Caucasian Business Week #99

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May 18, 2015 #99

May 18, 2015, Issue 99

BE INFORMED, DO BUSINESS

GEORGIA

WORLD ECONOMIC FORUM ASSESSES GEORGIA’S TRAVEL & TOURISM COMPETITIVENESS

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caucasian1

TBILISI HOSTED EBRD ANNUAL MEETING & BUSINESS FORUM 2015

eorgia has been ranked in the top three countries in the region for being a tourism-friendly country.

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NBG President Named Europe’s Best Central Banker

YOUNG BARRISTERS AGAINST INTERNET MARKET MONOPOLISTS

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he association of Young Barristers urges the National Agency of Competition to explore multiple facts of misuse of monopolistic positions on the internet market.

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SOCAR - THE LARGEST COMPANY IN GEORGIA

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OCAR Petroleum Georgia, Ltd is considered as “The largest company of Georgia of 2014”. Research conducted by Iliauni (Ilia State University).

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SOCAR ABOUT GOSSIP AROUND THE PROJECT IN GEORGIA

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ead of the Investment Department of the State Oil Company of Azerbaijan Vagif Aliyev named the reasons for suspending the construction of the company’s carbamide plant in Georgia.

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WENDY’S FIRST RESTAURANT DRIVE-THRU OPENED IN TBILISI Pg. 3

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PANORAMA TBILISI, SUPPORTERS, Pg. 7 OBJECTORS AND THEIR ARGUMENTS

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nternational Monetary Fund (IMF) does not have a hope that economic situation will be rapidly improved in the Eastern Europe and Central Asia Region.

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PERCEPTION OF THE SERVICE QUALITY IN GEORGIAN COMPANIES Georgian companies constantly try to improve their services either by constructing certain standards for service, training their staff or regularly monitoring their employees’ work.

Mirian Gogiashvili: Speculative Investments Come into Georgia Mikheil Chelidze: Only 1 of 90 New Enterprises Operates Successfully

IMF: GEORGIA MUST ADJUST ECONOMIC POLICY TO NEW CHALLENGES

Research

TBC Hosted Technical Trade Finance Forum Pg. 11

ilton Worldwide is expected to return to the public ownership after private equity group Blackstone decided to put it on the market.

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eorgia’s foreign trade turnover is annually reduced by 13%. According to “Sakstat”, foreign trade turnover with commodity has amounted to 3,015 billion USD through January-April, 2015.

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Mahir Mammadov: The Carbamide Plant Project in Georgia Was Temporarily postponed, Not Suspended

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MARKETING ACTIVITY OF BANK OF GEORGIA AND TBC BANK IN FACEBOOK NETWORK

IMPORTS DROP BY 8%, EXPORTS SHRINK BY 26%

Suma Chakrabarti: Georgia’s economy has a very positive prospectivePg. 8

Currency

THE GREEK TRAGEDY MAY LAST LONGER THAN WE THINK

TOYOTA PRADO’S SENSATIONAL PRICE - $32 995

INTERNATIONAL ORGANIZATIONS SUGGEST TO TOUGHEN ONLINE GAMBLING GAMES REGULATIONS

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GLOBAL ECONOMIC RELEASES TO DRIVE THE FOREX MARKET

GOVERNMENT NEWS

2 MAIN EVENTS EU ASSISTS GEORGIA WITH €60 MILLION TO IMPROVE JUDICIARY, HUMAN RIGHTS

MARGVELASHVILI MEETS PRESIDENT OF EUROPEAN COUNCIL

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uropean Union (EU) gives Georgia a solid financial assistance to improve the country’s judiciary system and develop human rights.

Today, Georgia’s State Minister on European and Euro-Atlantic Integration David Bakradze and Director for Neighbourhood and Enlargement Negotiations of the European Commission Gerhard Schumann-Hitzler signed two financing agreements with a total budget of €60 million (156 million GEL) at the Government Administration.

GEORGIA CONTINUES TO PARTICIPATE IN CENTRAL AFRICAN MISSION

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eorgia’s President Giorgi Margvelashvili has issued new decree on participation of Georgian soldiers in the European Union (EU) peacekeeping mission in Central Africa and Mali. The decree envisages sending of five military personnel to Central Africa for participation in the rapid response team, while one soldier will be sent to Mali to take part in the EU training mission.

The UN-mandated EU peacekeeping mission, commonly referred to as EUFOR RCA, is based in Bangui and the goal of the mission is to stabilise the area after more than a year of internal conflict.

US ARMY: NOBLE PARTNER IS A NAME THE GEORGIAN ARMY HAS EARNED

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he name ‘Noble Partner’ was deliberately chosen for the Georgia–United States (US) joint military exercises to underline the significance of the Georgian Armed Forces, said a US Army official.

The US Air Force Brigade General and European Command’s Director of exercises and assessments Mark Loeben praised the Georgian Army and stressed its special commitment to international security at the opening ceremony of the Noble Partner drills, currently being conducted at Vaziani military base.

“The name of exercise is not a coincidence. The name Noble Partner was deliberately chosen. It is a name that the Georgian Armed Forces have earned,” he said.

COE URGES RUSSIA TO GRANT HUMAN RIGHTS MONITORS ACCESS TO GEORGIA’S OCCUPIED REGIONS

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he Council of Europe (CoE) has called on Russia to facilitate and grant unrestricted access to CoE bodies to the areas affected by the conflict in Georgia, in a document adopted yesterday. This was the first time a document adopted by an international organisation has called on Russia to give unhindered access to Georgia’s occupied territories to monitor the human rights situation on the ground.

The CoE adopted this decision yesterday when the organisation and its member states expressed their “unequivocal support” for Georgia’s sovereignty and territorial integrity within its internationally recognised borders.

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resident of the European Council Donald Tusk said after meeting Georgian President Giorgi Margvelashvili in Brussels on May 12 that it was agreed to “redouble efforts” to successfully finalize EU visa liberalisation with Georgia “as soon as feasible.”

Echoing report of the European Commission, assessing Georgia’s implementation of visa liberalisation action plan, Tusk said that the country made a “significant progress”, but some steps are still remaining.

In a joint letter to the EU, including to the European Council President, on May 5, Georgian Pres-

ident Margvelashvili, PM Irakli Garibashvili and Parliament Chairman Davit Usupashvili called on the EU to make an “unambiguous endorsement of visa-free regime” with Georgia at the Eastern Partnership summit in Riga on May 21-22. But the European Commission said in its report on May 8 that despite of significant progress, Georgia “still needs to address the remaining recommendations” in the visa liberalization action plan.

The European Commission said that it will report on Georgia’s further progress on implementation of the visa liberalisation action plan by the end of 2015. But it also said that “in view of the significant progress Georgia has made in the past few

months, the Commission is ready to bring forward the timing of the next report provided that the rapid progress… continues.”

Speaking after meeting with President Margvelashvili on May 11 in Brussels, EU commissioner for neighborhood policy and enlargement negotiations Johannes Hahn said that the European Commission’s report was “very positive.”

“If few outstanding… issues are resolved, I would not exclude that very soon a very positive final report could be there,” Hahn said.

President of the European Council, Donald Tusk, said after meeting President Margvelashvili on May 12 that Georgia is “a close partner of the European Union.” “With the Eastern Partnership Summit in Riga just around the corner our meeting was well-timed. I assured President Margvelashvili that the Riga Summit will reaffirm the European Union’s strong commitment to the Eastern Partnership and the objective of developing strengthened, closer, and differentiated relations between the EU and its sovereign, independent Eastern partner states,” Tusk said.

He also said that “smooth” implementation of the Association Agreement and deep and comprehensive free trade treaty with the EU should be another priority.

“For the Georgian government the time is now ripe to drive forward necessary reforms while maintaining a close dialogue with the citizens to ensure long-term public support for the process,” Tusk said.

GEORGIA ESTABLISHES TAX FREE RELATIONS WITH CYPRUS, LIECHTENSTEIN AND ICELAND

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eorgia is stepping up cooperation in taxation, customs affairs and a number of other avenues with Cyprus, Liechtenstein and Iceland.

Finance Ministers of Cyprus, Liechtenstein and Iceland signed a cooperation agreement with Georgia on avoidance of double

taxation, prevention of evasion of income and capital taxes in Tbilisi today. Georgia’s Finance Minister Nodar Khaduri hosted his counterparts and signed the document at the Parliament Building in central Tbilisi, where the European Bank of Reconstruction and Development (EBRD) 24th Annual Meeting is currently taking place.

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 main goal of signing the agreement was to increase economic cooperation between the countries and attract more investments, underlined Khaduri after the meeting.

“This is an additional guarantee for investors that Georgia is an open country and its tax legislation

is convenient for them. At the same time Georgian investors are also able to invest in Cyprus, Liechtenstein and Iceland benefiting from favourable conditions,” Khaduri said.

The Cyprus Finance Minister said: “We are delighted that we are in Georgia and have signed an agreement which is a very important factor to attracting investments for both countries. Exactly this document creates the conditions to deepen economic relations between the countries and to implement the investment projects.”

Currently Georgia has treaties with more than 50 countries to ensure the avoidance of double taxation, and customs cooperation agreements with more than 16 countries.

Recently Georgia signed the same agreement on avoiding double taxation with Belarus, while its president Alexander Lukashenko paid an official visit to Georgia in April.

GEORGIA AND CHINA DEVELOP AGRICULTURAL TIES

STOLTENBERG: GEORGIA IS MOVING CLOSER TO NATO Georgia is a “strong partner” and an “important contributor” to NATO’s “shared security” – these were the words of NATO Secretary General Jens Stoltenberg when he hosted Georgia’s President Giorgi Margvelashvili in Brussels today.

During Margvelashvili’s first visit to the NATO headquarters the two leaders discussed deepening the partnership between the Alliance and Tbilisi.

“You play a remarkable role in our operations,” Stoltenberg told Margvelashvili at a joint press briefing.

“Today Georgia is the second largest contributor to our Resolute Support Mission in Afghanistan.

May 18, 2015 #99

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eorgia and China stand at the beginning of a new stage of relations where agriculture is the focus.

Thanks to Chinese support, more than 30 greenhouses will be built in Marneuli – a town in the Kvemo Kartli region of southern Georgia. In addition, China will provide Georgia with irrigation/reclamation machinery worth $9 million USD. These activities were a result of a cooperation project titled ‘Vegetable Cultivation Technology in Georgia’, which was signed between Georgia

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and China on November 18, 2014. The two-year project aimed to increase Georgia’s cultivation of herbs and implement new technologies as a way to stimulate the industry. Georgia’s Agriculture Minister Otar Danelia held talks with his counterpart from the People’s Republic of China, Han Changfu, about implementing joint projects in the agricultural sector.

Changfu and an official delegation from China are on an official visit to Georgia to share their country’s agricultural experience with Georgia.

At today’s meeting the sides spoke about a range of industry activities, such as tea growing, fish farming and fish processing technologies and more.

At the meeting the Georgian and Chinese sides emphasised the importance of increasing trade relationship between the two nations. Currently China is included in the top five largest trade partners of Georgia.

On another note China is one of the most important importer countries of Georgian wine. In January-February 2015, Georgian wine exports to China increased by 66.4 percent compared to

the same period of the previous year.

“It is very important that Chinese investments have been increasing significantly in Georgia’s economy. We plan to strengthen more trade and economic ties,” said Danelia.

Georgia’s Agriculture Minister recalled that China had donated 30 units of modern equipment to Georgia in 2014. Danelia said this equipment was successfully used for ongoing irrigation works.

“This year China will donate 26 units for irrigation worth $10,764,000 USD,” Danelia said.

In response, Changfu said agriculture was one of the most promising opportunities where both countries could develop trade relations.

“Georgian wine has a huge potential to establish itself not only in the Chinese but the world market. At the same time it is very important to support tea culture. We want to share our experience in this direction, which will be very useful for Georgia,” Changfu said.

Georgia has already developed a strategy and Action Plan for developing the agricultural industry, and this was “a guarantee for great success in this sector,” he added.

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

Editor: 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

May 18, 2015 #99

PUBLICITY

caucasian business week

WENDY’S FIRST RESTAURANT DRIVETHRU OPENED IN TBILISI

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he Wendy’s Company opened the first Wendy’s Drive-thru restaurant together with Wissol Group in Georgia, located in the Aghmashenebeli avenue, Tbilisi. Restaurant will be open 24/7 hours.U.S. Ambassador to Georgia, Richard Norland, and Tbilisi Mayor David Narmania participated in the opening ceremony.

Dr. Soso Pkhakadze, President of Wissol Group welcomed guests and said on the presentation“Drive-Thru has a different technology, that’s why we’ve sent, five people to USA on training, to fully educate them, in order to adapt those skills, that are needed for this kind of Restaurant.” He thanked the staff and people, who are involved in making one of the most successful restaurants in Georgia.

This Restaurant is the first to be opened next to Wissol Petrol Station.

Beside Wendy’s great-tasting signature menu –

featuring made-to-order hamburgers and sandwiches, fresh-made salads, French fries, chili and Frosty™ desserts — Wendy’s Café will offer customers 15 different kinds of famous Italian Trucillo brand premium quality coffee.

Wendy’s delicious food will be served in a contemporary, inviting atmosphere that will exceed the discerning expectations of Georgian consumers.

Ambassador Richard Nornald, appeared to be the first costumer of Wendy’s Georgia, he mentioned success of entrepreneurial business in Georgia, and said that these kind of activities help to improve cooperation between US and Georgia in economic development.

Wissol Group, one of the largest business groups in Georgia, signed a license agreement with Wendy’s in 2012 to develop the restaurant chain in Georgia. and from 2013 it has already opened four Restaurants, for Georgian and not only Georgian costumers.

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4 HEADLINES GEORGIA GETS READY FOR MAJOR GERMAN FAIR

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eorgia is preparing to host an exhibition of more than 50 German companies and organisations in Tbilisi at Expo Germany on May 20. The annual Expo Germany fair is organised by the German Business Association (DWV) and will be held at the exhibition center Expo Georgia in cooperation with the Caucasus Build - Georgia’s largest trade fair. More than 50 German companies and organisations active in Georgia and South Caucus will present their products and services the several thousand expected visitors.

INTERVIEW

EX-FINANCE MINISTER: SPECULATIVE INVESTMENTS COME INTO GEORGIA An interview with ex Finance Minister Mirian Gogiashvili

SPECIAL CREDIT LINE TO ENCOURAGE WOMEN ENTREPRENEURSHIP IN GEORGIA

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he European Bank for Reconstruction and Development (EBRD) is launching a program to support women entrepreneurship in Georgia. Over €50 million (130 million GEL) from the EBRD for credit lines was provided in a comprehensive programme of support for women-led small and medium-sized enterprises (SMEs). The program has been officially launched on the EBRD’s 24th Annual Meeting and Business Forum held in Tbilisi today and tomorrow. Today also marked a commitment by two Georgian banks to join the program.

GEORGIA’S EXPORTS REACHED $689M IN FOUR MONTHS

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he first part of the year has seen the value of Georgia’s exports and imports (External Merchandise Trade) experience a slight downward trend in comparison to 2014, claims the National Statistics Office of Georgia (Geostat).

In January, February, March and April Georgia’s External Merchandise Trade (excluding non-organised trade) amounted to just over $3 million USD. This was a 13 percent drop when compared to the same figures of 2014.

GEORGIA’S JANUARY-APRIL FOREIGN TRADE RECORDS 13% LOWER FIGURE Y-O-Y

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eorgia’s foreign trade turnover in the first four months of 2014 was 13 percent less than in the same period last year, according to preliminary figures published by the National Statistics Department, GeoStat. The turnover totaled USD 3,015 million in January-April, out of which export made up USD 689 million, 26 percent less than last year, and import was USD 2,326 million, 8 percent less than last year.

- Many regulations adopted by the Government in recent years spooked investors. How would you appreciate the investment climate in Georgia?

- I can say that real investments practically don’t come into Georgia and mainly speculative investments dominate in the country. Many countries do not welcome such investors as they come for a year or two in order to obtain very high profits, and this is not good.

In general, serious investors should be attracted differently that will cost much more.

bout 100ha of degraded forest from intensive cattle grazing will be restored in Georgia’s western Adjara region through the support of a European Union (EU)-funded forest sustainable development initiative. Overgrazing has been revealed as the major cause of forest degradation in Adjara and in many other parts of Georgia, so to combat this, several local and international agencies will work together to stop cattle overeating the precious greenery.

GEORGIA BOASTS CAUCASUS’ MOST ADVANCED PORK PRODUCTION FACILITY

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ussia, Greece and Italy top the 12 big donor countries with the volume of money transfers to Georgia. Despite the reduction of transfers from Russia, this country still remains the leader in terms of remittances. From Russia $37million USD was transferred to Georgia taking the 40.6 percent of the whole money transfers. Russia is followed by Greece with $13.3 million USD money transfers and Italy with $8.2 million USD money transfers.

tervene more actively and bring the refinancing rate at the previous level, as its increase by half a percentage doesn’t give anything in the short term - to put this measure into affect at least a few months are needed.

No one personally is responsible for what happened in the economic system of the country.

The National Bank has a lot of levers that can be used and are already being used - for example, $ 240 mln of foreign exchange reserves have been spent, although it did not bring much good.

- How would you rate the government’s economic policy? What is its role in the ongoing processes?

- It seems to me that the government does not have any analysis of the current situation. The National Bank analyzes the situation, and the government, in my opinion, does not.

The problem is that the government did not expect what has happened. Nobody has analyzed how the war in Ukraine and the crisis in Russia may affect Georgia’s economy, although both of them did not fall from the sky. But the situation has not been analyzed that was the main problem.

- Two months ago, the Government presented to Parliament a plan to resolve the crisis, which consists of several stages, including accelerated privatization. How justified is the accelerated privatization?

- I think it is a big mistake. In my opinion, it would be better to follow the path of development of sovereign funds and development funds, while the state-owned property should be directed as collateral to obtain cheap credit in the international market.

If a large investment project is not behind a privatization process, then it is a wrong step.

An interview with Executive President of Georgian Small and Medium Enterprises Association (GSMEA) Mikheil Chelidze

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LARGEST SHARE OF REMITTANCES COME FROM RUSSIA, GREECE AND ITALY

For example, an idea of turning Georgia into a regional hub is very good and will allow to attract serious companies which will enjoy benefits in the tax system, infrastructure construction, etc while investing. But it requires huge financial and human capital, as we are suffering a large deficit in both sectors, including human capital.

Despite the fact that there are many good specialists in the country, but their skills can’t be used as they are adapted to another economic system.

They need to be retrained that is a problem. In general, it is easy to do it, and it does not require high finances, but the state should spend the money for this purpose.

- You’re talking about speculative investments, and the government claims that in 2014 $ 1.1 billion was invested in the country which is significantly more than in 2013 and 2012. How would you assess these statements?

- There are not many serious investors in Georgia, they are a very rare exception. Neither the previous government nor the present can boast of it. A speculative capital is very short-term and unfavorable. In the end, we will be in big trouble because of this speculative capital.

- The National Bank of Georgia is often accused of devaluation of the national currency.

Is it true?

- Any statements that unequivocally say that the problem is with the National Bank are a big mistake, and even crime. No one can blame the National Bank for everything, or for example, the decline in exports. Of course, all factors affect the state of the national currency, including those which are beyond our control.

But we can demand a more rapid response from the authorities to avoid creating negative expectations in society. The National Bank must in-

ONLY 1 OF 90 NEW ENTERPRISES OPERATES SUCCESSFULLY

€9M EU-FUNDED PROGRAMME SUPPORTS FOREST RESTORATION IN GEORGIA

he most modern pork production facility in the Caucasus region has opened in Georgia.

Ukrainian company ABD Georgia invested $6.5 million USD in the facility, which now employed about 250 people. The meat works opened in Georgia’s Bolnisi region and will soon produce 30 types of sausages sold under the name Delicia.

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- How do you assess the current state of small and medium businesses in Georgia, what hinders its development?

- Over the past 10 years, especially after 2007, the level of administration has significantly improved in the country, in particular taxation, which is electronic now, that is very important.

As for the delays, two basic problems that are observed at the current stage in Georgia’s development are natural that is lack of knowledge and lack of access to finance.

Based on the fact that, in general, the viability of any business is always risky, banks don’t give loans to small and medium business without appropriate collateral, that is startups are not prac-

tically funded.

According to statistics, from 90 newly established small and medium-sized companies, only one manages to become profitable and work successfully. This means that the one who started the business was in a worse position than he was in the beginning. It is the worst of all since it kills entrepreneurial spirit and motivation to start a business. Therefore, everyone is trying to find a job in the civil service to feel himself stable.

Consulting companies that at the initial stage should advise start-ups play a very important role. In 2015 the project “Produce in Georgia” began to operate in the frames of which a program of support for micro business was launched.

In particular, grants are allocated in the amount of 5 000 GEL for 4 000 entrepreneurs throughout Georgia.

In the first phase, many opposed the initiative and believed that the money will be wasted, but we believe that on the contrary, it is a very useful program. If at least 400 entrepreneurs stand on their feet in the frames of this program then it will have a lot of progress. Others will see success and will want to repeat it, an incentive to start a business will appear. In general, the project is good in everything, in addition, budget funds are allocated for its implementation.

- Does the Georgian legislation regulate small and medium business?

- No, there are only the Statistics Service’s standards but a law that would regulate them doesn’t exist.

There are also some tax benefits. From 2011, we have raised the question of the need for the introduction of the flat tax for micro and small businesses that can relieve entrepreneurs with minimal income from spending on accounting records.

That is, we offer maximum simplification of procedures.

In general, in the current situation it is very difficult to predict a situation in which small and medium enterprises will found itself in 5 years.

- How seriously has this sector suffered from the devaluation of the national currency?

- The devaluation of the lari has dealt the most painful blow to small and medium businesses.

Firstly the cost of rent in dollars has increased, while business has income in the national currency.

The same can be said about loans in dollars since they were cheaper, and therefore, businessmen borrowed in foreign currency. Now they have to pay almost 30% more.

As a result, their incomes have fallen, they are forced to reduce the percentage of profits, raise prices, and this in turn reduces the demand.

The problem doesn’t lie in the lari’s exchange rate , but in its stabilization at a certain level so that the economy will be able to adapt to it. The problem now is that the business does not know what to expect, so it is impossible to make any definite decisions.

- How can you evaluate the banks’ proposals on debt restructuring for the most problematic debtors? What are the positive and negative sides of this initiative?

- Of course, the initiative has its positive and negative sides. The bad news is that the interest becomes more expensive, moreover, it applies only to individuals and not business.

In general, debt restructuring has always been relevant, because the banks themselves are uninterested to bankrupt the business and create unnecessary problems for themselves. Accordingly, the banks always meet interests of entrepreneurs.

I also have information that the owners of the premises charging a fee for rent in dollars make concessions to tenants in order not to lose them.

May 18, 2015 #99

ECONOMIX

YOUNG BARRISTERS AGAINST INTERNET MARKET MONOPOLISTS Companies Unilaterally Violate Contract Agreements with Subscribers

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he association of Young Barristers urges the National Agency of Competition to explore multiple facts of misuse of monopolistic positions on the internet market.

The association lawyer Nino Isakadze says the Competition Agency should explore the honesty of the internet market players over violation of the 6th article of the Georgian law on competition that directly bans an economic agent or a group of economic agents to misuse dominant market positions.

Starting March 2015 the internet market players have considerably increased the service tariffs.

Therefore, the companies have unilaterally violated the contract agreements with subscribers.

The necessity of growth in service tariffs has not been substantiated. Consequently, there is real

possibility that the internet market monopolist companies misuse their dominant positions and the competition agency is to explore all the related circumstances.

The legislation does not consider economic agents to have dominant positions if their market ratios are under 40%, but today the Georgian internet market registers several tens of providers and a 60% market ratio is controlled by Caucasus Online and Silknet, Nino Isakadze said.

The competition agency should explore the lawfulness of growth in internet service tariffs, because prices are grown on permanent basis and the companies refer to various factors all time such as international market realities and the existing economic situation in Georgia. Nevertheless, none of them names concrete reasons. If they mean the GEL rate volatility, then we should

note the providers mainly buy internet services in EUR, while the GEL has not devaluated in relation to EU, in practice.

According to the report of the Young Barristers, the monopolistic positions of JSC Silknet and Caucasus Online generate substantiated doubts that consumer rights and legal interests are overwhelmed by secrete agreements on tariff policy between the companies. Consequently, internet providers misuse their dominant positions.

The analytical report proves the quality of internet connection supplied by the internet providers, in most cases, does not fit the contract agreement conditions. Amid permanent growth in service tariffs, there is no system to offer preferential tariffs to the subscribers, even to the devoted category. The existing reality leaves the subscribers without choice, because the competition environment is very limited in this sector.

The Georgian law on competition is to prevent a misuse of dominant positions on the market, the Young Barristers assert. Direct or indirect introduction of unjust purchase-sale conditions or any other unjust trade conditions are considered a misuse of dominant positions. Hence, it is a direct responsibility of the competition agency to explore the internet market realities and they should provide timely reaction to these violations.

In July 2014 the Young Barristers submitted recommendations to the Georgian National Communications Commission (GNCC) to explore monopolistic activities of the key bodies on the internet market so as colluded tariff policy could not damage consumer interests and Georgian citizens could enjoy low-tariff internet packages, but the GNCC has provided no reaction yet. www.bfm.ge

INTERNATIONAL ORGANIZATIONS SUGGEST TO TOUGHEN ONLINE GAMBLING GAMES REGULATIONS Online Casinos Include Real Threats for Money Laundering

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he gambling business scales are growing. Along with technological progress, various social groups receive a wider access to the gambling games in various geographical areas and so on. Several years ago Georgian citizens used to visit gambling games assets, while today personal computers with internet connection suffice to get involved in the world of online gambling games.

As a rule, any change and development in this or that sector changes legislative basis and new regulations are introduced, while today the gambling business is regulated by the outdated norms introduced many years ago, when Georgian citizens had got limited access to the internet. Today over a half part of Georgian citizens use the internet and this is an entirely different reality that creates new challenges to providers of online services, including providers of online gambling games. This challenge is relevant to the Government too that is responsible for introducing fair and modern-standard regulations into this or that sector.

The gambling business always remains a relevant issue. There is no joint position and attitude to this issue. Sometime it is associated with collapse and misfortune, while another part makes fortune through it. The gambling business is considered to be an entertaining sector, but it is clear the business works and it is developed. This signifies a major part of gamers lose money and the gambling business exists at the expense of losers.

No much logics and analysis are required to make such a conclusion.

The more gambling gamers, the more losers are.

Indeed, there is a category that winners too, but the society, in whole, remains loser, because a major part of the gamers loses money.

An only way to somehow remunerate losses consists in taxes the casinos pay to the state budget.

These taxes go back to the society in various forms (asphalted roads, pensions and so on). But even in this respect the gambling business cannot bring much benefit, because the sector’s ratio in budget revenues makes up only 1%. Thus,

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the gambling business carries out an everyday expansion in our lives and we receive a growing number of losers and the accompanying negative results. But the growing number of gamers is not an only negative outcome, including underage gamers. Online casinos include many other risks, including money laundering and a criminal use of accounts in online casinos. It should be noted these risks have been mentioned many times in reports of various international organizations, including in recommendations of FATF and MONEYVAL calling for improving online registration procedures in the online gambling business sector. Under the current practice, online registration is not controlled and users are able to insert fraud and unreal personal information.

There are no regulations to make order in creating identification environment, casinos are able to apply unreliable methods and registered bodies are not verified. For example, some online casinos receive information on clients during registration with their names and personal number, but no copy of ID card is required to verify whether the inserted data and ID card information fit each other. Moreover, no control is carried out to prevent insertion of unreal names and ID number.

No control is carried out when users transfer

money to casino accounts. Moreover, if the client transfers money to bank accounts or credit cards, the personality is not verified.

FATF and MONEYVAL recommendations call for eradicating this problem, because similar practice bears risks of money laundering, financial support of terrorism and other illegal activities. Today online casino accounts represent illegal channels of money turnover. Therefore, all registered bodies should be valuably verified and their personalities must be examined with genuine documents to create protected databases.

It should be noted this system has been introduced in the developed countries. Moreover, the state sector carries out active control over registration procedures in line with international standards to prevent insertion of fraud or unreal data.

Thus, today’s registration procedures in online casinos entirely contradict to the international standards. Moreover, there are no similar standards in Georgia. Therefore, competent bodies cannot control casinos. Therefore, online casinos bear high risk of money laundering and financial support of criminal sector.

Casino accounts have become an alternative system for money transfers and financial turnover. www.bfm.ge

TOP STORY

WORLD ECONOMIC FORUM ASSESSES GEORGIA’S TRAVEL & TOURISM COMPETITIVENESS

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eorgia has been ranked in the top three countries in the region for being a tourism-friendly country.

Georgia placed 71st out of 141 countries in the latest Travel & Tourism Competitiveness Report released by the World Economic Forum.

Spain topped the list of the most tourist-friendly countries, followed by France and Germany while Guinea and Chad were at the bottom of the list.

Regionally Turkey was found to be the most travel-friendly country with a ranking of 44th, followed by Russia in 45th place then Georgia in 71st place. Azerbaijan gained 84th place, Armenia came 89th and Iran placed 97th. Georgia ranked ahead of Egypt and Israel.

Georgia gained a score of 3.7 in the travel and tourism competitiveness pillar, the index was expressed using a scale of 1-7, where 1 was the worst and 7 was the best, across 90 indicators.

The report assessed 141 economies.

Georgia ranked 32nd best in the world for its business environment, with a score of 4.9. Georgia also placed 32nd for business safety and security with its higher score of 6.0.

In terms of health and hygiene, Georgia placed 31st of 141 surveyed countries with a score of 6.1, which was the country’s best result in the whole report.

Georgia’s scores included: Prioritization of Travel & Tourism - ranked 53rd with a 4.8 score, Price competitiveness –ranked 66th with a 4.8 score, Human resources and labour market – ranked 50th with a 4.7 score, Tourist service infrastructure – ranked 50th with a 4.7 score, Environmental sustainability - ranked 52nd with a 4.3 score, Information and Communication Technology readiness – ranked 74th with a 4.0 score, Ground and port infrastructure – ranked 67th with a 3.5 score, International Openness – ranked 58th with a 3.4 score, Air transport infrastructure – ranked 94th with a 2.2 score, Natural resources – ranked 125th with a 2.1 score, Cultural resources and business travel – ranked 87th with a 1.5 score.

The Report analysed the performance of 141 economies through the Travel & Tourism Competitiveness Index (TTCI) and explored how the travel and tourism sector had responded to economic, security and health shocks over recent decades.

The report’s authors noted understanding the nature and extent of the sector’s resilience to shocks was important, as a strong travel and tourism sector was critical for job creation, economic growth and development in advanced and developing economies alike.

Published every two years, the report provided a strategic tool for business and governments: it allowed for cross-country comparison of the drivers of travel and tourism competitiveness, for benchmarking countries’ policy progress and for making investment decisions related to business and industry development. It also offered an opportunity for the travel and tourism industry to highlight to national policymakers the challenges to travel and tourism competitiveness that require policy attention, and to generate multistakeholder dialogue on formulating appropriate policies and action.

BUSINESS

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caucasian business week

IMF: GEORGIA MUST ADJUST ECONOMIC POLICY TO NEW CHALLENGES

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nternational Monetary Fund (IMF) does not have a hope that economic situation will be rapidly improved in the Eastern Europe and Central Asia Region.

President of National Bank of Georgia and IMF Middle East and Central Asia Department Deputy Director Juha Kahkonen have discussed the current situation, challenges and prospects of the region, including Georgia.

Representative of IMF regards, that Georgia

should adapt the economic policy to the new challenges. “We discussed the challenges and prospects, which exist in Georgia. The situation is precarious in the region and the risks are likely to be sustained for long time. We must adapt the economic policy to the new challenges, which the region and Georgia are facing”, - Juha Kahkonen has noted.

He has noted as well, that GEL devaluation is basically conditioned due to external factors.

NDI: 67% OF RESPONDENTS WORRIED ABOUT UNEMPLOYMENT

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opulation is mostly concerned with unemployment and economic conditions; they pessimistically estimate country’s development direction, but they are content with public services”, - National-Democratic Institute (NDI) has declared in April on the base of carried out researches in Georgia.

The research of NDI and its partner organization CRRC has showed, that the population considers jobs, inflation/price growth and poverty as the most national issue. As of the research, 67% of population regards jobs as the most problematic issue, 43% - inflation and growing prices, while 37% - poverty. Merely 3% of population

declares, that the situation is improved linked to these issues through the last two years.

In addition, 11% of the population declares, that their family conditions are improved, while it indicates to the growing dissatisfaction of the population; 34% regards, that their condition is worsened. Whereas, the same index has represented 17% in the research of August.

According to the research, a quarter of the population (23%) regards that Georgia is developed in the right direction. However, the same index has amounted to 40% as of the research of August, 2014. It has been fixed for the first time, that the number of people who think that the current government does not take important decisions for them (49%) exceeds the number of citizens, who regards, that government adopts important amendments for them (44%). Therefore, communication is still weak between the parliamentarians and voters. The population has low-expectations towards the elected government authorities.

The research is carried out from March 27 to April 19. However, 4360 respondents have been inquired and the research has been carried out between the population of the country. The average margin of error in the survey is+/- 2.3%.

APRIL RECORDS GROWTH IN GOVERNMENT DEBTS, DOWNTURN IN NBG DEBTS

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eorgian government’s foreign debt is increased in April.

According to Ministry of Finance, Georgia’s foreign debt volume is grown by 51,57 million USD through a month and the figure has amounted to 4,04 billion USD (9,32 billion GEL) in late April.

To note, 99% is foreign debt, which is increased by 54,86 million USD through a month. In addition, debt of National Bank amounts to 29,53 million USD, which is less by $3,3 million comparing to March.

It should be noted, that foreign debt volume is decreased by 90 million USD comparing to April, 2014.

SINGAPORE INTERNATIONAL ENTERPRISE AGENCY WILL ASSIST US IN RAISING AWARENESS OF GEORGIA AND EXPORT PROMOTION

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etevan Bochorishvili, deputy minister of Georgian Economy and Sustainable Development has hosted representatives of International Enterprise Singapore within the frame of annual meeting of EBRD in Georgia.

According to Ministry of Economy, Mabel Neo, director of Istanbul Branch of the Agency for International Entrepreneurship and Anna Hoe, head of European Direction Group have been at the meeting with Ketevan Bochorishvili.

The sides have discussed deepening of bilateral trade and investment relations between Singapore and Georgia and noted, that cooperation will be carried out with joint projects between Enterprise Development Agency of Ministry of Economy and Sustainable Development and International

Enterprise Singapore. It has been noted at the meeting, that the representative of Singapore Business Delegation will visit Georgia and local business opportunities will be discussed.

As it has been noted at the meeting, International Enterprise Singapore will help Georgian side in raising Georgia’s awareness and export promotion. Including food and beverage export, as well as in tourism direction.

International Enterprise Singapore is the identical profile institution of Enterprise Development Agency of Ministry of Economy and Sustainable Development, which is focused on the foreign economy directions and supports international trade development. In addition, it is oriented on investor attraction and establishment of competitive companies in order to encourage local, small and medium business.

May 18, 2015 #99

IMPORTS DROP BY 8%, EXPORTS SHRINK BY 26%

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eorgia’s foreign trade turnover is annually reduced by 13%.

According to “Sakstat”, foreign trade turnover with commodity (except unorganized trade) has amounted to 3,015 billion USD through JanuaryApril, 2015, which is less by 13% comparing to the previous year’s index.

As of 4-month data, export has been 689 million USD, 26% less comparing to the previous year.

In addition, import is decreased by 8% and the index has totaled to 1,637 billion USD. It should be noted, that negative trade balance is decreased comparing to January-March, which has made up 1,637 billion USD through JanuaryApril and 54% of foreign trade turnover. It has been 56% of the total turnover through JanuaryMarch.

As for April data, export is grown in April, while import is reduced.

However, export has totaled to 186 million

USD, which exceeds by 7 million to the index of March. But, it still remains the lowest index after 2011 and the figure is behind by 51 million to the data of 2014.

As for import, its volume is decreased by 115 million though a month and it has amounted to 551 million USD. The detail data of foreign trade turnover will be published on May 21.

EXPERTS SEE NOTING WRONG IN STATE INVOLVEMENT IN KHUDONI HPP CONSTRUCTION

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he government will take equity participation in the construction of a giant Khudoni Hydro Power Plant the Ministry of Energy has already announced, although the details of a future cooperation are not specified.

According to the President of Energy Academy Revaz Arveladze, the equity participation of the state can be considered positive, but after commissioning it will have to sell its stake.

“The government is doing wrong when it does not put forward any conditions for foreign investors, particularly in the natural resources management. Water is a resource, respectively, the state should be involved in it, “- he says.

In his words, participation of the state will also give more confidence to investors.

“Today Georgia is not very attractive to investors, respectively, the state’s participation in the project gives the investor certain guarantees,” he notes.

David Ebralidze, a former energy ombudsmen, agrees with this opinion.

“The fact that Georgia receives electricity from the Inguri hydroelectric power station at an affordable price has become possible only because it is owned by the state. If the Khudoni HPP is 100% private, it will be focused exclusively on exports. At this time Georgia is suffering a shortage of electricity, and the more energy will remain in the country, the better. But if the state does not spend the money for the construction, and the object is built only by the investors, then the company will have the full right to dispose all the generated power. And if the state is involved in the project, it will be able to get a part of the energy, “- he explains. Experts also wonder why it was decided to re- register investing company from offshore in the Netherlands.

“It’s not a very rational step, as is associated with increased costs, because if the project is carried out by a Dutch company, it will fall under the double taxation that will dramatically increase the costs. Accordingly, working with offshore is much more profitable at this stage, “- David Ebralidze notes.

CHINA DONATES EQUIPMENT WORTH $10M TO GEORGIA

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hina has donated modern irrigation equipment worth more than $10 million USD to Georgia.

A total of 245 pieces of equipment, including excavators, trucks, bulldozers, concrete mixers, off-road vehicles, tractors and more, were named on a list that was granted to Georgia’s Agriculture Ministry yesterday by the Chinese side. The total value of the equipment reached of $10,764,000.

Georgia’s Prime Minister Irakli Garibashvili thanked the Government of China for its valuable support and said this equipment would be used for ongoing irrigation works.

Furthermore, Garibashvili expressed delight and satisfaction about a cooperation project titled ‘Vegetable Cultivation Technology in Georgia’, which was signed between Georgia and China on November 18, 2014. The two-year project aimed

to increase Georgia’s cultivation of herbs and implement new technologies as a way to stimulate the agricultural industry.

Within the project more than 30 greenhouses will be built in Marneuli district in the Kvemo Kartli region of Georgia.

Georgia’s Prime Minister emphasised that Chinese investments were increasing in Georgia, and Georgia had been given a possibility to fulfil its historic function of linking Europe to Asia.

“Both countries are interested in deepening trade and economic relations. Georgia has a chance to link Europe and Asia and we should use this chance. Restoring the historic Silk Road is a new impulse which unites the countries from Europe to China under a unified trade system. We are involved in this process and it is vital for us today to deepen relations with China,” Garibashvili said.

THE MOST COMPLICATED SECTION OF BAKU-KARSI RAILROAD OPENS

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onnecting tunnel between Georgia and Turkey is opened on BakuTbilisi-Kars railway.

According to news agency Trend, Musa Panakhov, Deputy Transport Minister of Azerbaijani has declared about it.

“This is important step in order to implement the project, as construction of the tunnel has been the most difficult section”, - Panakhov has declared.

The length of the tunnel is 4,5 km. Now, track laying works are in progress in the tunnel.

It should be noted, that Azerbaijan Oil Fund has allocated two credits with a total volume of 775 million USD for construction-rehabilitation of Baku-Tbilisi-Kars’s railway section.

Construction of railway highway should be finished in late 2015. The highway peak throughput will be 17 million cargo in a year. Initially, it will serve 6,5 million t cargo at the first stage.

China, Kazakhstan, Turkmenistan, Pakistan, Afghanistan and India have expressed interest towards the railway highway.

May 18, 2015 #99

MEGA PROJECT caucasian business week

PANORAMA TBILISI, SUPPORTERS, OBJECTORS AND THEIR ARGUMENTS

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n 2014 the Co-Investment Fund introduced a concept with a conditional name of Panorama Tbilisi. The project calls for constructing a 7-star multifunctional complex in place of the former Tsekavshiri building on Freedom Square and rehabilitating the Karavansarai building on Erekle Second Street. Many supporters and objectors emerged after the project introduction. Permanent discussions are being conducted over Panorama Tbilisi and various substantiations are being submitted. There are many populist statements too.

The project was initiated by Bidzina Ivanishvili and this factor has become additional argument against the project. Many sceptics assert Ivanishvili is acting on his own will by ignoring the Old Tbilisi architecture, while Ivanishvili asserts Panorama Tbilisi is an unique project for the capital city development and it must be implemented as a visit card for tourists. It should be noted the project value makes up 0.5 billion USD, but no penny will be spent from the state budget. The project will be fully financed by Bidzina Ivanishvili jointly with other members of the Co-Investment Fund. Tbilisi City Hall rejected the initial plan, but approved the revised project and the construction works will start in the near future.

TERRITORY NEIGHBOURING THE SOLOLAKI The Panorama Tbilisi hotel complex will be constructed in the Sololaki zone. The multifunctional hotel complex will unite two assets – Sololaki Slope and Sololaki Height. The slope will include one and two-floor hotel apartments and this zone will be connected with the basic complex in the Leghvtakhevi Valley through elevators. The project consists of four parts – Sololaki Gardens, Sololaki Hills, Erekle Square and Freedom Square. A 7-star hotel with 241 suites will be constructed in place of the Tsekavshiri building that will be connected with the Sololaki Hills by a ropeway. The project also calls for constructing the Caucasus Region’s major 1000 seat conference hall with the most modern equipment, modern apartments, underground parking places, commercial assets, tennis courts, basketball and football halls, open and closed swimming pools, café-bars and restaurants, educational and tourism assets, planetarium and aquarium. One more detail is also very interesting and important. The 7-star hotel on Freedom Square and the Sololaki complex will be connected by ropeways. Under the project, the central and historical districts of Tbilisi will be connected to the greened outskirts with ropeways and inclined elevators. Moreover, visitors will enjoy historical sights of Tbilisi from glass cabins. The project also calls for constructing an underground parking place for 1800 vehicles. The project will employ over 6 000 individuals, while over 2000 working places will be maintained after the project comple-

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tion with a 150 million GEL salary fund. This project will be the most significant project of the recent years in the Caucasus Region. Preferences will be introduced for socially unprotected children and families with many children. At the final stage of the project, over 30 000 evergreen trees will be planted. The project implementation will end in 18 months after the inauguration of construction works.

POSITIONS OF BIDZINA IVANISHVILI AND THE PROJECT DIRECTOR “Panorama Tbilisi is a special project and it must be definitely implemented. The propaganda against Panorama Tbilisi project is unacceptable. They often say the recreation zone will be damaged and the historical zone of the capital city will be destructed. I would like to note this zone cannot be seen from Tbilisi, this is a backline leading to the valley. This zone is seen from only a helicopter. Previously, there was a trash dump there and the land zone has been changed. Nothing will be chopped down.

On the contrary, many trees have gone yellow in Tbilisi outskirts and many of them are amortized. Three months ago we started replacing similar trees and planting new trees.

A lot of meetings were conducted over the Panorama Tbilisi project. For the first time, the project was introduced to the society and all questions were answered. Today they have no arguments and they only demand that the proj-

ect be implemented on the left bank of the river Mtkvari.

Jointly with other members of the Co-investment fund I assume the responsibility for financing the project. This project does not damage the Old Tbilisi, but it enriches the capital city. Visitors will leave the capital city without transport and get to a unique nature in 3 minutes. We will construct a 25 meter aquarium, as well as a planetarium. Around the territory an excursion territory will be organized. This project is interesting for our children and tourists.

This will be one of the visit cards for tourists.

I am able and I want to assist my city. Let the

Lord save me from plans of making a fortune from hotels”, Bidzina Ivanishvili noted.

“Visitors will be able to get to the most beautiful nature from the capital city centre in 3 minutes by ropeway, an ecologically clean transport.

Our concept aims to organize a place on which many residents of Tbilisi have no information.

Anybody, domestic residents and foreign guests will be able to visit these places and spend the time here. Territory will not be damaged. In line with the legislation, we have changed the

zone on only 900 square meters. bridges will be used on all other territories”, Panorama Tbilisi project director Irakli Qarseladze noted.

SUPPORTERS AND OBJECTORS OF THE PROJECT We have already noted many supporters and objectors have expressed their positions over the project. We submit here their statements and considerations over the mentioned project.

“This project will overcharge the capital city in terms of infrastructure. These buildings are entirely unacceptable and they must remember the cultural heritage is protected by the legislation and Panorama Tbilisi is a full and direct violation of the law. New Constructions will arise on historical layers. Raising such big constructions in this historical zone – on Erekle Street, a historical centre for three centuries, is unacceptable, even more so ropeways. Bidzina Ivanishvili is presumed behind this project. This project should be implemented, but it should be implemented on the left bank of the river Mtkvari. The project would considerably develop the left bank infrastructure. This would be a new urban accent. We should try to persuade Bidzina Ivanishvili to implement the project on the left bank, because this project will further aggravate the right bank and this is inadmissible. Moreover, the project threatens landscape zones’ Tbilisi Council member Aleko Elisashvili asserts.

“Panorama Tbilisi is a mega project. Similar

projects create new infrastructure. After the project implementation a protection of historical places will move to a new stage. The project budget is impressive, but the budget value does not signify this or that project may violate the capital city regulations. Our population will see its benefits, because the project will develop the city economy. The Panorama Tbilisi project will also employ many citizens both during the project implementation and after its completion.

This is a certain pilot project that will show to everybody that we are able to implement largescale projects. Panorama Tbilisi and similar projects signify Georgia will survive”, Tbilisi Council Member Soso Manjavidze said.

“I highly appreciate both projects in terms of architecture and functionality. Architectural forms and outlines precisely fit the location and they naturally merge with the landscape and the existing bridges”, Japanese architect Hirokazu Mori says.

“It is difficult to talk about the project on the ground of only photo and video materials, but they can create impression on scales of the buildings and these scales create certain problems. Multifunctional centres in the historical part of the capital city are inappropriate and we tend to think this is an unilateral decision, a result of the unilateral decision and this is incorrect fundamentally”, architect Nano Zazanashvili asserts.

“We disagree with negative comments that are broadcast by TV channels and they do not reflect the reality. This project is a modern outline and it represents a wonderful sample of integration into a historical environment. Glass facades merge with surrounding spaces and reflect the nearby buildings”, Moscow City chief architect Giorgi Japaridze says.

“The project does not fit the landscape. The project lacks for Georgian style and it is inappropriate to the scales of historical part of Tbilisi. The number of floors and space of the building in place of the former Tsekavshiri has been enlarged and it will cross the Tbilisi Council building jointly with St. George Monument and shadow the historical part of Tbilisi. Large scale buildings that have arisen last period in Tbilisi distort the historical appearance of the capital city”, arts critic Maka Dvalishvili says.

“There are no plants of the Red Book on the Sololaki Hill, where the Co-Investment Fund will implement construction works. There are only Eldar pine trees on the territory and only a small number of these trees will be removed during the project implementation.

Panorama Tbilisi project will create no more impact compared to all other construction projects. Moreover, environmental impact may be lower during the project implementation (dust, noise and so on) compared to other construction works in the centre of Tbilisi”, ecologist Ughuli Akhvlediani said. www.bfm.ge

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OPINION

QUOTES

“The Carbamide Plant Project in Georgia Was Temporarily postponed, Not Suspended”

MAHIR MAMMADOV Director General of SOCAR Petrolium Georgia According to Mammadov, various speculations appeared in the local media on the subject that do not correspond to reality – the factory cannot be built until the completion of the Shah Deniz project, which is why the project was simply post-

May 18, 2015 #99

caucasian business week

GASTRONOMY & WINE TOURISM

poned until the appropriate time.

“We had some problems in connection with the project due to the economic situation in Azerbaijan. Therefore, the construction of the plant has been delayed, but we will definitely return to this project. It was our decision and the government of Georgia agreed with it. So the project is postponed, but not cancelled, “- says Mahir Mammadov.

Earlier, Vagif Aliyev, head of Investments Department of SOCAR, said that a cancellation of the construction of a carbamide plant in Georgia

by SOCAR (State Oil Company of Azerbaijan) was associated in particular with fluctuations in the energy market, long-term gas supply and other issues. According to him, SOCAR with the full responsibility declares that ” no other subjective factors have effect on the adoption of this decision.”

Aliyev also said that in recent days the media and social networks had spread unjustified and untrue speculative information about stopping the project. In his words, a serious work has been carried out on this project for a considerable amount of time, but after these issues arose, the project was revised which led to the project’s suspension.

“Georgia’s economy has a very positive prospective”

SIR SUMA CHAKRABARTI EBRD President The European Bank for Reconstruction and Development (EBRD) believes in the stability of Georgia’s banking sector and fully supports the reforms being implemented by the National Bank of Georgia (NBG), including the monetary policy.

On May 12, EBRD president Sir Suma Chakrabarti met NBG president Giorgi Kadagidze, two days before the EBRD Annual Meeting in Tbilisi.

It marked the first time this meeting was held in the Caucasus region.

The EBRD official said he had a very fruitful

meeting with Kadagidze and congratulated him on winning the Best Governor of the Central Bank. He said this recognition would reflect on Georgia’s economy.

“We assessed Georgia’s banking sector as strong and well capitalised. Two large [Georgian] banks are listed on the London Stock Exchange. This is a very important achievement for Georgia, proving that there is a strong banking sector, which is professionally regulated by the national bank,” Chakrabarti said.

The EBRD and NBG officials spoke about the development of Georgia’s securities market and recalled that the Bank had issued its first-ever bond in Georgian Lari recently.

“There are no fundamental problems in Georgia but temporary challenges that the country faces.

The Georgian economy has a very positive prospective,” said Chakrabarti.

Meanwhile, Kadagidze recognized EBRD as one of the most important strategic partners and investors of Georgia.

“It is important that we are moving into a new phase when EBRD is starting financing of the real sector. This means that successful Georgian companies have new opportunities to attract finances not only from commercial banks but from financial institutions as well,” Kadagidze said.

More than 60 countries’ governmental delegations and over 1,500 businessmen and international organisations representatives visited Georgia’s capital Tbilisi in the next few days to attend the 24th EBRD Annual Meeting.

“Present Fluctuations of GEL are Aggravated by Current Expectations”

GIORGI KADAGIDZE President of Georgia’s National Bank

Mr Kadagidze links present fluctuations of GEL to the current expectations and does not see reasons of GEL’s further devaluation for the medium term “Different factors affecting depreciation of GEL in the medium term are depleted. Reduction of import in April has the negative sides, but it has a very positive impact in order of GEL rate. It reduces the pressure on devaluation. Import reduction by 18% in April means that the level of devaluation already makes adjustment on the payment balance. That is why, we do not expect GEL further depreciation in mid-term period”, Gerorge Kadagidze has declared to the reporters on Thursday.

President of NBG declares, that expectations have a great impact on GEL fluctuation for a short-term period and formation of those expectations, which are carried out on the market, including with different statements”.

Cost of USD 1 totals to GEL 2,36. GEL is devaluated by 48 tetri towards USD i.e. 25,5%.

RESTAURANTS, CAFES AND BARS The turnover of cafes and restaurants has been growing rapidly since 2009 and reached GEL 508.9 mln in 2013. The highest increase occurred in 2011, when the growth amounted to 59%. According to statistics, types of visitors are corporate (30%) and individuals (70%). In total 75% of visitors are locals and only 25% tourists, of which the vast majority is represented by post soviet countries.

Supply is dominated by traditional Georgian restaurants providing national dishes and a unique environment. Many restaurants focus on serving customers the traditional Georgian dish, Khinkali.

Foreign cuisine takes up a relatively small proportion of total supply. Eastern dishes are more or less new for Georgian society and are steadily growing in popularity.

The majority of café-bars and restaurants are concentrated in Tbilisi and Batumi. The development of the gastronomy market in Batumi is mainly encouraged by the growing amount of tourists in the city. As regards Kutaisi gastronomy is relatively underdeveloped and it is dominated by traditional Georgian restaurants.

WINE TOURISM Georgia is one of the oldest wine regions in the world. The mention of the ancient traditions of vine growing in Georgia (or Colchis and Iberia as it was known in ancient times) can be found in the works of Homer and Apollonius of Rhodes.

Up to 500 indigenous grape varieties are still cultivated in Georgia. UNESCO added the ancient traditional Georgian winemaking method using the Kvevri clay jars to the UNESCO Intangible Cultural Heritage Lists.

Wine tourism has great potential in Georgia due to an abundance of wines, terrain features, the diversity of Georgian folklore and traditional Georgian food.

Château Mukhrani is among the ancient vineries producing high quality product and attracting tourists with a unique experience. It was founded 1878 by the Prince of Mukhrani, heir of the royal family of Georgia. Abandoned during the former Soviet Union, the castle and domain was completely renewed in 2003 by Marussia Beverages and Georgian shareholders. Château Mukhrani, with its heritage, quality, unique domain and cellars is a key attraction in the Georgian wine industry.

Several wineries, which are concentrated mainly in Kakheti, offer their guests the opportunity to get acquainted with winemaking technology, to visit vineyards and to take part in wine testing. These wineries include:Chateau Mere and Schuchmann wines Georgia, Besini, Shumi, GWS and Chateau Telavi.

May 18, 2015 #99

#EBRDam  2015 caucasian business week

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TBILISI HOSTED EBRD ANNUAL MEETING & BUSINESS FORUM 2015 European Bank for Reconstruction and Development picked Georgia as the host country for its Annual Business Forum. This is a lively and important event that brought hundreds of international business delegates to Tbilisi. EBRD is a multilateral developmental international financial institution with 1500 employees in more than 64 countries worldwide. The institutions main focus is offering direct investments in the form of loans and equity finance to recipient countries that demonstrate strong commercial prospects and benefit the local economy by developing private sector. EBRD conducts more than 170 projects in Georgia that are collectively worth 2,6 billion Euros. To be a host country of EBRD’s Annual Business Forum was a great opportunity for Georgia that aspires to be the regional hub in the South Caucasus.

From EBRD President Sir Suma Chakrabati’s Welcome Speech about Georgia: “Georgia’s long history has of course witnessed many transformations, but also amazing cultural resilience and continuity. To judge by the quality of Georgia’s transition towards a market economy over the past 25 years, this is a country that pursues a long-term vision with great determination. Of course there is still more to do. But Georgia can be proud of the results so far. “ WHY INVEST IN GEORGIA? In recent years the Government’s efforts has seen the country emerge as “one of the most attractive markets in the world to invest and do business,” said Garibashvili, and despite negative global and regional trends, FDI in 2014 increased 35 percent year-on-year, reaching $1.3 billion US dollars.

“Let me say this is the best indicator we have had since 2007,” said Garibashvili.

“Georgia is the front country in terms of transparency and open governance, that’s why it’s an ideal place for foreign investments and business operations,” said the PM. The country’s energy sector was also attractive - Georgia boasted high hydro power energy potential and vast natural resources.

Developing tourism was one of the Government’s top priorities of 2014 and its efforts had not been in vain. “Its obvious tourism numbers has increased rapidly; Georgia is such an attractive place with a stunning landscape and sights,” said Garibashvili.

Increasing tourist numbers had helped Georgia retain a positive economy despite the current regional challenges.

“The difficult geo-political situation in the region has had a negative impact on the economic conditions of countries in the Caucasus region, nevertheless, economic growth has been maintained in Georgia and the business environment is getting better and better, in terms of protection of property rights and optimisation of tax legislation,” said PM Garibashvili.

EBRD AND EU LAUNCH FIRST PROJECT UNDER DCFTA FACILITY IN GEORGIA EBRD is providing a €1.9 million loan to local broadcast operator Stereo+ Ltd, together with Georgia’s TBC Bank, to support the switch from analogue to digital broadcasting in Georgia. The European Union supports this transaction through a risk-sharing facility.

The digital switchover is critical in modernising the information technology and communications sector, which will help Georgia to meet EU standards. The use of digital broadcasting will make additional capacity available on freed-up frequencies. This will lead, in turn, to more advanced services and a more diverse and competitive market – two key goals in the establishment of the Deep and Comprehensive Free Trade Area (DCFTA).

The transaction is the first project under the EBRD-EU DCFTA Direct Support Facility for

small and medium sized-enterprises (SMEs), which will help businesses improve product quality and service standards, access to new markets and more generally accelerate economic development.

EBRD Announces Georgia’s Economy Forecast Georgia’s economy is expected to decelerate to 2.3 percent in 2015 and 2.6 percent in 2016, reflecting mainly a deteriorating external environment, with recession in Russia and sharp slowdown of regional trading partners.

Given the challenging external environment and some domestic political uncertainty, Georgia’s economy is expected to halve in 2015 from 4.8 per cent in 2014, said the European Bank for Reconstruction and Development (EBRD) document which provided the EBRD’s growth forecasts for its countries of operations.

The document ‘Regional Economic Prospects in EBRD Countries of Operations: May 2015’, which are released three times a year was published today within the EBRD annual meeting and business forum in Georgia’s capital Tbilisi.

The document said the outlook for the EBRD region has remained broadly unchanged since the last forecast in January. EBRD still expects overall stagnation, with however increasingly diverging sub-regional trends.

EBRD ANNUAL MEETING: GEORGIA AT HOST COUNTRY INVESTMENT OUTLOOK SESSION ‘Georgia – Invest in Growth’ was the theme of the session, which was followed by a discussion panel of Georgia’ Finance and Economy Ministers, banking experts and business envoys, moderated by CNN’s Emerging Markets Editor John Defterios. The event was part of the EBRD 24th Annual Meetingcurrently being held in Tbilisi, Georgia.

How much the country had changed in the past 20 years, successful joint projects currently underway in Georgia and future plans of the Government

were highlighted by Prime Minister Irakli Garibashvili in his opening address. He also spoke about Georgia’s strategic location and the country’s potential as a regional hub for business.

EBRD ALLOCATES ABOUT $200M FOR GEORGIA’S NENKSRA HYDRO POWER PLANT EBRD is ready to take part in funding the Nenskra HPP, which costs about $1 billion USD in total.”Hydropower sector is one of the priorities for us. We took the decision to fund the Nenskra HPP project,” said Chakrabarti.

EBRD will allocate about $200 million USD for Nenksra HPP project.

Last year Korean company K Water and PF representatives signed an agreement to launch the development and the construction works at the 280 megawatt power station.

PF Executive Director Irakli Kovzanadze believed the electricity generated by the Nenskra HPP would be distributed on the local market. In autumn and winter seasons the HPP would support the local energy market to replace the import.

Nenskra HPP will be constructed on the Nenskra river in Upper Svaneti, a mountain region of Georgia. The HPP is expected to produce 1.2 billion kilowatts of electricity per hour annually.

The project is planned to be completed by 2019.

EBRD AND GEORGIA SIGN INITIAL AGREEMENT TO WORK ON FIRST WIND PARK The letter was signed during the 2015 EBRD Annual Meeting in Tbilisi in the presence of Deputy Prime Minister and Minister of Energy, Kakha Kaladze; EBRD Managing Director for Energy and Natural Resources, Riccardo Puliti; Giorgi Bezhuashvili, Director of the Georgian Energy Development Fund; and Aida Sitdikova, EBRD Director for Energy and Natural Resources, Russia and Central Asia.

A mandate letter is an initial agreement which will be followed by work on the project by all parties. The EBRD’s Board of Directors is expected to vote on the project later this year.

The EBRD is considering providing up to a US$ 25 million senior loan to a special purpose vehicle established in Georgia for the sole purpose of constructing and operating a wind power plant (WPP) in Gori. Part of the loan is expected to be syndicated under an A/B loan structure.The total installed capacity of the power plant will be 20

MW and expected annual generation 85 GWh. The total estimated cost of the project is US$ 35 million.

NEW HOSPITAL WILL BE BUILT IN GEORGIA WITH EBRD AND LOCAL AVERSI COMPANY INVESTMENTS (EBRD) is providing a US$ 10.9 million loan to Aversi Pharma LLC, a leading Georgian health care company, to support a modernisation plan for local hospitals and the improvement of pharmaceutical supplies.

The loan will be used for the refurbishment of an infectious diseases hospital with 135 beds in the capital, Tbilisi, and the construction of a general paediatric and maternity hospital with 84 beds in Marneuli, in the south of the country. Part of the loan will be used to procure pharmaceuticals and improve the supply of medicine to patients.

“It is a great pleasure to complete this important agreement with the EBRD which will enable us to grow our business and further increase patient satisfaction. We hope that this will be a building block in a long-term relationship with the EBRD and we will have the opportunity to work together on many interesting projects in future,” commented Paata Kurtanidze, founder and shareholder of Aversi Group.

EBRD SEES WORSENING ECONOMIC OUTLOOK FOR THE CAUCASUS Countries in the Caucasus are being affected by the Ukraine-Russia crisis and the downturn in Russian economy, the EBRD says in latest economic outlook. The Bank’s Regional Economic Prospects report says growth in Georgia is expected to slow to 2.3 per cent in 2015 from 4.8 per cent in 2014. This reflects a deteriorating external environment, the recession in Russia and the sharp slow-down of regional trading partners. The resulting lower exports and remittances have negatively affected growth and the external balance of payments. National currency depreciation and domestic political uncertainty will be strong impact factors. In 2016 the EBRD is expecting modest growth of 2.6 per cent.

EBRD EXPANDS SUPPORT TO SMES WITH LAUNCH OF SMALL BUSINESS IMPACT FUND (EBRD) launched today its Small Business Impact Fund. The Fund, under the umbrella of the EBRD’s Small Business Initiative (SBI), will provide the main vehicle to channel donor resources to small and medium-sized enterprises (SMEs).

The EBRD provides over €1.5 billion to finance and develop SMEs each year. Under the Small Business Initiative, an integrated set of tools is provided to promote SMEs, including financing for businesses directly and through financial institutions, co-financing, business advice and policy.

Activities in each country under the Small Business Initiative are also adapted to ensure they are relevant for each country’s priorities and needs. SME competitiveness is fostered by targeted key strategic priorities such as innovation, trade promotion, inclusive growth and corporate governance.

EBRD President Sir Suma Chakrabarti said: “Small businesses matter for economic development. There is a strong entrepreneurial spirit across our region but much remains to be done to foster that spirit. The Small Business Initiative draws on a number of the EBRD’s strengths, from indirect and direct investment to capacitybuilding and policy. Through the SBI, we can and will do more.”

COMPANY NEWS 10 TOYOTA PRADO’S SENSATIONAL PRICE - $32 995 caucasian business week

May 18, 2015 #99

models because of their best adjustment to offroad conditions. These models belong to the Premium and Business Class vehicles in terms of comfort.

It should be noted the Prado Family model with 7 seats is the most popular vehicle in the Caucasus. It includes the third line of chairs that may be removed and the space may be transformed into an extensive trunk. Similar models are very convenient for families with many children for travelling to outskirts and taking long trips.

Diesel-driven models are the most required vehicles in Georgia with improved fuel consumption characteristics: about 8 to 11 liters per 100 kilometers in the city. The engine has also reduced emission indicator to 226 g/km, the Toyota representation says.

“In our region the models of Prado Family 3.0l and Prado Business 3.0l are the most favorite ones. Therefore, we have decided to introduce these vehicles, first of all, to our devoted clients under this campaign”, the Toyota representation says.

As to other models, the prices are as follows:

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oth Toyota centers in Tbilisi have launched a special campaign and introduced unprecedented prices for Toyota’s most required vehicles of Prado and LC 200.

“We have taken such a decision for the first time.

We want our clients to get chance and purchase

a desirable vehicle at the best price – with about 20% discount. Our clients are able to buy Prado Family 3.0l at 32 995 USD instead of 39 000 USD, while Prado Business 3.0l is being sold at 34 995 USD instead of 41 000 USD”, Toyota Caucasus and Central Asia Office report.

This unprecedented campaign started several

days ago and it has already drawn much attention. But the Toyota representation cannot specify the campaign duration, because only a limited number of vehicles have been put out for the sale campaign.

These models are the most popular ones among Toyota brands. They are considered the best

Prado ‘executive 3.0l’ – 57 400 USD -> 50 200 USD, Prado ‘business 4.0l’ – 47 700 USD -> 42 395 USD Prado ‘executive 4.0l’ – 58 300 USD -> 49 995 USD LC200 ‘comfort +’ – 47 400 USD -> 41 995 USD LC200 ‘prestige 4.5l’ – 74 400 USD -> 66 975 USD LC200 ‘ Prestige 4.6l’ – 74 000 USD -> 66 995 USD LC200 ‘SE 4.6l’ – 76 400 USD -> 67 995 USD

The campaign for these models run at both official retailers in Georgia: Toyota Center Tbilisi and Toyota Center Tegeta.

SOCAR - THE LARGEST COMPANY IN “TELIANI VALLEY” WILL HAVE NEW GEORGIA SUPERVISORY BOARD

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OCAR Petroleum Georgia, Ltd is considered as “The largest company of Georgia of 2014”. Research conducted by Iliauni (Ilia State University).

Rating was conducted on the basis of the information of “GeoStat”. SOCAR Petroleum Georgia, Ltd exports oil and possesses the network of petrol stations throughout whole Georgia. At this time rating did not cover banks and insurance companies.

Based on research producers and importers of oil and gas have dominated the rating with - 14%.

Followed by energy sector (9%), food industry

(9%), trade (9%), transport (8%), Auto-Import (7%), pharmaceuticals - 6%, communication, construction, retail (5%), tobacco industry (4%), sales of home appliances (4%), gambling (3%), the agriculture sector (2%), technology (1%).

List icludes, top ten companies such as “SOCAR Georgia Petroleum”, “Toyota - Caucasus”, “Wissol Group”, “Georgian Railway”, “Georgian Manganese”, “San Petroleum”, Oil and Gas Corporation, “SOCAR gas imports -Export “.

In comparison with 2013 year the first and second positions remain unchanged.

It should be noted that among the top 10 companies 7 are from fuel sector.

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he shareholders of the company will discuss the changes in the supervisory board at the shareholders’ meeting on May 28 and they will adopt decision on profit distribution alongside the other issues.

The management of the company has already informed the shareholders, that Murtaz Kikoria, George Vakhtangishvili and Irakli Burdiladze will leave the supervisory board of “Teliani Valley”. However, Irakli Gilauri, Avtandil Namicheishvili and Archil Gachchildze will be appointed instead of them.

The supervisory board will be staffed by David Ostbie, Steven Iaroslavgorelik, Irakli Gilauri, Avtandil Namicheishvili and Archil Gachchildze.

GEORGIAN WINEMAKERS RECOVERING RUSSIAN PARTNERS’ DEBTS THROUGH COURTS

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SOCAR ABOUT GOSSIP AROUND THE PROJECT IN GEORGIA

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ead of the Investment Department of the State Oil Company of Azerbaijan Vagif Aliyev named the reasons for suspending the construction of the company’s carbamide plant in Georgia.

“This decision was made due to the changes in the conditions in the energy market, long-term gas supply and other issues”- said Vagif Aliyev SOCAR declares with full responsibility that no subjective or other factors affected the adoption of this decision, according to the company rep-

resentative.

“In recent days, media outlets and social networks have spread groundless and untrue speculative information about suspending the project”.-He added Aliyev said that serious work was carried out on this project for a significant amount of time, however, after the mentioned issues emerged, the project was revised and it was decided to suspend it.

It was planned to construct the plant on the territory of the free industrial zone in Kulevi.

eorgian winemakers are trying to recover the Russian partners’ debts through arbitration. Since the beginning of the year the Georgian wine exports are facing problems with export to Russia. The companies claim that the part of the distributor companies went bankrupt and are unable to transfer the funds. Chairman of the Supervisory Board of “Telavi Wine Cellar” states “Commersant” that some companies became insolvent and for this reason some Georgian companies couldn’t get money, at the same time Zurab Ramazashvili says that part of the companies are trying to recover debts through court, part thought the arbitrage.

According to him, this is a normal process and the difficulties were xpected. However, he explains the crisis allowed them to gain more experience and now they will tighten the requirements and contracts in respect of payments in order to avoid surprises.

In the words of Zurab Ramazashvili, in the first 4 months the company’s exports decreased by 32% compared to last year due to the ongoing events in Russia and Ukraine, however, the growth is recorded in other markets. Ramazashvili notes that at this point some recovery has begun, and despite a crisis, they plan to become more active as Russia and Ukraine are traditional markets for Georgian and they are optimistic about sales of Georgian wine in these countries.

“Schuchmann Wines Georgia” Director General notes that the Russian partners still have financial problems. Nutsa Abramishvili explains that thety are recovering debts on an individual basis.

Abramishvili says that at this stage there are not any transfers problems either from Russia or Ukraine. In her words, “Schuchmann Wines Georgia” strategy is to reduce Russia’s share which is about 30% in the export portfolio, so the decline in exports is not reflected in their company.

She adds that the sales are increasing in the other markets where Georgia was represented slightly or was not represented at all. Therefore, “Schuchmann Wines Georgia” plans to sell million and a half bottles as in the previous year.

May 18, 2015 #99

BANKING NEWS

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caucasian business week

NBG PRESIDENT NAMED EUROPE’S BEST CENTRAL BANKER

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tephanie Linhart, European Editor of British leading financial magazine “The Banker” awarded the President of the National Bank of Georgia Giorgi Kadagidze within the frame of EBRD’s annual meeting and business forum.

Magazine “The Banker”, owned by Financial Time Group named Giorgi Kadagidze as the Best Central Bank Governor of 2014 for Europe.

President of National Bank thanked Stephanie Linhart for visiting the National Bank and handing for an award.

“I want to thank the team of National Bank, this nomination is recognition and appreciation of all your high professionalism, responsibility and patriotism.

Reorganization of National Bank by such popular and prestigious publication as “The Banker” is very important success for the country. This is a message for investors, that there are developed,

strong and European standard initiations in the country. This is a sign, that country’s financial sector is reliable and good partner for any Western-style organization.

Of course, citizens of Georgia have numerous social problems. They demand from us to arrange problems instead of the awards. However, we should note, that the key of problem solving is in the strong institutions, where responsible officials take decisions for the country and its population. I am proud that such team works in the National Bank. I want to congratulate recognition of your labor once more”, - George Kadagidze, President of NBG has stated.

The publication annually recognizes the best financial institutions and the best bankers in 149 countries. In addition, “the Banker” names the best officials of the financial sector who made the greatest contribution in promoting and stabilizing their economies.

EIB TO ENHANCE PRIVATE SECTOR SUPPORT

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he European Investment Bank (EIB) plans to further strengthen cooperation with Georgia.

“Within the Bank’s activity, we’ll support the private sector and thereby will contribute to the development of the Georgia’s economy”, - the Vice President of the European Investment Bank László Baranyay said after meeting with Finance Minister of Georgia.

He says that the European Investment Bank in Georgia has already invested more than half a billion euros, which is an important contribution to the country’s economy. Baranyay claims that the bank is actively collaborating with “Bank of Georgia”, and similar assistance for small and medium enterprises promotes jobs creation in Georgia.

However, in his words, apart from private sectors, they are also funding other sectors and he mentioned Kutaisi water supply and wastewater program.

“Two weeks ago, we opened the regional office in Tbilisi which will serve the region’s other countries. We’ll promote agriculture and private business , - says the EIB Vice-President.

According to Finance Minister Nodar Khaduri, it was decided that the European Investment Bank will become more active in supporting the private businesses both through Georgia’s banking system and its own office. In his words, it was agreed that the European Investment Bank will carry out the water supply sub-project in Kutaisi and 150 million euros in investments are allocated for this purpose, - Khaduri notes.

EBRD SUPPORTS NBG’S INDEPENDENCE AND MONETARY POLICY

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BRD is the second international organization after International Monetary Fund, which supports NBG’s policy related to national currency rate and regards, that NBG’s independence is critically important for investors’ trust. The President Of The European Reconstruction And Development Bank (EBRD) Sir Suma Chakrabarti has talked about this issue after the meeting with Giorgi Kadagidze, President of National Bank of Georgia.

The IMF’s permanent representative in Georgia Azim Sadikov has declared, that oppression on National Bank is unacceptable and he has considered that the floating exchange rate is correct in the previous week. The President Of The European Reconstruction And Development Bank (EBRD) Sir Suma Chakrabarti and Giorgi Kadagidze, President of National Bank of Georgia have discussed the implemented reforms.

It has been noted at the meeting, that EBRD still confirms the stability of the banking sector and totally supports monetary policy of NBG. “We had a very productive meeting with the management of the National Bank. Initially, I want to congratulate George Kadagidze to win the nomination of the Best Governor of Central Bank in Europe. This award is evaluation of the National Bank’ policy and his team work. This victory is important not only for National Bank, as it be reflected on the country’s economy. We have discussed EBRD’s support towards Georgian banking sector. As you know, long and productive cooperation unites us. According to our estimation, the country’s banking sector is strong, well-capitalized and shares of two big banks are traded on the London Stock Exchange. This is a big achievement for Georgia, it means that banking sector is strong and it is regulated with the best model and high professionalism by National Bank.

We have also considered development issue of

Georgian Stock Exchange Market. To remind, EBRD has carried out issuance of bonds dominated in GEL. We have discussed the problems as well. We consider that there are not fundamental problems in Georgia, these are temporary challenges and Georgia’s economy has a positive prospect. NBG’s monetary policy deserves praises. I regard, that National Bank has selected correct and wise policy in order to keep currency reserves during the fluctuation of national currency rate. However, currency reserves are important assets for the country. EBRD considers, that President of NBG’s acts are correct. National Bank performs the basic functions and tasks professionally and its independence is critically important and fundamental for investors’ confidence and economic development in the short, medium and long term period”, - The President Of The European Reconstruction And Development Bank (EBRD) Sir Suma Chakrabarti.

“European Bank for Development and Reconstruction (EBRD) is one of the most important and strategic partner of our country. Besides, that the bank is one of the biggest investor for several years and it makes not merely promotion of our economic but generally popularization of our country. Its strategy is especially important, which has been discussed at the meeting today. It is important that we are moved on the new phase, when European Bank starts funding of real sector, it means that these are new opportunities for Georgian successful companies to attract funds not from commercial sector but also from financial institutions. However, the project, which we carry in national currency is very important as well – emission of bonds dominated in GEL. This is one of the important projects, which is a step forward and on our side, we still continue productive cooperation, which we have with this organization”, - George Kadagidze, president of NBG has declared.

TBC HOSTED TECHNICAL TRADE FINANCE FORUM

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n 12 May 2015, ICC Georgia in cooperation with TBC Bank and EBRD held a Technical Trade Finance Forum at TBC Bank Headquarters. The Forum brought together the leading international trade finance experts from across the Globe for an intensive and interactive workshop focused on key developments in trade finance that have impact on real business activity.

Vincent O’Brien – Chair of ICC Banking Commission, Market Intelligence Group and Member ICC Banking Commission Executive Committee opened up the event with a welcome speech and marked the objectives of Technical Trade Finance Forum. Fady Asly - chairman of ICC Georgia delivered a welcome speech and gave an overview of ICC Georgia activities. The key note speakers of the event were: The Honorable Giorgi Kadagidze- Governor of the National Bank of Georgia, Mr. Vakhtang Butskhrikidze- CEO of

TBC Bank, Mr. Mikheil Janelidze- The Deputy Minister of Economics and Sustainable development. ICC Georgia Technical Trade Finance Forum covered the following topics presented by international experts: demand guarantee practice, advanced due diligence, compliance, and strategies for activation of trade finance professionals, international forfaiting and Chinese rules for trade finance. Mr. Rudolf Putz - Head of EBRD’s Trade Facilitation Program delivered a speech about Technical Trade Finance Skills as a foundation for Trade Finance.

At the end of the Forum, Ilia Gogichaishvili, chairman of ICC Georgia Banking Commission, together with Mr. Vincent O’Brien and Mr. Rudolf Putz awarded candidates with certificates as the Best TFP. ICC Georgia Technical Trade Finance Forum was attended by more than 100 local and international trade finance professionals and experts. The event was followed by a Gala Dinner at Tbilisi Funicular restaurant.

TBC BANK WINS DEAL OF THE YEAR FOR SNOWMAKING PROJECT

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he head of TBC Bank is proud to receive a special award from the European Bank for Reconstruction and Development (EBRD) for his bank’s support of an artificial snowmaking project in Georgia’s Gudauri and Bakuriani winter resorts.

The Bank was awarded the Deal of the Year 2014 at today’s Trade Facilitation Programme (TFP) Awards Ceremony, which was part of the EBRD’s 24thAnnual Meeting currently being held in Tbilisi.

The deal itself revolved around a €2.8 million letter of credit (LC) that supported the artificial snowmaking project. The project has since had a transformative impact on the two winter resorts.

The deal was supported by Raiffeisen Bank and the EBRD and the new snowmaking equipment enabled the Georgian Mountain Resorts Development Company to offer successful ski seasons and Gudauri and Bakuriani, regardless of natural snow cover.

WHY THIS DEAL IS SPECIAL? TBC Bank Chief Executive Officer Vakhtang Butskhrikidze and Deputy CEO David Tsiklauri spoke to Agenda.ge about the winning transaction and what made this deal so special.

This is a big achievement for us and I am very honoured to take this award on behalf of TBC Bank. I think [the snowmaking project] was a very clever and smart idea and we, at TBC Bank, helped execute that idea,” said Butskhrikidze.

He noted the deal was beneficial for the country and for TBC Bank. “The country needs tourism to increase but when there is no snow this won’t happen, so this project will address that. It’s a win-win deal for TBC Bank, for the companies involved and for the country. Everybody will benefit from this deal.”

Tsiklauri, the Bank’s Deputy CEO said: “This deal was very much the same as our other deals financially, but given that the priority of the Government was enhancing tourism infrastructure, they finally decided to go ahead with this project.”

“There was a long debate … but once the decision was made and details were finalised, it was executed very quickly, in a space of about four weeks,” said Tsiklauri.

PROJECT BENEFITS FOR GEORGIA The project generated a positive response from the public, particularly ski enthusiasts. According to Trade & Forfaiting Review, tourism generated around $1.7 billion of Georgia’s revenues and 10 percent of its employment. When it did not snow during the 2013-14 winter season both winter resorts suffered heavy losses.

Thanks to the introduction of artificial snow machines, ahead of the 2014-15 winter season about 85 percent of hotels in Gudauri were reportedly booked through to the end of January 2015.

EBRD Managing Director of Financial Institutions Nick Tesseyman said TBC Bank was a worthy winner of the Deal of the Year 2014 award.

“In the trade finance business, some banks are really strong and know how to work with the EBRD, and since we’ve been working with [TBC Bank] for so long, it’s one of the banks that really have a lot of experience. “[Developing the tourism sector] is important in this country. Tourism is one of the things Georgia can still do better and this will support the economy, so this deal ticked a lot of the boxes we were looking for.”

TBC Bank Group employed more than 4,000 employees in offices throughout Georgia.

Looking ahead, the TBC Bank CEO said his future vision for the Bank was bright.

“We are the leader in the Georgian market and we believe we will continue to be here and also grow our operations in the region. The banking sector is changing, not only here but worldwide and we have to compete on a global scale and I think we have a lot of initiatives in this direction. We are already doing a lot of things in this sense and I think in three to five years we will be one of the best institutions in the region,” said Butskhrikidze.

CURRENCY

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THE GREEK TRAGEDY MAY LAST LONGER THAN WE THINK

By Christopher Dembik, Economist, Saxo Bank We need to make it clear that a final agreement with Greece won’t happen soon. The situation keeps deteriorating but a default is very unlikely in the coming weeks. No one is ready to take this risk. The ECB proved it when it raised ELA ceiling for Greek banks at the end of March. A political solution will be found but it will take time.

The real deadline for Greece is July 20th when the country will need to repay 3.5 billion euros to the ECB. Meanwhile, Greece is able to meet its financial obligations. The country has especially a cushion of 87 billion euros of financial assets in the form of participations in Greek public companies and banks. The latest report dates back to September 2014 therefore we can consider that amount has depreciated sharply in the past months. However, it is sufficient to pay the IMF in the coming weeks.

On the short term, the most likely scenario is a wobbly agreement in the form of small loans with deferred social promises from the Greek government in order to save time. This agreement may also include a debt maturity extension up to 50 years and impose capital controls to avoid a bank run. In March, withdrawals from Greek banks continued, reaching 2.5 billion euros, which is however less than the previous month. In total,

nearly 22.3 billion euros have been withdrawn from Greek banks since the beginning of the year.

This is a significant amount but it only represents about one-seventh of the total amount of bank deposits in January.

An intermediary agreement won’t be enough to solve the crisis because the Greek debt is still unsustainable. The extension of the repayment period up to 50 years is the most often mentioned solution by creditors but it won’t lower the weight of the total debt and it won’t give enough flexibility to the government to help stimulate economic growth. In this situation, Greece is almost doomed to fail and to go through a decade of austerity.

Greece needs a catharsis of its own to start over.

Everyone knows that the only way out is a debt restructuring but it is politically sensitive at this moment. Talks about it may only happen in two or three years after the key elections in Spain (2015), France and Germany (2017). In a perfect world, the debt haircut should be around 50% or 60% but no EU member is prepared to accept such significant loss. A 30% haircut is more reasonable and could already be a good deal for Greece and its creditors.

In that case, the market reaction is unpredictable. A short-term trigger effect is possible and the Greek default could result in raising interest rate for indebted southern European countries, like Italy. Many hedge funds would see that credit event as an opportunity to make profit easily. However, the negative impact would certainly be very limited because the private sector is almost not exposed to Greece and the EU has many instruments to contain panic selling: the ECB QE, the OMT programme (Outright Monetary Transactions programme), the ESM (European Stability Mechanism) and the banking union. A default seems to be the least bad solution to end the Greek drama that represents a real risk for the European economic recovery.

FAO SCHWARZ STORE IN MANHATTAN TO CLOSE IN JULY AS RENTS RISE

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May 18, 2015 #99

caucasian business week

he FAO Schwarz toy store in midtown Manhattan will close in July because of rising rents, leaving the 153-yearold brand without a retail outlet.

Toys “R” Us Inc., which owns the store in the heart of Fifth Avenue across from the Plaza Hotel, said it’s looking for another Manhattan location for the shop. A new outlet could open in late 2016, a person familiar with the situation said.

While the company seeks another location, a line of toys bearing the FAO Schwarz name still will be sold in Toys “R” Us stores and online. The company also is trying to find jobs for the store’s 200 employees at its other shops in the region.

“The company is committed to the FAO Schwarz brand and growing its legacy,” Toys “R” Us said in an e-mailed statement. “While we are sad to say goodbye to our current location, we are excited about the opportunity to create a new flagship location in New York City that will no doubt delight generations of children to come.”

The Fifth Avenue store, which opened almost three decades ago, became famous after being featured in the 1988 hit film “Big” when actors Tom Hanks and Robert Loggia danced on a gi-

ant toy piano spread across the floor. The store eventually turned that into an attraction, allowing kids to play on it.

FAO Schwarz got its start in 1862 and has moved several times since then, including a stop in Manhattan’s Union Square. Toys “R” Us purchased FAO Schwarz in 2009. At the time, it had a store in Las Vegas that was in the process of closing when Toys “R” Us made the acquisition.

EARLY EXIT Toys “R” Us has been considering leaving the building, which is operated and majority owned by Boston Properties Inc., for more than a year and a half. The retailer hired brokers at CBRE Group Inc. to explore subleasing the space before the rental agreement expires in early 2017. “In working with the property owner, the company was able to agree on an early exit in advance of the 2017 lease expiration, providing the opportunity to realize meaningful rent savings,” Toys “R” Us said.

The company is considering moving FAO Schwarz into the below-ground space at 1633 Broadway, a 48-story skyscraper at Broadway and West 50th Street, just north of Times Square, Crain’s New York Business reported last week.

A Toys “R” Us spokeswoman declined to comment. Peter Brindley, senior vice president of leasing Paramount Group, which owns the tower, didn’t immediately return a phone call.

Calls to John Powers, regional manager for Boston Properties’ New York operations, weren’t immediately returned. The move comes as Toys “R” Us continues cutting costs while also trying to revive sales growth at its stores. It was taken private by Bain Capital Partners, KKR & Co. and Vornado Realty Trust a decade ago.

GLOBAL ECONOMIC RELEASES TO DRIVE THE FOREX MARKET

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ven if the US Dollar recovered during late Friday, mainly driven by the above 200K NFP and near seven year low of Unemployment Rate, the greenback remained subdued on a weekly basis as downward revision to March month NFP, coupled with softer than expected wage growth and larger Trade Deficit, seem raising bars for the Fed to hike interest rate sooner. The US Dollar Index registered consecutive fourth weekly decline while the greenback’s losses against Euro remained restricted as optimistic EU growth forecasts and better than consensus economics failed to counter pessimism surrounded by expectations of another stalled talks between Greece and its international creditors during Monday’s Eurogroup meeting. GBP was a clear winner after the ruling conservative party, lead by David Cameron, won 2015 general election by surpassing the pre-election polls with 330 seats while nine month high UK Services PMI provided additional fuel to the UK currency. Moreover, the Australian Dollar, even after witnessing the rate cut by the RBA, recovered a bit as possibilities of further interest rate got mitigated and the fresh stimulus from China kept supporting the Aussie against majority of its counterparts.

Having witnessed third attempt in a year by the Chinese central bank to further ease their monetary policy, on Sunday, current week offers many important events for the forex market players to observe. Though, the current week’s economic calendar is lighter that the previous

est rate hike should it stretch a bit longer; however, it remained a bit firm for its growth expectations. The UK central bank is expected to update its forward guidance on interest rates during the same announcement on Wednesday and a downward revision to growth/ inflation numbers or interest rate forecast and/or hawkish comments by the BoE Governor, in his speech following the announcement, could pullback recent gains by the GBP. Considering the recent victory of ruling party, that supports extended beneficial policies for the GBP, chances are higher that the BoE Governor spread hawkish words and fuels the near-term GBP rally; however, decline in GDP reading coupled with weaker inflation reading, could restrict the BoE to upgrade its inflation forecasts in QIR and can drag the GBP rally. Hence, it would be better to closely examine the details of announcement to determine the chances of BoE’s interest rate hike and the future course of GBP. Other than the QIR, monthly details of UK Manufacturing Production and the latest batch of employment figures, mainly the Unemployment Rate and Average Earnings, scheduled for Tuesday and Wednesday respectively, will also provide key details to determine near-term GBP moves. The Manufacturing Production is expected to slow a bit to 0.3% from 0.4% while Unemployment Rate is likely to continue drifting lower towards testing lowest level since September 2008 by printing 5.5% number against previous release of 5.6%.

The Average Earnings are likely to remain intact with

week, the BoE Inflation Report and UK labor market details, Euro-zone GDP, RBNZ Financial Stability report and US Retail Sales, Empire State Manufacturing and Preliminary reading of UoM Consumer Sentiment, are key events to determine near-term forex moves.

With the decent rise in NFP, surpassing 200K again, and the near seven year lows of Unemployment Rate at 5.4%, market players are likely to closely examine US economic details to foresee chances of interest rate alternation by the Federal Reserve. Moreover, weakness into the growth numbers also pushes investors toward this week’s important details to predict US growth and inflation scenario, another important component that could force the Fed to fuel interest rates for the first time since 2006 sooner than later.

Monthly reading of Retail Sales and preliminary UoM Consumer Sentiment, are key details to examine US economic progress at a micro level. Although, the Retail Sales are likely revealing slower than previous growth in sales, to 0.3% against 0.9%, the consumer sentiment index could print a four month high of 96.5 against 95.9 registered earlier. Further, PPI and the Empire State Manufacturing Index, scheduled to release on Thursday and Friday respectively, are also showing mixed expectations as the PPI could print 0.1% after reversing four month declines in its previous announcement to 0.2%, while the gauge of manufacturing is expected to reverse its -1.2 print by revealing 5.9 number.

After recent labor market details clouded its March pessimism, expectations concerning earlier interest rate hike could strengthen; however, rise in Retail Sales and manufacturing gauge, coupled with improvement in consumer sentiment, may provide additional strength to the greenback traders who foresee such move sooner and supports considerable US Dollar rally.

Last week’s electoral victory by the ruling UK party fueled the GBP towards testing four month high against its US counterparts as speculations concerning extended pro-GBP policies spread optimism amongst UK currency traders. Moreover, nine month high Services PMI is likely to become a reason for the BoE Governor to become hawkish in his speech during Quarterly Inflation Report (QIR) announcement, on Wednesday.

The Bank of England, that maintained its status-quo monetary policy during Monday’s MPC meeting, avoided supporting the interest rate hike during its February meeting, signaling that the recent decline in inflation reading could hinder the path of future inter-

1.7% growth and the Claimant Count Change could register a bit of improvement by showing -20.1K against previous release of -20.7K. With the labor market details continue showing considerable improvements, chances are higher that the GBP could extend its recent gains should the actual results meets consensus; moreover, the industrial production could limit the GBP advance given the number plunges below expectations.

Flash estimations of Q1 2015 Euro-Zone GDP, scheduled for Wednesday release, is the only release from Euro-zone to help determine near-term Euro moves.

The growth number is expected to rally towards highest level since May 2011 by printing 0.5% reading against its previous reading of 0.3%. Recent flow of better-than-expected economics from the Euro-zone could become a reason for the GDP to follow estimates and fuel near-term Euro rally; however, progress on talks between the Greece and its international creditors during the Eurogroup meeting, starting from Monday, could become important to better foresee Euro moves.

RBNZ Financial Stability Report, the bi-annual publication by the New-Zealand central bank, scheduled for Tuesday, is an important release to forecast immediate NZD moves. The RBNZ Governor, in latest monetary policy meeting, talked down the need of interest rate hike and rather spread dovish words to pullback the NZD. Should the Governor continue observing his dovish tone, in his speech following the report announcement, the NZD could head for additional southward trading; however, a neutral or positive remarks are likely to again fuel the NZD. Last but not the least, Chinese Industrial Production, scheduled for release on Wednesday, becomes an important detail to forecast chances of further easing by the Chinese central bank that said during its Sunday announcement that further easing can’t be denied. The forecasts are optimistic that signals the Chinese Industrial production to rally by 6.1% against previous reading of 5.6%, that was lowest since March 2009. Should the actual reading plunges below the previous reading, chances are higher that the Chinese Central bank again practices any of the monetary policy easing methods to pump their economy. Even if the immediate impact of the weaker release could pullback commodity currencies, NZD, CAD and AUD, expectations concerning additional stimulus and higher demand by the world’s industrial power house could provide a bit of strength to these currencies.

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

May 18, 2015 #99

RESEARCH

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PERCEPTION OF THE ENERGY SECTOR - 2014 SERVICE QUALITY IN GEORGIAN COMPANIES

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eorgian companies constantly try to improve their services either by constructing certain standards for service, training their staff or regularly monitoring their employees’ work. Nonetheless, people still have varying opinions concerning the service quality of Georgian companies.

ACT researched how residents of Tbilisi evaluate the quality of service in different areas and their experience in these matter.

As the results show, every second citizen of capital (53%) considers that Georgian companies provide good service, while 36% of them evaluate it as average. Only 8% of the residents of Tbilisi think that Georgian companies have bad service.

NEIGHBORHOOD

Bank of Russia Buys $181 Million to Start Rebuilding Reserves

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he Bank of Russia made its first foreigncurrency purchases after an almost yearlong hiatus. The central bank bought $181 million in the market on Wednesday, according to its website. That’s the first time the Bank of Russia has sold rubles since June. The bank plans to buy $100 million to $200 million daily to replenish its international reserves, policy makers saidThursday. The Bank of Russia is moving to stockpile foreign currency after last year’s plunge in its holdings pushed it to the lowest in almost six years. Sanctions over Ukraine and falling oil prices triggered a run on the ruble that forced the monetary authority to spend almost $90 billion on defending the ruble. The purchases will be made smoothly during the trading day to minimize the impact on the exchange rate, according to the central bank. The volume of daily operations may be adjusted if there are “significant changes on the foreign currency market,” it said.

Saudi Arabia aims to increase trade turnover with Azerbaijan

S The research found interesting differences according to the field: in terms of service quality, pharmacies are leaders(4.2), followed by fuel realtors (4.1) and household appliance stores (4.0). Residents of Tbilisi give the worst evaluations to public/governmental services (3.6). It should be noted, that according to research conducted by ACT in February, 2012, the service quality of the public sector was rated higher (4.1).

audi Arabia is interested in increasing the trade turnover with Azerbaijan, Minister of Commerce and Industry of Saudi Arabia Tawfiq bin Fawzan Al Rabiah said at the Azerbaijani-Saudi Arabian business forum in Baku May 15. “Although Azerbaijan and Saudi Arabia signed the intergovernmental agreements on elimination of double taxation and protection of investments, the trade turnover between our countries is at a very low level and we are here to fix the situation,” he said.

During his speech, the minister expressed confidence that further meetings, in particular, the joint business forum to be held in Saudi Arabia in November 2015 will expand cooperation between the two countries.

Central Bank of Turkey ready to prevent further depreciation of lira

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According to the research, half of the residents of Tbilisi (50%) have had extremely bad experience of service with one of the companies. However, as it turns out, the customers rarely take any action to protect their rights. Specifically, half of those, who experienced bad service (49%) do not react to the bad service. Although, 29% take action and express their dissatisfaction at the spot. It should also be noted that one out of five residents of Tbilisi (19%) refuse to utilize the services of these companies.

he Central Bank of Turkey has sufficient experience to prevent the depreciation of the lira against the dollar, deputy chairman of the Central Bank of Turkey Necati Sahin told reporters May 14 in Baku.

“Of course, we are concerned about fluctuations of the US dollar rate against the Turkish lira, but we have enough experience to prevent excessive depreciation of the national currency,” he said.

He went on to add that the decline of the lira to a certain extent affected the investment climate in the country. In the first quarter of 2015 investments in Turkish economy amounted to $2.8 billion, which is 9.15 percent less than the same period last year.

However, a rise in price of the dollar on the foreign exchange market is a normal phenomenon, as it happens not only in Turkey but also in many countries around the world, according to Sahin.

Armenia’s economy gets negative forecast by EBRD

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The survey was conducted on 416 adult citizens of Tbilisi in March, 2015. The statistical error of the data does not exceed 4.75%.

The survey was conducted exclusively for internet magazine “Marketer”. Third party must give a notice before using the given information fully or partially.

eteriorating economy of Armenia has got its assessment from the European Bank for Reconstruction and Development - the bank revised downward its forecast for the country’s economic development.

Regional Economic Prospects in EBRD Countries of Operations: May 2015 report released by the European bank forecasted a 1.5 percent fall in Armenia’s GDP in 2015. The EBRD put the decrease in remittances and exports as the major reasons behind the recession started in Armenia’s economy earlier this year, saying “the real GDP growth in Armenia will be negative”.

“International reserves of Armenia dropped by 25 percent in March compared to the same period last year. Tax and budget policy is limited due to high rate of correlation between the state debt and GDP,” the report read.

WORLD NEWS

Fifth year Apple named most valuable brand, at $145bn

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pple’s reported advertising budget of $1.2 billion less than a third of Samsung’s $4 billion. Its brand value is backed by a vast base of loyal users, as well as regular launches of innovative products like Apple Watch. According to Piper Jaffray analysts, the watches might contribute 10 percent to company’s 2017 revenue. Microsoft and Google were ranked as the second and third most valuable brands. The brand value of Microsoft is up 10 percent since last year at $69.3 billion. The Redmond giant under new CEO Satya Nadella has announced ambitious plans for the Windows 10 operating system coming out this summer, expecting to reach 1 billion users by 2018.

The Google brand value at $65.5 billion is up 16 percent since last year, as company revenue of $66 billion in 2014 was up 19 percent with good momentum in the mobile advertising segment.

The top ten list also includes Coca-Cola ($56.0 billion), IBM ($49.8 billion), McDonald’s ($39.5 billion), Samsung ($37.9 billion), Toyota (37.8 billion), General Electric ($37.5 billion) and Facebook ($36.5 billion). Of the top ten, eight brands are USbased; the other two represent Japan and South Korea. 2015 is also the first time Facebook entered the top ten. This year’s biggest gainers in brand value are Facebook (54 percent), Amazon (32 percent) and Disney (26 percent). Adidas (-14 percent) and Danone (-13 percent) showed the biggest drops.

China is world’s top crude buyer

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hina overtook the United States as the world’s top importer of crude oil for the first time in April, and its purchases are expected to remain strong despite a slowing economy, with far-reaching consequences for global oil and commodities markets.

The soaring imports came as a surprise as growth in the world’s second-largest economy was sputtering and its oil demand was expected to ease. However, low oil prices and China’s series of interest rate cuts - including one over the weekend - in a bid to stoke growth are factors boosting demand.

China’s crude oil imports hit a record of almost 7.4 million barrels a day (bpd) last month, putting it ahead of the United States’ estimated imports of 7.2 million bpd for April, Reuters data show.

Eurozone grows fastest in two years, as France leaves Germany behind

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he economy of the eurozone is showing signs of recovery, growing by 0.4 percent in the first quarter of 2015 which is the best quarter in the last two years. Stronger growth in France and Italy compensated for a slower Germany. The GDP of the eurozone increased one percent in annual terms, the European statistical agency Eurostat reported Wednesday. The economy of the EU countries has shown growth of 1.4 percent compared to the same period in 2014.

France in the first quarter of 2015 showed the highest growth rate of the past two years. The country’s GDP increased 0.6 percent in the first three months, according to France’s National Institute for Statistics and Economic Studies.

US, China economies slow down, while eurozone rebounds - OECD

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conomic growth in the US and China is expected to slow down while the eurozone is still on course for economic recovery this year, according to the Organization for Economic Cooperation and Development (OECD). “In the euro area, growth momentum continues to strengthen, particularly in France and Italy. Signs of easing growth momentum are emerging in the United States, although these may reflect transitory factors,” the organization said in its Tuesday report based on March data.

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May 18, 2015 #99

May 18, 2015 #99

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

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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

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,

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

Real Estate International Real Estate Company (IREC) Tbilisi. 9 P. Aslanidi St. Tel: +995 32 238 058 Mob: 599 95 76 71 Email: Info@irec.ge www.irec.ge

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

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

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

PUBLICITY

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METRO ATLAS GEORGIA JSC The project Metro City started its implementation in 2015. It takes place on the Black Sea coast in Batumi, in new boulevard. It integrates two hotels with different concepts, two casinos, a shopping centre, conference halls, dining area, cinema, bowling center and apartments consisting of two buildings.

Investment costs:

100,000,000 USD Project completion date: May 2017

Residence - apartments The residence consists of two buildings. Within the project Metro City, there are represented 471 apartments with an amazing sea view, residence pool and special playing area for kids +pool.

Prices for apartments are defined according to the 2015/2016 years and the final 2017 year.

The height of floors and sea view will also impact on prices.

Address: Mtsvane Street N1, Batumi Tel: +995 577 14 17 14 info@metrocity.ge www.facebook.com/MetroCity.GE

www.metrocity.ge

May 18, 2015 #99