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April 27, 2015 #96

April 27, 2015, Issue 96

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BE INFORMED, DO BUSINESS

GEORGIA

GEORGIA UPS ITS EXPORTS TO EU

eorgia has developed its trading ties with European markets, delivering more Georgian products to consumers in Europe and possibly further abroad. Pg. 3

BANK OF GEORGIA’S TRACES IN BUSINESS RACKETEERING

eorgian cuisine has had a very successful year in the Western media, making tabloid stories in such publications as the Washington Post, New York Times and Huffington Post. Pg. 6

FITCH REVISES GEORGIA’S OUTLOOK TO STABLE; AFFIRMS AT ‘BB-’

he issue ratings on Georgia’s senior unsecured foreign and local currency bonds have also been affirmed at ‘BB-’. Pg. 7

TBC STARTS CREDITING COOPERATIVES

BATUMI OIL TERMINAL LAW SUITS SETTLED

Pg. 3

The Bank Gambles with Deposits

There were various methods of racketeering the business sector under the ruling of the United National Movement (UNM), including “masterminding criminal cases against businessmen” was one of the approbated ways to extort money and real estate through imprisonment or imprisonment threats.

SILKNET AND CAUCASUS ONLINE

Research

Pg. 13

ATTITUDES TOWARD CITY CLEANING AND GREENERY City cleaning and greenery are important parts of the image and health of a city. ACT was interested, what residents of Tbilisi think concerning these topics and how do they evaluate the current situation compared to that in previous years.

Pg. 4

Irakli Baidashvili: We are in works on Moxy, Marriott’s subsidiary hotel to gia be built in Georgia

Pg. 4

Pg. 3

Cartel Collusion Signs on Internet Market and Subscribers without Choice

REASONS FOR RESTRICTING ONLINE GAMBLING GAMES Pg. 5

Jean-Elie Malkin: Health is a Human Right

Tariel Zivzivadze: Currency Outflows in 2014 Exceeded 5 billion USD

SOCAR CONTINUES TO IMPLEMENT PROJECTS IN GEORGIA

Pg. 8

n April 23rd 2015, the group of Batumi Terminals Limited companies, including Ltd Batumi Oil Terminal Limited and Petrotrans Limited, Vibro Diagnostic, a foreign company, which owns several reservoirs in the Batumi Oil Terminal for transporting heavy and light oil trucking, as well as the company Libra Trading FZC, reached an agreement. Pg. 10

Pg. 8

Bruno Balvanera: The National Bank’s Decision to Save Reserves amid the Lari’s Depreciation was Right

AMERICAN RESTAURANT SELLS 10,000 KHACHAPURIS

GEORGIA – TRANSPORT AND LOGISTICS INFRASTRUCTURE

Bidzina Ivanishvili: They Say Economy is Falling down, but Nothing of the Sort is Happening

policy and request a certain amount of money for playing, while online casinos ignore both circumstances. People, especially, young residents of our country succumb to temptation and fall into huge problems and debts. The number of online casino gamers is growing catastrophically. Many of them have lost property, many families have divorced, and some of them have committed suicide… We believe the Authorities should interfere in this direction and protect the present and future of our country”, the epistle of the Catholicos-Patriarch of All Georgia reads.

Transit Georgia Potential for US Foreign Policy Success Pg. 11

Pg. 12

Currency

SAXO BANK DISSECTS THE MARKET FOR TRADERS WITH LIVE VIDEO STREAMING OF EXPERT TRADING IDEAS

MARKET TURNS CAUTIOUS ON USD

GOVERNMENT NEWS

2 MAIN EVENTS

GEORGIA’S PM PROMOTES MTSKHETA-MTIANETI REGION

BELARUS RECOGNIZES GEORGIA’S SOVEREIGNTY AND TERRITORIAL INTEGRITY

ur position will be unwavering. Otherwise I would not come to Georgia,” stated Belarus’ president Alexander Lukashenko at a press conference yesterday while commenting on his country’s recognition and support of Georgia’s sovereignty and territorial integrity. Lukashenko advised the Georgian authorities “to stop the rhetoric and resume dialogue with Moscow” regarding Russia’s deals with occupied Abkhazia and Tskhinvali (South Ossetia).

GEORGIAN WWII VETERANS OFFERED FINANCIAL BONUS

ore than 2,000 Georgians who served in World War II are being offered a one-time financial bonus in recognition of their service to their homeland. At a Governmental meeting today, lawmakers agreed to offer 1,800 war veterans and 500 non-commissioned citizens who served as a medic, nurse or other role during WWII with a one-off sum of 1,000 GEL to mark the 70th anniversary of the Day of Victory over Fascism and the end of WWII.

GEORGIA-CHILE SET VISA-FREE REGIME FOR OFFICIALS

eorgia and Chile have reached a visa free travel agreement to allow easier travel between the countries for people with diplomatic, service and official passports. The agreement will come into force from May 1, after which Georgian officials will be able to travel to Chile without a visa. The same rules apply to the Chilean side.

US GRANTS $20M USD TO BOOST GEORGIA’S DEFENCE AND SECURITY

he United States (US) will grant $20 million USD to Georgia for security assistance, which will go towards funding Georgia’s reforms, training and equipping Georgian troops and more. The Georgian and US sides met at Georgia’s Foreign Ministry yesterday for the latest regular meeting of the Defence and Security working group of the US -Georgia Strategic Partnership Charter.

FILMS ON GEORGIAN-ABKHAZ RELATIONS TRANSLATED INTO ABKHAZ LANGUAGE

eorgian movies that discuss the GeorgiaAbkhazia relationship are being translated into the Abkhazian language as a way to promote Georgian movies in the breakaway region. The Other Bank (Gagma Napiri)by Oscar nominee movie director Georg Ovashvili is the first movie to be translated within the project. The film tells about the extraordinary internal drama of a young boy named Tedo; his thoughts, passions, feelings and efforts to cope with difficulties that span from his displacement from his hometown Abkhazia.

GOVERNMENT TO ALLEVIATE SANCTIONS ON DRUG ADDICTS

ew details have been unveiled about the proposed changes to Georgia’s drug laws, which foresee differentiating penalties for people who deal and use drugs. The proposed amendment to Article 260 of the Criminal Code of Georgia outlined separation of criminal liability for people who purchase, or possess drugs and those who sell drugs.

SOLIDARITY FUND DONATES 2 MILLION FOR TREATMENT OF 70 ILL CHILDREN

he people of Georgia have donated more than two million GEL to a fund that will pay for expensive medical treatment for children with cancer.

April 27, 2015 #96

caucasian business week

ourism, agriculture and manufacturing are promising areas that will aid the development of MtskhetaMtianeti’s economic potential, believes Georgia’s Prime Minister

Irakli Garibashvili. Today, Garibashvili mobilised central and regional Government representatives, businessmen and potential investors in Gudauri and introduced them to the various opportunities available in the region

and promised “full Governmental support” if they put extra effort into doing business there. “Agriculture can be developed in this region in the following directions: cattle breeding, sheep breeding, producing milk, meat, fruit and vegetables, beekeeping, market gardening, fruit growing and greenhouse development,” Garibashvili said. “Mtskheta city has potential in fruit processing, producing natural juices and having a confectionery factory. In the region people can produce textiles,” he added. “In Kazbegi it is possible to create a logistic centre and produce wool products as well as traditional souvenirs. In Tianeti one can produce ecologically clean products,” Garibashvili noted. Mtskheta-Mtianeti is the sixth region of Georgia where Garibashvili has recently visited for the purpose of promoting the economic potential of Georgia’s regions. Promoting Georgia’s regions was part of the Governmental program Strong Region for Strong Georgia.

GEORGIA-BELARUS AVOID DOUBLE TAXATION, ESTABLISH CUSTOMS COOPERATION

eorgia and Belarus are stepping up their bilateral cooperation in taxation, customs affairs, and a number of other avenues. Representatives of both countries today signed a cooperation agreement on avoidance of double taxation, prevention of evasion of income and capital taxes, which would act as a basis for further talks. Double taxation is the levying of tax by two or more jurisdictions on the same declared income (in the case of income taxes), assets (in the case

of capital taxes), or financial transaction (in the case of sales taxes). This double liability is often mitigated by tax treaties between countries. The agreement was signed by Georgia’s Finance Minister Nodar Khaduri and Belarusian Minister of Foreign Affairs Vladimir Makei. The agreement also included cooperation and mutual assistance in customs issues. The main goal of signing the agreement was to increase economic cooperation between the countries and attract more investments, noted Georgia’s Foreign Ministry.

Belarus is one of the most important trade-economic partners of Georgia. From 2010-2014, the volume of trade turnover between the countries amounted to $303 million USD. Of this, the value of Georgia’s exports exceeded $142 million USD. Furthermore, from 2010-2014, the Foreign Direct Investments implemented in both countries reached $132,000 USD. Currently Georgia has treaties with 47 countries to ensure the avoidance of double taxation, and customs cooperation agreements with 16 countries.

AGRICULTURE MINISTER: GOVERNMENT OF GEORGIA FUNDED 119 NEW ENTERPRISES

t is important to show to the public each enterprise which was funded by our government, - the Prime Minister Irakli Garibashvili said at the government session today. Prime Minister appreciated the media-tour initiative which is carried out in the state-funded enterprises. “I think the media and

the opposition will have no more questions about the promised enterprises”, - Irakli Garibashvili notes. Agriculture Minister Otar Danelia informed Prime Minister at the today’s session that the government of Georgia funded 119 new enterprises. The Minister spoke about the media-tour

carried out at the enterprises funded by the government and selected by the media on the basis of lototron. According to Otar Danelia, the mediatour continues and journalists can observe the enterprises funded by the state in all regions. The Minister thanked the media for participation and positive attitude.

GOVERNMENT KEEPS WORKING ON LIST OF STRATEGIC ASSETS

xactly one year ago, the Prime Minister instructed the government to make a list of strategic facilities that are not subject to privatization, but this list has not been submitted yet. They say in the administration of the government that the work in this direction continues. The list should include the objects of particular national importance which privatization will be banned

and belonging to the state is not subject to revision. A special working group had to make the list. It was also said that the criteria for the identification of strategic facilities will be made taking into account the threats and challenges facing by the country, and will affect only facilities in state ownership. The term “strategic site” was removed from official documents under the previous government in 2008, and was replaced by

“state ownership of special importance.” In particular, these sites included military airdromes and ports. Experts say that given the political and economic situation in the country and around it, regulation that would take into account national and strategic interests must be introduced. The government states that the work on the list is going on, but does not specify at what stage it is.

IN 2014, ECONOMIC ACTIVITY DECLINED IN GEORGIA

n 2014, the economic activity of the business sector decreased compared to previous years – a report prepared by the NGO “Society and the banks” says based on the data of Statistics Service. The NGO believes that the reason for this is the deterioration of the business climate, which is mainly caused by the tightening of all sorts of regulations - in particular, the introduction of visa restrictions, a ban on the sale of agricultural land to foreign citizens. “All this has a negative effect on the business climate and a negative impact on raising capital in the country” - believe in the organization. According to the report, despite the fact that the state allocates large subsidies for various agricul-

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tural programs, however the share of the agricultural sector in the country’s business turnover decreased to 0.53 in 2014 %, although earlier it was low - for example, in 2013 this figure was 0.50%. “This allows us to conclude that public spending in agriculture is ineffective. This is evidenced by the fact that 69 beneficiaries were registered in “Produced in Georgia” program but in reality only 27 are functioning. The fact that the development of production is recognized as the government’s priority, of course, is positive, but at the same time, all the measures should be more effective. It should also be noted that a large number of people are employed in the health sector, but the turnover of the sector is also very low.

This demonstrates the inefficient use of human resources “- say in the NGO. According to NGOs, the lowest wages in the country are recorded in the education system and the restaurant business. “Society and the banks” also emphasizes the connection of low income in these industries with another problem - the lack of qualified personnel. “The problem of lack of qualification is typical for all sectors of the economy, respectively, to solve it there should be high salaries in the education system, “ - believe in the organization. The NGO experts also emphasize the negative impact of low wages in the restaurant business on the economy.

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Editor: Nino Gojiashvili. Mobile phone: 595 050404 Reporters: Nutsa Galumashvili; Lazare Gvimradze

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

April 27, 2015 #96

ECONOMIX

caucasian business week

BANK OF GEORGIA’S TRACES IN BUSINESS RACKETEERING

TOP STORY

The Bank Gambles with Deposits

he business sector racketeering and oppression under the ruling of the previous Authorities has been already widely covered. The prosecutor’s office has accepted over 20 000 appeals against state officials, who have inflicted losses to the private sector by illegal activities. There were various methods of racketeering the business sector under the ruling of the United National Movement (UNM), including “masterminding criminal cases against businessmen” was one of the approbated ways to extort money and real estate through imprisonment or imprisonment threats. Commercial banks are reported to have taken active part in money extortion schemes from the private sector. There are grounded doubts that sometimes these commercial banks used to issue loans by instructions of the prosecutor’s office. Similar tendencies were intensified after the 2010 local self-government elections, when small and medium-sized business sectors were being fined indefinitely. The Finance Police and the prosecutor’s office used to instruct the fined businessmen to go to the concrete commercial banks, submit a fine protocol and the commercial banks used to issue loans without problems in the amount of the fine. The loans were directly remitted to the due accounts. Several weeks ago the Banks & Finances published an article covering the history with Valeri Shoshiashvili. The businessman has submitted

proofs showing Bank of Georgia has issued a 400 000 USD credit for purchase of a real estate that was estimated by an auditor at 8 000 USD. Valeri Shoshiashvili has preserved an 2010 SMS message from representative of the prosecutor’s office Beka Basilaia. The message reads that Bank of Georgia would issue a 700 000 GEL loan for an old culture house in the village of Gremi, the Kvareli Municipality and the issue had been agreed with a manager of the crediting committee. Later Valeri Shoshiashvili and Bank of Georgia signed an agreement, under which Bank of Georgia has issued the loan for purchase of the Gremi Culture House. Currently, Shoshiashvili’s company has been included in the Black List of CreditInfo and his real estate has been arrested, while Beka Basilaia is a human rights defender for the UNM high-ranking officials. Bank of Georgia is the bank sector’s leader, while the UNM is speculating by unfavorable business environment in Georgia. The Banks & Finances has also covered another story with the participation of Bank of Georgia. The scheme is the same. The prosecutors’ office detains a businessman and Bank of Georgia issues a loan for bail. Businessmen Giorgi Bichashvili, Besik Gavasheli and Zviad Gavasheli were detained on charge of illegal purchase of a 1000 square meter land plot near the Eliava Fair. It is interesting these persons had purchased the land plot from their relative

and a notarially-certified purchase agreement and paid bill prove this. The prosecutor’s office had no legal ground for instituting legal proceedings on this deal, but Giorgi Bichashvili and brothers Gavasheli were detained anyway. We were detained for money extortion, asserts Giorgi Bichashvili. This assertion is proved by the fact legal proceedings started and ended on the same day, staring from the case institution and ending with detention. Similar proceedings are absolutely absurd, as valuable investigation and other legal procedures require much time, lawyers noted. The case was developed in a standard way. Next day after the detention of the businessmen, they were offered a procedural agreement of 1.5 million GEL. The detainees had to give their consent. The prosecutor’s office released one of them. I was released to settle the issue with the commercial bank, Zviad Gavasheli noted. The prosecutor’s office provided assistance in taking the loan, he added. They had got small business and they could not take a 1.5 million GEL credit, but representatives of the prosecutor’s office agreed with Bank of Georgia to issue the loan to Zviad Gavasheli. The loan was issued through violation of all bank standards. Bank of Georgia approved a 710 000 USD loan in a questionably short period and substantiated the loan purpose was to cover liabilities of the founder, Giorgi Bichashvili said. These facts generate grounded doubts Bank of Georgia had got tight criminal ties with representatives of the former Authorities. In other case no manager would gamble with deposits of their clients by issuing credits of several million of GEL through violation of all bank standards. P.S. the Banks & Finances will continue covering the participation of commercial banks in racketeering and terror of the business sector. The editorial board calls on victims of similar cases to publicize all similar facts. www.bfm.ge

SILKNET AND CAUCASUS ONLINE Cartel Collusion Signs on Internet Market and Subscribers without Choice

nternet service tariffs have become an additional headache for Georgian subscribers. Domestic providers offer unaffordable prices on the internet services market. According to the report of the Association of Young Financiers and Businessmen (AYFB), today the Georgian internet market registers several tens of providers, while only Caucasus Online and Silknet control a 60% ratio of the internet market. The rules of game are determined by these companies. Uncompetitive environment has brought cartel collusion signs. The companies have been jointly growing prices and subscribers are left without choice. Caucasus Online has recently introduced a new tariff system for both internet and TV service packages. Thus, subscribers will pay the following tariffs: Optimal: 10mb/sc – 27 GEL (instead of 25 GEL); Express: 30mb/sc – 37 GEL (35 GEL); Extreme: 50mb/sc (45 GEL); Infinite: 100mb/sc – 100 GEL. Prices have increased because of international market realities and current economic situation in Georgia, Caucasus Online asserts. In early March Silknet took the same decision. Tariffs increased because of higher internet connection speed and the market realities, Ilia Enuqashsili, a director for Silknet strategic development department, noted. AYFB vice president Giorgi Kapanadze says in both cases the companies refer to the request of their subscribers for growth in internet connection speed. In this case the companies were to take into account the consumer interests and enable them to either to maintain the existing tariffs and use less speed or increase the speed and price consequently. Information we have received from the Georgian

National Communications Commission (GNCC) shows in 2014 Caucasus Online expenditures on purchase of internet services shrank by 5 million GEL compared to 2013. Consequently, we believe the company has increased tariffs without substantiation, Giorgi Kapanadze said. AYFB has introduced a report on the expenditures Caucasus Online and Silknet have taken in 2013 to 2014. Silknet has purchased 211 656 megabytes more internet space and spent 2 056 542 GEL more compared to 2013, but the GNCC statistics shows from only operators of foreign countries and according to the 6-month report, the company received 605 393 more revenues compared to 2013 and sold 46 000 megabytes more internet connection. Moreover, the companies have also sold the internet connection to Georgian providers and received revenues from them, as well as from increased service tariffs from subscribers, Kapanadze noted. AYFB has also collected information on tariffs in various countries of the world. The analysis has showed Georgian internet providers have set biased prices in practice.

Kapanadze calls on GNCC to show interest in this question and request the companies to officially publish the set tariffs on their websites. Providers must enable subscribers to choose either to maintain the existing packages or to move to new packages, he added. “GNCC should explore the market of internet providers in details, identify real expenditures and revenues of the companies. If the exploration proves these companies have artificially increased tariffs and receive super profits, GNCC should apply the law on electronic communications and set a top margin tariff. AYFB will continue exploring the market and introduce various reports to the society”, Kapanadze noted. Georgian citizens permanently complain about the quality and speed of the internet connection. Several months ago the Young Barristers also explored the market and developed recommendations for GNCC to set top margin tariff to the provider companies, but in vain. As a result, providers have been growing service tariffs without taking into account the consumer interests. www.bfm.ge

GEORGIA UPS ITS EXPORTS TO EU

eorgia has developed its trading ties with European markets, delivering more Georgian products to consumers in Europe and possibly further abroad. Preliminary data from the country’s National Statistics Office, Geostat, revealed that Georgia enjoyed a 21 percent increase in its exports to Europe in the first three months of this year, while imports decreased by five percent. This revealed that Georgia boosted its export power and at the same time reduced its imports relying more on locally-produced goods. Furthermore, the data suggested that Georgia is now becoming less dependent on markets it formerly relied on, particularly Commonwealth of Independent States markets. Geostat data showed that in January-March 2015, the country’s external trade with the EU jumped by 0.4 percent compared to the corresponding indicators in the previous year. The total value of Georgia’s external trade with EU countries amounted to $637 million. Particularly, exports stood at $170 million, while imports amounted to $467 million. Meanwhile, the external trade of Georgia with CIS countries (Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Tajikistan and Uzbekistan) dropped by 25 percent compared to January-March 2014. In the first three months of 2015, the external trade of Georgia with CIS countries totaled $675 million. Exports stood at $175 million (55 percent lower than last year’s numbers), while imports equaled to $500 million (2 percent lower than the last year’s numbers). In a nutshell, in the first three months of 2015, nearly 35 percent of Georgian exports went to CIS countries, and some 34 percent went to EU countries and the remaining 31 percent went to other countries. In terms of imports, about 28 percent came from CIS countries, 26 percent from EU countries and 46 percent from other countries, according to Geostat. Georgia’s top trading partners by turnover for the first part of the year were Turkey with $361 million, Azerbaijan with $214 million and China with $192 million. Exports equalled $503 million USD while imports stood at $1.77 billion USD. The negative trade balance was $1.27 billion USD in January-March 2015 and its share in external trade turnover constituted 56 percent. Meanwhile, the external trade of Georgia with CIS countries (Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Tajikistan and Uzbekistan) dropped 25 percent compared to JanuaryMarch 2014. In the first three months of 2015, the external trade of Georgia with CIS countries totalled $675 million USD. Exports stood at $175 million USD (55 percent lower), while imports equaled $500 million USD (two percent lower). Overall, in the first three months of 2015, 35 percent of Georgian exports went to CIS countries, 34 percent went to EU countries and 31 percent went to other countries. In terms of imports, 28 percent came from CIS countries, 26 percent of imports were from EU countries and 46 percent were from other countries, noted Geostat.

4 HEADLINES GEORGIAN WINE SAMPLED AT CZECH DEGUSTATION

INTERVIEW caucasian business week

JEAN-ELIE MALKIN: HEALTH IS A HUMAN RIGHT Georgian Government Signs Cooperation Agreement for Healthcare System Improvement

he Czech Republic has hosted a Georgian wine degustation event. The Georgian wine tasting session was initiated by the Centre for the Promotion of Imports from developing countries (CBI), which is part of the Netherlands’ Enterprise Agency and commissioned by the Ministry of Foreign Affairs of the Netherlands.

In a move that recognized the Government’s desire to make much-needed improvements to the country’s healthcare system, on April 6 the Ministry of Labor, Health and Social Affairs of Georgia signed a cooperation agreement with consulting organization Global Alliance for Health and Social Compact (GAHSC), a team of international experts who are now set to catalyze partnership and collaboration with national counterparts towards health improvement in the country in. Following on from the heritage of the former Soviet Union system, Georgia has succeeded in transforming its health care system through a step-by-step process involving privatization, the delegation of care services to health insurance companies, and then, in 2012, the establishment of universal health coverage. But there are still many improvements that could and should be made. The GAHSC will be offering guidance, monitoring and evaluation services to the government in order to reduce costs, and improve management and accessibility of better care to the population.

FRANCE’S COMPAGNIE DE VICHY INVOLVED IN $750M TSKALTUBO PROJECT

he French company that runs one of Europe’s leading spa destinations is ready to get involved in a project worth $750 million to develop the Tskaltubo Spa Resort – an area famous for its radon-carbonate mineral springs in west-central Georgia. One of the developers of Skype visits Georgia Young Estonian man who helped develop one of the world’s most popular online communication services is coming to Georgia to share his entrepreneurial experience with young Georgian leaders. Martin Villig, a young entrepreneur and one of the developers of Skype, is due to visit Georgia’s capital Tbilisi tomorrow, April 23, where he will host a master classes for budding Georgian entrepreneurs.

GREEK LOW-COST AIRLINE ELLINAIR ANNOUNCES GEORGIA FLIGHTS

ew flights from Georgia to some of the world’s most exotic destinations are ahead as more airline companies pledge to enter the Georgian aviation market. Several low-cost airlines recently announced to begin flights into and out of Georgia; first Pegasus Airlines of Turkey and today Ellinair of Greece. The Greek low-cost airline said it would begin flights to Georgia from June 8, allowing passengers to use the Georgia-Greece route once per week.

GEORGIA PARTICIPATES IN 3RD EAST FORUM BERLIN 2015

eorgia’s Economy Minister Giorgi Kvirikashvili is on an official visit to Berlin, Germany, and attending the third East Forum Berlin 2015. Kvirikashvili will participate in the panel discussions and deliver a speech during the event which is expected to generate an international audience of more than 200.

- Dr. Malkin, could you tell us more about how the cooperation agreement will work; what the main focal points are, and how soon our citizens will be able to feel the changes? - The agreement signed on 6th of April aims to provide services, guidance and recommendations regarding the main components of the health care system in Georgia. That doesn’t mean that Georgia’s health care system isn’t working or that it’s working particularly badly. Of course, if we compare health care systems in different countries from Western Europe to Eastern Europe or within Eastern Europe, we come up against the heritage of the former Soviet Union system. Since then a lot of changes have been made, especially in Georgia, which means that during recent years the people of Georgia have been getting better access to services. But there are always improvements which should be made, such as in better management of the whole system in Georgia; through re-engineering of the

LOW-COST AIRLINES TO ENTER GEORGIAN MARKET IN JUNE

WORLD BANK AND IFC PLEDGE “FULL SUPPORT” FOR GEORGIA’S REFORMS

he International Finance Corporation (IFC) is pledging to continue supporting the ongoing reforms in Georgia. Georgia’s Finance Minister Nodar Khaduri received this news in Washington, D.C., where he is currently on an official visit and participating in the International Monetary Fund (IMF) and World Bank Group annual spring meetings. IFC is a member of the World Bank Group.

ties as they are either distrustful of them or because the facilities are not sufficiently equipped, or for the simple fact that there are people who prefer going directly to hospital. In such cases a certain re-engineering is called for, which we will recommend to perform step-by-step through joint activities of government institutions and various stakeholders. This should become a common goal for all stakeholders. - The Georgian Government names health care a top priority. Could you talk about the challenges facing the healthcare system and the cooperation between the GAHSC and the Ministry of Health? - Georgia, like all countries in the region, has a lot of issues to be addressed in order to move forward: economic challenges, social challenges, industrial challenges, but health is definitely something committed to by the higher authorities. The reason is simple: Georgia’s political leaders now understand that if they don’t give quality care to the majority of the population, those citizens will be prevented from contributing to and participating in the economic growth of the country. Health is a human right. A better health care system will serve to satisfy the general population as one of the highest priorities in any household is health. The Georgian government understands this, and that’s why the challenge now is to move forward in the main directions of quality and cost reduction. The GAHSC will support the government in finding how to successfully re-design the system; that’s to say, not transforming everything, nor using a copy/paste system, but adapting innovative tools and making them usable in Georgian specificities. One of the challenges is to do this by building, transforming, improving, and strengthening the system with one objective in mind: to be closer to European Union standards.

The Georgian government and experts introduce various initiatives for Georgia’s economic development, but all initiatives and ideas resemble each other. Advisor, trainer and speaker Tariel Zivzivadze has developed an alternative approach on Georgia’s economic development. Huge potential remains unemployed in the country, he asserts. This potential is preserved in those consumers, who ignore domestic products and prefers to buy imported goods. The Georgian consumers should realize they should give preference to domestic products, otherwise, economic development and two-digit economic growth cannot be achieved.

ne of the biggest importers in China’s Xinjiang province is planning to import half a million bottles of Georgian wine – a threefold increase on its current quota, announced Georgia’s National Wine Agency. Agency representative Maia Tskitishvili held a business meeting with Xinjiang Beifangjianda Trade Co. Ltd leaders yesterday, where the sides agreed to deliver three-times the amount of wine to the Xinjiang province than current rates.

integrated service delivery model; in the balance between the hospital sector , patient clinics and primary healthcare. That means also improving the quality of care, because if the people ask for better access to care, that means better access to better quality of care. This is the kind of advance the GAHSC will be aiming for by co-operating with the Georgian Government. The universal healthcare coverage programme has seen huge progress, though there’s still a lot to be done in order to reduce the costs. Reducing the cost means two things: first of all reducing the overall cost for the government and for the project, and secondly reducing the cost for the individual. The cost of drugs is still very high in Georgia. We need to address all these issues. - Since the majority of Georgia’s population is socially vulnerable, how accessible to individuals do you see the future model being? Do you see them being able to take full advantage of it? - Of course, improving any health care system means offering access for the majority of the population, including what we call the most vulnerable people. And once again, the universal health coverage has been a step forward on this issue. Now there are a variety of further issues that need addressing in order to improve this access. For example, we should find a way to improve the services provided by primary healthcare facilities. This means that people should have access to basic packages of care in their own neighborhoods, which would not only be prime quality care, but also without personal cost to those people. At present in Georgia there are many hospitals meant to reduce out-of-pocket expenses, but it is often the case that the target social group avoids such facili-

TARIEL ZIVZIVADZE: CURRENCY OUTFLOWS IN 2014 EXCEEDED 5 BILLION USD

GEORGIA’S WINE EXPORTS TO CHINESE XINJIANG TO TRIPLE

eorgian travellers are being given an opportunity to fly to more destinations without having to pay sky-high fees that are usually associated with air travel. The expected introduction of several low cost airlines to the Georgian market this June will make air travel from Georgia more affordable and ensure more flights are carried out to more destinations.

April 27, 2015 #96

- Which main directions should be prioritized by the government and which fields should be mostly financed from the state budget at this stage of economic development of Georgia? -Our main challenge is related to low economic growth paces and our officials see the solution in foreign inflows, growth in investments, cutting expenditures, growth in output, but I have nothing heard about the necessity of purchase of domestic goods. Huge development potential exists in our citizens and this potential should be vivified. Therefore, I will pay special attention to this issue jointly with my team. -What would you say about Georgia’s negative trade balance with main trade partners? Do you think, in reality, our economy regresses? -We, Georgians, like feasts and expressive toasts for our homeland, but, in reality, almost all products on the table are imported goods. Today we have very complicated situation with exports and imports balance. What does this signify? In only 2014 Georgia’s negative

trade balance marked 5.735 billion USD. The exports also increased, but the imports growth increased the misbalance to a record figure. We had never got such a negative report. This signifies the country lost over 5 billion USD in 2014. At the same time, I would alleviate the picture and say we have positive trade balance with some countries too, for example our positive balance with Nepal is over 6 000 USD. It is ridiculous, is not it? We have got 23 000 USD positive trade balance with Benin, 25 000 USD positive trade balance with Trinidad and Tobago. The highest positive balance of 78 million USD is recorded with Armenia, 53 million USD - with Kazakhstan, 41 million USD - with Uzbekistan, 35 million USD - with Canada, 13 million USD - with Belarus, 10 million USD - with Tajikistan and so on. In whole, our positive trade balance in 2014 was recorded with 41 countries. To resolve the problem all of us should do a simple thing – when buying something, we should take a breath and choose Georgian goods, I mean high-quality Georgian products and we have got many similar products. For example, you have got a farm to produce beef. I buy the beef of your farm and I pay money to you, to your production. This signifies the domestic business is developed, and you are able to develop your business, employ more people and pay dues to the state budget. The employees receive wages and then spend money. This is a scheme that enables to develop your business, employ individuals and develop the country, in whole. But when we have 1.5 billion USD negative balance with trade partner (Turkey), this signifies you buy Turkish products, you develop Turkey, develop Turkish business and employ Turkish citizens. -In your public speeches you always call on Georgian citizens to buy Georgian products and assure them this conduct and choice is of vital importance

for the economic development, but there are many skeptics that blame Georgian products for lowquality and advise to give preference to foreign quality. What would you respond to this category? - When you see Georgian products and they are high-quality products, you should buy them, you should ignore low-quality goods and “bury” them jointly with the manufacturers so as no Georgian enterprise produce similar products. We keep the solution that is called money. It is our responsibility to spend this money on this or that product. If we spend this money on high-quality Georgian products, this signifies we promote the development of high-quality Georgian production and this choice will bring reciprocal results, that is, if I take decision to do some business and there are many similar people like me, I will also hope these people will purchase my products. And skeptics will always exist. I always listen to them because they show interest to this issue and sometime disputes with them are very useful. -Your website actively popularizes Georgian products that have penetrated foreign markets. Naturally, this is a significant success and we should appreciate this achievement. What barriers and procedures have these companies passed to find a niche beside competitive and hiogh-quality foreign products abroad? - We are sure it is a significant achievement when Georgian products get to foreign trade assets after overcoming all barriers starting from marketing issues and ending with legal issues. This idea has come spontaneously: if Georgian emigrants meet Georgian products abroad at supermarkets, they should take a photo and send them to us to popularize these products in Georgia for the people who find this is an important achievement. And this category is about 30% in Georgia.

April 27, 2015 #96

ECONOMIX

caucasian business week

REASONS FOR RESTRICTING ONLINE GAMBLING GAMES

egative impact from online casinos and bookmakers has exceeded all expectations in the gambling business. The problem relevance was stressed by Catholicos-Patriarch of All Georgia Ilia Second in his Easter Epistle, where the gambling games are estimated as a dangerous and serious problem. Many countries have banned this business, despite casinos and bookmakers transfer considerable funds the state budgets. “Ordinary casinos follow the age restriction policy and request a certain amount of money for playing, while online casinos ignore both circumstances. People, especially, young residents of our country succumb to temptation and fall into huge problems and debts. The number of online casino gamers is growing catastrophically. Many of them have lost property, many families have divorced, and some of them have committed suicide… We believe the Authorities should interfere in this direction and protect the present and future of our country”, the epistle of the Catholicos-Patriarch of All Georgia reads. Internet is quickly penetrating new places and spaces and online gambling games are also becoming popular. Consequently, risks of casino affection also grow. Free access of underage individuals to online casinos is one of the major challenges. According to the Interior Ministry, 70% of the adolescents online gambling gamers. Psychologist Marina Kacharava asserts the problem is complex and uncontrolled. “The number of gambling gamers has exceeded the quantity of drug addicts. Age restriction does not work and representatives of any age category have got a free access to gambling games. Psychology cannot heal pathological cases. Psychiatrists are required in this case, because break mechanism has been dissolved in brains that is individuals cannot control their conduct. They fully obey this custom and the demand for gambling games becomes dominant and all other things become unimportant”, Kacharava noted. MP Zurab Tkemaladze, a chairman of the parliament’s sectoral economy committee, seems to be showing full consent with the Georgian CatholicPatriarch. He suggests developing such regulations that will protect Georgian citizens and will not damage the gambling business. “I object the gambling business as much as to smoking! At this stage a special zone should be organized far away from the capital city so as poor individuals, especially young people could not reach this place …We can also restrict an access of Georgian citizens to casinos. Many countries have banned their citizens to visit casinos.

As to the state budget losses, our priority is the welfare of our citizens, not the state budget! If the public welfare needs this, we should restrict this field. At the same time, the state budget should be replenished by all means that promote the public welfare”, MP Zurab Tkemaladze noted. Despite this statement, the parliamentary committee chaired by MP Zurab Tkemaladze makes no efforts to resolve this problem. Two years ago the sectoral economy committee set up a special commission to develop legal amendments on organizing lotteries, gambling business and winning games, but in vain, no progress is discerned. The workgroup has never gathered. The gambling business supporters assert that the state budget receives considerable transfers from the sector. According to unofficial report, the gambling business ratio in total budget revenues makes up 1%, that is 80 million GEL. Casinos pay annual license duties that range from 250 000 GEL to 5 million GEL due to the zones and territories. Casinos also pay fixed duty from gambling tables and machines. As a result, online casinos remain beyond the taxation system and this signifies the state has no fiscal effect from this growing and main direction of the gambling business. Nodar Chichinadze, a president for the association of young financiers and businessmen (AYFB), says the current legislation on gambling business is outdated and it cannot respond to the existing challenges. “Online gambling games become more and more

popular and accessible every day. Today over a halt part of residents in Georgia have got free access to the internet. The Economy Ministry is implementing a project for further spread of internet connection. The project calls for fully covering the whole territory of Georgia with internet connection. This signifies online services and gambling games will wider spread in the country and reach new zones and spaces. I believe this sector should not be regulated by the old legislation. Today websites of the most popular gambling games have got over 100 000 visitors a day. There are several gambling games websites in the Georgian space and consequently, the quantity of gamers is also very impressive. The current legislation cannot ensure and efficiently regulate the involvement of Georgian residents in the gambling games because of invaluable registration process. Underage residents have free access to similar websites and the existing registration modules cannot valuably provide personal identification, because visitors insert unreal data without problems and this fact includes criminal aspects. Our organization has demonstrated many public activities over these problems. International organizations also point to the exiting problems. FATF and MONEYVAL have introduced recommendations for improving personal registration procedures in the internet space. Thus, the regulatory environment should be improved and changed. Today the situation in the online gambling business radically differs from the situation

5 years ago and in the future this business will become larger-scale and more popular. Therefore, all these changes and new realities should be reflected in the legislation and regulatory norms. Officially, gambling games are entertaining business, but in Georgia this does not work and the gambling business has acquired the image of a monster and misfortune. Therefore, only proper and valuable regulations can protect the society from negative affects of the gambling games and on the other hand, the gambling business will get rid of the negative image too. The current regulations contains risks of involvement of underage residents in gambling games and crimes, as well as money laundering”, Nodar Chichinadze said. According to the Dialogue of Generations nongovernmental organization, a major part of young residents in Georgia play gambling games. We have visited Kutaisi no.5 public school and inquired pupils of the 14 to 18 age category. 41% of the respondents have already played gambling games, while 7% turned out active players. In whole we have inquired over 400 adolescents”, Gvantsa Totadze, the NGO secretary general noted. The situation is alarming because this group belongs to the high-risky category. 75% of the respondents have got friends who permanently play online gambling games or visit slots clubs, she added. It is worth noting this report was prepared in only Kutaisi, while more aggravated situation is reported in the capital city and the whole country.

WORLD BANK: ‘EXPORT-LED JOB CREATION IS THE KEY TO UNLOCKING GEORGIA’S FULL POTENTIAL’

ashmi Shankar, WB Program Leader for the South Caucasus, working on Armenia, Azerbaijan, and Georgia, says in her article that having lived in Tbilisi for almost three years now, she continues to be fascinated by the contradictions of the Georgian story. On one hand, Georgia has achieved significant economic growth over the past decade, successfully introduced much needed governance reform, and become synonymous with world leadership in terms of doing business (ranked in the top 15 and better than some OECD countries). On the other hand, the country has been dogged persistently by high poverty rates – among the highest in the Europe and Central Asia region. And, despite a highly improved business environment, unemployment rates remain in the double digits: official unemployment is currently around 15 percent! So, how can Georgia ensure both strong growth and social sustainability? In my view, export-led job creation is the key to unlocking Georgia’s full potential. We know some of the arithmetic behind sluggish

job growth in Georgia: a short history of reforms before the Russo-Georgian conflict in 2008 and the global financial crisis, relatively slow productivity growth in the export sectors, and increased unemployment as less efficient sectors of the economy shed workers faster than growing sectors could absorb them. We still do not see signs of a scaling-up in production. If jobs are to be created, this scaling-up is essential. However, given the small size of Georgia’s economy, this will only be possible through far stronger export performance. Georgian exporters have been relatively successful at creating jobs compared to domestically oriented firms, and even compared to exporters in other countries across Europe and Central Asia. However, while Georgia’s exports tripled in value between 2006 and 2012, the regional crisis around the economic contraction in Russia and Ukraine has since wiped out much of the gains made. Even with exports of goods and services at over 40 percent of GDP, the trade deficit is nearly 18 percent of GDP as of 2014. One of the most significant challenges that export firms in Georgia face is survival. The other

challenge – which is related – is improving export sophistication. Nearly two-thirds of Georgian exporters exit foreign markets before their first year is up – a significantly higher proportion than other countries in Europe and Central Asia. Georgia’s main goods exports remain primary products, with scrap metal emerging in importance now that the used-car re-export market is winding down (following stricter environmental regulations in key markets like Azerbaijan). Georgia’s main goods exports remain primary products, with scrap metal emerging in importance now that the used-car re-export market is winding down (following stricter environmental regulations in key markets like Azerbaijan). Product diversification is especially important, but over 80 percent of Georgia’s export growth has so far come from traditional products going to traditional destinations. Firms argue that their biggest constraint is the inability to compete – given the high fixed costs of entry into new markets. In addition, high transportation costs drive up the prices of some Georgian products, including its most sophisticated export – wine.

While foreign investment yields clear dividends in terms of productivity growth and employment, capital has historically been more likely to flow to Georgia’s non-tradable sectors, especially real estate. So, what can Georgia do? For a start, investment in export promotion and in strengthened logistics and supply chain management, including through public-private partnerships, can unleash potentially high gains, as will active promotion of foreign direct investment in export sectors. Labor mobility in Georgia will certainly need to be strengthened – which is a challenge because of the large concentration of employment in agriculture – but, as opportunities expand in the private sector, we should see workers moving in response. A skills strategy, developed jointly with the private sector, would also help here. For Georgian exporters to be able to create jobs back home, it is critical that they can stay in business and deepen the exporting relationship – ultimately strengthening the link between trade and labor market outcomes. Perhaps then, we will see Georgia’s true potential.

BUSINESS

caucasian business week

AMERICAN RESTAURANT SELLS 10,000 KHACHAPURIS

eorgian cuisine has had a very successful year in the Western media, making tabloid stories in such publications as the Washington Post, New York Times and Huffington Post. This week a Washington D.C.-based restaurant boasts of hitting a milestone with selling 10,000 orders of Khachapuri, local restaurant cataloging website D.C. Eater reported yesterday. Compasse Rose is a North-Western D.C. restaurant that specializes in serving its customers what it calls “street foods” from all over the globe, hence the compass logo. They serve dishes from Cuba, Japan, Mexico and Lebanon, all in one place. Accordingly, an exotic and yet staple-looking dish from the South Caucasus khachapuri entered its menu last year. The restaurant

made a fun tweet for its followers to celebrate the 10,000 khachapuri orders it sold this year. Compasse Rose owner Ms Previte told DC Eater the restaurant is looking forward to adding Khinkali, traditional Georgian meat-dumplings to its menu by the Georgian Independence Day on May 26. “Call it intuition, or just a hunch, but I’m expecting a big demand for khinkali,” Ms Previte shares her enthusiasm. Georgian cuisine’s successful flirtation with the West culminated recently in “Eating Khinkali” becoming a status-worthy activity on Facebook. All of this is exciting news for Georgians who love to share their national food with visitors as well foreign friends living abroad.

INCOMPETENCE - MAJOR CHALLENGE IN SMALL AND MEDIUM BUSINESS SECTORS

mall and medium business (SMB) is a sector, which is considered one of the most perspective in the world. The share of this business is quite high in the US and the EU, however, SMEs accounted for no more that 20% of total turnover. One of the problems the small and medium businesses face is the availability of cash resources. Mikhail Chelidze, President of GSMEA (Georgian Small & Medium Enterprises Association), says that entrepreneurs practically do not have access to finance, because the banks are not lending them. “Banks do not give loans without collateral, while small and medium enterprises can’t offer it ,” – Chelidze points out. According to him, another problem is the lack of knowledge. Chelidze says that in most cases when taking out loans, entrepreneurs do not calculate risks, do not have a business plan which also prevents access to finances.

Nodar Chichinadze, President of the Association of Young Financiers and Businessmen (AYFB) and the “2030” member, also speaks about the need for access to financial resources. According to him, at this stage large business has more access to financial resources, because the government offers more benefits to major projects. President of the Association of Banks of Georgia Zurab Gvasalia talks about the educational deficit. He says in many cases t entrepreneurs do not understand why they are taking a loan and what risks may exist. Gvasalia explains entrepreneurs often cannot understand why the bank refuses to give a loan and they go to private lenders. In his words, due to the lack of education, the Association had a project which covered Georgia’s several regions in the frames of which the potential borrowers received training. Gvasalia believes various agencies and organizations should continue working in this direction.

April 27, 2015 #96

COMPETITION INTENSIFIES IN THE COFFEE MARKET

ompetition intensifies in the coffee market. “Georgian Coffee Company” released an insoluble and instant coffee “Jambo” and “Egoist” to the market; as a representative of the company states “Commersant”, the company was founded last year on Italian investment, the company’s products appeared in the market in the current year and are sold in 1 600 markets. Tsikhelashvili says “Cherry” cannot compete with their company either on quality or price as their product is 100% natural and was awarded with a GOLDEN CROWN QUALITY AWARD in London. “The Georgian Coffee Company” representative notes that in the near future another kind of premium coffee will be released to the market. Negotiations are underway to

export the product to Israel. “Cherry” Director General, which appeared on the market in 2012, says he has no information about the emergence of new players in the market. In his words, at present “Cherry” is the insoluble coffee market leader. Irakli Lomtatidze explains that their products are made from a mixture of 15 kinds of coffee and can be purchased at “Cherry” brand store. Lomtatidze adds that the company is working on instant coffee production which is expected to go on sale by the end of the year. In his words, the trial parties were sent to several countries and by the end of the year they are planning to enter several neighboring countries. “Cherry” coffee is sold in all price categories. The price of goods ranges within GEL 0. 80 - GEL 10.

CRISIS IN BUSINESS OF USED VEHICLES

n the first quarter of the current year exports of used cars amounted to $ 57.7 million that is 2.6 times less compared to the same period of last year. It should be noted that growth in the export of cars was recorded since 2000, the first decline was observed in 2009 while the second- a 26% decrease compared to 2013 was observed in 2014. Problems began after Azerbaijan introduced the standard of fuel Euro-4 that automatically stopped exporting cars made before 2005. In January Azerbaijan also increased the excise rates on imported cars . According to the amendments, the share of excise tax in the cost of passenger cars with an engine capacity of up to 2,000 cubic centimeters has been set at 0.2 AZN per each cubic centimeter, up to 3,000 cubic centimeters - at 400 AZN (plus one AZN for each cubic centimeter with an engine capacity of 2,001- 3,000 cubic centimeters), up to 4,000 cubic centimeters – 1,900 AZN (plus four AZN per each cubic centimeter with an engine capacity of up to 3,001-4,000 cubic centimeters), up to 5,000 cubic centimeters – 5,900 AZN (plus eight AZN per cubic centimeter with an engine capacity of 4,000-5,000 cubic centimeters), 5,000 cubic centimeters - 13,900 AZN (plus ten AZN per each cubic centimeter with an engine capacity exceeding 4,000 cubic centimeters). What is happening today in the car market and what expectations do the companies have amid the global economic crisis and challenges inside the country ? What will happen to the car business, and whether small auto dealers will be forced to suspend their activities?

Local dealers say that now they are mainly engaged in the sale of motor vehicles in the domestic market, but due to the domestic economic-financial crisis and the sharp devaluation of the Georgian lari, companies are selling cars at prices below cost, but the number of buyers still dramatically reduced. Ioseb Zarandia, Director of the used cars dealer “Zarios Auto”, explains the decline in exports by the regulations introduced by Azerbaijan. In Zarandia’s words, 70-80% of re-export accounted for Azerbaijan, the remaining 30% - for Armenia from where cars were exported to Russia. At this stage there are no almost orders, one-two cars are exported a month while earlier their number amounted to 10-15. He says the company now operates mainly in the domestic market, but sales have cut due to the financial crisis. According to him, many individuals who brought about 5 cars per month have given up this business Zarandia says the situation in the country should stabilize and the government should regulate the exchange rate. As for taxes, all pay fees as the customs fees are still the lowest in the region, however, people must have money to order a car. Now they are afraid to buy a car, because they do not know what will happen tomorrow. He thinks if the exchange rate maintains at this level, people will get used to, and will calculate the costs in accordance with it, but amid these fluctuations, there is even some hope that the rate will fall. One of the auto importers Nikoloz Rostiashvili notes that Azerbaijan has learned alternative ways and imports vehicles from America, Europe and Japan without a mediator while Georgia is used as the transit corridor.

THESE 10 OF YOUR FAVOURITE DISHES WERE INVENTED BY ACCIDENT Here’s how it happened

Some of the greatest discoveries have been made by accident and it’s no exception when it comes to food. Mistakes, or in other words fails, have this unpredictable, paradoxical probability that somehow they might flip into their opposite: great successes. Take for instance X-rays, penicillin, post-it notes, play-doh, chewing gum, the microwave oven, and fireworks, which was actually invented by a cook in China. All have come from mistakes. Such is also the case with some delicious foods that were born out of a marvelous confluence of laziness, resourcefulness, luck or just pure failure. From a frozen sweet to an upside-down tarte, foodpanda (www.foodpanda.ge) chose 10 of your favourite foods that are the result of pure serendipity. #1. CRÊPES SUZETTE Who invented it? Henri Charpentier When? 1896 What happened? Improvisation In 1896, the 16-year-old waiter Henri Charpentier, tried to extinguish a flaming pan with pancakes. It was the day that Prince of Wales Edward VII visited Monte Carlo’s Café de Paris and requested a special dessert just for him. Henri accidentally caught a pan of liqueurs on fire and thinking quickly, he threw the crêpes in the hot sweet sauce and served them. The Prince loved them and asked for the dessert’s name, to which Charpentier replied Crêpe Princesse, after him. But future King Edward requested that it be named in honour of his companion, named Suzette and voilà! Crêpes Suzette were unintentionally -but luckily for us- born! There are more scenarios for the invention of this flaming dessert, but it doesn’t really matter. What matters is sweet pancakes soaked in booze #2. TARTE TATIN Who invented it? Stéphanie & Caroline Tatin When? 19th century What happened? Laziness The upside-down dessert was created because a tart was forgotten in the oven. It was in France, in a hotel owned by two sisters, Stéphanie and Caroline Tatin, in the 19th century. Stéphanie was making an apple tart but accidentally overcooked the apples, so tried to rescue it by putting the pastry base on top, and voilà! A masterpiece was created. The French did it again.

#3. CHOCOLATE CHIPS Who invented it? Ruth Graves Wakefield When? 1930 What happened? Resourcefulness The chocolate chip cookie was first made by Ruth Wakefield, who had one day ran out of baking chocolate, so she smashed up a bar of semisweet chocolate and added it to her batter hoping it would all melt together. But the pieces remained intact: what resulted was a cookie with chunks of chocolate, and so the chocolate chip cookie was born. Soon, her hotel was known for its chocolate chip cookies. In 1997, to honor the popular recipe’s origin, the state of Massachusetts designated the chocolate chip cookie as its official state cookie. #4. POTATO CHIPS Who invented it? George Crum When? 1853 What happened? Revenge George Crum, an American chef that in 1853 was tired of a customer who was complaining his fried potatoes were not thin enough. So Crum decided to take his revenge by making them inedible. He sliced them thinly, baked them to a crisp and covered them with salt. The customer loved them and the rest is history. #5. BEER Who invented it? Mesopotamians When? About 10,00 years ago What happened? Luck Beer would never exist if the Mesopotamians’ storage spaces were dry. When they began storing grains for bread, their storage spaces occasionally became damp, which caused the grains to ferment. This fermentation process resulted in the earliest beer. We should all raise a glass to that first Mesopotamian who was brave enough to sample the strange liquid. #6. SANDWICH Who invented it? John Montagu, 4th Earl of Sandwich When? Sometime in the 1700s What happened? Gambling problem John Montagu, the 4th Earl of Sandwich just needed both hands to gamble. Some believe Motagu couldn’t leave a particularly intense gambling game, so he requested that meat should be brought to him between two pieces of bread. Montagu’s refusal to get up for a meal resulted in one of the greatest culinary advances in history.

#7. COCA-COLA Who invented it? John Pemberton When? 1886 What happened? Addiction Coca Cola was first invented as a substitute to morphine. Pemberton was a wounded veteran who had become addicted to morphine. He sought to create a replacement to stave off his addiction. Through some experimenting in his pharmacy, he created a tonic (the original Coca Cola formula) that contained small amounts of cocaine as well as the caffeine-rich kola nut. In 1887, another Atlanta pharmacist, Asa Candler, bought the formula for Coca Cola from Pemberton for $2,300. By the late 1890s, Coca Cola was one of America’s most popular fountain drinks, largely due to Candler’s aggressive marketing of the product as a soda. #8. LEA & PERRINS WORCESTERSHIRE SAUCE Who invented it? Lord Marcus Sandy, Lea & Perrins When? 1838 What happened? Ageing This amazing sauce was a result of a ‘second try’. Without the mistake of two chemists, meats or salads wouldn’t be as tasty. In the early 1800’s, Lord Sandys commissioned chemists John Wheeley Lea and William Henry Perrins to the task of recreating a recipe he had tasted in Bengal. Lea and Perrins attempted the sauce, but did not like the result, so they left the sauce in jars in a cellar. Two years later, the two stumbled across the

sauce, decided to taste it and found something amazing: This ageing period improved the flavours vastly and soon became a hit. #9. POPSICLES (ICE LOLLY) Who invented it? Frank Epperson When? 1905 What happened? Absentmindedness Young Frank Epperson left a glass of soda on his San Francisco front porch with a stirring stick in it. By the next morning the drink had frozen and when he pulled the stick, the drink came with it. In 1924, he applied for a patent for his new discovery, which he originally dubbed the “Epsicle”. Eventually, his kids would refer to the frozen pop as Pop’s ‘sicle, causing Epperson to change the name. In 1923, Epperson sold the rights to Popsicle® and today, the company sells 2 billion ice pops annually, with cherry being the most popular flavor amongst its consumers. #10. ICE CREAM CONES Who invented it? Ernest Hamwi When? 1904 What happened? Love thy neighbour At the 1904 St. Louis World’s Fair, when an ice-cream vendor run out of dishes. To help him out, Hamwi, a neighboring concessionaire, rolled the waffle-like pastries he was selling (called zalabis) into a cone so that the ice cream could be held inside. Talk about an accident that turned out oh-so-right.

April 27, 2015 #96

ECONOMY

caucasian business week

FITCH REVISES GEORGIA’S OUTLOOK TO STABLE; AFFIRMS AT ‘BB-’

he following statement was released by the rating agency. “Fitch Ratings has revised the Outlook on Georgia’s Long-term foreign and local currency Issuer Default Ratings (IDR) to Stable from Positive and affirmed the IDRs at ‘BB-’. The issue ratings on Georgia’s senior unsecured foreign and local currency bonds have also been affirmed at ‘BB-’. The Country Ceiling has been affirmed at ‘BB’ and the Shortterm foreign currency IDR at ‘B’. KEY RATING DRIVERS The revision of the Outlook to Stable reflects the following key rating drivers and their relative weights: HIGH Georgia has experienced multiple external shocks following the lower oil price/sanctions-induced downturn in Russia, which has spilled over to surrounding CIS economies, triggering a wave of trading partner currency devaluations. These developments have had a highly adverse impact on Georgian trade and remittances: exports have fallen sharply, while remittances are down about 25%. The external sector remains Georgia’s main weakness. The Georgian lari has depreciated by about 30% from its 2011-13 levels compared to the US dollar, although the real effective exchange rate has remained relatively stable. The floating of the lari provides a shock absorber and mitigates the decline in foreign-exchange reserves. Nevertheless, the central bank has intervened on six occasions since November 2014, lowering reserves by USD240m to USD2.45bn in March, their lowest level since January 2011. We expect reserves to fall below 2.5 months of import coverage in 2015 and 2016, well below the ‘BB’ median. With CIS countries accounting for over half of total exports, Fitch expects exports to fall by 20% in 2015. Despite a decline in imports, we expect the current account deficit (CAD) to widen to about 14% of GDP in 2015 from 9% in 2014. The depreciation will also push net external debt up from 58% of GDP in 2014 to nearly 80% in 2015, far above the ‘BB’ rating median of 15%. MEDIUM Economic growth is expected to slow markedly to 2% in 2015 from 4.8% in 2014, primarily due to

spillovers from the regional economic downturn. Lower exports to Russia and other CIS countries, weaker business and consumer sentiment will weigh on the economy. Downside risks remain and will be linked to further developments in the oil price, Russia and other trading partners. The lari depreciation will reduce Georgia’s per capita GDP in US dollar terms from USD3,623 in 2014 to an estimated USD2,923 in 2015, a fall of almost 20%, leaving it over 30% below the ‘BB’ median. Lower per capita GDP can accentuate vulnerability to shocks and reduce debt tolerance. Given the economic slowdown and the government’s decision to preserve investment and social spending, we forecast the 2015 general government deficit to reach about 3.5% of GDP, with some risks of moderate fiscal slippage. The high share of foreign currency-denominated debt in Georgia (about 80%) means that the depreciation of the lari will push general government debt above 43% of GDP in 2015. Despite the high share of concessional or near-concessional debt, debt dynamics remain vulnerable to further exchange rate developments. The government has reiterated its determination to maintain its fiscal

stimulus, primarily via the continuation of its ambitious investment programme. However, should revenue significantly underperform expectations, we expect the government to adopt corrective measures to maintain fiscal sustainability. As a large share of public investment is financed by international financial institutions (IFIs) and the near-term external redemption schedule is not heavy, liquidity risks should be contained. Georgian banks do not run major short open current positions, which will limit direct devaluation losses. Foreign currency-deposit outflows (adjusted for exchange-rate changes) have been moderate and banks have significant liquidity cushions, partly because of stringent regulations. The economy is highly dollarised. Nonetheless, with over 60% of banks’ loan portfolios US-dollar denominated, the fall of the lari could create asset-quality pressures and a slight decrease in regulatory capital ratios due to asset inflation. Georgia’s ‘BB-’ IDRs also reflect the following key rating drivers: Georgia continues to demonstrate a strong commitment to economic and structural reforms, guided by a succession of IMF programmes, including a three-year standby arrangement signed

in July 2014. Georgia has also signed an Association Agreement with the EU, which entails a Deep and Comprehensive Free Trade Area. Easier access to EU markets should help to boost Georgia’s attractiveness as an investment location over the medium to long term. Georgia’s business environment compares favourably with rating peers, as illustrated by the World Bank’s ease of doing business indicators. We expect FDI flows to remain robust, supported by IFIs but also private investors’ appetite. Some large-scale infrastructure projects could boost investment over the coming years, notably in the railway, road, energy and sea transport sectors. However, the high import content of investments limits their short-term impact on growth. A recent reform of immigration regulation appears to have created difficulties for businesses, which already face a shortage of skilled labour. Amendments are expected in 2015 to lift these difficulties. Russia’s decision to sign an integration treaty with the breakaway regions of South Ossetia and Abkhazia has sparked some protest from Georgia, the US and the EU, but so far has not derailed the slow and relative normalization of the bilateral relationship. The main factors that could lead to a downgrade are: renewed pressure on reserves and the exchange rate, brought about by a worsening of the downturn affecting trading partners and widening in the CAD. - A departure from prudent fiscal and monetary policymaking. - A further deterioration of the domestic or regional political climate. The main factors that could lead to an upgrade are: a revival of strong and sustainable GDP growth combined with fiscal discipline. A stabilization of the net external debt ratio, accompanied by export growth and strong FDI inflows. - A further and significant reduction in the dollarization ratio. Fitch does not expect a significant worsening of the economic downturn in Russia and in major trading partners. Fitch assumes that the government will maintain its medium-term ambition to keep fiscal deficit below 3% of GDP, stabilizing the gross general government debt ratio below 40% of GDP.

INVESTMENT GROUP DENIES KHODORKOVSKY’S CONNECTION WITH TBILISI PROJECTS WORTH $200M

nvestment Group Quadrum Global is refusing the notion that Russian billionaire Mikhail Khodorkovsky is connected in any way with its implementation of two large-scale projects in Georgia’s capital worth about $200 million USD. “Mikhail Khodorkovsky does not own part of Quadrum Global. He is not a shareholder in the company. He also has nothing to do whatsoever with Quadrum’s projects in Georgia” said the company today. “Quadrum Global is an independent private equity investment and advisory group owned by its founder Oleg Pavlov. Its investor base includes a mixture of international institutional, family office and high net worth investors,” said Quadrum Global in a statement today. The company’s statement was released following the dissemination of information throughout Georgia stating that Russian billionaire Khodorkovsky was involved in the two major projects in Tbilisi, in which Quadrum Global was developing. The first project was the East Point Shopping and Entertainment Centre and the other was the establishment of the Tbilisi Garden residential complex. The Quadrum Global press release stated it was involved in a project within Georgia’s developing real estate market. “The firm principally targets real estate opportunities in the US and the UK, but is also developing projects in several emerging markets including Georgia. Since 2005 the firm has committed over $1 billion of capital to real estate assets and has grown its total portfolio to $2 billion.” Some details of the East Point Shopping and Entertainment Centre have already been announced.

The mall is expected to open in autumn this year. As of April, 80 percent of the space had been rented, while the total investment was approaching $90 million USD. Stretched over 24 hectares, the facility will occupy an area of 70,000 sqm and will be located on the motorway connecting the city centre with Tbilisi International Airport, on the eastern edge of Tbilisi known as the “Kakheti Highway”. It is a 10 minute drive from Freedom Square in central Tbilisi, a 15 minute drive from Rustavi city and about one hour from Armenia or Azerbaijan. The area was regarded as a good transportation link with growing residential demand. It is believed the facility will enjoy approximately 70,000 patrons daily. Project developers said this will be Georgia’s first open-concept retail and entertainment complex – a unique offering in a market with a growing demand for international quality shopping. Phase I of the development will encompass building the foundations and an area that will accommodate a hypermarket, the city’s first DIY store, the first electronics superstore, a 27,000 sqm outdoor fashion mall, cinema and more than 150 branded shops. The main brands already evident in Georgia’s retail market will feature at the centre but will be joined by several international operators who are entering the Georgian market for the first time. Specifically, East Point will feature a 10-screen cinema complex with IMAX technology – the first such screen in Georgia and one of the largest in Europe. It will also have a large-scale home improvement (DIY) store that will be the first of its kind in the country, and also offer a children’s entertainment and education centre spread over 3,500 sqm – also a unique feature.

The mall will also provide a bowling alley and food outlets. All shops will have front doors on the ground floor. Furthermore, visitors should have no trouble finding a park - the facility will boast more than 2,000 parking spaces. Regarding the second project, in Tbilisi’s Saburtalo district Quadrum Global was currently constructing the 150,000 sqm Tbilisi Garden residen-

tial complex. The total budget of the project was $120 million USD. The project consisted of several phases; with the first phase investment value being $30 million, which will cover construction of the first residential tower with amenities as well as landscaping the whole territory. Agenda.ge

ANALYTICS

QUOTES

“They Say Economy is Falling down and the Country is Suffering Crisis, but Nothing of the Sort is Happening” BIDZINA IVANISHVILI Georgian businessman and former PM According to former Prime Minister Bidzina Ivanishvili, the National Movement wants the county’s economy to collapse and investments to be hindered.Ivanishvili said on the “Weekly 20/30” talk show yesterday that the former ruling party is trying to achieve this by spreading lies. “Many agree with the opposition that the government is weak and incapable. The National Movement continues to use violence against society, this time they do so with lies. They do will anything to stop investments in the country. They constantly fight and say that our economy is falling down, that there is crisis and the country is being destroyed. However, nothing of the sort is happening. They say the crime rate has increased and if they substantiate this claim, it makes things seem dangerous for investors. They want the economy to collapse,”- said Ivanishvili.

“The National Bank’s Decision to Save Reserves amid the Lari’s Depreciation was Right” BRUNO BALVANERA EBRD’s Director for the South Caucasus, Moldova and Belarus Mr Balvanera believes that external shocks had the impact on Georgia’s economy. “The reality is that Georgia is in a difficult environment, due to the strengthening of the dollar against the world’s major currencies. A decline in oil prices has also influenced oil products markets in Georgia, Russia and Azerbaijan. We are now facing a different reality and the countries’ economic growth will be less than expected. EBRD does not produce its forecast for economic growth in Georgia. Today’s forecast rate is 4.2 percent. However, we’ll reconsider this figure and the new data will be published before the EBRD annual meeting”, - Bruno Balvanera says. The EBRD Director for the South Caucasus talked about changes to Georgia’s sovereign rating from positive to stable by Fitch Ratings. According to him, the credit agency’s data reflects the reality. “The National Bank’s actions during the national currency devaluation were right, when the reserves were not fully spent. This period will be difficult for those who have taken a loan in dollars, but economy will recover quickly,” - Bruno Balvanera adds.

“We are in works on Moxy, Marriott’s subsidiary hotel to be built in Georgia”

IRAKLI BAIDASHVILI Vice-president of GMT Group “We have been negotiating this subject for quite some time now. Marriott is one of the largest and most important hotel chains in the world. For Georgia, it is of great importance from a tourist point of view, and in addition, we have sought to attract potential of this network in all segments. A 5-star Marriott Tbilisi hotel is operating in

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Tbilisi as well as Courtyard Marriott hotels, of a bit lower class, now we should increase the number of low-cost economy-class hotels,” –Mr Baidashvili said. “Marriott launched Moxy brand just for this segment. It’s a new brand which opened its first hotel in Milan. In addition, another 50 hotels are planned to be built and ours will be one of the first in Eastern Europe. Investment for the project amounts to approximately $25 million, although in this case it will not be only a hotel, but also office buildings, shopping centers, restaurants, etc. We plan to open branches of several popular restaurants in Tbilisi there. In regard to the architectural design, we signed a contract with a local company, and after a month we will have a specific project, which will be presented to the city authorities, and then we will acquaint the public with it. By the end of the year we will purchase land, and then we will hold an international tender to identify the one company-contractor that will build the hotel. For now we are concentrated on this one particular project, and do not plan anything else before its implementation. However, in the future we intend to expand Moxy network, as this chain, more than any other networks meets the requirements of the market. Within 3-5 years, we intend to present a plan to expand in regions of Georgia.”

GEORGIA – TRANSPORT AND LOGISTICS INFRASTRUCTURE

eorgia provides significant investment opportunities in the manufacturing sector, which already contributes up to 12% to gross domestic product of the country and, since 2007, has attracted more than $ 1.2 billion in investments. New opportunities are expected to be grasped by Greenfield investments in export oriented manufacturing sectors, for which access to the European market would be attractive. Therefore, together with international and local experts, the Government of Georgia is undertaking a deep analysis of competitive sectors in order to find ways of stimulating investment inflows, attracting new technology and know-how and creating high value-added production in the country. From the perspective of transport and logistics, Georgia can serve as a gateway for foreign companies interested in the Caucasus/CIS region due to its geographic location and open business environment. Georgia is uniquely positioned to capitalize on increasing trade flows between Europe, the Caspian Region, Central Asia and China in the foreseeable future. The country offers the shortest route between the Black Sea and the Caspian Sea. The railway line connecting Georgia and Turkey is in the final stage of development and it will further facilitate trade in the entire region. The government is investing heavily in the development of road infrastructure, including highways and local roads. Georgia has 19,109 km of public roads and 1,612 km of railway. Reconstruction of Georgia’s central highway is one of the top priorities in the Government’s infrastructure rehabilitation program. Most roads of international importance were reconstructed and upgraded in 2005. Due to the fact that Russia eliminated discounts on transit in the direction of Ukraine, Georgian Railway is expected to become more competitive. Completion of the BakuTbilisi-Kars (BTK) railway in 2015 will also stimulate advancement of Georgian Railway. Therefore, Georgia aspires to be, and can be, the best place for regional offices, regional stocks and various value chains. Poti Sea Port is the largest port in the Republic of Georgia. The port currently serves as the European gateway for international trade in Georgia, Armenia and Azerbaijan and is ideally located to become a future hub for Central Asia trade. Poti Sea Port has experienced high growth over the last decade and the fundamentals for continued solid growth remain. APM Terminals Poti is operating Poti Sea Port in a joint venture with RAKIA. A plan to build a new deep sea port in Anaklia, which is located on the Black sea coast, has also been an-

nounced. The new port will take the country’s logistic capabilities to a new level. Georgia has four airports in different regions of the country. The largest one is in the capital city Tbilisi, operated by TAV Airports. The other airports are in Batumi, Mestia and Kutaisi. Currently, modern warehouse and logistics facilities hardly exist in Georgia and are mostly owner-occupied. The only significant recent development is the first phase of the Gebrüder Weiss logistics park near Tbilisi Airport. The anticipated development of infrastructure and manufacturing in Georgia, combined with its increasingly recognized strategic location at the cross roads of Europe and Asia, will open up opportunities for modern industrial real estate. GEORGIA – WAREHOUSE MARKET OVERVIEW The total volume of warehouse space in Georgia amounts to around 1.8 million sqm, of which around 1.2 million sqm is owner-occupied (65%) and the remainder is leasable (35%). The largest share of total leasable space is located in Tbilisi (61%), with 23% assigned to Batumi, 10% and 6% allocated to Poti and Rustavi, respectively. BREAKDOWN BY TYPES The total leasable stock is divided into dry and cold storage warehouses. The share held by dry storage warehouses is approximately eight times higher than the same figure for cold storage warehouses and accounts for 557,385 square metres. The leasable area of cold storage warehouses is around 11% of the total supply. The total capacity of cold storage amounts 243,000 tons. Demand for cold storage warehouses is seasonal as it rises in the winter and falls in the summer. Accordingly, the average annual vacancy rate for dry storage warehouses is significantly lower than the same figure for cold storage warehouses. The vacancy rate in dry storage warehouses amounts to 30%, while the same figure in cold storage warehouse is around 46%. The lowest dry storage vacancy rate is reported in Tbilisi – 23%, and the highest in Batumi – 30%. The highest vacancy rate of cold storage warehouse appears in Tbilisi (51%) and the lowest in Poti (26%). Breakdown by Classes Gebrüder Weiss, located in Tbilisi, is the only supplier of A class warehouses in Georgia, providing 2% of the total leasable supply. Class B comprises 59% (371,333 sqm) of total supply. Leasable space provided by C class warehouses equals 245,903 sqm.

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BANKING & STATISTICS

caucasian business week

STATE FOREIGN DEBTS SHRINK BY 85 MILLION USD

eorgian state foreign debt volume has amounted to 3,988 billion USD in March of this year, - official statistics of Ministry of Finance reports. The debt volume has been 4,073 billion USD in late February and respectively, Georgian state foreign liabilities are reduced by 85 million USD

in March. To note, 3,956 billion USD out of total credit liabilities have accounted for government foreign debt in late March, while the remained 32,832 million USD – National Bank of Georgia. Government debt has been 4,035 billion USD in late February, whereas National Bank – 37,437 million USD.

TRADE TURNOVER GROWS WITH EU, FALLS WITH CIS

eorgian foreign trade turn over is decreased by 10% annually through January-March of this year. However, turnover with the EU is grown by 0,4%, whereas decreased by 25% with the CIS, Sakstat’s statistics, published on Tuesday, reports. Georgian foreign trade turnover with commodity (except unorganized trade) has made up 2,279 billion USD in January-March, 2015. At that, export totals to 503 million USD (reduction by 28%), while import – 1,776 billion USD (decline by 3%). Negative trade balance of Georgia has amounted to 56%. However, Georgian foreign trade turnover with EU countries has made up 637 million USD in January - March, 2015, which is more by 0,4% comparing to the index of the previous year. At that, export has been 170 million USD (more by 21 %), while import – 467 million USD (less by 5%). The share of these countries in Georgian foreign trade turnover has totaled to 28%, including 24% - in export and

28% - in import (respectively, 25,20 and 27% in January-March, 2014). Trade deficit of 23% has accounted for the EU countries (31% in January-March, 2014). Therefore, foreign trade turnover with the CIS countries has amounted to 675 million USD in January-March, 2015 (reduction of 25 % comparing to January-March, 2014). At that, 175 million USD (less by 55%) has been export, whereas 500 million USD (less by 2%) has been import. CIS countries’ share in Georgian foreign trade turnover has been 35% and import 28% (reportedly, 36,56 and 28% in January-March, 2014). Trade deficit of 26% has accounted for the CIS countries in January-March, 2015 (10% in January-March, 2014). It should be noted, that share of 10 biggest trade partners of Georgia has amounted to 67% in January-March, 2015. The biggest trade partners are Turkey (361 million USD), Azerbaijan (214 million USD) and China (192 million USD).

VEHICLES LOSE LEADING POSITION AMONG EXPORTS ITEMS

ehicle export from Georgia is reduced by 62% through a year and as of the statistics of Q1, 2015, this product is not N1 export product for the first time through the many years. Vehicles are replaced by copper ores and concentrates. According to the Statistics, vehicles of 57,707 million USD has been exported from Georgia on the foreign market in this year, while cars cost of 152,012 million USD – through three months of the previous year. However, export of N1 export product copper has made up 61,127 million USD, while 51,229 million USD in the previous year. The leading top three of export products is finished with nuts, which share is increased by 138,7% annually – from 21,641 million USD to 51,658 million USD. Export of treating means (from 13,771 million

USD to 25,161 million USD), crude oil (from 6,872 million USD to 12,74 million USD) and gold (from 8,188 million USD to 12,686 million USD) is increased. Export of ferroalloy (from 69,893 million USD to 48,244 million USD), nitrogenous fertilizers (from 45,659 million USD to 24,043 million USD), mineral waters (from 34,415 million USD to 22,622 million USD) and wine (from 47,473 million USD to 15,589 million USD) is decreased. Azerbaijan still remains as the N1 export market. However, export is reduced from 145,676 million USD to 63,488 million USD. Bulgaria takes the second place, where export is grown – from 42,907 million USD to 51,581 million USD. The thirds export market is Turkey, therefore export is declined from 49,432 million USD to 40,779 million USD. Total export of Georgia has made up 503 million USD in Q1, 2015 and it is annual drop of 28%.

GEORGIA’S ANNUAL EXPORTS TO RUSSIA FALLS BY 59.7%

xport of commodity and services from Georgia to Russia is annually decreased by 59,7%. According to Sakstat, commodity export, cost of 27,208 million USD, has been made from Georgia to Russia through January –March of this year. However, the figure has made up 67,543 million USD in the same period of the previous year.

Despite such significant drop, Russia is still in the top ten of Georgia’s exporting countries and it takes the 5th position. Therefore, Georgia is number 4 trade partner for Georgia. Import form neighboring countries have made up 142,891 million USD in January – March, 2015, the decline has made up 122,756 million USD in the same period of the previous year.

TOURISTS INFLOW TO ACHARA GROWS BY 3.22%

ccording to Statistic Data of Adjara Tourism Department, the number of visitors in the region is grown by 4,64% in March, 2015 comparing to March, 2014. As for the capacity coefficient of the objects, the figure is grown by 5,64%. According to Adjara Tourism Department, totally 13 thousand and 885 visitors have visited Adjara in March.

As for three month data, totally 38 thousand and 546 visitors have been in Adjara through JanuaryMarch, 2015, while 37 thousand and 345 visitors in the same period of 2014. Respectively, the growth has made up 3,22%. As for the capacity coefficient, the mentioned index is increased by 2,51% as of January-March. To remind, as of February data, the number of visitors has been declined by 3,20% in the region.

TBC STARTS CREDITING COOPERATIVES

BC Bank has announced about group loan offer to agriculture clients. “Producers of agriculture, who have not been able to apply loans individually, now have possibility to take preferential agriculture loans with cooperative status”,- the bank declares. According to them, the advantage of the loan is that the responsibility will be equally distributed on all entities, which reduces the risks. The second advantage is that these are cheap loans. Cheap agriculture loans are issued from 20 000

GEL. Annual interest rate on circulating means is up to 6-7%, while basic means – 3-4%. To note, ≥ 3 legal entities can register as cooperatives in the mountainous regions, while ≥ 5 in the low regions. TBC Bank has worked out the project jointly with “Agriculture Cooperative Development Agency”. “I am proud, that we are the first, who has made precedent of cooperative funding and I regard, that we can make significant contribution in the development of agriculture”, - Nika Kurdiani, Deputy Director of the Microfinance of TBC Bank.

TBC BANK RATION ON INDIVIDUAL DEPOSITS MARKET MAKES UP 34.3%

BC Bank’s share increased up to 34,3% at the retail deposit market (2014 – 33%, 2013 – 32%, 2012 – 35,2%). As of Q1, private individuals’ depos-

its of 2,24 billion GEL is placed in TBC Bank; total portfolio (without banking deposits) – 3,57 billion GEL. The bank is represented with two brands on the market: TBC and TBC Constanta.

BANKING SECTOR PROFIT INCREASED BY 7%

eorgian banking sector finished Q1 with a profit of 101,4 million GEL. March profit totals to 39,6 million GEL (February – 46 million, January – 15,8 million). According to the statistics of National Bank of Georgia, the growth amounts to 7% comparing

to January-March, 2014 (Q1, 2014 – 45%). Three months’ revues of the sector has made up 987,5 million GEL (Q1/2014 – 608,8 million; Q1/2013 – 529,2 million). The expenditures have amounted to 878 million GEL (Q1/ 2014 – 497 million; Q1/2013 – 457 million). The market is represented by 20 banks.

GEORGIAN BANKS ACTUALIZE LOANS RESTRUCTURING ISSUE

s reported, the National Bank of Georgia has recommended commercial banks to develop measures to alleviate the situation for the customers who have income in local currency and loans – in foreign. How do commercial banks perform these instructions? At this stage there are no statistics on how many customers applied to the bank with a request on restructuring because of the devaluation of the lari, and how many requests were satisfied. However, bankers say that customers actively apply to the banks with the relevant requests, and banks actively meet them. According to Vice President of the Association of Banks of Georgia George Tsutskiridze, the country’s two largest banks – “Bank of Georgia” and “TBC Bank” were the first who responded to the call of President of the National Bank. Then their example was followed by other financial institutions. “With this step, the banking sector once again showed its solidarity with the interests of customers and intends to defend them as much as possible. Since that time, customers actively apply to banks and, accordingly, the banks are restructuring debts. Consumers are satisfied with these proposals, and actively use them. Basically we are talking about those who earn in the national currency and pay loans in foreign. They found themselves

in the most difficult position as a result of the crisis. Sometimes people say that the banks refuse to restructure debts, but it should be noted that the restructuring does not apply to problem loans appeared before the devaluation of the national currency. Accordingly, the banks refused them restructuring,”- he says. According to the expert Gigi Bedianashvili, despite the fact that some customers prefer to pay loans on the existing schedule, it is obvious that the majority of consumers are forced to go to restructuring, so there is no doubt that the statements of banks on customer activity are real. “In a situation where revenues in GEL fell, and loans in dollars remained the same, there are two ways out – either to lower interest rates or extend the repayment period. Banks certainty will not lower interest rates ; restructuring of loans is also unwelcome for banks, as it worsens their loan portfolio and increases maturity of the loan, etc. Especially when risks of banks are growing because of the economic slowdown and the devaluation of the currency. In this situation, the restructuring is also undesirable. Business is a business, and it does not bear social responsibility. When bankers say that they are responsible, there are doubts about their sincerity. But at the same time, banks are on the front lines before the economic shocks, and they have to make certain concessions to customers ,”- he notes.

COMPANY NEWS caucasian business week

April 27, 2015 #96

NEW COLD TEA APPEARS IN DISTRIBUTION NETWORKS

nother kind of the cold tea “Tonus Tea” appeared on the market . According to the product manufacturer- “Geo India Trading”, “Tonus tea” will be available in the market, the company produces three varieties of tea - green tea, peach and raspberry tea. George Sutiashvili notes that the iced tea is sold in large supermarkets and in the near future will be de-

SOCAR CONTINUES TO IMPLEMENT PROJECTS IN GEORGIA

espite the crisis, Azerbaijan’s state oil company “SOCAR” intends to continue all projects implemented in Georgia - the CEO of the company Rovnag Abdullayev said during a meeting with Prime Minister of Georgia Irakli Garibashvili. According to him, the company’s activity in Georgia has been praised by the country’s leadership. “Despite the crisis, we continue to invest in Georgia, both in the construction of gas stations and gasification of the

country. We have undertaken this commitment and will carry out them. The process continues, and in general the year of 2014 was encouraging for us, “- said Rovnag Abdullayev. “Our network of gas stations works very well, gas stations are especially in the great demand as they are equipped with the latest technology, allowing us to provide high quality service and an appropriate level of security. the construction of one gas station costs GEL 1.5-2 million, “- says the CEO of SOCAR.

TALKS WITH TAV GEORGIA ENDED

n agreement with TAV GEORGIA will be signed in the coming days - “Commersant” was told by Minister of Economy and Sustainable Development, Vice-Prime Minister George Kvirikashvili. Batumi airport issue has already been resolved and the contract is ready for signing. However, the Minister does not specify exactly whether this process will be completed before the end of April, however, points out that the both sides are in full readiness, as all issues are agreed. Despite the Minister’s announcement, the company notes that everything is not over yet, but will be completed in the near future. The company does not name a specific date when the contract may be signed. But notes that the main trends have been agreed with the Tbilisi international airport, although some issues need to be clarified, while the talks concerned mainly the Batumi airport. Both the company and the government refrain from making public key issues in the agreement. The only thing that was discussed at the February session of the government was that Georgia Airports Association (GAA) and “TAV Urban Georgia” would sign the new BOT contract, ac-

cording to which “TAV’s” operation expires in January 2027 (instead of 2037 laid down in the memorandum). Following IATA recommendations, “TAV” will carry out a complete rehabilitation of the existing runway and taxiways and add aircraft parking space by the end of 2015. The new version of the agreement includes specific commitments and enforcement mechanisms for infrastructure maintenance , according to which, “TAV” is obliged to provide for the current and future passenger services until a contract is expired (2027) as well as arrange infrastructure adhering to ICAO and other international standards. In addition, it was noted that the new agreement includes such responsibilities that have not been foreseen by the 2005 agreement. In particular, we are talking about the airport’s rehabilitation, the airport development plan, contract exclusivity, the airport’s operation standards, capital expenditure plan, the airport’s back conveying, insurance, dispute resolution, compensation for damages, take-off and landing fees, compensation for termination of the contract and other important issues.

PEGASUS LAUNCHES FLIGHTS FROM ISTANBUL TO KUTAISI

hanks to the joint efforts of the Georgian aviation authorities, Pegasus Airlines will operate Istanbul - Kutaisi flights from May 18. In late January, the Turkish airline Pegasus expressed desire to fulfill direct regular flights between Istanbul and Kutaisi, however, under the current agreement, regular air traffic on this route was impossible.

Ministry of Economy and Sustainable Development and the Civil Aviation Agency held written consultations with the Turkish aviation authorities, as a result of which, changes were made to “Air Transport Agreement between the Governments of the Republic of Turkey and Georgia “ and Kutaisi was determined the destination point. Pegasus has been appointed a carrier on Istanbul –Kutaisi route.

livered to fast food restaurants. Sutiashvili says “ Tonus tea” is distinguished by its flavoring qualities, is made from Indian tea and is a natural product sold at a lower price than the one offered by rivals. In his words, soon the company will start selling the Indian tea, “Geo India Trading” is the Indian “Will Tea” exclusive distributor in Georgia. George Sutiashvili says that at this stage the product is sold only in the local market.

GRANT THORNTON GEORGIA ANNOUNCES MERGER WITH AKHVLEDIANI CONSULTING

artners of Grant Thornton Georgia and Akhvlediani Consulting have announced their agreement to merge the two firms to create one of the largest growth-oriented audit and business advisory teams in Georgia. The merger firmly establishes Grant Thornton as the country’s fastest growing dynamic accounting firm, bringing together global and local resources, expert capability and market credibility to make the brand a leading advisor to dynamic organizations in Georgia. Commenting on the deal, Nelson Petrosyan, Grant Thornton Georgia Managing Partner said: “Akhvlediani Consulting is a strategic fit for Grant Thornton, boosting the firm’s local feel and reputation in tax review, valuation and procurement compliance. This merger enables us to offer a unique value proposition to our clients, and adds to our capabilities in such industries as real estate & construction, healthcare, education and public sector. “This merger is unique for the Georgian professional services industry as it is the first time an international brand has joined forces with a national firm to combine global expertise and local knowledge.” Grant Thornton and Akhvlediani Consulting are two well-established firms with strong organizational cultures and corporate values focusing on service excellence. Both firms are oriented on developing long-term client relationships and investing in human capital. Zviad Akhvlediani, co-Managing Partner: “I am confident that our consolidation with one of the fastest-growing international networks will set a new stage for our professional development, supported by global expertise. Both our clients and people want to work with the best in business and that is what drives this merger.” Grant Thornton Georgia is a multi-professional group of public accountants and auditors, business advisers in finance and management, as well as accounting, tax and legal specialists.

Grant Thornton is one of the world’s leading organisations of independent assurance, tax and advisory firms. These firms help dynamic organisations unlock their potential for growth by providing meaningful, forward looking advice. Proactive teams, led by approachable partners in these firms, use insights, experience and instinct to understand complex issues for privately owned, publicly listed and public sector clients and help them to find solutions. More than 40,000 Grant Thornton people, across over 130 countries, are focused on making a difference to clients, colleagues and the communities in which we live and work. Akhvlediani Consulting is one of the leading local consulting firms operating on Georgian market since 2006. Professionals with domestic expertise provide wide range of accounting, tax and valuation services in public and private sectors.

BATUMI OIL TERMINAL LAW SUITS SETTLED

NEW AIR CARRIERS TO ENTER THE GEORGIAN MARKET IN JUNE

ew companies will enter the Georgian market in June. The Georgian side has carried out direct talks with “Ryanair “, “Easyjet” and “Airberlin”. It became known at the biggest airline and airport networking route development forum in Europe Routes Europe 2015 where Georgia Airports Association (GAA) was represented with its own stand. Talks aim is to add the new routs on the Georgian market and expand existing flights. Apart from face to face meetings, various events were held to promote Georgia abroad. According to Deputy Economy Minister Keti Bochorisvili, in June new companies will begin

to enter Georgia. “Negotiations with some companies have entered the final stage. It’s a never-ending process, because our goal is to attract more and more companies ... We are constantly working, in the near future Air Berlin will start operating in Georgia “, - says Keti Bochorishvili. But she doesn’t specify concrete terms when new companies will enter the market. Recall that last month the Economy Ministry announced about the entry of new companies. To promote tourism, the Economy Minister said about bringing the so-called low cost carriers. According to the Minister, active negotiations are going on with “Ryanair “, “Easyjet” and “Airberlin.

Batumi and Tbilisi’s public courts, respectively. All the law suits, including the sequestation inquiries, will be settled and cancelled in accordance with the Georgian law and practice. Along with this, the participants of the settlement express a readiness to engage in mutually benefitial collaborations in the future. The companies in question agree to use all available means to better Georgia’s oil trucking services, increasing the volume of the transported oil on the territory of the country by using the Batumi Terminal’s infrastructure.

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CENTRAL ASIA caucasian business week

TRANSIT GEORGIA – POTENTIAL FOR US FOREIGN POLICY SUCCESS

Mamuka Tsereteli is a Senior Research Fellow and serves as Director of Research with the Central Asia-Caucasus Institute & Silk Road Studies Program Joint Center, based in Washington DC. His expertise includes international economic policy, economic and energy security, political and economic risk analysis and mitigation strategies, and business development in the South Caucasus and Central Asia.

eorgia plays a growing, though little-known, role in the global economy. Strategically linked with Azerbaijan, it serves as a key element in the transportation network that connects landlocked, but resource-rich areas of Central Asia to world markets via its Black Sea ports and Turkey. Over one million barrels of oil and oil products cross Georgian territory daily using pipelines, the railways, and ports. For a decade, Georgian ports have also served as entry points for commercial and military cargo destined for Central Asia and Afghanistan. Azerbaijan and Georgia are expected to play a greater role in container transit between Asia and Europe in the years to come. A close ally of the US and NATO that has made significant troop contributions to Afghanistan, Georgia needs greater support for its security from the US as well as from multiple actors interested in Georgia’s growing transit potential.

Recent developments On November 8, 2014, the bulk cargo carrier Thor Friendship, currently sailing under a Singaporean flag, delivered 2,280 steel pipes from Japan to the Georgian port of Poti, owned by APM Terminals, a global firm headquartered in the Netherlands. The US-Georgian joint venture Pace Group, which leases several berths in Poti from APM, received the cargo and stored it at its own newly developed New Port Pace Terminal. From there the 48-inch pipes are being shipped by the Georgian Railway to Azerbaijan to be used for expansion of the South Caucasus Pipeline (SCP). The Swiss-based global logistical company Panalpina is contracted by BP, the operating company for the Shah-Deniz consortium, to provide logistical services for this project. SCP links the Azerbaijani Shah-Deniz gas field to Turkey via Georgia, and is soon to be connected to new pipeline systems that will deliver Azerbaijani gas directly to European customers in Albania, Bulgaria, Greece, Italy, and other countries. This project vividly reflects Georgia’s growing participation in the globalized economy. The expansion of SCP is part of a massive $45 billion project designed to serve export needs for the second phase of the Shah-Deniz natural gas field development operated by BP. These investments and the project itself highlight the beginning of the next stage of development of the Caspian hydrocarbon resources. While the late 1990s were all about getting Caspian oil to Europe, now the focus is on the strategic linkage of natural gas reserves with European markets. Georgia will serve as a transit country for the additional 16 billion cubic meters of Shah Deniz gas shipped to Turkey and Europe. The expansion envisages the development of a parallel line to the existing SCP pipeline for so-called looping, allowing the shipping of larger volumes. Overall, over a two-year period, half a million tons of cargo will be received and transshipped by the Pace Group for this project. In addition to pipes, Georgia will also receive equipment for two compressor stations to be placed on Georgian territory to push natural gas coming from

Azerbaijan into Turkey and beyond. The cost of equipment and construction of each of the compressor stations is $1 billion. Through this project, in next two years Georgia will receive the largest foreign direct investments in its history. The Shah Deniz expansion project has particular significance in the context of growing tensions between Europe and Russia over the conflict in Ukraine as it is one of several ways in which Europe can gradually reduce its dependence on Russian gas. In particular, it is of key importance for those Eastern European countries that have no ability to receive alternative supplies, such as liquefied natural gas.

Beyond energy Energy and pipeline development over the past twenty years stimulated substantial infrastructure development all the way from Georgia’s Black Sea coast to Central Asia. This was followed by a growing interest in the emerging potential transportation linkage between Asia and Europe. This has, in turn, spurred infrastructure developments, few of which have made headlines in the West. First, considerable upgrades of railways and highways have been undertaken in Afghanistan, Azerbaijan, Georgia, Kazakhstan, Tajikistan, and Turkmenistan. Second, the BakuTbilisi-Kars railway system is nearing completion. Following the completion of the Marmara railway connection under the Bosphorus, this is the last missing link in a railway connection that could transport goods from Hamburg to Hanoi. Third, the littoral states of the Caspian Sea have invested substantially in upgrading their port facilities. Thus, much greater potential now exists in transit through Kazakhstan’s Aktau port, Turkmenistan’s Turkmenbashi port, and Azerbaijan’s port of Alat. Fourth, there have been numerous terminal upgrades as well as new port facilities constructed on Georgia’s Black Sea coast, including the Poti Port, the Batumi Port, New Port Pace Terminal, and the Kulevi oil terminal. Soon, development will start at a port facility in Anaklia, further north. The Georgian government received multiple responses from different companies on a call for the development of this new deepwater port. Fifth, in addition to infrastructure development, there are clear signs of greater coordination between the transit countries. Azerbaijan, Georgia, Kazakhstan. and Turkey — within the framework of the so-called Silk Wind project — have agreed to create a common customs and tariff structure for container trains shipped from China to Europe. The railway companies of Azerbaijan, Georgia, and Kazakhstan have also agreed on a common tariff on grain and liquefied petroleum gas. As a sign of greater collaboration between Georgian and Azerbaijani railways, container

block trains resumed regular operations in July of 2014 between Baku and Poti, allowing containers to move from the Caspian port to the Black Sea port in about 30 hours. The Port of Poti plays a particularly important role in regional trade, being a receiving and redistribution point for construction materials, ferrous and non-ferrous metals, coal, grains, as well as food products. On November 22, 2014, the Georgian company Agricom partnered with US grain trader Bunge and the Pace Group to inaugurate an upgraded grain storage facility at Poti. Agricom and Bunge will be able to trade about 400,000 tons of grain annually through this new facility. This will include transshipment of grains in and out of the region, with particular emphasis on export of grains from Kazakhstan. When seen in a broader context, these developments make it clear that Georgia plays a key role in transit and trade for the Caucasus and Central Asia, serving effectively as the mouth of this eastwest corridor. This strengthens Georgia’s strategic position and economic potential. It also serves the strategic interests of the entire transatlantic community, allowing access to this important region for both trade and military security purposes.

Georgia’s security cannot be taken for granted It is only possible to develop a thriving transportation system in a stable security environment. Unfortunately, global private sector actors cannot take security and stability in Georgia for granted. Moscow does not welcome the growing energy and transportation corridor from Asia to Europe since it does not cross Russian territory. As a result, Moscow is putting increasing pressure on Azerbaijan and Georgia. The most recent example of that pressure is Russia’s decision to impose an agreement on “alliance and strategic partnership” with Georgia’s breakaway region of Abkhazia, and a “comprehensive agreement on integration” with the Georgia’s other breakaway region, South Ossetia. These agreements effectively imply the de facto annexation of parts of a sovereign state by the Russian Federation, in violation of the UN Charter and international law. Russia clearly aims to destabilize Georgia in order to disrupt both Georgia’s process of Euro-Atlantic integration as well as the growing transit through the South Caucasus. These developments, of course, take place in the context of Russia’s actions in Ukraine. Russia is moving forward with its plan to assert control of the former Soviet space and to reduce the independence and sovereignty of its neighbors to no more

than a formality. The international community needs to respond to Russia’s actions with a clear strategy. The US has a special role to play. At stake is the vital US interest in access to Central Eurasia, and the stability of this strategically important region in which the United States has made considerable financial and political investments over the past twenty years. US interests in this case converge with the interests of major Asian powers like China and India, as well as other regional states that are looking forward to greater commercial engagement with Europe via Central Asia and the Caucasus. This convergence of interests creates favorable preconditions for successful engagement. Twenty years ago, US diplomatic efforts made it possible to initiate and successfully implement energy projects that helped European and global energy security, and strengthened sovereignty and independence of the states of the South Caucasus and Central Asia. US leadership was critical for regional governments as well as multinational corporations involved in energy projects. The United States needs to use that experience and lead a concerted effort to assist Georgia by engaging all actors interested in trade and access between Asia and Europe. The current geopolitical environment makes China’s participation in this effort of particular importance. China is looking for transportation options that will shorten the delivery time for products produced in western China that are destined for Europe. The South Caucasus transportation corridor via Georgia and Azerbaijan is one of the alternatives under consideration. With the United States advancing toward a Transatlantic Trade and Investment Partnership with Europe, and China increasingly involved in the rules-based global trade system, it is natural to seek greater political support and security guarantees for the functioning of the transportation corridor that serves the interests of multiple actors. Recent visits by Russian President Vladimir Putin to China, Turkey, and India indicate Russia’s growing interest and dependency on those countries. If managed properly, the United States and the European Union could benefit from working with these states to balance Russian pressure on its South Caucasus neighbors thus bringing more stability to the region. This will require strong US leadership and clear strategy focused on development of the Asia-Europe transportation network. By harmonizing multiple interests, the United States will achieve its strategic goal of facilitation of global and regional stability. Mamuka Tsereteli is the director of research at Central Asia-Caucasus Institute at Johns Hopkins University’s School of Advanced International Studies. He teaches class on Energy Markets for Middle East and Central Asia at SAIS. He was a member of the Atlantic Council’s Georgia Task Force. Atlantic Council

CURRENCY

April 27, 2015 #96

caucasian business week

MARKET TURNS CAUTIOUS ON USD

SAXO BANK DISSECTS THE MARKET FOR TRADERS WITH LIVE VIDEO STREAMING OF EXPERT TRADING IDEAS

axo Bank, the online multi-asset trading and investment specialist, is the first investment firm to live stream trading ideas to its retail clients. Saxo Bank wants to break the ultimate barrier to investing for retail investors by allowing them access to real time tradable ideas from its suite of experts and analysts. The move serves to further level the playing field between retail and institutional investors, democratizing trading as has been a clear goal of Saxo Bank for more than 20 years. The new service, called #SaxoStrats is available on Twitter via @SaxoStrats. In keeping with the company’s innovative ethos, the service will also be available via Persicope, Twitter’s new live streaming app which is accessible primarily through mobile devices. With one fifth of the banks’ overall retail trading currently taking place on mobile devices, of which 60% is done on smartphones and 40% via tablet, consumers are craving tradable information on the go and the #SaxoStrats service is designed to cater directly to those needs. Claus Nielsen, Head of Markets, said: “It’s an important barrier to trading we have broken. We have given our retail clients another crucial tool for investing. Advancement in technology has enabled greater access to information than ever before, and most retail clients today can download earnings documents, comparison charts, or follow financial news simply by searching on the web. What we are offering with our service is ideas

for their next trade, our analysts’ real-time view of the markets and how that translates into real-time trading ideas. “Retail investors are moving away into more sophisticated ways of trading. They are looking at their portfolios holistically, diversifying their exposures and moving into new asset classes. The time and resources needed to monitor the markets and achieve performance are often beyond their reach. We have perhaps reached a tipping point where there is too much information available and what we are offering is independent dissection of that information, real-time view of the market and concrete trading ideas, something institutional investors have had for years.” Reflecting the full spectrum of asset classes and products traded on Saxo Bank’s platforms, the service includes live-streaming of trading ideas from its resident experts. These include: Patrice Henault on futures & listed options; Simon Fasdal and Michael Boye on fixed income; Mads Koefoed and Kay Van Peterson on macro strategy; Peter Garnry on equities; Ole Hansen on commodities, and John Hardy on FX. The video service is available to Saxo Bank clients, TradingFloor members and followers of the social channels and features real-time analyst views and ideas covering commodities, stocks, global macro and FX. Unlike many sell-side analysts, Saxo Bank analysts also trade on their recommendations, meaning their interests and those of Saxo Bank’s clients are fully aligned.

EQUITIES AT ALL-TIME HIGH AFTER NASDAQ RECORD

lobal equity markets rode to new all-time highs on Friday, with positive corporate updates in Europe and a post-dotcomboom peak for the U.S. Nasdaq stoking investor optimism. There were also some positive signs from previously deadlocked negotiations between Greece and its international creditors, with Athens offering concessions on some key reforms in exchange for urgently needed new funding. “Optimism of some form of deal does appear to be slowly trickling back,” said CMC Markets analyst Michael Hewson. The MSCI All-Country World index .MIWD00000PUS hit a lifetime high of 441.1 points, extending a multiyear rally driven by plentiful central bank cash and the global economy’s recovery from the 2008 financial crisis. On Wall Street on Thursday, the Nasdaq pushed above its previous record set in March 2000, the height of the dotcom boom. Weak readings on U.S. jobless claims, manufacturing and home sales contrasted with the shining share market performance and rekindled doubts about the timing of a U.S. rate hike. Investor sentiment in Europe was boosted by positive updates from companies including Electrolux (ELUXb. ST) and Renault (RENA.PA). European companies are set for a bumper earnings season on the back of a weak euro and an improved economy. The euro also rose to a two-week high ahead of a key German business sentiment survey, the Ifo, whose

business climate indicator rose in April by more than expected. German 10-year Bund yields dipped but remained on track for one of their biggest weekly gains this year. The prospect of a breakthrough in Greece’s debt drama underpinned markets. “We give a low probability to a default event in the coming month and expect a (tentative) deal to be struck by June, at the latest,” Credit Suisse economists wrote in a note to clients. “Greece has shown a clear resilience in recent months, given that no official cash has been disbursed to the country for the past eight months or so.” MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.9 percent, after marking its highest level since January 2008. China stocks slipped after the country’s securities regulator said it would accelerate approval of initial public offerings in an apparent effort to cool the red hot market. The CSI300 index .CSI300 fell 0.8 percent while the Shanghai Composite Index .SSEC lost 0.5 percent, with both still on track for robust weekly gains. Japan’s Nikkei stock index .N225 ended down 0.8 percent after hitting a 15-year peak on Thursday, but was still up 1.9 percent for the week. Oil prices held steady near 2015 highs reached on Thursday, remaining on track for weekly gains after renewed air strikes in Yemen stoked concerns on the security of Middle East oil shipments.

ast week’s US economic data managed to move back to reflect positive growth but fell short of consensus estimates. Apart from Friday’s headline inflation data for March that rose in-line with market expectations, most of the economic data points that included monthly retail sales data, regional manufacturing indices and housing data, although reversed prior month’s declines, printed weaker-than-expected numbers. Tepid US economic data resurfaced expectation that the Fed might refrain from raising interest rates until the last quarter of 2015, eventually dragging the US Dollar lower for the week against most major currencies. With very little in terms of any major economic releases scheduled during the course of upcoming week, investors will have the opportunity to further gauge the health of US housing market and manufacturing sector. This week’s data from US housing market data features the release of existing and new home sales data, scheduled for release on Wednesday and Thursday respectively. Following a lower-than-expected reading in last four releases, the existing home sales data for the month of March is expected to reclaim the 5 million units mark and come-in at an annualized rate of 5.04 million units. Meanwhile, new home sales data for the month of March is expected to continue holding the 5 million mark unit but is expected to slip from 539K and reach seasonally adjusted annual pace of 514K.

vices 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. Other key economic release featuring this week’s Euro-zone economic calendar features the release of German ZEW economic sentiment and Ifo business climate for the month of April, scheduled for release on Tuesday and Friday respectively. Following last week’s up-surge in EURUSD, led by the optimistic comments from ECB President Mario Draghi, during the press conference following the ECB monetary policy decision, improvement in this week’s PMI figures is likely to help the common currency to extend its near-term recovery. Dominant UK economic releases from this week’s economic calendar consists of monthly retail sales data and minutes from Bank of England’s latest monetary policy meeting. The BoE monetary policy meeting minutes, scheduled for release on Wednesday, might continue probing some volatile moves for GBP pairs. The minutes from BoE’s latest policy meeting is unlikely to show any change in the number of MPC members showing willingness to raise benchmark interest rates. BoE, however, has projected upbeat inflation and economic growth in its quarterly inflation report. Hence, the minutes could provide some insight that might help investors in determining the timing of a rate hike by the

Apart from the US housing market data, investors will also have the opportunity to gauge the health of US manufacturing sector from Durable Goods orders data for March and flash manufacturing PMI for April. Data pertaining to durable goods orders is scheduled for release on Friday and flash manufacturing PMI data is scheduled for release on Thursday. Following its recent decline, orders for durable goods, which also includes transportation items, is expected to register a gain of 0.7% in the month of March and core durable goods (excluding transportation items) are anticipated to rise by 0.2%. Meanwhile, the Markit flash manufacturing PMI for April is expected to continue reflecting expanding manufacturing activity and come-in at 55.6. After last week’s dismal economic data, the market now seems to have turned cautious and any further deterioration in the economic numbers is likely to extend the near-term corrective move for the US Dollar. From the Euro-zone, investors will remain focused on the key developments over a possible solution to the Greek drama from Friday’s meeting of Euro-zone finance ministers. The key agenda will be to reach an amicable deal to help Greece avoid a default on its debt. On the economic data front, investors will be keeping a close watch on the latest 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 April are scheduled for release on Thursday. 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 ser-

central bank. Meanwhile, consumer spending, which remains supportive pillar of UK’s economic recovery, is expected to have risen by 0.4% in March on a monthon-month basis. After an unexpected rise in February, stronger or in-line with estimates March retail sales data, scheduled for release on Thursday, is likely to continue supporting GBP, at-least in the near-term. Elsewhere, the flash version of HSBC’s Chinese manufacturing data for the month of April is scheduled for release on Thursday. The PMI data is expected to print a reading below 50, indicating contraction in manufacturing activity. 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 fade demand for commodity currencies, especially the Australian counterpart (AUD) and New-Zealand Dollar, China’s largest trading partners. Other economic releases that could possibly moves AUD includes the release of RBA’s April monetary policy meeting minutes and quarterly CPI data for the quarter ended March 2015, scheduled for release on Tuesday and Wednesday respectively. The RBA policy meeting minutes are likely to prove a non-event for the Australian Dollar (AUD). Australian CPI is expected to continue with its downward trend in-line with commodity prices and come-in at 0.1%, as against the rise of 0.2% recorded in the previous quarter. A further drop in the inflation could possibly hint towards continuing the deflationary phase. This accompanied with a slowdown in the Chinese economy would further reinforce the prospects of RBA initiating some stimulus measures. However, should the releases matches consensus forecast, it is likely to boost the near-term demand for AUD.

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

April 27, 2015 #96

RESEARCH

caucasian business week

ATTITUDES TOWARD CITY ENERGY SECTOR - 2014 CLEANING AND GREENERY

ity cleaning and greenery are important parts of the image and health of a city. ACT was interested, what residents of Tbilisi think concerning these topics and how do they evaluate the current situation compared to that in previous years. Quite a large portion of Tbilisi citizens (43%) think that there have not been any changes in city cleaning in the last three years. Notably, every third (32%) resident of Tbilisi thinks that the situation has become worse. It should also be mentioned that one fourth of the residents think that city cleaning has been improving.

NEIGHBORHOOD

Azerbaijan, US to diminish Europe’s dependence on Russian gas – The Hill

he booming natural gas production in the United States and Azerbaijan and, hopefully, the shipment of US gas to Europe can work to diminish Russian natural gas sales to Europe, said the article of Raoul Lowery Contreras, a political commentator, published in The Hill newspaper (USA). “With a combination of the United States and Azerbaijani booming natural gas industries, Russian natural gas sales to a dependent Europe will decline resulting in less Russian influence and economic and political blackmail of Eastern Europe,” said the article. The author of the article said that natural gas discovery and production of new fields in Azerbaijan couldn’t occur at a better time.

Turkey: Business confidence lower in April As for state of city greenery, there are almost equal number of Tbilisi residents, who think it has improved and those, who think has gone worse. However, every second respondent (50%) considers that there have been no changes in this matter for last few years.

ndexes for Turkey’s service, construction and retail sector all saw a drop in April. Confidence indexes for key sectors in Turkish business slipped in April after falling in March, the Turkish Statistical Institute said in a statement Friday. This decrease in the services confidence index stemmed from the decreased number of managers evaluating an improved “business situation” over the past three months and an increase in “demand-turnover” over the past three months, the statement said. The index for the service sector decreased 0.5 percent from March, dropping to 100.53 points from 101.03 points.

WORLD NEWS

First Islamic bank in Germany to open in July

ermany is to get its first fully operational Islamic bank on July 1. Opened by the Turkish finance group Kuveyt Turk it will provide Sharia compliant banking services. “This new achievement will open vast areas of business and investment in Europe’s largest economies, as this is the first bank to obtain a full function license to take deposits and offer credit finance facilities in Germany as per Islamic rules and regulations,” Kuwait Finance House said in a statement on Thursday. The wholly-owned subsidiary of the Turkish lender will be called KT Bank AG with its headquarters based in Frankfurt and branches in Cologne and Berlin. It will serve Germany’s 4 million Muslims but also plans to expand its services throughout Europe. “Our market research has shown, that 21 percent of Muslims in this country would see an Islamic bank as their natural household bank,” Kuveyt Turk’s managing director Kemal Ozan was cited as saying by Deutsche Welle.

China manufacturing at 1yr low

hina’s economic dominance is showing more cracks, and in April, the indicator of manufacturing activity, the purchasing managers’ index (PMI), fell to a one-year low. The HSBC Flash China Manufacturing PMI for April fell to 49.2 from 49.6 in March, still below the 50 mark which separates expansion from contraction. The last time the PMI was above 50 was in February 2015.

Armenia Honors Its Dead US should write laws as Germany Defies Turkey of global economy, not China - Obama on Genocide he laws of the global economy should

The research was conducted on 419 adult residents of Tbilisi in February, 2015. The statistical error of the data does not exceed 4.9%.

RE-INVENTING THE WHEELS: FORD’S GREATEST CAR GETS A DO-OVER

n any business, recreating a favorite product is a fraught undertaking. Ask any Hollywood producer or software developer. Make the sequel too similar to the seminal version, and it will fall flat. Make it too different, and purists will scream bloody murder.

In other words, Moray Callum had his work cut out for him when he picked up a pencil to redesign one the most coveted cars in history—the Ford GT40. The backstory is the stuff of legend. Ford, spurned in an attempt to buy Ferrari, made 107 of the racecars between 1964 and 1969.

rmenian President Serzh Sargsyan declared that “nothing is forgotten” at a ceremony to mark the centenary of the slaughter of as many as 1.5 million Armenians in the Ottoman Empire, while Germany defied Turkey’s objections to join other states for the first time in describing the killings as genocide. Turkish European Union Affairs Minister Volkan Bozkir became his government’s first representative to attend a mass at the Armenian church in Istanbul for the victims of the 1915 killings and deportations. Turkey denies there was a genocide, while acknowledging atrocities occurred.

Putin urges to fill Russian market with domestic food quickly

ussian President Vladimir Putin has tasked the new Agriculture Minister Aleksandr Tkachyov with strengthening the sector and solving import substitution goal quickly. Western food imports have been banned following the US and EU anti-Russia sanctions. The president has instructed new Agriculture Minister Tkachyov and his predecessor Nikolai Fyodorov, who has become a presidential aide, to work closely with the regions to develop the sector, focusing on import substitution.

11% as Optimistic Outlook for Russia’s Inflation Rate

ussia’s inflation may constitute lower than 11% if the current trend of the ruble’s strengthening continues – the Russian publication Vedemosti reported the country’s deputy finance minister saying. According to the local news agency TASS, Russia’s deputy finance minister Maksim Oreshkin commented on the subject to the press. He said the inflation rate could be lowered to 4,5% as soon as year 2016. A “temperate” and “stable” growth in income is the necessary prerequisite for the inflation rate in the Russian economy to go down, according to Oreshkin.

be written by the United States and not by the likes of China according to President Obama, as concern over China’s influence is growing. Washington hopes a Pacific free trade pact will curb Beijing’s investment bank. “When 95 percent of our potential customers live abroad, we must be sure that we are writing the rules for the global economy, not a country like China,” Obama said in his special message to Congress on Thursday, RIA reports. he White House is now looking forward to completing the Trans-Pacific Partnership agreement this year to remove trade barriers between the participating nations which account for 40 percent of the global economy and more than a third of global trade.

Apple Watch goes on sale in low-key launch at select boutiques

small group of Japanese tech-addicts lined up in Tokyo to become the first to buy the Apple Watch from select stores on Friday, but there was no sign of the frenzy that usually accompanies Apple Inc product rollouts. So far, buyers can get the device from only a handful of upscale boutiques and department stores. They include The Corner in Berlin, Colette in Paris, Maxfield in Los Angeles and Dover Street Market in Tokyo and London. Apple courted the outlets to help present the watch as a fashion item rather than just another techie gizmo. Paired with an iPhone, the watch allows users to check email, listen to music and make phone calls. It also tracks a person’s health, for instance by monitoring heartbeats or tracking calories burned during a workout. The gadget, which has a tiny screen, cannot be bought in Apple stores yet. For the past two weeks, the company has been directing people to order online instead, drastically curtailing the long lines of devotees who typically flock to iPhone launches.

PUBLICITY

caucasian business week

April 27, 2015 #96

Embassy United States of America Embassy 11 Balanchivadze St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 53-23-34 E-mail: tbilisivisa@state.gov; askconsultbilisi@state.gov United Kingdom of Great Britain and Northern Ireland Embassy 51 Krtsanisi Str., Tbilisi, Tel: 227-47-47 E-mail: british.embassy.tbilisi@fco.gov.uk Republic of France Embassy 49, Krtsanisi Str. Tbilisi, Tel: 272 14 90 E-mail: ambafrance@access.sanet.ge Web-site: www.ambafrance-ge.org Federal Republic of Germany Embassy 20 Telavi St. Tbilisi Tel: 44 73 00, Fax: 44 73 64 Italian RepublicEmbassy 3a Chitadze St, Tbilisi, Tel: 299-64-18, 292-14-62, 292-18-54 E-mail: embassy.tbilisi@esteri.it Republic of Estonia Embassy 4 Likhauri St., Tbilisi, Tel: 236-51-40 E-mail: tbilisisaatkond@mfa.ee Republic of Lithuania Embassy 25 Tengiz Abuladze St, Tbilisi Tel: 291-29-33 E-mail: amb.ge@urm.lt Republic of Latvia Embassy 16 Akhmeta Str., Avlabari, 0144 Tbilisi. E-mail: embassy.georgia@mfa.gov.lv Greece Republic Embassy 37. Tabidze St. Tbilisi Tel: 91 49 70, 91 49 71, 91 49 72 Czech RepublicEmbassy 37 Chavchavadze St. Tbilisi ;Tel: 291-67-40/41/42 E-mail: czechembassy@gol.ge Web-sait: www.mzv.cz Japan Embassy 7 Krtsanisi St. Tbilisi Tel: +995 32 2 75 21 11, Fax: +995 32 2 75 21 20 Kingdom of Sweden Embassy 15 Kipshidze St. Tbilisi Tel: +995 32 2 55 03 20 , Fax: +995 32 2 22 48 90 Kingdom of the Netherlands Embassy 20 Telavi St. Tbilisi Tel: 27 62 00, Fax: 27 62 32 People’s Republic of China Embassy 52 Barnov St. Tbilisi Tel: 225-22-86, 225-21-75, 225-26-70 E-mail: zhangling@access.sanet.ge Republic of Bulgaria Embassy 15 Gorgasali Exit, 0105 Tbilisi, Georgia Tel: +995 32 291 01 94; +995 32 291 01 95 Fax: +99 532 291 02 70 Republic of Hungary Embassy 83 Lvovi Street, Tbilisi Tel: 39 90 08; E-mail: hunembtbs@gmail.com State of Israel Embassy 61 Agmashenebeli Ave. Tbilisi Tel: 95 17 09, 94 27 05 Embassy of Swiss Confederation’s Russian Federation Interests Section Embassy 51 Chavchavadze Av., Tbilisi Tel: 291-26-45, 291-24-06, 225-28-03 E-mail: RussianEmbassy@Caucasus.net Ukraine Embassy 75, Oniashvili St., Tbilisi Tel: 231-11-61, 231-12-02, 231-14-54 E-mail: ukraina_pu@wanex.net; emb_ge@mfa.gov.ua Consular Agency: 71, Melikishvili St., Batumi Tel: (8-88-222) 3-16-00/ 3-14-78 Republic of Turkey Embassy 35 Chavchavadze Av., Tbilisi Tel: 225-20-72/73/74/76 E-mail: turkemb.tbilisi@mfa.gov.tr Address: 8, M. Abashidze str. Batumi, Georgia; tel: (8-88-222) 7 47 90 Republic of Azerbaijan Embassy Kipshidze II-bl . N1., Tbilisi Tel: 225-26-39, 225-35-26/27/28 E-mail: tbilisi@mission.mfa.gov.az Address: Dumbadze str. 14, Batumi Tel: 222-7-67-00 Fax: 222-7-34-43 Republic of Armenia Embassy 4 Tetelashvili St. Tbilisi Tel: 95-94-43, 95-17-23, 95-44-08 E-mail: armemb@caucasus.net Web: www.armenianembassy.ge Consulate General, Batumi Address: Batumi, Gogebashvili str. 32, Apt. 16 Kingdom of Spain Embassy Rustaveli Ave. 24, I floor, Tbilisi Tel: 230-54-64 E-mail: emb.tiflis@maec.es Romania Embassy

TBILISI GUIDE

caucasian business week

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

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

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

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

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

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

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

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

Cinemas AKHMETELI Tbilisi. “Akhmeteli” Subway Station Tel: 58 66 69 AMIRANI Tbilisi. 36 Kostava St. Tel: 99 99 55, RUSTAVELI Tbilisi. 5 Rustaveli Ave. Tel: 92 03 57, 92 02 85, SAKARTVELO Tbilisi. 2/9 Guramishvili Ave. Tel: 8 322308080,

Theatres A. GRIBOEDOV RUSSIAN STATE DRAMA THEATRE Tbilisi. 2 Rustaveli Ave. Tel: 93 58 11, Fax: 93 31 15 INDEPENDENT THEATRE Tbilisi. 2 Rustaveli Ave. Tel: 98 58 21, Fax: 93 31 15 K. MARJANISHVILI STATE ACADEMIC THEATRE Tbilisi. 8 Marjanishvili St. Tel: 95 35 82, Fax: 95 40 01 M. TUMANISHVILI CINEMA ACTORS THEATRE Tbilisi. 164 Agmashenebeli Ave. Tel: 35 31 52, 34 28 99, Fax: 35 01 94 METEKHI – THEATRE OF GEORGIAN NATIONAL BALLET Tbilisi. 69 Balanchivadze St. Tel: (99) 20 22 10 MUSIC AND DRAMATIC STATE THEATRE Tbilisi. 182 Agmashenebeli Ave. Tel: 34 80 90, Fax: 34 80 90 NABADI - GEORGIAN FOLKLORE THEATRE Tbilisi. 19 Rustaveli Ave. Tel: 98 99 91 S. AKHMETELI STATE DRAMATIC THEATRE Tbilisi. 8 I. Vekua St. Tel: 62 59 73

THE BEST GEORGIAN HONEY OF CHESTNUTS,ACACIA AND LIME FLOWERS FROM THE VERY HART OF ADJARA MATCHAKHELA GORGE IN THE NETWORK OF GOODWILL, NIKORA AND SMART

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caucasian business week

April 27, 2015 #96