzar Jgerenaia, this step is very important in terms of supporting the construction business. “Reduction of tax from 20% to 5% is a very positive initiative that will allow people to buy an apartment not only to live in, but also to invest available funds. Now people will have a choice - to invest in banks, or buy real estate for rent, because now they will pay to the budget not 20% of the rental but only 5%. If the government takes steps to simplify lending, then it will be easier to buy an apartment, and, accordingly, people’s revenues will grow. Our society is still in the mistaken belief that some innovative economy based on high technology can be built in Georgia. In fact, this is unrealistic. Even if someone invents something, he will be immediately taken away to the West. Georgia will not be able to produce products similar to “Samsung” or “Apple”. No one will cede this business, as the future belongs to it. So the current situation is quite different,

and it is necessary to use the opportunities that exist ,”- the expert notes. According to Irakli Rostomashvili, the head of the Developers’ Association, an initiative of the government is an additional motivation for the development of the real estate market. “Now everyone who rents an apartment are doing it in order to increase their income, but it has not yet become a full-fledged business. The government’s new initiative is a major step in this direction. Those who make high profits from their activities will be able to invest their savings in real estate, “- he notes. Apart from that, he believes that the initiative will improve the quality of statistical data. “To date, there are no statistics on the lease of real estate. According to unofficial data, approximately 40 000 individuals lease property, but it is impossible to say anything more or less accurately - the tax was so high that individuals were forced to lease apartments informally. Now when the tax is set at 5%, they will have the motivation to work openly. And the state will have exact data on this sector of the economy, “- Irakli Rostomashvili underlines. In his words, the government’s initiative will help revitalize the real estate market, since individuals will have motivation to buy an apartment for investment purposes.

UNISON RANKS THIRD IN INSURANCE SECTOR WITH 19% MARKET RATIO Unison insurance company plans to join the agribusiness insurance state project. The company will launch preparatory works and active communication with beneficiaries as part of the project. Unison director general VASIL AKHRAKHADZE provides detailed information on the Georgian insurance market and the project. -When did you launch operation on the Georgia market? Was it difficult for a new company to find a niche on the Georgian insurance market? -Unison has been actively operating on the insurance market for 4 years and the company manages to maintain the dynamically growing, stable and reliable image thanks to reasonable management. According to the 2014 official report of the Georgian Insurance Supervision Service, Unison is recorded in the list of Georgia’s three leading insurance companies in terms of generated premium and a 19% market ratio. The company has advanced in the list by 5 positions compared to 2013 and moved to the third place from the previous 8th place. -The market competition has sharpened. What are your priorities and how do you plan to compete with more experienced companies? - Penetration into the Georgian insurance market is very difficult, in general, because of the market size. Unison represents a remarkable sample of western-European style insurance company that operates on only insurance direction and this is our advantage. Unison and their founders are interested in developing only insurance business. The company is not affiliated with commercial banks, medical and pharmaceutical business and other structures and this creates more flexibility to ensure freedom and quality of services for our clients. To maximally manage and minimize risks, Unison company actively employs reinsurance mechanisms. On the one hand, this ensures longterm stability and success of the company, one the other hand, confidence of clients and comfort are guaranteed. As a result, Unison is the most reinsured company in the Georgian insurance sector. Unison has been successfully cooperating with such influential partner reinsurance companies as: Lloyd’s Syndicate, Hannover Re, Polish Re, Allianz, SCOR and so on. - In general, how would you appraise the Georgian insurance market? How developed is the system and what is the market’s default? - The previous year of 2014 was full of various challenges. Serious changes have taken place on both financial market and in the legislation. Insurance is an important sector without which the country cannot be developed. If the legislative basis is not timely improved, I doubt we will fail to meet the European values. A lack of obligatory insurance products is very

problematic, while in all developed countries, including in the Post-Soviet countries, similar practice was introduced long ago in many directions. It is the government’s responsibility to resolve these issues. We have already launched operation in this direction and we hope concrete results will be attained in the near future. Another important issue is related to fundamental legislative amendments to separate the insurance sector from bank, hospital and pharmaceutical sectors. This step will create preconditions for considerable advancement and success. - What insurance products do you offer to consumers and on which products do you make accent most of all. Which insurance products are most sellable? - Our main strategy is to maximally diversify portfolio not to be dependent on one direction or state projects. Unison provides all insurance products (excluding pension schemes), including life and nonlife insurance products. We are leaders in the property insurance field with 32% higher market ratio compared to 2014. Our clients are such major companies as Batumi Sea Port, Radisson, Sheraton, Telasi, Inter RAO assets, Rompetrol, Georgian Beer Company, Geocell, Gino Paradise, Orbi and so on. The responsibility insurance product is also very important, as well as healthcare insurance and auto insurance products. - You have joined the agribusiness insurance project. This is a very complex project and in many countries similar projects fail without state assistance. Will this project bring benefit to your company and what works should be done to develop a project? -This year we decided to join the agribusiness insurance state project and started active preparatory works. We are completely ready for the project in terms of technical and human resources to fully implement the project obligations. We have already conducted introductory meetings with several municipalities and farmers in regions. This is a significant project for the agribusiness sector development and it is pleasant the Authorities provide such a support to farmers. This direction is new for our country and it is difficult to think of profits, because insurance culture is very low and our population is not solvent either. Nevertheless, we believe this direction will justify and it is of vital importance to develop this sector for both the business and the country in whole.


10

COMPANY NEWS caucasian business week

March 30, 2015 #93

INTERNET PROVIDERS INCREASE SERVICE TARIFFS, CONSUMERS DEMAND EXPLANATION

C

aucasus Online has introduced a new tariffs system for both internet and TV services. Under the new tariffs plan, subscribers will pay 27 GEL for Optimal package with10 mb/sc (instead of previous 25 GEL), 37 GEL for Express package with 30 mb/sc (35 GEL), 50 GEL for Extreme package with 50mb/sc(45 GEL) and 100 GEL for Infinite package with 100mb/sc. Caucasus Online substantiates the decision by the current situation on the international market and Georgia’s economic developments. “These factors have made it necessary to correct the tariffs, but in this situation we have tried to make the rise in prices as painless as possible for our subscribers”, the company says. New tariffs for telecommunications services came into force on March 23, while the current subscribers will move to the new tariffs system for a month. Each of them will receive individual notifications, the company says. In February 2015 Silknet also increased tariffs on internet and TV services. Changes concerned the speed of Silk Optic/DSL internet packages. Tariffs have increased on Silk Optic/ DSL internet, basic TV and thematic packages. Silknet subscribers now pay 26 GEL for Silk Optic Start package instead of previous 20 GEL, as the service speed has increased from 5 mb/sc to 10 mb/sc. The price of DSL internet standard

package has also increased from 37 GEL to 45 GEL, as the service speed has grown to 6 mb/sc from 3 mb/sc. Silknet substantiates the decision by a growth in the speed of internet connection. Meanwhile, a part of the subscribers pretests against a growth in service tariffs. They pose questions at the social networks: What is the connection between the GEL devaluation and the increased tariffs? They demand for detailed explanations from the provider companies. Providers confine with only brief comments and refer to international realities and current economic situation in Georgia. It is difficult to assert whether a growth in tariffs was inevitable amid the GEL rate devaluation. We should obtain detailed information to make due conclusions on how this or that company has determined the tariffs, Gela Butbaia, an expert in communications, noted. As to the relation between the GEL devaluation and the tariffs growth, Butbaia explains Georgian companies buy certain services abroad in USD. Therefore, their expenditures in these segments grow, but we should know what is the role of these costs in generating tariffs to determine whether the company has failed to maintain the existing tariffs or decided to follow the trend of rising tariffs. “We should know how proportionally the USD-indexed expenditures have changed. Domestic providers make payments in USD for the so-called Upper Domain host-providers and international communications channels service tariffs. If these costs make up only 10% of total expenditures, but the tariffs have doubled, would not be it justified to increase tariffs by only 8% to 10%? It is difficult to determine this, because all these data are preserved by the companies. In general, amid inflation expectations and overall upturn in tariffs of products and services, the companies nay just have followed the trend of a growth in prices”, Butbaia noted.

HYATT PLANS TO OPEN HOTELS IN REGIONS OF GEORGIA

A

fter Tbilisi, “Hyatt” plans to open hotels in other cities of Georgia. “Hyatt Hotels Corporation” signed a contract with “Rustaveli Property Ltd” regarding the construction of Hyatt Regency hotel. The company’s representative says in his letter sent to “Commersant” that “Hyatt” is expanding only in the cities where their hotel‘s guests want to rest. Due to hospitality, nature, the best drinks and meals, Georgia has become a popular tourist destination. In his words, Georgia is also attractive in terms of foreign investments, thanks to political, economic

and administrative reforms. “Hyatt” representative notes that the company has a strong representation in the region, including Armenia, Azerbaijan, Turkey, Russia and Ukraine, but the company aims to increase its presence in the cities where their tourists wish to travel and the opening of the hotel in Georgia is a logical step. He says, “Hyatt” will be happy to discuss the possibilities of opening hotels in other Georgian cities, given that it will be commercially viable both for the owner and “Hayat “. As reported, “Hyatt” five-star hotel in Rustaveli Avenue, Tbilisi will be opened in the former building of the Ministry of Justice in 2017.

TRUMP TOWER ARCHITECT SUSPENDS NEW PROJECT

T

rump Tower architect says at this stage the prospect of launching a new project in Georgia is very small. John Fotiadis planned to come in Georgia in the spring of the current year to start new projects. However, in a letter sent to “Commersant” Fotiadis writes that his company’s representative arrived in Georgia in December and found out that the projects, the

company worked on, are still unfinished and chances to start the new projects are low. He explains this by the tense situation in Ukraine and when the geopolitical situation handles and stability returns, the likelihood of the resumption of work will be much larger. Prior to this, Fotiadis doubts that their company will find a new job. Fotiadis is an author of “Trump Tower” project and “Tsinandali Radisson” hotel in Georgia.

BATUMI MCDONALD’S AMONG THE TOP 10 MOST INNOVATIVE BUILDINGS

T

he website Ideas.ted.com has published a list of 10 buildings that reflect the future of architecture. The list includes the McDonald’s building in Batumi, Georgia. “It’s a gas station, a restaurant, a public park and a reflecting pool. Because why shouldn’t gas stations offer true amenities to travelers? Design was developed by Giorgi Khmaladze Architects. The list also includes Tverrfjellhytta reindeer pavilion in Hjerkinn, Norway. A hiking trail leads to a spectacular site overlooking the Dovrefjell mountain range in central Norway, home to some of the last remaining wild reindeer herds in Europe. A sinewy pavilion designed by Snøhetta invites visitors to warm themselves while observing the animals. Metropol Parasol in Seville in Spain. When Seville officials decided to replace the park-

ing lot and bus station in the city center, they were surprised to discover Roman ruins beneath the surface. Alcabideche Social Complex in Alcabideche, Portugal - a unique housing complex for the elderly reflects Portugal’s cultural emphasis on quality of life. Drift pavilion for Design Miami/ 2012 in Miami Beach, Florida, United States. Ark Nova in Matsushima, Japan- an inflatable and mobile concert hall is made of a stretchy plastic membrane. China Central Television headquarters in Beijing, China. Wendy pavilion in Queens, New York, United States; Mapungubwe Interpretation Centre at Mapungubwe National Park in Limpopo, South Africa. As reported, the influential Internet outlet ArchDaily named McDonald’s complex in Batumi the best building of 2014, while Architizer. com named it the world’s best commercial building design in 2014.

AIRZENA TO LAUNCH FLIGHTS TO ANOTHER THREE CITIES OF RUSSIA IN THE NEAR FUTURE

A

irzena” airline in the near future plans to launch flights to another 3 cities of Russia. Direct flights will be performed to Samara, Saint - Petersburg and Vladikavkaz. The company’s Director General Iase Zautashvili says in a conversation with “Commersant” that the company has already filed an application to the Aviation Agency. According to him, they sent data to the Russian side and the final decision will be announced in the near future. Only after that flight schedule and tariffs will be specified. Zautashvili notes that flights to Samara are likely to be carried out 4 times a week, to St. Petersburg- twice a week and to Vladikavkaz- once a week. However, this depends on the Russian

side’s decision. Zautashvili says that study is being conducted to find out demand level for the above-mentioned routes. Technical consultations between the aviation authorities of Georgia and Russia were held at the end of December 2014. But given the fact that the final agreement has not been reached between the parties, the technical consultation will last until March 28, 2015. Georgian and Russian sides cannot agree on this issue for several months. The Georgian airline “Georgian Airways” protests against 18 -18 frequency and says that it can lead the company to bankruptcy. A frequency of flights to Samara, St. Petersburg and Vladikavkaz is still unknown.

TURKISH AIRLINES’ NET PROFIT DOUBLED LAST YEAR

N

et profit of Turkish Airlines, leader of Georgian air transport market, increased twice in the last year comparing to 2013 and the figure amounted to 845 million USD. At the same time, the revenue grew by 13% and it made up 11 billion USD. Growth of shipment volume allows the company to increase its share on the world market. As of 2013, the figure is grown by 1,6%, while in 2014 – by 1,8%. It should be noted, that Georgian airports have

served 2,007 million passengers in 2014. At that, 16,5% of the total passengers accounted for Turkish Airlines. The air company is on the 1st place in Georgia with this data. The company’s load rate has amounted to 79% in 2014. Turkish Airlines has served to 54,7 million passengers in 2014, the figure exceeds by 13,3% to the previous year’s rate. The company supposes, that passengers’ flow will be increased up to 63,2 million, while the load ration will exceed 80%.

TEMUR CHKONIA EXPECTS WIZZ AIR SUSPENDS KYIV-KUTAISI EXPORTS TO INCREASE WITH CHINA FLIGHTS

E

xport of non-alcohol beverages, cost of 29 USD, has been made in January - February, 2015, the figure is increased 13 times comparing to the same period of the previous year. Export of “Zandukeli” lemonade has been the reason of export growth in China. “Castel Georgia” started product export in the previous October. Temur Chkonia, holder of “Castel Georgia”

is content with export in China. According to him, sales are growing and it will be increased in the future. “It is merely the beginning. China has appreciated “Zandukeli” and export volume will be increased in the future. China is a very difficult market in order to master it. It requires big work. Large stock is not exported but we have communications. We work and hope that it will be increased”, - Temur Chkonia declares.

A

low-cost airline “Wizz Air” stops flights between Kiev and Kutaisi, the second largest city of Georgia due to restructuring activities in Ukraine carried out by Wizz Air Holdings Plc (together with its subsidiaries Wizz Air). On April 20, 2015 “Wizz Air Hungary” will operate 8 flights to and from Ukraine. “Wizz Air Ukraine”, which currently runs 16 flights on two

planes, will cease operations. The Ukrainian newspaper “Delo” reports. Aircraft Airbus A320, which is now based in Kiev, will be moved to the new Wizz Air base in Kosice, Slovakia, and will operate flights from Kosice to Milan Bergamo and Doncaster Sheffield airports from early June 2015. Along with Kutaisi, the company stops flights to several European cities such as Milan, Barcelona, Naples, Valencia, Venice.


March 30, 2015 #93

BANKING

11

caucasian business week

STRONG FINANCE SYSTEMS, BROAD ACCESS NEEDED FOR INCLUSIVE GROWTH

F

inancial systems in developing Asia have improved in the past decade but further deepening of banks and capital markets and greater access to finance is essential to enhance growth and equity in the region, says a new Asian Development Bank (ADB) report released today. “Improving the efficiency of the banking sector and capital market can boost investment, productivity, and innovation,” said ADB Chief Economist Shang-Jin Wei. “Reducing the dominance of state-owned financial institutions and developing local currency bond markets are some of the important steps needed in promoting Asia’s financial development.” Despite a lot of progress, developing Asia’s financial systems still lag advanced countries by a wide margin. Bank deposits, for example, equal 60% of regional gross domestic product (GDP), compared with an average of 110% among members of the Organisation for Economic Cooperation and Development. Developing Asia bond markets equal less than half of GDP, or about a third of the 140% average in advanced economies. Financing Asia’s Future Growth, the special theme chapter in ADB’s Asian Development Outlook 2015 (ADO), notes that boosting developing Asia’s average ratio to GDP of liquid liabilities— currency plus checking and interest-bearing accounts in financial institutions—from about 65% to 75% would add almost 0.4 percentage points to average annual GDP growth per capita.

“Data shows that financial development does not necessarily lead to a reduction in income inequality,” said Mr. Wei. “It is therefore important to also pursue financial inclusion policies—measures that can boost access to financial services by low-income households and small and medium-sized enterprises.” The empirical evidence in the ADB report suggests that, while financial development tends to alleviate inequality in its early stages, inclusive growth becomes more likely with concerted government efforts to improve financial inclusion. Because a financial crisis can both lead to a recession and generate a disproportionate amount of misery for economically disadvantaged groups, as seen during the Asian financial crisis and the more recent global financial crisis, safeguarding financial stability is important for growth and economic inclusion. The ADB report finds that countries with better regulation of financial institutions, more foreign direct investment relative to foreign bank loans and foreign portfolio flows, and a more diversified source of international funds, are likely to be more resilient to financial shocks. The most effective approach to developing the financial sector needs to take into account a country’s circumstances. For low income countries in Asia, further improving their banking sector’s ability to mobilize domestic savings, lower the cost of credit, and improve access for households and firms may be the most important elements of financial development. For middle income countries, further developing their local currency bond market and stock market is also required in order to stimulate innovation. ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region.

GEORGIAN GEL TO FIX NEW EXCHANGE RATE IN SEVERAL MONTHS

W

e expect that in the coming months the national currency will find a new equilibrium,” - George Kadagidze, President of the National Bank of Georgia, states. According to him, the import is bound to be adjusted due to lower demand. “This will lead to changes in the balance of pay-

ments. Import growth has stopped and soon will stabilize at a new level, “- the head of the National Bank believes. “The National Bank will not be able to stop the processes that take place in recent months,” – George Kadagidze noted during a meeting with businessmen. In his words, entrepreneurs must have appropriate expectations and properly drawn up plans. “It is very important to overcome those fundamental reasons that caused the devaluation of the national currency. An inflow of foreign currency in the country must be renewed – this is the main recipe for overcoming the crisis. The National Bank cannot stop the ongoing processes. Our mandate is price and currency stability. Our main landmark is a target rate of inflation around which the National Bank will act. Our policy is correct and consistent, “- George Kadagidze says.

NBG KEEPS KEY RATE AT 4.5%

N

ational Bank of Georgia kept its key policy rate unchanged at 4.5%, after it was increased by 50 basis points last month. Annual inflation was 1.3% in February. Monetary policy committee of the National Bank of Georgia said after its meeting on March 25, that depreciation of Georgian lari against U.S. dollar is expected to push inflation up in coming months, but weakening external and domestic demand is likely to offset upside risks to inflation in a medium term. The central bank said that inflation is expected to reach target level of about 5% by the end of year, but warned that this projection is subject to risk in both, upside and downside, directions as it would largely depend on external factors. It also said that worsening economic situation

in Georgia’s main trading partner countries in the region continues to have negative affect on Georgia with declining exports, remittances and inflow of tourists. Georgia’s exports declined 26% year-on-year in January-February to USD 324 million; import was down by 2% y/y to USD 1.1 billion. Exports to the countries of Commonwealth of Independent States (CIS) declined by 23% y/y, but there was 9% y/y increase of Georgian exports to the EU-member states in January-February. Remittances decreased by 22.4% y/y in JanuaryFebruary to USD 157.4 million and number of tourists was down by 7.8% y/y in the first two months of this year. The Georgian government said it expect economy to grow by 2% this year instead of initially forecasted 5%.

75% OF TBC BANK CLIENTS MAKE ECOMMERCE PAYMENTS ON GEORGIAN WEBSITES

A

long with a proliferation of the internet technologies, eCommerce transactions have also become widespread all over the world. The eCommerce provides a purchase and sales of products and service through electronic technologies such as the Internet and other networks. At the same time, the eCommerce is based on mobile commerce, on electronic transmission, chain management, internet marketing, online transactions, electronic date interchange (EDI), system of management of inventories. As a rule, eCommerce is considered as sales of aspects of the electronic business. It also includes exchange of data to ease aspects of finances and payments of business transactions. This is an efficient and profitable way of communications between business organizations and the most convenient way for doing business. What is the current situation on the Georgian market in this respect and what are the eCommerce perspectives in Georgia? The statistics shows this segment is rapidly growing in Georgia and it is being dynamically developed. According to the National Bank of Georgia (NBG), the number of internet transactions and payments by cards of commercial banks are growing. NBG has been publishing the statistics on the website since 2007. At the same time, under the report, the year of 2012 has recorded a contraction in internet transactions, while a growing tendency was reported in all other years. Transactions of 487.891 million GEL were registered in 2014, up 24.8% compared to 2013. TBC Bank confirms the eCommerce segment is growing in Georgia and 75% of its clients prefer to make transactions on Georgian websites. “At this stage E-commerce is a very required service in Georgia. Currently, this sector is being rapidly developed and we should provide much work to reach a final stage like the developed

countries. Currently, eCommerce transactions are basically carried out in the following directions: gambling business, money transfers and payment for state services. 90% of transactions are made on Georgian websites, while the remaining 10% are registered for shopping transactions from websites. Georgian consumers intensively buy clothes, various accessories and appliances from foreign websites. The behavior of TBC clients shows about 75% of eCommerce transactions are made on Georgian websites and 25% is registered on foreign websites. Money transfers, purchase of state services and other products and services are carried out on Georgian websites”, Nikoloz Kikvidze, TBC Bank Acquiring Development Chief, says. To better develop this segment, in 2015 TBC Bank introduced a new program for promoting eCommerce. “TBC Bank considers this direction to be perspective and we believe this segment will be further developed in the coming years. At this stage, there is much demand to join the eCommerce system, make various websites, but they do not know how to regulate them. They are farcing many difficulties and they have to take considerable costs. Therefore, TBC bank has decided to play a certain role in developing eCommerce and in January 2015 we introduced a simplified online website. To this end we have established relations with a domestic company that develops due online websites. Consumers are able to receive ready online websites for only 800 GEL with an installed payment page and a uploading photos and carrying out online sales. TBC Bank is interested in developing this segment to promote transactions with cards of TBC and all other commercial banks”, Kikvidze noted. Under the report, Georgian consumers prefer Amazon and eBay websites among foreign websites to make online purchase transactions.

GOVERNMENT’S PREPARATIONS FOR THE ANNUAL MEETING OF EBRD ARE UNDERWAY

A

nother regular meeting of the government commission for preparations of the annual meeting of EBRD has been held at the Ministry of Finance on Tuesday. The meeting was managed by the regional manager of European Bank for Reconstruction and Development and Finance Minister Nodar Khaduri. The meeting was organized by Georgian government and EBRD and ongoing organizational works in the city have been discussed. The annual meeting of EBRD will be held in May in Tbilisi. According to Ministry of Finance, the members of the commission have heard the information about the infrastructural works, which are carried out on the nearby area of Georgian parliament and Place of Youth and Pupils. As noted, organization of investment session of the hosting country is planned to host the annual meeting and business forum on high level. However, it will enable the guests to be introduced to the Georgian investment, tourism and cultural potential.

Two-day international forum will be broadcasted by the all leading media means, which have already expresses big interest related to this arrangement. According to the minister of Finance, members of the commission periodically will be informed about the ongoing works in the presence of media. According to the minister, all procurements and tenders will be available to avoid any questions with regard to the transparency and detailed information will be given to the society.


CURRENCY

12

March 30, 2015 #93

caucasian business week

US DOLLAR MIGHT EXTEND THE CORRECTIVE MOVE

GOLD NEVER LOSES ITS LUSTRE; HOW TO BENEFIT FROM A FALLING GOLD MARKET

EMMANOUIL LEMONAKIS, Head of Central Eastern Europe Region for Saxo Bank

N

ot so long ago in the summer of 2011 investors could not get enough of gold. It was the hot investment with the price skyrocketing to a record high of 1890.7 US dollars an ounce in August that year. Much of the rush to buy gold was instigated by the Eurozone crisis with speculation reaching fever pitch that Greece had gone bankrupt and was shortly due to exit the Eurozone. With gold renowned as a safe haven investment, market participants engaged in furious gold purchasing as a way to protect against any significant changes that might negatively impact their wealth. This high demand for the precious metal pushed prices up to levels never seen before and not seen since. While we may not have seen such high prices for gold since 2011, there are still advantages for investing in gold. Gold is primarily used within a portfolio as a type of insurance against losses suffered by other assets. Gold is uniquely renowned for performing independently of other asset classes, such as stocks, which makes it appealing when the stock market is falling. Likewise, gold usually strengthens in price as the US dollar weakens. In a balanced portfolio it is generally considered appropriate to allocate somewhere between 5% and 10% to gold investments. But what about investing during a falling gold market? Gold can be traded in many different forms, the most commonly being physical gold (gold bul-

lion), but one drawback of trading physical gold is that investors only benefit when the market is going up. However, an increasingly popular way to gain access to the gold market is to invest in Gold CFDs (contracts for difference) which allow investors to realise a gain from movements in the gold market regardless of whether the market is going up or down. Gold CFDs are a derivative product which allow investors to take a position in the market and trade live market price movements without needing to own the underlying asset. By predicting whether the price of gold will rise or fall, investors can profit. It is this flexibility of having the chance to realise a gain from both upward moving prices by “going long” and also downward prices by “going short” that is behind the surge in popularity of Gold CFDs. Purchasing physical gold will always have its advantages as a long term investment in particular because gold is renowned for maintaining its value over time and is a popular hedge against inflation. However, the advantage that Gold CFDs have over physical gold purchases is that you can trade much smaller lots than if you are purchasing the physical asset and you can also take advantage of short term volatility. Another benefit of gold investments is that they can act as a strategic protection against currency valuation fluctuations. While the US dollar is currently riding high on the back of a progressive recovery leading to less safe haven demand for gold from investors, there is still good potential for gold to go higher. Not least due to a global savings glut that is increasingly being confronted by a shortage of traditional safe assets such as bonds where many safe bond markets are trading at negative interest rates. In fact, the recent downward trend for gold may not be continuing for much longer according to Saxo Bank Chief Economist Steen Jakobsen who says gold remains top of his list for new investments: “We are in an “in-between period” - where the US will slow down and ultimately hand over the growth engine to emerging markets by the earliest in Q42015 but firmly in 2016. The problem is that emerging markets are not ready due to high US dollar debt and waning commodity prices and Europe is still too weak to contribute net to world growth leaving a growth vacuum for new growth.” Regardless of whether the price of gold makes a return to strength or not, gold will perennially play an important strategic role in any balanced investment portfolio and is certainly not losing its lustre.

FUTURES DOWN AFTER SAUDI AIR STRIKES ON YEMEN

U

.S. stock index futures were lower on Thursday to put the S&P 500 on track for a fourth straight decline, after Saudi Arabia and its allies launched air strikes on Yemen. Oil prices spiked, with Brent crude up 3.4 percent to $58.40 and U.S. crude up 3.5 percent to $50.93 after warplanes from Saudi Arabia and its allies struck Shi’ite Muslim rebels fighting to oust Yemen’s president. Halliburton shares gained 1.3 percent to $44.02 in premarket trade. U.S. stocks dropped on Wednesday as a slump in technology and biotechs sent the Nasdaq to its biggest decline in nearly a year while the S&P 500 fell through key support levels. Semiconductor stocks are likely to be under pressure for a fourth straight session, after SanDisk (SNDK.O) cut its first-quarter and 2015 revenue outlook and withdrew its other forecasts for the same time frame. Shares of SanDisk tumbled 13 percent to $70.60 before the opening bell. The PHLX semiconductor index .SOX had its biggest drop since Oct. 10 on Wednesday and is down 6.3 percent for the week. Weekly initial jobless claims

data will be eyed at 8:30 a.m. (1230 GMT) for signs of continued strength in the labor market. Expectations call for claims to dip slightly to 290,000 from the 291,000 in the prior week. At 9:45 a.m. (1345 GMT), the preliminary or “flash” March reading of financial data firm Markit’s Purchasing Managers Index on the services sector is scheduled for release. Lululemon Athletica (LULU.O) lost 1.6 percent to $60.01 in premarket after the Canadian yogawear retailer forecast a weaker-than expected first quarter profit, months after it said margins would trough in 2015 as it continues to invest in improving quality and solving supply-chain problems. Consulting and outsourcing company Accenture Plc’s (ACN.N) quarterly net revenue rose 5 percent, helped by growth in its outsourcing business as North American companies look to cut costs. Its shares rose 2.6 percent to $90.49 before the opening bell. European shares fell with the London Stock Exchange leading the market lower on news Borse Dubai will sell its full stake in the company and ARM Holdings (ARM.L) extending the previous session’s steep losses. In Asia, Japan’s Nikkei suffered its worst drop in 10 weeks on weakness in semiconductor stocks while Chinese stocks ended higher in a volatile volatile sessions as a sharp drop in Internet stocks was offset by a surge in energy shares. S&P 500 e-minis ESc1 were down 14 points, or 0.68 percent, with 208,435 contracts changing hands. Nasdaq 100 e-minis NQc1 were down 46.25 points, or 1.07 percent, in volume of 39,480 contracts. Dow e-minis 1YMc1 were down 124 points, or 0.7 percent, with 35,886 contracts changing hands.

L

ast week’s movement in the Forex market was driven by one of the most eagerly awaited FOMC meeting statement. As was anticipated, the Federal Reserve dropped the word “patient” from its policy statement but the tone portrayed a dovish economic outlook. The US central bank lowered its economic growth outlook and inflation projections. Moreover, although the FOMC expects to begin raising interest rates later during the year, but the projected pace was more gradual than the market participants were expecting. Recent strengthening of the US Dollar was quoted as one of the primary reasons for downward revision of the economic outlook. Fed’s dovish economic outlook was reaffirmed by last week’s lackluster US housing starts data and an unexpected drop in two regional manufacturing indices. This led to a sharp sell-off for the US Dollar, snapping the overall US Dollar Index’s (I.USDX) four weeks of winning streak. Moving ahead, investors will have the opportunity to further gauge the health of US housing market and manufacturing sector from this week’s existing home sales and durable goods orders. However, this week’s key drivers from US economic calendar would be the latest reading on US headline inflation, consumer price inflation (CPI), and the final print of US GDP for the fourth-quarter of 2014. Data pertaining to durable goods orders for the month of February is scheduled for release on Wednesday. Following its first rise in three months, durable goods orders are expected to register a marginal gain of 0.2%. Meanwhile, core durable goods orders, which excludes transportation items, are anticipated to have gained 0.4% in the month of February. This week’s housing data from the US features the release of existing and new home sales data for the month of February and are scheduled for release on Monday and Tuesday respectively. The US housing market data is expected to show signs of stabilizing with existing home sales expected to rise to an annualized rate of 4.91 million units from 4.82 million pace recorded last month. On the other hand, New home sales data, a forward looking indicator, is expected to register a slight decline and come-in at an annualized rate of 472K, down from a print of 481K in January. The US CPI figure for February is scheduled for release on Tuesday. Following last month’s subdued print of -0.7%, led by sharp fall in oil prices, CPI for February is expected to have gained 0.2%. The core CPI number, which excludes the volatile food and energy prices, is also expected to increase marginally by 0.1% on a month-on-month basis. The final estimate of US GDP for the fourth-quarter of 2014 is scheduled for release on Friday and after a downward revision, economists this time are expecting an upward revision. Consensus estimate the data to show an annualized growth rate of 2.4%, indicating

a steady growth trajectory which is more likely to be carried forward in 2015. After last week’s dovish Fed comments, a disappointing economic data this week, especially weaker-than-expected CPI and (or) GDP data, is likely to hurt near-term demand for the US Dollar, triggering extension of its near-term corrective move. From the Euro-zone, investors will remain focused on the key developments over a possible solution to Greece’s problems. Investors will also be focusing on the release of PMI data, a leading indicator of economic health, for both manufacturing and services sector from the Euro-zone. The flash reading of the PMI numbers from Euro-zone’s two largest economies, France and Germany, along with the broader Euro-zone PMI for the month of March are scheduled for release on Tuesday. The German manufacturing and services PMI are expected to show continuous expansion. Meanwhile, French PMI figures are expected to show contraction in manufacturing activity while services PMI is expected to remain in expansion territory. The overall Euro-zone PMI data, however, is expected to show activity in both manufacturing and services sectors expanding at a faster pace than recorded in the previous month. From UK, inflation data accompanied with retail sales data are likely to continue probing some volatile moves for GBP pairs in the week ahead. Last month UK inflation printed the lowest level on record and the trend is expected to continue with this week’s report, scheduled for release on Tuesday, expected to show inflation declining further to 0.1%. Meanwhile, consumer spending, which remains supportive pillar of UK’s economic recovery, is expected to have bounced back in February with consensus forecasting retail sales, scheduled on Wednesday, to register a 0.4% growth following a decline of 0.3% in the previous month. Subdued inflation and relatively weaker-than-expected retail sales data is likely to further push the expectations a interest rate hike by BoE, resulting into continuing weakness for GBP in the near-term. Elsewhere, the flash version of HSBC’s Chinese manufacturing data for the month of March is scheduled for release on Tuesday and is expected to remain in expansion territory. Being the largest manufacturer of the world, Chinese manufacturing data bears some meaningful impact on the Forex market. Deterioration in Chinese manufacturing activity is likely to boost demand for safe-haven currencies, especially against the Australian counterpart (AUD), China’s largest trading partner. Last week the Fed provided the required trigger for a short-term corrective move for the US Dollar. Going forward, positive developments from the Greek drama coupled with relatively strong fundamental data from other economics has the potential to further extend the near-term pull-back for the US Dollar.

Admiralmarkets.ge/analytics/ facebook.com/adimralmarketsgeorgia/


March 30, 2015 #93

RESEARCH

13

caucasian business week

USAGE OF- 2014 PAY ENERGY SECTOR BOX SERVICES

NEIGHBORHOOD

Azerbaijan to be Soros calls on Europe to represented as full member provide financial aid to at G20 events in Turkey Ukraine

A

O

illionaire investor George Soros has called on Europe to provide financial assistance to Ukraine, adding that it would be a “terrible, terrible mistake” not to. “Europe has to establish a source of funds. It doesn’t mean a blank check,” he told BBC Radio 4’s Today program. Europe will do whatever it takes to help Ukraine, “subject to not violating the ceasefire and not getting involved in a direct military confirmation,” he said.

Turks spend $13.3 billion on telecommunications

he newest tech fad snatched up $14 million in funding, and its backers say is going to change the way people use the internet forever. The new app lets users stream and share videos in real time and automatically sends them to Twitter. “We are all about re-inventing shared experiences,” the company says on its website.

urks spent more than 35.5 billion Turkish Liras ($13.3 billion) on telecommunications last year, up from 32.2 billion liras ($12.2 billion) in 2013, according to a report released by the Information and Communications Technologies Authority (BTK) on March 27. Over 80 percent of the amount spent went on Turkey’s top four telecommunication companies, the report stated. The revenue of the four leading telecommunications companies (landline provider Turk Telekom and mobile networks providers Turkcell, Vodafone and Avea) jumped 8.6 percent annually, rising from 25.9 billion liras in 2013 to 28.1 billion liras ($10.1 billion). Their net sales reached 7.4 billion liras ($2.9 billion) last year, an increase of 16 percent compared with the previous year. In the same period, these same companies also invested more than 4.1 billion liras ($1.6 billion), up by 9 percent from 2013.

Armenia uses Eurobond proceeds to cover deficit and buy back debt

A

As for the operations, survey results show that most frequently, residents of Tbilisi use Pay Box to fill in the balance on their mobile phones (85%). Moreover, they actively use this service to make payments for communal taxes (60%). Among other types of payments, some citizens of the capital (14%) are also keen to use Pay Box to fill balance on online gambling accounts. As expected, men are more likely to do so than women (26% and 4%, respectively).

rmenia has used proceeds of a recent $500 million Eurobond to buy back part of an older issue and will use another $85 million to cover its 2015 budget deficit instead of selling domestic debt, the deputy finance minister said. Pavel Safaryan told a government meeting on Thursday that Armenia had received $487.4 million from the March 19 sale of a $500 million 10-year Eurobond. Some of that money was used to buy back $205 million of its only previous Eurobond, a $700 million seven-year transaction sold in September 2013. The new Eurobond paid a yield of 7.5 percent, much less than the 2020 bond’s 10 percent coupon. “We will use 40 billion drams ($85 million) from the Eurobond issue to cover the budget deficit in 2015 instead of an initial decision to issue local treasury bills,” Safaryan said, adding this would avoid overloading the domestic debt market.

Russia to build Jordan’s first $10bn nuclear power plan

R

The survey was conducted on 419 adult residents of Tbilisi, in February, 2015. The statistical error of the data does not exceed 4.9% The survey was conducted exclusively for internet magazine “Marketer”. Third party must give a notice before using the given information fully or partially.

B

zerbaijan will be represented as a full member at all the events to be held on the G20 platform chaired by Turkey, Azerbaijan’s Foreign Ministry said March 25. The ministry said the talks on this platform would be held in two directions – sherpa (special representatives of states and governments) and finance. The issues related to finance will be coordinated by Azerbaijan’s Finance Ministry, while the questions on sherpa – by the Foreign Ministry itself. The Turkish city of Izmir is hosting on March 2526 a second meeting on sherpa, which involves a delegation led by Azerbaijan’s Deputy Foreign Minister Mahmud Mammadguliyev.

T nly few years ago, Pay Boxes made appearance in Georgia and instantly became popular. Today, up to ten companies operate in the market and offer customers a convenient and fast way to make a variety of payments or money transfers. As the competition increases, so do the diversity of services these companies offer – at this point, it is possible to pay for a wide range of services, fill the customer balance and even donate to different charities. As the result of ACT research show, residents of Tbilisi are avid users of Pay Boxes – nine of ten (90%) citizens have used this method to pay/transfer money in the last 3 months. In this context, men are more active than women (94% and 88% respectively). According to the research, absolute majority (97-98%) of the younger citizens (18-34-years old) uses Pay Box services and as the age rises the consumption tendency decreases. However, it should be mentioned that even in older people, the consumption rate is still high– as it turns out, in 65-years old and older people, seven out of ten (72%) make use of Pay Boxes for payments and other kinds of money transfers.

WORLD NEWS

ussia has signed a $10 billion agreement with Jordan for the construction of the country’s first nuclear power plant. Jordan currently lacks local energy sources and struggles to meet its growing electricity demand. The agreement between Russia’s state-run Rosatom and the Jordan Atomic Energy Commission was signed on Tuesday in Amman. The contract is for the construction of a two-unit 2,000 megawatt power plant in the north of the country by 2022. “I would like to stress that Rosatom and the entire Russian nuclear sector take Jordan’s invitation to build its first nuclear plant as a big trust,” Rosatom chief Sergey Kiriyenko said, adding that cooperation with Jordan would open the door for future nuclear fuel supply deals. “The nuclear power plant is the embodiment of a strategic partnership.”

New live streaming app Meerkat snags $14mn funding

T

Saudi Arabia eyes boosting oil supplies to China

S

audi Arabia’s state-owned oil company, Saudi Aramco, aims to increase supplies to China. It sees big opportunities in Beijing’s efforts to restructure the country’s economic growth model and believes supplies could double at some point. Saudi Aramco, China’s largest crude oil supplier, has an over 10 percent market share and expects its Chinese operations to grow with Chinese demand, Saudi Aramco president and CEO Khalid Al-Falih said in an exclusive interview to Beijing-based media group Caixin on Monday. The company’s goal is to boost supplies even more while making products more affordable and energy efficient, according to Al-Falih.

Oil Rigs Decline by Smallest Number in 15 Weeks

U

.S. oil rigs fell by the smallest number in 15 weeks, a potential sign that America’s oil-drilling crash may be tapering. Drillers idled 12 oil rigs (excluding gas rigs), dropping the number to 813, Baker Hughes reported on Friday. The rig count has dropped 49 percent since October, an unprecedented retreat, as the drop in oil prices has made production less profitable. The median forecast from a Bloomberg survey of 10 #RigCountGuesses on Twitter was for a decline of 39. But production isn’t slowing yet, and new efficiencies in U.S. drilling and pumping may make raw numbers of rigs in the field misleading. The U.S. will pump 9.3 million barrels a day this year, the most since 1972, despite the fewest rigs in the field in almost four years, according to the Energy Information Administration.

Samsung Building A Foldable Phone, LG On Transparent Screens

S

amsung is releasing the occasional flip smartphone, but those are niche products with limited availability and appeal. A Samsung official revealed that the company has a plant to leverage its bendable display technology to create foldable phones. The official did not provide any more info though if a foldable, flip phone like form factor can be used to provide a large screen in a compact body. While that may sound futuristic, we may see it as early as next year. The new flexible screen tech has four phases: curved, bent, foldable and rollable. The first two are already a reality, the third one is coming soon while the last one holds promise of displays that are stored like roller blinds.


14

PUBLICITY

caucasian business week

March 30, 2015 #93


March 30, 2015 #93

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

15

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


16

PUBLICITY

caucasian business week

March 30, 2015 #93


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.