Caucasus Business Week #259

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November 5, 2018 - www.cbw.ge

#259

WEEK

Georgia Advances to the 6th Position in Doing Business Rating

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Media in Social Media

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Interview with PR and Marketing Communications Company GEPRA’s Senior Consultant Tinatin Samkurashvili

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SRPC on the GLOBAL PETROCHEMICAL MAP

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Wyndham Grand Expands to Georgia with Iconic Location in the Heart of Capital City Tbilisi

Ivane Machavariani: Progress in Doing Business Rating will Be Converted in Investments

Wyndham Hotels & Resorts, the hospitality powerhouse with nearly 9,000 hotels in more than 80 countries, today announced the upcoming opening of Wyndham Grand Tbilisi, in a prime location in the heart of Georgia’s capital. The hotel is expected to open in January 2019 and will be managed by McInerney Hospitality International Georgia.

Georgia’s progress in Doing Business rating will be converted in investments, Minister of Finance Ivane Machavariani noted when appraising the WB annual report Doing Business, where Georgia gained three positions and advanced to the 6th place.

George Kobulia: Furniture Producing Should be Important Export Sector in Georgia Within the framework of the working visit to Turkey, the Minister of Economy and Sustainable Development of Georgia, George Kobulia had a meeting with the heads of the 12 leading Turkish companies. Some of those companies are already operating in Georgia and are planning to increase the production and to export the products as well.

Liberty Started New Social Project with National Library

Second Round of Presidential Elections to be held on December 2 The second round of elections will be held on December 2, – Chairwoman of the Central Election Commission Tamar Zhvania said at the briefing today.

The Fourth Official Ceremony of the Welcome to Georgia! National Tourism Awards On December 3, 2018 Rustaveli Theatre will host the most remarkable event of the Tourism and Hospitality industry of Georgia – the Fourth Official Ceremony of the Welcome to Georgia! National Tourism Awards.

Since November 1, Liberty has launched a new social project, according to which 60-year-old + pensioners will take a one-month course of computer and internet use.

3641 Georgian Emigrants Take Part in the 2018 Presidential Elections A total of 3641 emigrants from Georgia have taken part in the October 28 elections, at polling stations in foreign countries.

TBC Bank bought BONACO MFO TBC Bank has bought assets and liabilities of BONACO MFO.

Schools from Eastern Neighbourhood Awarded European Quality Label 2018 The EU-funded eTwinning Plus project has announced the schools awarded the European Quality Label 2018.

National Bank: New Regulations will not Take Effect on November 1 New regulations proposed by the National Bank of Georgia (NBG) will not take effect on November 1, the NBG officials told BM.GE.

The Editorial Board Follows Press Freedom Principles Publisher: LLC Caucasian Business Week - CBW Director: Levan Beglarishvili WWW.CBW.GE Address: Aleksidze Street 1 Sales: Mob: +995 591 01 39 36 Email: caucasianbusiness@gmail.com Editor: Nutsa Galumashvili. Mobile phone: 595 380382 Copy Editor: Ellie Rambo Reporters: Nina Gomarteli; Mariam Kopaliani; Merab Janiashvili, Economic columnist: Andria Gvidiani; Technical Assistant: Giorgi Kheladze;

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Georgia Advances to the 6th Position in Doing Business Rating Georgia has progressed to the 6th position in the World Bank (WB) rating of Doing Business, according to the new report by the World Bank Group. Georgia has essentially improved its indicators among 190 countries and moved to the 6th position from 9th place of 2017, while the country ranked 16th in 2016. This is the best result Georgia has recorded ever.

The rating comprises various criteria. Georgia has recorded the best result in terms of protection of minority stakeholders and ranks second worldwide like the year of 2017. The country ranks fourth in terms of starting business and in terms of property registration.

Georgia has recorded one the worst results in the criterion of Trade without Borders, under which the country ranks 43rd.

In the World Bank rating Georgia’s rating point is 83.28. As compared to 2017 (82.04), Georgia’s rating point has increased. At the same time, Georgia’s rating point surpasses the region’s averaged point (72.3).

According to the World Bank, Georgia ranks 6th in Doing Business simplicity. Macedonia is also recorded in top 10 countries.

1.New Zealand 2.Singapore; 3.Denmark; 4.Hong-Kong 5.South Korea; 6.Georgia 7.Norway 8.The USA 9.Great Britain 10.Macedonia Georgia has recorded the best progress in the component of tax payments (1.89 point growth). The WB rating has appraised 190 countries worldwide. Georgia has not worsened any criterion in the 2018 report.

The Doing Business is the most influential international rating, where Georgia has advanced to the 6th position. This is a huge progress for integration of Georgia’s economy in global economy. The fact proves that the reforms implemented by Government of Georgia serves economic development and we are happy, when the world’s influential organizations give preference to Georgia in such important and prestigious international ratings, Prime Minister Mamuka Bakhtadze said.

According to the 2018 rating, Georgia was named as a champion country in terms of implemented reforms. According to the 2018 Doing Business, Georgia occupies leading positions along with the world’s top 10 countries. The World Bank calls Georgia as the most reformatory country, where business may be launched in 2 days. „We are glad that several reforms were reflected in the 2018 rating of the World Bank. For example: we have exempted reinvested capital from tax and this reform has brought efficient results. We have also essentially simplified procedures for registration of VAT payers and this reform was also brought positive results. We have made serious progress in the court system. Namely, we have introduced the regulation for random distribution of cases between judges and naturally, this method considerably reduces subjectivism and expands the court system potential for passing valuable decisions”, Minister of Economy and Sustainable Development Giorgi Kobulia said.

Economic experts and businessmen appreciate Georgia’s progress in the Doing Business rating. At the same time, we should not make erroneous conclusions from this rating. This rating assesses how fast and simply a country starts and registers business, while making business is another issue. „This may seem to be absurd and it is hardly believable that Georgia is one of the leading countries in terms of business inauguration; that only Denmark surpass our country in EU, whilst we have certain problems in terms of business development. The point is that the Doing Business makes concentration on how simple it is to launch business and related procedures, including regis-

tration of a company, simplicity in licensing, timeframes and so on. The Doing Business rating does not imply the following stages of business inauguration – court system, staff qualification, access to financial resources, market size and so on. Thus, this is a peculiar rating that the Government frequently uses to stress the fact that the country is developed”, Vakhtang Charaia, director for Tbilisi State University Centre for Analysis and Prognosis noted.

As to the indicators, the report comprises various criteria. The best result Georgia has showed in protection of minority shareholders and ranks second worldwide like the previous years. In the business inauguration component Georgia ranks fourth. The country also ranks fourth in property registration component.

We have positive results in several directions. We have comparatively negative figures in terms of timeframes for arranging electricity supply to specific business (71 days in our case and this is not a good figure). We have also weak positions in terms of issuing construction licenses and the country ranks 27th in this component. There are 11 procedures for licensing construction works and the whole process lasts about 63 days.

Our country makes progress in the rating year to year, but as noted above, only in the first stage of the doing business. As to other components, they are subjected to other research works and reports, Charaia said.

By Merab Janiashvili

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Multi-faceted Reasons behind Postponing Enforcement of New Banking Regulations for November 15 The new banking regulations did not take effect on November 1. The announced regulations will be simplified and currently, technical details are being specified, the National Bank of Georgia (NBG) noted.

The new regulations will be enforced no later than November 15.

“Over the past week active consultations were held over the retail crediting draft provision at the NBG with representatives of the finance sector, experts and the field specialists.

The working version of the revised provision reflects almost all key technical remarks outlined by the NBG. At the same time, key principles of the regulation remain unchanged. At this stage, consultations proceed for specification and simplification of distinct articles and paragraphs. Since the document was subjected to essential technical changes, the revised document will be submitted to the finance organizations as soon as possible. At the same time, finance organisations will be given several days for exploring the amendments and adjusting their own inhouse procedures to the new regulations”, the NBG statement reads.

The NBG does not unveil what circumstances have inspired the NBG to postpone an enforcement of the new regulations, how the new regulations will be simplified and whether the banking sector was involved in the process.

Aleksandre Dzneladze, head of the Association of Banks, says that there are multi-faceted reasons behind the mentioned postponement. Comprehensive information was supplied to the NBG, economic team of the Government and all parties about negative impact of new regulations, he added.

“In truth, continuous working process was carried out by the National Bank, the parliament’s committee for finance and budget issues and the Business Ombudsman.

We have dis-

cussed the existing expectations and how the enforcement of the initial edition of the regulations would influence economy and crediting portfolio. It turned out that the real results would be essentially different from the NBG expectations”, Dzneladze noted.

As to how the regulations will be simplified, Dzneladze noted that it is untimely to talk about this. It is important that consultations continue and both commercial banks and Association of Bank have engaged in the process.

In response to the question, whether the postponement signifies that the government and NBG have made concession, Dzneladze pointed out that the NBG has taken significant decision on behalf of the business sector. “Consultations will be continued and in the working process we will unveil additional details”, Dzneladze said.

The president of Association of Banks could not specify how long the banking regulations would be postponed.

Roman Kakulia, head of the parliament’s sectoral economy committee, does not have information which articles will be specified and simplified by the NBG, but he expressed suppositions that the new regulations were postponed based on the business sector’s remarks.

Kakulia approves that the regulations will definitely shrink the crediting volume and result in economic slowdown.

According to the banking sector’s calculations, the initial edition of regulations will slow down the economy by about 3%.

“The key segment must be protected, but if different approaches run for the business segment and higher-income persons, this will optimize the legislation and everybody will be content.

No specialized knowledge is required to conclude that downturn in crediting volume will slow down economic growth and this is evident. In our economy we have high-degree interdependency and therefore, the mentioned scenario is realistic.

My preliminary assessment of the bill is as follows: it is being improved and polished, seemingly, based on recommendations, remarks of the business sector, Roman Kakulia noted.

Gocha Tutberidze, profes-

sor for University of Europe says that there are several reasons behind postponement of the new banking regulations, including disagreements between the NBG and commercial banks and the second round of presidential elections.

The initial edition is excessively rigorous and it will create serious problems to entrepreneurs, both in retail and corporate sectors, commercial banks and microfinance organizations, he noted.

The NBG will carry out only facade changes and this approach will bring serious problems in the sector, Tutberidze pointed out.

“There may be disagreements over the timeframes. For example, about the mortgage loan maturity. The new regulations set top margins. Nowhere in the world the central bank instructs commercial banks about maturity of this or that loan. Traditionally, commercial banks regulate these issues themselves jointly with borrowers. I suppose these details are being specified”, Tutberidze said.

Starting November 2018, the new regulations on retail crediting were to take effect under the NBG president’s resolution.

Namely, the package was to limit crediting policy of commercial banks and they will have to more essentially analyse solvency of borrowers and tighten crediting policy.

The matter is of regulations, under which mortgage loans will have no more than 15year maturity, consumer loans secured by real estate – 10-year maturity, auto loans – 6-year maturity and 4-year maturity is set for all other types of loans.

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Tinatin Samkurashvili: "We Need to Know what Society Expects from us to Establish Successful Communication" Interview with PR and Marketing Communications Company GEPRA’s Senior Consultant Tinatin Samkurashvili.

Why did you decide to enter this field and what opportunities does it give in terms of career growth?

I did not choose it by myself, I accidentally entered this field. I studied journalism and dreamed of a TV journalist's career when I did PR and Integrated Marketing Communications Course at PR School. After completing the course I was hired by Gepra for three-month internship. That’s where my career begins in PR. I think any profession gives an opportunity to grow in career, the main thing is how we can develop our own capabilities in the profession that interests us. For career growth it is important that you love your work and yourself while doing this job, that’s the key to developing. I think routine life is impossible in this field, if you like one pace, that means you got left behind, as there will always be someone who moves faster. I’ve been in constant motion for the tenth year already.

What is it necessary to hold successful communication with public?

We need to know what society expects from us in order to establish successful communication and knowing how to meet their wishes. Or vice versa, what feedback are we expecting and what are the messages that we send in order to get desired response.

What three tips would you offer someone just starting out in PR? First-read a lot, learn about cases and expand horizon; Second- do your job at high quality. There is no case in PR that is less important or doesn’t bring enough experience; Third- admit and note down your own mistakes, failure lets us grow.

Describe your typical work week.

I’d call a typical week the one that might go without weekend. It’s impossible PR Manager’s duty to stop on Friday night and continue on Monday morning. We at least have to answer phone calls, email and Facebook messages regarding our job.

How would you go about finding relevant contacts and sources?

In this regard, the best opportunity is direct communication and personal relationships.

Contacts can be found anywhere, whether it’s business meeting or unofficial reception.

While, reputation is required to use those contacts. Happy clients, students interested in our story are the ones who help us to strengthen reputation. Consequently, I think our contact source is established by our proffesionalism.

How would you prioritize and start your work day?

My morning starts with coffee and chocolate, it’s a must do ritual for me to get energy. Meanwhile, I can also check emails, read news on agencies. Then it starts active phase, that includes meetings, distributing tasks in team and monitoring, thinking, writing, reading, phone calls, etc.

I mostly work on several projects simultaneously. PR, especially consulting requires multitasking skill to succeed. That’s why my work day is longer than it’s settled.

What are the skills successful PR Manager needs?

PR Manager needs to be sociable and presentable, having a skill to mobilise, sharp thinking and react to issues rapidly.

What trait do you value the most in your co-workers?

I value modesty, sense of responsibility and organized. I like to see people working and loving it.

What is the best PR practice technology can’t change?

The best PR practice is interacting with group of people who know more than you.

I was raised in Gepra, its founder Soso Galumashvili and Senior Parner Kakha Magradze have extremely contributed to my development. We established internship programme at Gepra that supports new generation’s career growth. This process is very pleasant for me, as I know it well how important solid foundation is.

What are some of the growing trends in the public relations industry?

In a competitive environment where the quality of the product or service is already equally achievable, it becomes more important to enhance the company's reputation. The main purpose of PR is to create an organization's managed image in order to improve its competitiveness. Consequently, it became trendy to participate in communication processes. The digital media is getting stronger and the movement of companies in the social networks is more campaigning, than reposting material published in media. Now the most important challenge is to find touch points with the target audience.

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Business News Aparthotel in Gudauri – Offer by Bank of Georgia and Red-Co

3Q2019, the Azerbaijan Railways CJSC said in a statement.

Bank of Georgia and Red-Сo development company offer 9% discount scheme to clients for buying an apartment in Gudauri ski resort.

Wine and Spirit Tasting-Competition Georgia – Homeland of Wine Coming Up On November 7-8,2018, for the first time, the international tasting of Eurasian wine and spirits “Georgia – Homeland of Wine” will be held in Georgia. Competition is organized under the patronage of “International Organization for Vine and Wine” (OIV).

Sakaeronavigatsia to Buy New Helicopter at 2.5 million EUR

Georgia to Campaign NAME Film for OSCAR and Golden Globe Awards

Radisson Collection Hotel Opened in the Historical Land of Tsinandali Another international-standard hotel has opened in Georgia. The new hotel complex Radisson Collection equipped with the latest modern infrastructure is about to launch operations in Tsinandali. This first branded hotel in the Kakheti Region was opened today by Georgian Prime Minister Mamuka Bakhtadze.

Sakaeronavigatsia plans to buy a new helicopter at 2.5 million EUR. The company asks for admitting simplified procurement procedures.

Georgia will launch campaigns for OSCAR and Golden Globe Awards. As reported, Georgian film NAME directed by Zaza Khalvashi will be nominated in the category of the best foreign-language film for Oscar and Golden Globe awards.

Regulations Hamper the Start of Towers construction on Kazbegi Avenue

Tbilisi Street Market for Small Entrepreneurs Starts Tomorrow On November 3, the series of events “Tbilisi Street Market” begins. The goal of the project is to promote entrepreneurship development, helping entrepreneurs to realize productivity and increase awareness.

Date of Commencement of Passenger Transportation by BTK Railway Announced Georgia Advances to 6th Position in Doing Business Rating Georgia has made progress in the Doing Business rating and advanced to the 6th position.

Ekaterine Mikabadze: Positive Trends that Recorded since the Beginning of Year are Still on Agenda According to the preliminary assessment, Georgia’s economic growth in September 2018, compared to the same period of 2017, equals to 5.6%, while the average economic growth in January-September 2018 is 4.9%.

The transportation of passengers by BakuTbilisi-Kars (BTK) railway is planned to begin in

The start date of the towers construction on the area of the former building of the Blood Transfusion Institute at Kazbegi Avenue in Tbilisi is still unknown. Tornike Janashvili, executive director of Block Invest, says in a conversation with Commersant that currently the fire safety standards are being determined at the City Hall.

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Supsa Refining-Petrochemicals Complex (SRPC) within 4 years, will invest up to 3 BLN USD for the start up of a refinery and petrochemical complex designed to Euro 5+ emission standards in Supsa, Georgia. The facility will process 5 million tons of raw materials per annum, making oil and petrochemical exports from Georgia on a global scale.

SRPC has already become the member of the Global Refining and Petrochemical Industry.

GBC (Global Business Club) has placed SRPC on the Global Refining-Petrochemicals Map and highlighted it as one of the major projects in the region.

Within the frames of Downstream Project Management Conference in Frankfurt, important meetings with the main players in the Petrochemical Market were conducted.

Caucasian Business Week interviewed CEO Mr. Lasha Koridze regarding the SRPC’s further development.

In summary, in examining the potential market opportunities, Argus drew the broad conclusion that, in the markets likely to be open to a Georgian refining facility, there is sufficient incre-

supply and demand outlook for the period to 2050, price forecasts, and forthcoming legislation, Argus highlighted the following as key conclusions when considering such investment in

Which companies or financial institutions are interested to invest in this project?

How did you appear on this map and how important is this for Georgia?

It is very important that our company was well received by the global Petrochemical family. You know that Georgia is 100% dependent on imported oil products and our complex gives our country the chance to become a net exporter of oil products.

At the Downstream Project Management Conference we had meetings with international companies such as: Exxon Mobil Corporation, VA Tech Wabag and Schneider Electrics. They expressed a great interest towards SRPC and stand ready to be part of the project. However, before the BFS is finalized, any details of such cooperation cannot be disclosed. The final BFS document will be ready in 2 months.

Argus Consulting conducted the market study to analyze the feasibility of the proposed complex.

•Demand for transport fuels globally is likely to peak in the middle of the lifetime of the proposed refinery, and competition for export buyers may increase towards the end of the forecast period.

•Petrochemicals demand is expected to continue to increase through the period, driven by industrial growth in the developing world.

•Georgia, Turkey, Ukraine, and some Eastern European markets are projected to have long-term demand growth potential.

•For some products, notably PX and mixed xylenes, Far Eastern and Chinese buyers are likely to be the most favorable markets.

So, we are convinced that the project will be financially viable and very attractive for the investors - not to mention the benefits it will provide to Georgia.

mental demand combined with a structural deficit for producing refined products to justify additional capacity investment.

Based on the analysis of the

Georgia: •Forthcoming legislation and ensuring oversupply is likely to make Heavy Sulphur Fuel Oil a very low value product.

Before the BFS is finalized, we cannot complete negotiations and sign agreements with companies we are in talks with. At this stage we cannot disclose their names due to signed initial agreements. We are confident, that based on many factors, such as, the location of our complex, our business friendly environment, Georgia’s international ratings, liberal tax code and the overall country development, we will attract global investors.

This is reinforced by our daily interactions with the major players in the global refining market.

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Every year, a lot of changes are done in media relations. These amendments are studied by appropriate professionals in PR, marketing and advertising companies and consult customers during media-product choosing process. The channels, segment, rating and reputation should be relevant to the product and in the end, consumer should receive desired outcome. Two media managers work for GEPRA for this. One of them, Nini Metreveli talked about changing trends and alternative sources of information: "Professionals from developed countries say that the television will no longer exist in 10 years and the source of information will only be Internet. This is not the case with us, because the Internet is still unavailable for the part of the Georgian population.

10 seems a little bit few, but in 20 years it is possible that traditional media will be replaced.

Moreover, TV companies, radios, magazines and newspapers have been actively using the internet for their own content.

Some people do not even consider using mentioned channels, and the names have been identified: Internet TV, Internet-radio and

Online magazine. The reason is simple - the TV remote control panel and the social networking experience actually give similar results.

Trends change according to the demand-supply principle. The viewer does not have the time to watch the entire newscast, entire program in anticipation of the interesting story. In the workplace, one prefers to scroll the phone quietly, rather than reading a paper.

Eventually, information about the earthquake is spread rapidly in social networks, quicker than Center of Seismology shares. We read: ‘’The earthquake occured in Georgia. Our journalists are trying to verify the

information in the Center of Seismology’’. That’s it, we’ve heard about the news, before we turn TV or radio on, or buying a newspaper next day.

It turns out that it is more convenient to watch live on Facebook, find stories cut down, read the article on the site and listen to the audio. Here it certainly does not exclude the existence of readers of TV viewers, radio columnists and magazines and newspapers.

This demand-supply principle works for placement of advertising material.

The media sells everything - from the news agency news to branded shirt of program participant. The product in which you want to

integrate your ads is so diverse that makes it hard to choose. The ratings are gradually becoming numbers and the focus is on media reputation or target audience. Trends are changing here too.

Besides rating, it is important to see how many likes Facebook pages have, whether there are users' comments and whether they share posts.

When buying a media product, the customer asks the product to be placed in the social media unconditionally, that automatically means sharing it on traditional media too. This service has also become a miniproduct that initially was a bonus by media outlets, but now it is a necessity.

Media has been added to social media, on the contrary, it does not matter much. The main thing is that watching TV through Facebook, scrolling magazine on phone, peeking into radio programme studios on social networks became a normal thing.

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