Us Business in Georgia 2012 by The FINANCIAL

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“ G e o r g i a D i d n ’ t D o a S u f f i c i e n t J o b i n A t t r a c t i n g U S F u n ds ”

“Today’s Young Generation is More Educated,” President of Caucasus University

Frequent Changes to Tax Code Concern for Foreign Businesses

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Stephen Haykin USAID

USAID Spent USD 52 Million in Georgia this Year The FINANCIAL

he largest project USAID implemented in 2012 was the Power and Gas Infrastructure Programme. USAID’s budget for fiscal year 2012 was USD 52.2 million with the following sectoral breakdown (in millions of USD): Continued on p. 26

UGT Holding Expecting Moderate Growth in 2012

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Radisson Batumi Expecting High Occupancy over New Year Celebrations

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Radisson Blu Iveria Hotel has had the Best Occupancy Rate in 2012

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Georgia AmCham to Focus on Agri Business The FINANCIAL

he most interesting field for American businessmen this year will be agriculture as the new government plans to promote the sector, Sarah Williamson, President of AmCham told The FINANCIAL in exclusive interview. She said stability and security are the top questions in the minds of foreign investors which makes the new government’s approach to

dealing with the private sector extremely important and urgent. As she claims, there is no problem in Georgia in this regard. “Relations with the new government are a top priority right now. We are also working to further strengthen our US ties,” said Sarah Williamson. “I have just returned from Washington D.C. Continued on p. 2

David Lee: Georgia is a “buy” The FINANCIAL “If the Russian market is open for Georgia it will not disturb Georgian-American trade relations”, said David Lee, the President of Magticom and Chairman of the Eurasia Partnership Foundation. He told the FINANCIAL that any strengthening of Georgia’s economy through increased trade with any country only makes Georgia a more attractive place for American trade and investment. “The very idea that in the 21st century a country must choose between trading with America or Russia is archaic,” he said.

“It is my understanding that the new administration wants businesses to succeed and they are committed to normalizing relationships with all businesses and breaking up cartels. This is good for the country and good for business,” said Lee. “I believe that the attacks on Mr Ivanishvili as too pro-Russian are motivated by politics and often by those with vested interests who have abused the previous system and have something to hide.

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IREX Georgia Media Development Program to be a Priority

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“Georgia Ready to Integrate With NATO,” LTC Reneé Underwood

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AmCham to Focus on Agri Business

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The FINANCIAL By Mariam Papidze

“Relations with the new government are a top priority right now. We are also working to further strengthen our US ties,” said Sarah Williamson. “I have just returned from Washington D.C. where I was in one-on-one meetings with executives of the US Chamber in regards to some of the issues we are currently focused on. My vision for the future of AmCham is to see it continue to grow and strengthen its influence

Sarah Williamson, President of AmCham

in the Georgian business community. To do this, the two primary areas I am working together with the Board of directors on currently are: 1) Member outreach & involvement; and 2) Working to see AmCham increase its public policy and legislative efforts so that we have greater influence in areas that affect our members’

companies. Both of these lead me to focus on the strengthening of AmCham’s committees and to the establishment of new ones, where appropriate,” said Sarah Williamson. Q. AmCham is actively engaged in meeting with foreigners who arrive in Georgia to do business. What

kinds of business are they interested in doing in Georgia? A. I think that in looking to the future, some of this depends on the sectors that the new government specifies as its areas of priority. For example, so far we know that they are planning to promote investments in the agri-business sector. Speaking of the previous Cabinet and Parliament, tourism, construction, energy and IT were also priority sectors. We’ve seen quite a bit of success in those sectors and we assume that they will continue to be a priority along with agriculture. Q. Which significant deals would you highlight from the US side in 2012? A. According to GeoStat and the published statistics through 2nd Quarter 2012, the United States was the seventh largest contributor of FDI in Georgia. As far as specific deals, off the top of my head, I can mention the OPIC financing of Georgian American University (GAU), Wendy’s Restaurants coming to Georgia with fifteen branches and various hotels breaking ground in Batumi and Kakheti. Q. Is Georgia a good place to do business among its major competitors when it comes to foreigners choosing where to invest? A. Of course and for many reasons. Some of those include Georgia’s very business friendly Tax Code - few total number of taxes and extremely competitive tax rates; the current Labour Code - it’s very business-friendly and was established with the desire to attract employers to Georgia and create jobs; the extent to which corruption has been eradicated is incredible in comparison to other countries in this region; the labour force is very talented with regards to speaking multiple languages, including English and Western European languages, Continued on p. 14

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David Lee: Georgia is a “buy” President of Magticom and Chairman of the Eurasia Partnership Foundation expects that many investors will return and new ones will arrive

The FINANCIAL By Mariam Papidze “If the Russian market is open for Georgia it will not disturb Georgian-American trade relations”, said David Lee, the President of Magticom and Chairman of the Eurasia Partnership Foundation. He told the FINANCIAL that any strengthening of Georgia’s economy through increased trade with any country only makes Georgia a more attractive place for American trade and investment. “The very idea that in the 21st century a country must choose between trading with America or Russia is archaic,” he said. “It is my understanding that the new administration wants businesses to succeed and they are committed to normalizing relationships with all businesses and breaking up cartels. This is good for the country and good for business,” said Lee. “I believe that the attacks on Mr Ivanishvili as too pro-Russian are motivated by politics and often by those with vested interests who have abused the previous system and have something to hide. I David Lee, the President of Magticom and Chairman of the Eurasia Partnership Foundation

Continued on p. 15

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U.S. Business In Georgia

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U.S. Business In Georgia “World Savings Day 2012” Will be Celebrated First Time in Georgia

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and the country itself. The importance has different levels. I would sort out the private level. Saving, teaching even small kids to manage their funds, to make decisions, to invest and keep the money. This is the first important level. The second level is very individual, because saving gives you an opportunity to realize your personal and professional dreams – education, a car or a house. Saving is realizing these objectives. When people save money it has the following message – we believe in future, our political and economical situation is stable. Saving has a good

impact on economic development in general. It is difficult to gain access in micro finance due to different facts. Saving money for certain purpose can be an alternative to applying for a micro grant. As for the Georgian banks and how they offer saving system in the county I would say that they are doing their best,” said Silke Klover, First Counsellor, Head of Development Cooperation at Embassy of the Republic of Germany in Georgia. Savings are a sustainable way to satisfy the needs of today in a way that future generations find themselves in

an environment that is socially and economically intact. Carrying out a World Savings Day that is backed by several financial institutions, the National Bank, academies and associations will help to restore the overall trust into the financial industry. At the occasion and around that day financial institutions will in particular attract children, young people and their parents by offering specific products, explaining how to best get along with ones money, and undertaking interesting events. The goal is not only to attract savings but to get

potential new clients into the bank. The sector wide initiative will take place in the week from 31st of October – 8th of November. There will be a common frame (brochures, video clips and an overall mascot) in which every participating bank is free to organize various activities (in particular heading to children and their parents). Besides distribution of brochures and placement of video-clip in banks’ branches, ATMs, web-pages and in social networks, Georgian commercial banks will visit schools in Tbilisi and in the regions, where they will make presentations, inform about savings habits and will held small lessons on financial literacy. Banks will also organize various competitions and games for school pupils. There will be an evening for children organized in Kote Marjanishvili State Drama Theatre, where guests receive information about World Savings Day via common brochures - have a look into inside life of theatre and attend the performance as well. Alongside with schools, financial sector representatives will visit their client organizations and hold presentations about importance of savings. Different types of media support will be provided from the commercial banks’ side during the week. The World Savings Day is a good tool to overcome the barrier between population and commercial banks, it will increase trust towards financial sector and is supposed to encourage people to save in the banks. Savings Bank Foundation for International Cooperation (SBFIC) is implementing the project Mobilisation of Savings and Financial Capability in Georgia and Azerbaijan, where World Savings Day is also celebrated first time this year. The project receives support by the German Federal Ministry for Economic Cooperation and Development.

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his year Georgian banks will celebrate World Savings Day for the first time ever. Events will start on October 31 with the opening press-conference at the National Bank of Georgia and end on Bankers Day on November 8. The event is organized by Georgian commercial banks together with Savings Banks Foundation for International Cooperation, the National Bank of Georgia, Association of Banks of Georgia and Georgian Banking Training Centre. “Georgian banking sector is one of the most stabile and developed spheres of the Georgian economy. Total volume of deposits is growing annually; the figure reached 8bln GEL in the current year. This data indicates high trust from population towards the banks. Although, the potential is much higher, therefore, the National Bank of Georgia is keen to participate in this project, we will always support and encourage financial education of the society” – stated Executive Director of the National Bank of Georgia, Giorgi Melashvili. Having long history World Savings Day has been celebrated with different events in many countries since 1925. For nearly 90 years the German savings banks organise and conduct (along with other financial institutions in many countries all over the world) the World Savings Day. World Savings Day, or World Thrift Day as it was formerly called, was established by the World Savings Banks Institute (WSBI) in order to inform people all around the world about the idea of saving their money in a bank rather than keeping it under their mattress. Starting in 1925 it soon became an annual tradition in several countries going along with celebrations and campaigns to encourage savings. “Georgian banks celebrating World Saving Day for the first time ever. This is very important for Georgian banks

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U.S. Business In Georgia

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Georgia is the Top Improver Globally Amid Global Uncertainty, the Importance of Fighting Poverty Jim Yong Kim World Bank President

orld leaders are rightfully concerned about the fragility of the global economy, and many of us are closely following what is happening in the Euro-zone, especially with the difficult situations in Greece and Spain. At stake, though, is not just what happens in Europe, or in other developed areas of the world. Also at stake is how the global crisis will affect the economies of developing countries, particularly fragile ones such as Haiti. Because we can’t lose our focus on these countries, my visit to Haiti in early November is an important one. We need to focus on two interrelated goals: ending extreme poverty in a much more condensed time frame and boosting shared prosperity in all countries around the world. Some may say this is too daunting a task. Yet more than 1 billion people living in dire poverty around the world cannot afford to wait. For the last several years, more than 50 percent of the world’s growth has come from developing countries. And when fragile states unravel even further by conflict or strife, we lose great opportunities to boost those states out of fragility and onto a path of stability on which they help grow the global economy. I believe the path to ending poverty and enhancing prosperity must be built on three pillars. First, we need to bring renewed evidence-based solutions to our development efforts. Amid the global economic pessimism of the past few years, we must not forget that we are on a historic trajectory for moving people out of poverty, reducing the percentage of the poorest by half in the last 25 years. Let’s look at what’s happened to Africa in recent years. In the decade before the 2008-09 financial crisis, economies in sub-Saharan Africa were growing by 5 to 6 percent a year on average. Today, most African countries’ economies have recovered and moved beyond pre-crisis levels. If these growth rates can be maintained, African GDP would double in about 12 years. By 2015, Africa is forecast to have 41.2 percent of its population living on less than $1.25 a day, compared to 24 percent in South Asia and 7.7 percent in East Asia and the Pacific. Those figures underscore the great challenge that remains in Africa, but the continent is moving in the right direction. In 2008, 47 percent of the population lived below this poverty line. We have to find ways now to accelerate this progress. Second, as we move forward I believe we need to pay greater attention to questions of equity, fairness, and justice in the process of economic development. We must take active steps to ensure that the benefits of growth reach the lower and middle classes. We must recognize that jobs lie at the heart of development, and that the private sector creates 90 percent of jobs in the developing world. Governments must create the best environment for inclusive growth. Third, we need to become even more focused on results and implementation in our development interventions. We will need to produce more results out of our limited resources. To do so, we must become more scientific in how we think about service delivery, building robust systems that are reliable and sustainable. For the World Bank Group, this means we must change. We have long talked about ourselves as the knowledge bank. Now we are at a turning point. We must become the solutions bank. By that, I don’t mean that we have all the solutions; we don’t. But we can help gather and disseminate solutions for the most difficult issues around growth and development worldwide. The best ideas in development come from all corners of the globe. At the World Bank , we enter this discussion with our vast store of development data, analytic capabilities, and decades of on-the ground experience. What we need to do now is help capture evidence-based solutions that come from all over the world, build a “science of delivery,” and then put those solutions into practice. In Haiti, and in my other trips ahead, we need to have spirited discussions around these ideas. In this global economy, we’re all in this together. We need to carve a path ahead that leads to prosperity and leaves no one behind. Martin Luther King, Jr. captured this universal quest for progress and dignity when he said: “the arc of the moral universe is long, but it bends toward justice.” I believe it is time to bend the arc of history. With global solidarity underpinned by a relentless drive for results, we can, we must, and we will end poverty and build shared prosperity. Jim Yong Kim is President of the World Bank Group.

Tiny country which survived the war with Russia in 2008 now is joining the top 10 economies in the global ease of doing business ranking by World Bank The FINANCIAL

new IFC and World Bank report finds that since 2005, the Eastern Europe and Central Asia region leads the world in enhancing the business climate for local firms. The region overtook East Asia and the Pacific to become the world’s second most business-friendly, after OECD high-income economies. Eastern Europe and Central Asia has implemented nearly 400 institutional or regulatory reforms since 2005, more than any other region in the world. The report shows Georgia joining the top 10 economies in the global ease of doing business ranking. Georgia implemented reforms in six areas, more than

any other economy in the region. It made improvements in getting credit, paying taxes, trading across borders, enforcing contracts, resolving insolvency, and getting electricity. Improving business regulation is a challenging task, and doing it consistently over time even more so, says World Bank. Yet some economies have achieved considerable success since 2005 in doing just that. A few of these economies stand out within their region: Georgia, Rwanda, Colombia, China and Poland. Georgia is the top improver since 2005 both in Eastern Europe and Central Asia and globally. With 35 institutional and regulatory reforms since 2005, Georgia has improved in all areas measured by Doing Business. In the past year alone it improved in 6 areas. As just one example, Georgia made trading across borders easier by introducing customs clearance zones in such cities as Tbilisi and Poti. These one-stop shops for trade clearance processes are open all day every day, allowing traders to submit customs documents and complete other formalities in a single place. Georgia also strengthened its secured transactions system. A new amendment to its civil code allows a security interest to extend to the products, proceeds and replacements of an asset used as collateral. Georgia has also distinguished itself by following a relatively balanced regulatory reform path. Many economies aiming

to improve their regulatory environment start by reducing the complexity and cost of regulatory processes (in such areas as starting a business). Later they may move on to reforms strengthening legal institutions relevant to business regulation (in such areas as getting credit). These tend to be a bigger challenge, sometimes requiring amendments to key pieces of legislation rather than simply changes in administrative procedures. Georgia has followed this pattern, focusing initially on reducing the complexity and cost of regulatory processes and later on strengthening legal institutions. But among a group of 5 top regional improvers, Georgia has improved the most along both dimensions. Rwanda, the number 2 improver globally and top improver in Sub-Saharan Africa since 2005, has reduced the gap with the frontier by almost half. To highlight key lessons emerging from Rwanda’s sustained efforts, this year’s report features a case study of its reform process. Local entrepreneurs in developing countries are finding it easier to do business than at any time in the last 10 years, highlighting the significant progress that has been made in improving business regulatory practices across the globe, according to a new report released today by the World Bank and IFC. Over the past decade, nearly 2,000 regulatory reforms were implemented by 180 economies. The reforms have yielded

major benefits for local entrepreneurs across the globe. For example: Since 2005, the average time to start a business has fallen from 50 days to 30—and in low- income economies the average has been reduced by half. In the past eight years, the average time to transfer property fell by 35 days, from 90 to 55, and the average cost by 1.2 percentage points—from 7.1 percent of the property value to 5.9 percent. In the past eight years, improvements to simplify tax compliance have reduced the time required annually to comply with the three major taxes measured (profit, labor, and consumption taxes) by 54 hours on average.Eastern Europe and Central Asia had the largest share of economies implementing regulatory reforms—with 88 percent reforming in at least one of the areas measured by Doing Business. Singapore topped the global ranking on the ease of doing business for the seventh consecutive year. Joining it on the list of the top 10 economies with the most business-friendly regulation were Hong Kong SAR, China; New Zealand; the United States; Denmark; Norway; the United Kingdom; the Republic of Korea; Georgia; and Australia.Topping the list of economies that registered the biggest improvements in the ease of doing business over the last year were Poland, Sri Lanka, Ukraine, Uzbekistan, Burundi, Costa Rica, Mongolia, Greece, Serbia, and Kazakhstan.

“Georgia Ready to Integrate With NATO,” LTC Reneé Underwood The FINANCIAL By Mariam Papidze

ieutenant Colonel Reneé Underwood, Chief of the Office of Defense Cooperation in Tbilisi, in her interview with The FINANCIAL claims that the Georgia Deployment Program for ISAF is one of the most important security cooperation initiatives to come out of the US military's role in Georgia. Underwood also believes that due to its big achievements, the Georgian army is ready for integration with NATO. “Evaluations and decisions on NATO membership are made at NATO levels and are political. The Georgian army has made many strides forward in the last few years and has proven an invaluable asset to NATO in ISAF. They have proven themselves willing and able to fight alongside NATO forces and we support their aspirations to join the alliance,” Underwood said. 32 and 12 light infantry battalions of the Georgian Armed Forces are deployed in Afghanistan where in the province of Helmand the Georgian peacekeeping units engage in the ISAF mission as part of the US contingent. The Georgian military units have been performing full spectrum operations shoulder to shoulder with US Marines since 2010.

As for the Georgia Deployment Program for ISAF, within the framework of this programme, Georgia has proven itself a strong partner. In August 2011, Georgia was the second-largest non-NATO troop contributor to NATO’s International Security Assistance Force (ISAF) in Afghanistan, and since March 2010, Georgia has provided a battalion (approximately 750 soldiers) to participate in ISAF operations, fighting without national caveats alongside US Marines in Helmand Province. “In October 2011, Georgia announced it would send an additional battalion, for a total of two battalions in combat, to Afghanistan. Upon deployment of this second battalion, in October 2012 Georgia became the largest non-NATO contributor of troops to ISAF operations. The two Georgian Battalions serve in Helmand province and fall under a Marine Regimental Combat Team. Georgian deployments to Afghanistan are supported by the Marine Forces Europe’s Georgia Deployment Program for ISAF, a programme designed to assist the Georgians in training for this very challenging mission. The Marines have a special relationship with Georgia and are proud to serve with them. “Additionally, we assist Georgia with their professional military education to help them

grow quality future leaders as well as assisting them with continued military reforms along the lines of US/NATO doctrine. Georgians also participate in several US exercises every year including two that occur in Georgia: Agile Spirit and Shared Horizons,” she added. This time the task of the Georgian military servicemen deployed in Afghanistan is to combat terrorism, conduct patrolling and setting up of mobile control posts in the operational zone of the province. Among NATO non-member states Georgia is the largest per capita troop contributor to the NATO mission. Initially, a Reinforced Infantry Platoon (up to 50 military servants) from Georgia was deployed in the ISAF peacekeeping mission under German subordination in 2004. Q. The new Minister of Foreign Affairs, Maia Panjikidze told The FINANCIAL that Georgia may leave the Afghan mission. How would you evaluate this decision? A. Georgia is an important partner to the US, especially in Afghanistan. Certainly decreasing forces in Afghanistan will be a national political decision. It makes sense that Georgia would reduce their footprint in Afghanistan eventually as the troop contributions to ISAF reduce in general.

Q. When the battalions return from missions, they exchange their experience with new battalions. What kind of experience do our military obtain in Afghanistan? A. Georgia has demonstrated through their ISAF deployments their capability to conduct stability operations. For the ISAF deployments, the Georgian battalions go through six months of very demanding and focused training to prepare. US senior leadership has praised Georgia on the performance of Georgian units in Afghanistan on many occasions. *** Lieutenant Colonel Reneé Underwood has been in the military for nineteen years. She was recruited to go to West Point to throw the discus. “At the time I would have never imagined that I would serve in the military, but it has been a great career for me,” Underwood said. “I arrived in Georgia in July of this year. I had been to Georgia before on a short visit and requested this assignment. I consider myself lucky to be here. I love my job. I have great partners at the Ministry of Defence and Georgian Armed Forces. I really enjoy living and travelling in Georgia as well. I have been to Kazbegi, Shatili and Sighnagi. I look forward to getting out and seeing more of the country,” she added.

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UGT Holding Expecting Moderate Growth in 2012 The FINANCIAL By Madona Gasanova

GT Holding, leading systems integrator and provider of solutions in the field of information and communication technology, expects to have growth of 15-20% by the end of 2012. The company which started operations in Georgia in 1997 has its US based head office today in Dallas, Texas and plans to open new branches in Florida and Washington in near future.

“2012 has been successful for UGT Holding so far. Georgia is continuing its economic growth in spite of the economic crisis taking place on an international level, including in Europe and America,” George Chirakadze, President of UGT Holding, told The FINANCIAL. “The IT sector is very specific. In general demand for IT is increasing all over the world, and consequently, an increase has been observed in Georgia as well. UGT Holding is much diversified. We serve various sectors incorporating large companies, small and medium-sized businesses and consumer. We hope that this growth will continue in the fourth quarter. The recession does affect the IT sector but this field manages to recover soon. In general IT companies in general are first to overcome crises. The demand for technologies is due to companies’ decisions to increase efficiency and reduce expenditure. Of course domestic political events such as the election period do generally affect the economy. Nevertheless we believe that this period is over in Georgia and therefore the fourth quarter and the year as a whole will be successful. Q. UGT started operating on the Georgian market in 1997. Tell us in brief please - what kinds of steps have been accomplished for your customers? A. When we started operating in Georgia in 1997 many people did not even know what a computer looked like. Demand for IT from companies was very low. Ten years ago many people did not know how credit cards or ATMs worked, whereas today the vast majority of the population uses electronic services which are based on the work of Information Technology. Currently IT is one of the most important and competitive elements for the state, for businesses and consumers. This is due to the fact that large companies such as banks, telephone companies and the public sector invested considerable amounts of money and effort in technologies. This has really enabled the prompt development of information technologies. In terms of the developmental level of IPTV Georgia exceed the United States and many other developed countries. IPTV totally stands behind information technologies: databases, servers etc. The implementation of IPTV moved TV in Georgia forward. IT has become a tool for the competitiveness of many businesses and companies in Georgia. No one could have imagined that cable communication companies Silknet and Caucasus Online would become associated with television. These companies that were once associated only with internet providing and telecommunication suddenly found themselves large players in the TV industry. The number of IPTV users in Georgia today is growing. The key issue is that the

George Chirakadze, President of UGT Holding

service offered by the above-mentioned companies is totally based on information technologies. Any service delivered by banking, communication or any other industry is entirely backed by technologies. Significant changes have occurred in the Georgian technology industry during the last 10-15 years. As we are a small country, it is much easier to do many things more quickly. The IT industry has been developing in Georgia and at present is much more developed than it was just a few years ago. Q. UGT made a significant contribution to the technological development of Georgian companies. What kind of technological changes should be expected in the coming years? In particular, what will happen in this field and how will these changes affect business in the country? A. Future progress in our industry depends on the country’s economic development. Information Technology is based on economic development. Everything depends on the global situation as well. The economic growth of Georgia is closely linked with the world economy. European and American recessions do matter to us. Unfortunately we are not yet seeing any signs of recovery from this crisis in the world. Nevertheless, we have managed to avoid the worst conditions. The IT industry is developing faster than the country’s economy. Further development of the state sector, commercial and large enterprises that will stimulate economic activity, will influence our motion forward. IT is the basis of everything. The prospect of this industry’s development in Georgia is huge. IT allows both businesses and consumers to get competitive advantages. Today we are able to pay utility bills from home, do not have to spend hours waiting to watch a specific news story on the TV. The saving of time and comfort that has been brought by modern technologies is a great relief. All the advantages of modern services are brought to us by IT. If people do not wish a return to the Stone Age, then IT will continue to develop very rapidly. IT enables each of us to be more productive, competitive, and receive such services that were previously considered inconceiv-

able. We are experiencing a totally A. Virtualization is one of the hotdifferent way of life. We are facing test topics in the IT world because of an IT revolution which will enable the potential for serious economic us to have access to services and re- benefits. Virtualization enables mulsources that seemed impossible 10- tiple operating systems to run on a 15 years ago. Our offers to our cus- single physical machine as virtual tomers are based on their demand. machines. With server virtualizaDemand develops differently in dif- tion, consumers can consolidate ferent fields. It is good that demand workloads of underutilized server for information technologies has machines onto a smaller number of been demonstrated by government fully utilized machines. Mobile deorganizations. We hope that the vices, services and mobility in genernewly elected al is the future government for our induswill continue try. The techThe 2008 Russia-Georgia war recognizing nical structure made that clear, that Cyber secuthe importance of personal of IT sector. computers rity is very important issue. The Q. What is attacks carried out in the banking has remained unchanged the situation sector and many state structures meanwhile cell in terms of were an important tool used by phones, tablets cyber secuand TV have rity in GeorRussia during the war. been promotgian compaed with their nies? Have revolutionary you faced corporate, cyber espionage in developments. We are witnessing serious innovation, which has been Georgia? A. The 2008 Russia-Georgia war introduced in for consumer, corpomade that clear, that Cyber security rate and government sectors in reis very important issue. The attacks cent years. Services which are designed for carried out in the banking sector and many state structures were an im- consumers provide a competitive portant tool used by Russia during edge for companies. Today any the war. In general the whole world bank that offers online transactions is very vulnerable to cyber-attacks. charges its consumers 50 tetri to 1 Billions of dollars are spent world- lari. That extra cost however greatly wide on cyber security. Georgia is no saves time and brings many advanexception. Cyber security is a very tages. Any company that continues important area and our company to improve service will increase its actively participates in that. Cyber advantages. Electronic systems are security is largely dependent on changing our way of thinking and government agencies’ and the com- nothing can replace them. The main mercial sector’s desires to spend on key for a success is finding services it. Georgia is currently not succeed- that are useful for consumers for ing in cyber security, despite the fact which they will pay for it. Only those that many private or public com- companies that understand market panies pay huge interest in it. The needs, customer demands and see reason for it is that cyber security business opportunity will succeed. requires huge investments, qualified Q. Which technological inspecialists and even then you are not novation can you offer the new a hundred percent sure. After 2008 government? Georgian organizations increased A. UGT Holding can offer varitheir investments in cyber security, ous services to the new government. but there is no uniform policy. The First of all we will try to see the new importance of cyber security de- government’s priorities, to see in pends on a company’s and public’s which direction they will decide to attachment to electronic services. work. Their priorities will directly Georgian banks spend millions of influence our decision to make new dollars on cyber defense. proposals and offers. There are Q. What is the last word in many things to be done in Georgia. technology today? Which tech- The more you do the more you need nological products determine - this is the principle of IT. The situation is the same in consumer service. a business’s success?

The more services customers receive the larger the area of opportunities. We are ready to cooperate with them and provide them with the services they choose. Q. UGT is operating in the USA. How would you assess your work in the States and how would you compare business operations in the United States to those in Georgia? A. Our company has been success in the USA as a startup. America is a very large market. We consider our operations there in the longterm because the opportunities are abnormally large. A deficit of time for concentration is the main obstacle for our work in the USA. We are quite satisfied with the results of business development there. There is a big difference between Georgian and American consumer levels. Doing business in America is very specific. In many cases, doing business in America is more difficult than in Georgia. Some things are easier there. For example, credit terms - financial resources are much cheaper in US than in Georgia. Meanwhile in a bureaucratic way many things are much more difficult in the USA than in Georgia. Q. How will US-Georgian business cooperation develop in the future? What are your expectations and the attitude of Americans towards Georgia? A. The investment environment is bilateral. The main issue for investors is finding the right business opportunities, the right projects in the country that will bring benefits. I am optimistic that the recent political changes in Georgia we will manage to attract new investors and partners, and move the country forwards. We should keep in mind that America is far away, it is too big and finding partners will be difficult for Georgia. This is not related to the advantages or disadvantages of Georgia. Finding American investors is not easy. Everything depends on our entrepreneurs and businessmen. They have to find the right partners, do proper marketing, create a successful case and convince them to make investments, here in Georgia. Many do not realize that if Americans can earn the same amount in their own country they will not invest in Georgia. The only reason why they do it is for the diversification of business or higher ROI. We must remember that we are not the only ones; we are one from around 140 countries in the world. Q. What will the main challenge be for the Georgian economy and your company in 2013? A. We frequently hear that access to cheap credit resources is important for the country. We cannot blame the banks for that because financial resources are expensive for Georgian banks due to the global economic problems. Expensive credit is consequently hampering business development. Handling such high interest rates would be really positive sign. Political stability is a significant factor. We have successfully carried out elections without any conflict or mass protests and that was a very good message to be delivered to the international world. After the past 15-20 years Georgia has finally, lawfully changed government. The third main factor is moving the country in the right direction. I cannot see any left-wing power in the current government so I am optimistic that Georgia will maintain a course towards the west. The fact that the current PM has a business background is a positive sign. It means that he does understand how to develop business and better business environment the country. The European crisis will most probably have its impact on Georgia. If the recession escalates it will firstly influence the banking sector and the result of that will be more expensive credit resources.

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Frequent Changes to Tax Code Concern for Foreign Businesses The FINANCIAL By Nana Mghebrishvili

eorgian revenue administration in both the tax and customs spheres is now very modern with a strong client service approach, ample infrastructure, innovative thinking, effective use of technology and good IT infrastructure, and a young, motivated and focused staff, claims Deloitte. “The only backlog is that there is a practice of making frequent changes to the Tax Code and tax regulations, sometimes several times a year. While the main intention of such changes is to clarify the law, this may be difficult for taxpayers to understand their obligations,” John Robinson, Audit partner at Deloitte CIS told The FINANCIAL in an exclusive interview. Mr. Robinson, who is the resident Partner in Georgia, supported by a local Tax Director, says that corruption has been eliminated and the country has made great progress in tax administration. Lately a strong emphasis has been put on the development of e-services. “Now the relations of a taxpayer and tax authority are mainly ebased, through an electronic portal. This has resulted in a very high level of electronic filing and reduced taxpayer compliance costs as well as administration costs for the Revenue Service of the Ministry of Finance of Georgia. Many services at the Revenue Service are free. A number of services have become fee-based, often with the fees related to speed of service or personalized assistance,” said Robinson. Deloitte opened its office in Georgia in 2001. The Georgian practice is part of a wider CIS practice. Across the whole region the firm has 98 partners and employs approximately 2,500, and of those around 70 are resident in Georgia. John Robinson is originally from the UK, but has spent much of his professional life after qualifying as an accountant outside of the UK. He initially spent some time in the Middle East, before spending approximately sixteen years in Central Europe mainly working in Poland, also spending time working in most of the Central European countries. Robinson spent two years in the US and most recently spent almost two years in Nigeria. “I have only recently arrived in Georgia, and after just a few months have started to get a feel for the people, place and the business environment and its challenges,” he continued. “Compared to other places that I have worked in, audit requirements in Georgia are a little different, as it is primarily only required for the banks and public interest entities and for those entities that require audit as a result of requirements imposed on them by providers of loans and other related financing arrangements. The market therefore is quite small with many companies, even some large ones, not in need of these services. Whilst the services of the auditors are appreciated by the clients we have, as the regulations for audit do not touch many smaller and medium sized enterprises the understanding of what an audit actually is, and the added benefits that can be derived from this service are not always well understood in the marketplace.”

John Robinson, Audit partner at Deloitte CIS

Q. Please could you name the and medium-sized hydroelectric biggest sectors and companies power market. which you serve? Q. In your opinion what are A. As you would imagine, because companies’ expectations of of the fact that banks and public in- their auditors? terest entities (PIEs) are the ones A. Many times the companies are that actually require audits, these looking to get efficient audits and to make up a reasonable proportion of meet the deadlines set by the varithe work we do in audit. We do also ous stakeholders of the businesses. have significant clients in the retail, The added benefit of having a fresh real estate and manufacturing sec- pair of eyes look at certain aspects tors. Within the tax department we to the business though is invaluable. have an impressive list of clients in Whilst there is no doubt a benefit all sectors providing them with a full to the audit process, it does inevirange of taxation services. There is tably lead to some disruption. Loan increasing appetite though for gistically just having space for our additional consulting projects in teams can be challenging, but more the market which importantly the we are looking at client’s staff still carefully in colhave their daylaboration with to-day work to our other CIS complete as well “Integrity and an colleagues. At the as to answering overall desire to moment we use our enquiries. combined CIS “do the right thing” We need to be reand Georgian spectful of this in teams in order goes a long way in the way in which to bring the best approach the business as well as we of Deloitte to our work and to plan clients. the application of as much as posWe have some sible to minimize common sense.” senior members any disruption so of staff from our that this indeed US firm resident can be as efficient in Georgia workand effective as ing on two large possible. USAID projects with a number of Q. Each firm has its own local experts. The two projects we standards and guidelines that have are a USAID four-year Eco- a client should meet. What cirnomic Prosperity Initiative (EPI) cumstances should clients satwhich is designed to improve enter- isfy to be audited by Deloitte? prise, industry, and country-level A. Deloitte as with all the other competitiveness in Georgia. The Big Four firms has a very robust project serves as a catalyst to spur system of client and engagement investments, increase employment, acceptance. Quite a lot of time and productivity and access to local effort goes into background checks, finance in agriculture and high- conflict of interest checks and other export manufacturing and service such matters. We strive to work with sectors. The second is a three year clients that share our own high stanUSAID Hydropower Investment dards and values. This is not necPromotion Project (HIPP) that sup- essarily only size related, however ports market-based initiatives to from a practical perspective as our stimulate and secure international cost structures are higher because of investments into Georgia’s small the investments that we make in how

we operate as a business and the investment we make in our people and tools we are often more expensive. We do not apologize for this however as we want to be measured by value added rather than simply the cost of the services. Q. Due to the high expenses many SMEs cannot afford the cost of being audited. Do you serve SMEs in Georgia and what are your offers for them? In general do you think that audit is necessary for SMEs? A. Many of the SME companies do not require audits by law and therefore the cost does not really factor unless they have specific circumstances that require them to be audited. My own opinion however is that the market would benefit from more entities being subjected to audit procedures. The quality of financial information will be enhanced and the decision-making will improve as the underlying data will often be more reliable. It also gives these businesses an insight from a group of professionals that see in the course of any time period a lot of different issues. Some of these are recurring issues and some are specific. As we deal with such issues on a daily basis we can more easily bring cost-effective solutions to clients. Q. You are auditing international firms in Georgia, what are the major concerns and obstacles for foreign businesses in Georgia? A. The foreign businesses we deal with are generally less concerned with how things work in Georgia compared to other more challenging places. Bureaucracy is not something we hear as a major concern of the international clients that we have. Q. Please tell us the advantages of having an internal audit department within a company. In your opinion is the service becoming popular in Georgian companies?

A. Internal audit is a valuable function provided that its mandate is clear and its reporting lines are well established. The establishment of an internal audit plan for any given period needs to be clear as this is not the same scope as for external audit. There really isn’t a one-sizefits-all model. As clients get more sophisticated these will certainly become more and more visible in companies, however there is some way to go before I would say that it is “becoming popular” in Georgian companies. Q. Please name the most important recent changes to the tax system of Georgia? A. Attractiveness of the Georgian tax system has been boosted by the following tax administration reform initiatives: • Rationalizing the number of taxes; • Restructuring the headquarters and the operational units of the Georgian Revenue Service; • Strengthening client orientation with modernized public offices and new services such as the Personal Tax Advisor service and e-services; • Compliance initiatives such as a new Alternative Audit option for taxpayers and requiring cash-based businesses to use modern cash registers with real time reporting to the Revenue Service; • A new mediation process that aims to avoid tax audit disputes and reduce the likelihood that these will escalate to formal disputes. Q. How does the firm support the development of its employees’ careers? A. We are ultimately a “people business” - our people deal with our clients’ people. Our people are our main asset as a professional services firm. We have an enormous amount of interest shown in our firm both globally and locally. And we are in a position where we can be selective and bring people in who are highquality, both in terms of what they have achieved academically and intellectually. All client-facing professionals are required to study for internationally and locally recognized qualifications depending upon their field of expertise. This is supported by the firm in terms of time off for study as well as of course financial support. Our people are updated on new and upcoming changes through ongoing training programmes. For our people on the job training, coaching by more senior employees and feedback from the engagement work are as important as any formal training programmes and we put significant efforts into these in order to develop the best professional staff in the market. Q. What is the main challenge for the firm at the moment? A. One is that we need to develop our own talent pool as there is not a large labour market with the right skills from which we can hire. Therefore we need to hire people and then train and give them the experiences to develop into competent professionals which takes time and resources. Another challenge would be the tremendous fee pressure in the marketplace for professional services. There is a continuing downward trend that is, to a great extent, unsustainable in a developing market. The cost of living and general cost of labour cannot increase with the cost of professional services going down. This coupled with the fact that we need to invest more in talent development just adds to the complication. Having said that though we work closely with our clients to have value driven rather than cost driven discussions and we are confident that in time we will reach a situation where fair fees for outstanding service are the norm.

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“Today’s Young Generation is More Educated,” President of Caucasus University The FINANCIAL By Nana Mghebrishvili

lmost 100 percent of Caucasus University’s Master’s graduates are employed, while up to 90 percent of Bachelor’s graduates are in work as well. “Demand for our graduates is very high,” Kakha Shengelia, President of Caucasus University, told The FINANCIAL. “It is constantly being said that the unemployment rate in Georgia is very high, but in reality any good specialist is needed and in demand. I know of many businesses that cannot find properly qualified staff to work for them.”

Caucasus University has up to 300 graduates of both masters and bachelors degrees a year. “All graduates who study well are either employed or have their own businesses. There are many examples of our graduates working abroad. They work in many different cities including Baku, Yerevan, Moscow, New York, London, Prague, Tokyo, even Buenos Aires. We are spreading Georgia’s fame throughout the whole world.” Q. Who are the main employers of your graduates? A. They are employed in all sectors. The biggest employers are banks and audit firms as well as big companies like Pepsi, Coca-Cola and Metalurgi Rustavi. Q. Caucasus University was founded with the support of the USA. What are the possibilities of studying in the US for your students? A. Lots of our students study in the USA. 20-30 students go there each semester. So we give them double-diplomas. We have the first 4 year American Ph.D programme in Georgia which was financed by USAID and is very successful. We offer the most double-diplomas in the Caucasus and many international programmes. Our students currently study in the USA, UK, France, Japan, South Korea, Argentina, Canada etc. We want to make learning abroad one of the necessary components for graduating from Caucasus University. Currently about 100 of our students are studying abroad. We choose them by ratings. The university finances a lot of them but we have many cases where we just help a student to study abroad while the student pays for themselves.

Kakha Shengelia, President of Caucasus University

Q. How does USAID support the University? A. USAID helps us to create good programmes. This concerns Bachelor, Master as well Ph.D programmes. At the same time, they have supported us in several projects including a lecturers exchange programme and trainings for businesswomen. If not for the support of the USA and this fund we would not have been created at all. Q. Caucasus University was founded in 1998. What has changed in the system since then? A. The systems of then and now are totally different. The way that we have developed since 2003, when Saakashvili’s government came into power, has really been a time of building an entirely new education system. There was great corruption

in the system at the time. We could not even run examinations properly. Corruption was later abolished however, and we along with the whole system made significant progress. As for the University, Caucasus Business School was founded by the American State Department and USAID. This was an entirely American project. Lots of people still know Caucasus University as Caucasus Business School. There are several good universities but the first American school in the Caucasus still has the biggest fame in the region. I hope that the new government will pay more attention to education and that the system will grow as a result. This automatically means our growth. We are currently one of the most competitive universities in Eastern Europe and we have possibilities to develop even further.

Q. Is the volume of students also different now to how it was back then? A. The country’s youth is completely different. The general level of knowledge of students nowadays compared to in that period is incomparable. The young generation today has a deal more knowledge. I’m glad that such a generation is growing and that they will soon be the ones to rule the country. Q. You said that the education system is developing greatly. But what western standards must still be adopted? A. What we are missing is discipline. Curriculums have to improve significantly. Lecturers are of quite a low level as well; the system really lacks good lecturers. There are only a few good teachers of each sub-

ject. Part of the young generation, who have been educated abroad or worked there, are returning to Georgia to teach here, but it is not enough. As for us, from the beginning we had our curriculums taken from American universities and have continued to do so up till now. We have been following the Western standard guidelines for all these years. Q. Which are the most and least demanded faculties at the moment? A. Our school of Business has been maintaining its huge popularity as well as Law. Tourism and IT are gaining more and more popularity with time. Engineering is quite in demand also. Humanitarian faculties are the least popular. Fortunately, psychology is still in slight demand unlike philology or history. Of course, this is not good. But the market rules the process. I still think that the state has to support the situation; a little interference is necessary. Q. How do you see the role of universities in this process? A. Private universities can’t interfere in this. It is the responsibility of the state and therefore state universities. My responsibility is to offer good programmes in the directions which are in demand and to produce qualified professionals; the specific faculties are not most important to us. Q. How would you evaluate the business environment in the country? A. On the whole the situation is good. But I hope that the new government will change a lot and improve the general situation significantly. It is difficult to make a prognosis at a time when there are big changes happening in the government. Business must become totally independent from the state. The only communication between business and state must be in the paying of taxes. Our hope for the future is that it will be much better than the current situation. Q. What are the main challenges for foreign and especially American businesses in Georgia? A. Their main interest when starting a business in Georgia is how safe their capital will be here. So the safety of their capital is the main challenge for them. Investors are also interested in low taxes. high living standards additionally support investors entering the country. A lack of any of these factors may become a challenge for foreign businesses. The entrance of more American businesses is very positive for the country. What it means is that American money will be in the country and as a result the USA will be more interested in the safety and prosperity of Georgia. Q. What is your advice for today’s young generation? How can they gain success in business? A. I advise everyone to be hardworking. Only in that way will they have the possibility to grow in to good professionals. If they do work hard, then I’m sure that they will gain great success. Hard work is the only way for any student to become a good employee or run their own business.

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Radisson Batumi Expecting High Occupancy over New Year Celebrations The FINANCIAL By Tako Khelaia

adisson Blu Batumi Hotel expects high occupancy during the New Year celebrations according to Mr. Torbjorn Bodin, General Manager of the Hotel. As Mr. Bodin says, summer is the high season in Batumi and this is reflected in the increased number of hotel bookings during this period. “We were running at almost full hotel capacity from midJune to mid-September with a lot of people in the Hotel, around the pools and in the restaurants,” he added. Featuring 168 rooms the property is located at the centre of the city alongside the famous Batumi Boulevard. It is conveniently located in the main business district of Batumi. The Radisson Blu Hotel, Batumi, is designed for comfort. The bedrooms

Torbjorn Bodin, General Manager of the Radisson Blu Batumi Hotel

feature trendy and modern interior design and come equipped with complimentary high-speed Wi-Fi. The majority of the rooms offer breath-

taking views over the Black Sea. Radisson Blu Hotel was officially opened on 10 August, 2011. During this period the Hotel gained popu-

larity and success with its stunning combination of luxury and intuitive service with panoramic beauty and high class comfort. “We opened the Hotel in late 2011 and we are still in the ramp-up stage with the hotel operations. A year to date the Hotel is performing as planned, where of course the summer season is our high performance period,” Mr. Bodin said. “Business travellers are our business base in the off season. For winter our focus will be to attract conference and meeting groups. Since Batumi is very nice during the winter as well, we will also get people travelling for leisure,” Mr. Bodin said. There are many hotels in Batumi and more to come. If all hotels should be able to give a return on investment we need to create a more attractive atmosphere around Batumi. The private sector needs to join forces with the Government and the Department of Tourism of Adjara to attract more visitors,” Mr. Bodin stated. “Since the opening our hotel has followed the expected performance. If we consider the individual bookings, since the booking pattern varies between groups and individuals, most of our reservations come online, mainly through our website: radissonblu.com/hotel-Batumi,” Mr. Bodin said. “We are expecting a moderate increase in occupancy for next year,” he added. ”The price of a hotel room varies in all hotels on an almost daily basis. You cannot save an unsold hotel room and sell it the next day. This is why the rates are different during the high season and low season. For

Radisson Blu Batumi the rates in the low season are around USD 150 and in the high season around USD 250,” Mr. Bodin said. “Our hotel is a well-equipped, full service hotel. Besides our 168 stunningly designed modern hotel rooms, we are offering state-of-theart meeting and events facilities, an outstanding Anne Semonin Spa with outdoor and indoor swimming pools, four restaurants and bars, including the acclaimed Clouds Bar and Restaurant with a view over the city and the Black Sea. In the building there is also Casino Iveria,” Mr. Bodin said. “This year, besides guests living in Georgia, our visitors mainly came from Turkey, Ukraine, Russia, Azerbaijan, Armenia and different parts of Europe. Since the Hotel is almost new, we are not looking for major changes at the Hotel. We have just launched our new Experience Meetings concept where we offer a new style of personalized meetings,” Mr. Bodin stated. “Our hotel is quite popular in terms of arranging business meetings and forums. Many international meetings are held in Batumi and we have had a large number of participants staying in our hotel,” Mr. Bodin said. Radisson Blu Batumi hotel is starting to prepare for the New Year and Christmas celebrations. According to Mr. Bodin they are working on different concepts for the New Year festivities. “I can already say that we will have a New Year’s party with dinner and dancing to live music in a warm and elegant environment,” he said.

Radisson Blu Iveria Hotel has had the Best Occupancy Rate in 2012 The FINANCIAL

By Tako Khelaia

he year 2012 has been the best year so far in terms of occupancy according to Michael Jacobi, General Manager of Radisson Blu Iveria Hotel. The Hotel has been in operation since September 2009 and its business levels have grown steadily since the opening according to Mr. Jacobi. “A lot of business over the summer was related to the parliamentary elections on 1 October,” said Mr. Jacobi. “October was a little bit quieter than initially forecasted which was linked to the election outcome. Several projects were on hold during the formation of the new government which affected the numbers of visitors coming to Tbilisi. We are optimistic about the rest of the year,” Jacobi said. “We are predominantly a business hotel and mainly host visiting guests

from outside of Georgia. Our key feeder markets remain the CIS and our neighbouring countries, however we also see increasing demand from areas in Western Europe, the United States as well as Asia,” Jacobi said. Radisson Blu Iveria Hotel often hosts different celebrities from all around the world. Among the celebrity guests of Radisson Blu Iveria there have been Roberto Cavalli, Sharon Stone, Andy Garcia and many more. “All of our guests are important to us and the real celebrities for us are the guests that are loyal and come back to stay with us over and over again. These guests get the real VIP treatment they deserve. We are proud to have built up a large number of repeat visitors already and this number is growing steadily,” Jacobi said. According to Mr. Jacobi, as part of the Hotel’s Responsible Business Program they launched the Think Planet initiative in May of this year. This initiative aims to reduce 25% of electricity consumption by 2015 and 5% by the end of this year. “We have a range of activities linked to energy saving and I am happy to report that we are exceeding the saving targets quite substantially,” he added. “We have plenty of additional facilities at the Hotel. Our spa is a real wow factor. It is located on the top floors of the hotel with amazing views over Tbilisi. It is spread over 1,600 sq.m and its facilities include several treatment rooms, an infinity pool overlooking the city, sauna

Michael Jacobi, General Manager of Radisson Blu Iveria Hotel

and steam rooms as well as a fantastic gym. The spa is one of the most popular facilities with our visitors,” Jacobi said. Mr. Jacobi says that the Hotel welcomes competition as competition keeps them alert and on their toes. “The best way to beat the competition is to offer better services, better facilities, friendlier staff and simply a better value offering. We have some very good hotels here in Tbilisi so we have to spend a lot of time and effort to stay ahead,” Jacobi said. New Year is coming soon and as usual Radisson Blu Iveria Hotel will offer its guest different events and celebrations specially for this date. “As in the last few years we will once again host a great party over New Year’s Eve, including an amazing live band and delicious food and beverages in a relaxed and fun atmosphere. I recommend people to call our hotel as soon as possible to make an early booking as the demand is already very high. We will also have some activity in our fantastic Filini Restaurant and there will be plenty of action over the Christmas period as well,” Jacobi said. As Mr. Jacobi says, the Hotel is starting their super Sunday Brunch again, which will be the biggest and most generous brunch buffet that Tbilisi has seen so far. “Brunch is starting from 4 November, timings are from 12.30pm to 3.30pm and include an all-you-caneat buffet with live cooking stations, a designated kids’ corner as well as unlimited soft drinks, selected wine and beer,” Mr. Jacobi said.

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U.S. Business In Georgia

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5 November, 2012 | finchannel.com

AmCham to Focus on Agri Business Continued from p. 2

which makes it easier for western companies to find and train employees; and of huge importance is Georgia’s geographical location along the old Silk Road and its infrastructure development over the last few years. We have two ports, a rail system, international airports and a continuously improving set of roads and highways connecting them. Q. What has changed in Georgia since AmCham was established and what is the role of the Chamber in these processes? A. You are asking about a time spanning the days when we didn’t have regular electricity to run the computers in our offices through to today - a time when, by most accounts we live in a modern, European country. The short answer is that the changes have been unprecedented in scope and speed. The role of AmCham has been steadfast in these fourteen years of our existence although we do employ various methods of achieving our goals based on the various political and economic environments we have worked through. We always work for the overall betterment of the business climate, to promote US and Foreign Direct Investment and protect the economic interests of our members. Specifically, our biggest successes have been major revisions of the

28 new companies joined the American Chamber of Commerce in Georgia this year, which consisted of 165 companies in total. Since its inception, AmCham has increased its membership year on year. In just the last few months, AmCham has welcomed Frontera Resources, Dechert Georgia, Grant Thornton, The Hangar Bar, Statoil, Perdue Farms., Dexus, Hualing International Special Economic Zone, Nodia, Urumashvili & Partners and Policy and Management Consulting Group (PMCG). Tax and Customs codes. Insuring the Labour Code is a competitive one for bringing investment, numerous Trade and Investment Conferences and Delegations aimed at promoting Georgia as a place to invest and creating a strong platform for open dialogue between the public and private sectors.

Q. Which fields are the most attractive for US businesses currently? A. US investors are slightly more risk-averse than other foreign investors. That being said, we see lots of US management contracts and consultancy. We have the big five audit & accounting firms. We also have investors interested

The main challenge to the country and to our businesses was to get through the election process peacefully and democratically. I’m proud to say that, once again, Georgia exceeded the world’s expectations. I think that next year will present a similar challenge and I expect another peaceful process. in energy, technology and hospitality. Q. What should Americans that are thinking of investing in Georgia know in advance? A. Well, for those familiar with The Wizard of Oz book and movie, “you’re not in Kansas anymore!” They need to understand that this is a developing economy and a developing democracy. Obviously Georgia is an emerging market with all the opportunity and risks associated. As far as Georgia-specific issues are concerned, the pace at which legislation can change in Georgia has often been dizzying. You need an excellent and well-informed tax or legal advisor to keep you up to date. Due diligence is key.

Q. Which Georgian products could be made popular in the US and what do Georgian businesses lack when it comes to expanding to foreign markets? A. Wine, water and perhaps processed agricultural products could be popular in the US. As for the weak sides of Georgian business, when it comes to expanding to foreign markets I would sort out capital (financial) resources and experience in international marketing strategies. Q. How does the US benefit from investing in Georgia? A. Speaking of the US as a country, meaning a government, I think it is a strategically important geo-political

decision and I strongly urge the US to continue on its course of support to Georgia. MCC, OPIC and even EBRD in which the US has a significant capital share, are examples of financial investment mechanisms the US Government has. Q. In your opinion, which American franchises might be successful in Georgia? Why are global brands like Starbucks, Burger King or others not expanding their markets to Georgia? A. I think that the number one impediment to those companies and others like them coming to Georgia is the small market size. Although, specifically for Starbucks and many others, the lack of protection of Intellectual Property Rights (brand protection) in Georgia is also strongly concerning. Q. Do you take into consideration David Lee’s experience as the former President of AmCham? And how does he help you in running the Chamber? A. I served as David’s Vice President for the four years that he was President and I certainly learned a lot from watching the way he led the AmCham and the experiences we went through. He did a great job. He now serves in an advisory capacity, as an Emeritus, which gives the Board and me the ability to benefit from his experience when needed.

Bidzina, Mshia! Frank Klobucar GORBI

ost understand that the quality of life for the poorest Georgians is quite bad. It would be reasonable, though, to think that the situation has been improving with the seemingly steady growth in GDP, right? Unfortunately, this is quite untrue. The poor of Georgia are among the hungriest in the world, at least by self-assessment. Georgian Opinion Research business International, with partners around the globe, carried out the most recent Global Barometer survey for WIN-Gallup International. We asked respondents whether they had problems feeding themselves at any point over the last 12 months. Worldwide, 12% of respondents said they often had too little to eat (3%) or that it was a problem sometimes (9%). Georgians fared worse than that with a 62% “freedom from hunger,” a rate higher than only five other countries. These numbers may seem radical, but we can find corroborating evidence in many surveys. GORBI has many times asked the question, “Which of the following best describes your family’s finan-

cial situation?” In 2005, over half of respondents said they had enough money for food, but not for clothing; another 20% said they hadn’t enough money even for food. These numbers have not improved, either. In fact, 43% of respondents said they didn’t have enough money for clothing in 2012, and 37% had times where they could not afford enough food.

Wealth The global distribution of this hunger is somewhat surprising, and has far less to do with wealth than you might expect. Virtually all of some countries’ citizens feel they had enough to eat last year, such as Hong Kong (99%), Tunisia (99%), and Azerbaijan (96%). Other countries have much more trouble feeding their citizens, such as Cameroon (49%), Palestine (48%), and the terribly hungry South Sudan (20%). This “felt-hunger” rate seems to be completely unrelated to the strength of a country’s economy. The countries in this poll were categorized into high, middle, and low income countries (based on local purchasing power), and there was virtually no difference in the average felthunger by income strata. The

Hong Kong Tunisia Germany Netherlands Poland Global Average Georgia Nigeria South Africa Cameroon Palestinian territories South Sudan

Often

Sometimes

0% 0% 1% 1% 0% 3% 23% 23% 7% 20% 17% 17%

1% 1% 1% 2% 3% 9% 15% 24% 39% 31% 34% 63%

US, with a per capita GDP of $48,442, scored a 78% on the felt-hunger index. However, Vietnamese earning $3,435 a year on average, less than Georgians, had virtually no problems eating in the last 12 months (96%). The reason this is worth mentioning: this is one of a series of examples clearly showing that GDP growth does not solve socioeconomic problems like hunger and extreme poverty; the researchers who worked on this study suggest that felt-Hunger likely has social roots beyond poverty. Especially in countries like Georgia, different kinds of economic and social reform would be needed to properly address these issues. Massive amounts of foreign investment have flowed into

"Freedom from felt-Hunger" 99% 99% 97% 97% 97% 88% 62% 54% 54% 49% 48% 20%

the country, and the government has borrowed well over a billion dollars from the IMF to enact economic reform. Because of this, Georgia has enjoyed some very impressive GDP growth since the mid1990s, repeatedly posting double digit annual growth. This has not been a robust and inclusive growth, though, as income is distributed less equally in Georgia than in every western country, including the US. I would suggest the nearly exclusive investment on tourism and viticulture industries is a major factor in this asymmetric growth, especially when combined with cronyism at all levels of government. If the Georgian government is serious about solving

# of Countries

"Freedom from felt-Hunger"

87%

89%

88%

Low Income (<10,000 USD PPS) Middle Income (10,000 - 30,000 PPS) High Income (> 30,000 USD PPS)

the widespread hunger problems, it will steer foreign and domestic investments to areas which, while not providing big and immediate returns, provide a better foundation for work and security for the poorest and hungriest Georgians.

SelfAssessments Finally, it’s important to briefly discuss the fact that these numbers come from self-assessment; if we can attribute the persistence of hunger to culture, we could certainly attribute an inclination to over represent felt-hunger and poverty to culture. Perhaps Georgians aren’t actually so hungry, but rather they like to complain. Unfortunately for the hopeful, other statistics that don’t rely on selfassessment seem to confirm these numbers. The Food and Agriculture Organization (FAO), for ex-

ample, calculates world hunger by estimating the calorie intake of various members of the household and undernourishment in the population. The total number of hungry people by the FAO’s calculations is 925 million as of 2010, whereas this survey estimates 840 million suffer from felt-hunger. On a country level, the FAO does not place Georgia as far down on the list as our poll has, but it still declares that over one million Georgians suffer from undernourishment, around 25% of the population. Even with a disagreement on the extent of undernourishment, all agree: Georgia has far too many hungry citizens. This report is exclusively provided to The FINANCIAL. Crediting The FINANCIAL is obligatory. Visit GORBI website at gorbi.com

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U.S. Business In Georgia

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David Lee: Georgia is a “buy”

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“Since Georgia's independence more than 20 years ago, the United States has supported its democratic transition and Europe-Atlantic aspirations. At the outset of your tenure as Prime Minister, we recommit to our strong partnership and look forward to deepening our relationship in the years to come,” U.S. President Obama's Letter of Congratulation to PM Ivanishvili. October 29, 2012

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In Octtober 2012, the t Tbilisi price of khachaapuri added 3.3% compared to the prrevious montth, while pricces in Batum mi and Kutaissi increased b by 3.2% and 3.6%, respecctively. Telavvi saw the larrgest increasee (5.7%), as ccould be expected at this time of thee year. Calculated as a sim mple averagee of individuaal city indices, the national dex added allmost 4% com mpared to Seeptember 20 012, reachingg 3.3 GEL. Kh-Ind Whilee traditionallyy the main driver of Khacchapuri Indexx inflation at this time of the year is cheese, last month an addition nal element of drama waas supplied byy the post-ellection hike in the price o of wheat flou ur. In pest flour pro oduced from locally grown wheat add ded some 13% % (from 80 to o 90 Telavi, for example, the cheap i byy about 20% (from ( 40 to 4 48 GEL). On aaverage, the price tetri),, while a 50kgg bag of “Karrmen” flour increased of flou ur did not inccrease as mu uch: by 8% in n both Telavi and Kutaisi, and by 5% and 3% in Battumi and Tbilisi, respeectively.

Continued from p. 2

believe this is nonsense and is being used for political purposes. Georgia has an interest in doing business with both American and Russian companies. The United States is the largest economy in the world and I see no reason why the election of the new government would be an obstacle for further trade and a strengthening of ties. It is obvious that a normalizing of relations with Russia would have benefits for the economy and hence be good for American and any other foreign businesses in Georgia,” David Lee said. “As a US business, Magticom sees the peaceful transfer of power to the new administration as a wonderful achievement that reduces business risk considerably. We have no intention of delaying any of our planned investments in infrastructure and new products. I am delighted that we are now able to carry all the Georgian language TV channels on our MagtiSat service which will enable all Georgians, wherever they live, to receive high quality TV,” Lee added. “I am not a politician or a diplomat and do not care to speak of diplomatic relationships. However I lived for four years in Sakhalin and three years in Moscow. I believe that the vast majority of ordinary Russians think of Georgia and Georgians fondly and with kindness. They wish to import our products and holiday here as it was before. This is surely a foundation on which the new administration can build a united Georgia that is on friendly terms and trades with all its neighbors, especially with the EU and I hope one day again with Russia,” he added. “Georgia is now a democratic country and the world watched and took note. As the CoChair of the EUGBC DCFTA Committee, I met with EU representatives recently and it is clear that their perception of Georgia and the leadership has changed. Two months ago many people laughed at the prospects of Georgia joining the EU and NATO. No-one is laughing now. A peaceful transfer of power is the best thing that could have happened for business confidence and FDI. Georgia is a “Buy”.” “For a long time this has been a much greater factor than the state of the diplomatic relations with Russia. After the initial surprise, my colleagues in the United States and other western countries were delighted that the elections accurately reflected the will of the people to be truly democratic and progressive and they look forward to an improved investment climate.” Due to the uncertainty of the pre-election period and governmental changes in the country, it is possible that some investors lost confidence in doing business in Georgia or suspended business in the country, but David Lee thinks that the political situation is not an obstacle for investors in Georgia. “The ease of business tables did not reflect the critical lack of confidence in the judicial and tax processes that existed before the election. The successful and peaceful transfer of power sends a signal to the whole world that Georgia is open for business. Georgia is a “buy” and I expect many investors will return and new ones will arrive,” said Lee.

Prices in GEL

5 November, 2012, Georgia

Khachapuri Index is exclusively provided to The FINANCIAL by ISET

October 2012

KhachapuriIndex ECON NOMICS LESSSON OF THE WEEK. W CONSSUMER CONFFIDENCE BOO OSTED BY ELLECTIONS, IN N TBILISI

Our C Consumer Confidence Surrvey was con nducted in the third weekk of October, capturing th he effect of higheer bread pricees and electio ons. These two t events m may have worrked in the o opposite directions, partiaally canceelling out eacch other, yet the overall effect e is posittive, especially as far as eexpectations are concerned.

KHACHAPURI INDEX: CONSUMER EXPECTATIONS ARE UP, AND SO ARE PRICES, TOO! By Eric Livny and Lasha Labadze

n October 2012, the Tbilisi price of khachapuri added 3.3% compared to the previous month, while prices in Batumi and Kutaisi increased by 3.2% and 3.6%, respectively. Telavi saw the largest increase (5.7%), as could be expected at this time of the year. Calculated as a simple average of individual city indices, the national Kh-Index added almost 4% compared to September 2012, reaching 3.3 GEL. While traditionally the main driver of Khachapuri Index inflation at this time of the year is cheese, last month an additional element of drama was supplied by the post-election hike in the price of wheat flour. In Telavi, for example, the cheapest flour produced from locally grown wheat added some 13% (from 80 to 90 tetri), while a 50kg bag of “Karmen” flour increased by about 20% (from 40 to 48 GEL). On average, the price of flour did not increase as much: by 8% in both Telavi and Kutaisi, and by 5% and 3% in Batumi and Tbilisi, respectively.

ECONOMICS LESSON OF THE WEEK. CONSUMER CONFIDENCE BOOSTED BY ELECTIONS, IN TBILISI Our Consumer Confidence Survey was conducted in the third week of October, capturing the effect of higher bread prices and elections. These two events may have worked in the opposite directions, partially cancelling out each other, yet the overall effect is positive, especially as far as expectations are concerned. The sharp improvement of almost 8 percentage points in the Consumer “Expectations Index” is a sign that as a whole the Georgian public is welcoming the first orderly and peaceful democratic transition in Georgia’s modern history. The overall Consumer Confidence Index did not improve as much, climbing from -11.8% in September to -8% in October 2012. Still, this is the highest level reached by the index since its launch in May 2012. Consumers’ assessment of the current situation (measured by the “Present

tion should be sought in the medium term.

Co onsumeer Confid dence In ndex (CC CI) 0% 5.0

1.0%

0% 0.0

-2..4%

… AND DEPRESSED BY HIGHER PRICES IN REST OF GEORGIA

-5.5%

-6.1 1% -6.8% 0% -5.0 -7..7% % 2012.. Consumers’ ’ assessmentt of the curreent situation (measured by b the “Preseent Situation Index”) -8.0% -9.3% remaiined withoutt change (-17 7% compared d to -16.8% in n September r). However, expectations regarding -10 0.5% -10.00% 11.8% -12.0% % perso onal financial standing and the generaal economic ssituation imp proved quite significantlyy, crossing for the -13 3.0% -14. 9% first time into the positive terrritory (+1%, ccompared to o -6.8% in Sep ptember). -16.2% -16.8% -17.0% -15.0 0% 8.2% far from homoggeneous, it m may be-18.4% useful to see how people’s perrceptions of tthe recent Georggia being-18 changges in the eco onomic in po olitical realities vary acrosss different strata s of Georgia’s populaation. -20.0 0%

May y-12 Jul-12 g-12 pronouunced SSep-12 Oct-12 the (positivee) impact to As could have bee en expected,Jun-12 of eelectionsAug is more m in Tbilisi relative o the c wh hat we know w about Tbilissi. First, it hass (negaative) impact of higher bread prices. TThis is quite consistent Overall CC CI Present situaation index Expeectations in ndex predo ominately voted for the G Georgian Dreeam. Second, it is quite a bit wealthierr than the rest of Georgiaa, index co onsumer exp pectations rea sma butless positiv ve value ofation 1value .% and the result –a suffe spend ding lessThe on asof a sha are expectations of income e, and – asreaches a aches ering fro om food infla e hike The index ofeffood consumer aall small but positive of 1.% in thee flour and brread prices. The sharp improvement of alm most 8 percentage pointss in the Consu umer “Expecctations Index” is a sign th hat tionsthe about Qu uestions ut rgia’s whole Geeorgian public is welcomin ng the first o orderly and peaceful p dem mocratic trans sition abou in Geo as Quest aw past aand present: expectations: mode ern history. TThe overall Pre Co onsumer Con nfidence Indeex did not im mprove as mu uch, climbing g from -11.8% % in esent Q1.ember Ch hangetoin-8% 2. Change in in May Q2 Septe % in October his is the high its launch ation Still, th Situ2012. 2hest level reaached by thee index since

CCI - TTbilisi

financcial position (perso onal)

Q12. A Ability to save (perso onal)

Q8. Is now the timee for maajor purchaases (general))

-100%

Q3. Ch hange in financcial position (generral)

Q6 6. Inflation (geeneral)

7 3

Sep-12

Oct-1 12

Q1 11. Ability to ssave (peersonal) Q4 4. Change in fin nancial position (geeneral)

Q5. Inflation (generral)

Q9 9. Major purch hases (peersonal)

-50%

fin nancial position (peersonal)

Q10. Is now the time to save (generral)

50%

Expectaations

Q7 7. Unemploym ment (geeneral)

expandss in in all all direct tions TbilisiTbilisi CCICCIexpands directions

Situation Index”) remained without change (-17% compared to -16.8% in September). However, expectations regarding personal financial standing and the general economic situation improved quite significantly, crossing for the first time into the positive territory (+1%, compared to -6.8% in September). Georgia being far from homogeneous, it may be useful to see how people’s perceptions of the recent changes in the economic in political realities vary across different strata of Georgia’s population. As could have been expected, the (positive) impact of elections is more pronounced in Tbilisi relative to the (negative) impact of higher bread prices. This is quite consistent what we know about Tbilisi. First, it has predominately voted for the Georgian Dream. Second, it is quite a bit wealthier than the rest of Georgia, spending less on food as a share of income, and – as a result – suffering less from food inflation and the hike in the flour and bread prices. Tbilisi now exceeds rest-ofGeorgia on almost all Consumer

Confidence parameters, but the differences are most pronounced as far as the likelihood of making major purchases and ability to save are concerned. Tbilisi residents are considerably more confident that now is the time to save (question 10) and make major purchases (question 8). They are also more certain about their ability to save (question 11) and make such purchases in the future (question 9). It is worth noting, however, that ability to save (questions 11 and 12) remains a major common weakness for all Georgians, regardless of age, gender, type of settlement and education. This is evident from our survey and the macroeconomic data available from the National Bank of Georgia. As a country, Georgia is saving much less than most other nations in the region or countries that are comparable to Georgia in terms of economic development. A partial solution – at the individual level – is being currently provided by subsistence farming and the steady inflow of remittances but a more “civilized” policy solu-

1 12 10 1

60% 40% 20% 0% -20% -40% -60% -80%

The ISET Policy Institute (ISETPI, www.iset-pi.ge) is an independent think-tank associated with the International School of Economics at TSU (ISET). ISET-PI designed a simple and robust way of tracking inflation and the differences in the cost of living across Georgia’s major cities. Unlike traditional “consumer baskets” used for monitoring price inflation, our “basket” includes only those ingredients that are needed to cook one Imeretian khachapuri (cheese, butter, flour, yeast, eggs, and milk) and energy inputs (gas and electricity). We conduct a monthly survey of the major markets in Tbilisi, Kutaisi, Batumi and Telavi to measure the differences in the cost of living across Georgia and to track the monthly fluctuations in the prices of all relevant ingredients.

Present Situation

9 11

50% 5

2 9

50% -5

10 0

-10 00%

Tbilissi

THE ISET KHACHAPURI INDEX

CCI - R Rest of G Georgiaa

Tbilisii vs. Rest of Georgia 2 Oct-2012

Present Situation

Most interestingly, however, there was very little change in 9 out of 12 consumer confidence parameters of the non-Tbilisi population and, in particular, there was almost no change at all in any of the expectations-related parameters. Thus, outside Tbilisi people seem to have no hopes (or illusions) concerning the new government’s ability to quickly generate change and turn around the difficult economic situation. Moreover, if anything, the changes in sentiment we do observe are negative, perhaps under the influence of the recent price hikes. People tend to think that compared to September now is a less appropriate time to make major purchases or save. They also became somewhat more negative in their assessment of the change in Georgia’s general economic situation over the past 12 months (question 3).

6 5

Expectations

R Rest of Georrgia

Tbilisi CCI eexceeds “restt-of-Georgia”” on almost a all parameteers

Tbilisi CCI exceeds “rest-of-Georgia” on almost all

7 3

Sep--12

Exxpectations

Oct-12

CCIIstagnates stagnates or oordeclines ou utside Tbilisi i CCI declines outside Tbilisi

parameters ds rest-of-Geeorgia on alm most all Consu umer Confideence parameeters, but thee differencess are Tbilisii now exceed most pronounced d as far as thee likelihood of o making maajor purchasees and abilityy to save are concerned. THE ISSET KHACHAPURI INDEX Tbilisii residents arre considerab bly more con nfident that n now is the tim me to save (q question 10) and make m major

purch hases (question 8). They aare also moree certain abo out their ability to save (q question 11)IS andPolicy make su uch The SET Ins stitute (ISET--PI, www.isett-pi.ge) is an independent think-tank associated w purch hases in the ffuture (questtion 9). Intern national Scho ool of Econom mics at TSU ((ISET). ISET-P PI designed a simple and robust way

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U.S. Business In Georgia

HEADLINE NEWS & ANALYSIS

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Heidelbergcement Doubled the Amount of Money Collected During Charity Marathon David Kharazishvili crossed the finish line in 1hour and 14 minutes…

Winners got identified in three categories, namely: for 5km distance winners were revealed among boys and girls under the age of 17; on 21 km distance winners were identified in 18 -35 and over 35 - year age categories, also separately among men and women. Winners were awarded with valuable prizes – computers and digital equipment. David Kharazishvili, being under 35-year category, covered 21 kilometers within 1 hour and 14 minutes and was the first to cross the finish line. All marathoners received diplomas certifying their participation in the first grand halfmarathon in Georgia. Among marathon participants were employees of HeidelbergCement, other business companies and embassies, as well as Tbilisi residents and foreign guests. „First half-marathon came to its end. The idea turned to be the right one – it was a charity event where the main objective was participation not winning. TbilisiMarathon will become a tradition and we are expecting more participants for the next year”, - said Nino Subeliani, Communications Manager of HeidelbergCement. Memorandum of Cooperation was concluded between Heidelbergcement and the Athletics National Federation. Main objective of the Memorandum is to promote a healthy lifestyle in Georgia, specifically to organize sports events – marathons, semi-marathons and runs and promote wide participation of the public in such undertakings. HeidelbergCement is the global market leader in aggregates and a prominent player in the fields of cement, concrete and other downstream activities, making it one of the world’s largest manufacturers of building materials. The company employs 53 000 people in 2 500 enterprises across 40 countries of the world. HeidelbergCement is operating in Georgia since 2006 and manages 3 cement and 3 concrete plants.

bilisiMarathon, a grand event organized on the Tbilisi Sea Territory on Sunday, October 28, was finalized with the winners’ award ceremony. TbilisiMarathon was the first grand half-marathon in Georgia dedicated simultaneously to establishing healthy lifestyle in Georgia and to charity. The project was implemented under the aegis of the HeidelbergCement with support of the Athletics National Federation. Everyone, amateur or professional, could participate in the marathon. Tbilisi Marathon will be held every year, in autumn, and become a tradition. GEL 5,000 collected from registration of marathon participants will be transferred to Iavnana Charity Fund for beneficiaries from Tbilisi, Rustavi and Kaspi regions. It is noteworthy that HeidelbergCement, the organizer of the event, doubled this amount and transferred additional GEL 5,000 to the charity fund. HeidelbergCement, as a building materials producer, implements social projects in those regions, where its enterprises are located. Respectively, the Tbilisi Marathon Charity Fund is designated for Tbilisi, Rustavi and Kaspi regions.

IREX Georgia Media Development Program to be a Priority The FINANCIAL By Mariam Papidze

o improve the quality and diversity of content and broaden delivery IREX has provided up to USD 2,000,000 in grants to media outlets in Georgia for the production of public affairs, investigative and other specialized content. The Regional Election Initiative created a coalition of more than 60 regional media outlets which produced TV, radio and internet coverage of the parliamentary election campaign. “We have also trained more than 100 journalists in new media content production and we are helping a number of media outlets establish websites and create multimedia content,” Matt Shelley, Country Director, told The FINANCIAL. “This initiative to train journalists in multimedia content production and use of social media will become more intensive in the upcoming (third) year of the project. This is a very ambitious programme and covers a full range of issues important to the establishment and support of independent media. In funding the G-MEDIA Program to this extent (USD 13 million over four years), USAID has established media development as a priority in Georgia,” he added. IREX is an international nonprofit organization providing leadership and innovative programmes to improve the quality of education,

strengthen independent media, and foster pluralistic civil society development. Founded in 1968, IREX has an annual portfolio of USD 50 million and a staff of over 400 professionals worldwide. IREX and its partner IREX Europe deliver cross-cutting programmes and consulting expertise in more than 50 countries. Q. Independent media is one of the main problems in Georgia. Everyone knows that different TV channels were controlled by different political forces. Bidzina Ivanishvili, who is Prime Minister in Georgia, is an owner of Channel 9. In your opinion, is it right when politicians have an impact on TV channels or are even the owners of TV stations and how does that hamper media independent improvement in Georgia? A. I can’t necessarily say that a politician’s ownership of a TV station is inherently wrong but common sense tells us that when a media outlet is owned by someone active in politics then the news coverage will likely reflect the interests of the owner. There is no question that political interests have controlled media in Georgia and this is contrary to an independent media sector which is managed according to market forces and where news coverage and programming is based on the interests and needs of the public and not on political factions. Independent media and journalists should serve the interests and

needs of the public rather than special interests, including political parties. A media sector that is controlled by political interests will not have the trust and support of a public which is understandably sceptical and even cynical. Access to information, advertising business, access to public officials and events all become subject to political power. Independent media thrive on transparency, a free and open forum for public discussion and a social and business climate in which people are not intimidated by political powers. Q. What was the biggest project IREX implemented in Georgia in 2012, can you single out the most successful ones? A. The largest single project in dollar terms was development of the Multimedia Education Center. This is a tremendous space that offers first class teaching facilities and the latest digital production equipment for student training. It supports teaching for students from the Caucasus School of Journalism and Media Management (CSJMM at GIPA), the Caucasus School of Media, training programmes run by Radio Free Europe/Radio Liberty practical skills in order to prepare them for careers in journalism. Transparency International has used G-MEDIA support to fund a number of important studies including problems in the advertising sector, difficulties of journalists working in the regional media, and they have been very active in key efforts regarding the must-carry rule, regulations on access to information

and transparency in media ownership. GYLA uses IREX G-MEDIA support to defend, consult and train journalists on legal issues. We support a variety of civil society and media advocacy groups. These groups continue to be an important voice for independent media, working on the safety of journalists, access to information and other issues crucial for development of a free and professional press. We know that efforts to build independent journalism in Georgia will not be successful unless independent media outlets are sustainable. We are working with a number of (mostly regional) media on business planning and we have trained more than 50 sales and business professionals from media outlets in Tbilisi and the regions. We are also providing support for the first radio audience research project, which will help radio stations sell advertising to businesses in and outside of Georgia. An audit of the TV research system will be done early next year in order to help build advertiser confidence in that system. Q. What are the upcoming programmes? A. We are halfway through our four year project. This year we will continue the projects I have discussed but we also have a number of priorities. A key issue facing the Georgian public and media is the digital switchover. This has tremendous implications for how broadcast signals will be provided in the future, who will operate the transmission system and who will have

access to it. We will work with our advocacy organizations to encourage the Government to provide a very public process in which all technical, economic and social issues affected by this change will be openly discussed. We believe the regional media are making progress in terms of their locally-produced programming and we want to support that by providing international trainers to work on-site with their journalists and technical colleagues. Social media played a significant role in the previous election but we know that many journalists and media outlets are anxious for more training and technical support so we will put new resources into that in the coming year. We are also happy to support radio audience research starting next year. The radio stations have struggled in finding advertisers because they did not have audience data. The IREX G-MEDIA Program has selected a company to start a programme of regular research and that company is working with the radio stations and advertising agencies so the system can be sustainable after our support ends. We also want to help the TV sector by providing an audit of the ratings system. These systems are typically audited every couple of years but the Georgian TV industry has not been able to afford an audit in some time and we believe that this will increase the credibility of the TV ratings which will be a benefit to the TV stations and advertisers as well.

CMYK

U.S. Business In Georgia

HEADLINE NEWS & ANALYSIS

FINANCIAL

5 November, 2012 | finchannel.com

Advertiser: Vellagio. Contact FINANCIAL Ad Dep at marketing@finchannel.com

CMYK

FINANCIAL HEADLINE NEWS & ANALYSIS finchannel.com | 5 November, 2012

U.S. Business In Georgia

USAID Project Secured USD 109 Million FDI, Waiting for Additional USD 559 Million The FINANCIAL By Nana Mghebrishvili

ith just 50 employees in total, Economic Prosperity Initiative’s (EPI) project in Tbilisi, financed by USAID, has so far secured USD 109 million in foreign investment and commitments, with an additional pipeline of investment opportunities of USD 559 million. “In close cooperation with governmental agencies EPI facilitated USD 155 million in exports, mostly through its efforts in the wine and MICE tourism, hazelnut and apparel sectors,” said Tina Mendelson, Project Director for EPI. Tina Mendelson, currently residing in Georgia, is a senior manager at Deloitte Consulting, LLP, the implementing firm of the EPI project.

“EPI also achieved consistent increases in productivity with 40% average productivity increases for all of its value chains. Our sectors generated 7,050 new jobs and contributed to annual revenue increase of 27% or USD 11.8 million for the agricultural sector, and 61% increase or USD 47 million for the manufacturing and services sectors. As you can see we are passionate about measuring our results, so we better understand our return on investment before we engage in new project activities.” “Since 1992 USAID has implemented projects in Georgia that stimulate economic growth, improve the business environment and expand opportunities for the private sector. To this end USAID has invested almost USD 2 billion in Georgia. Recognizing the opportunity to build upon the combination of assets and an attractive business environment available in Georgia, USAID designed EPI to further increase the country-level competitiveness. The EPI approach is unique in Georgia as it is foremost commercial, targeting whole sectors to improve their competitiveness, benefiting as many companies and employees as possible. Similarly, we look for opportunities within Georgia to identify interested private companies to serve as our partners. EPI facilitated an alliance with Ferrero, a global confectionary company, to provide their own resources and know-how. We conduct a joint programme to enable hazelnut growers in West Georgia to adopt the best growing practices that can significantly increase the quality and yield of Georgian hazelnuts. We try to help Georgian companies implement production, marketing or other practices that do not require heavy investments. Sometimes very small change can make a huge difference. The mandarin sector is the best example in this regard. Modern techniques of pruning or orchard floor management require even less efforts compared to what is common here in Georgia. However, adoption of these practices will significantly increase yields and quality of Georgian mandarins that can eventually compete with mandarins from Spain or Turkey. Q. What are the main challenges that Georgian businesses currently face and how does

Tina Mendelson, Project Director for EPI

EPI support the solving of such challenges? A. The Georgian business climate has changed dramatically over the past decade. The removal of petty corruption, efficiencies in customs operations, low and streamlined tax rates and eGovernance systems that focus on efficiency and customer services, are just some of the benefits Georgian businesses can take advantage of that don’t exist in other countries in the region. The challenges, however, that the businesses face, are much more structural in nature. With some notable exceptions of course, a vast majority of businesses, and especially small and medium-size enterprises, still need to increase their competitiveness to be able to compete domestically and globally. With Georgia being a small country, the only option is to connect to global markets in order to achieve economic development that will allow its population to prosper. To start with, businesses need to understand their market and the customer, their specific preferences, standards and quality requirements. Once they know that, they need access to finance and relevant workforce skills that allows them to develop the right product or services, streamline production processes, manage their supply chain efficiently, and adopt new technologies. And this is where the challenge exists - businesses lack market linkages and even when they establish them, their access to finance and skilled employees is often very limited. This prevents whole sectors from increasing their competitiveness and that is exactly what EPI was designed to support. Q. What are Georgia’s main perspectives globally? A. Georgia benefits from a strategic location, beautiful physical features and historical treasures, and talented, energetic people. These assets

can be successfully used to become a part of today’s global economy. For instance, Georgia has the potential to become a regional hub for trade and transit goods - a regional centre for moving goods between large markets in Europe, Central Asia, and even China. Georgia has already been placed on a wine tourism map with its long-standing wine tradition and history, numerous historical places, largest grape varieties and excellent wines, Georgia will be a favourable destination for wine lovers and enthusiasts. Another important sector is Georgia’s hydro energy potential, especially when supported by the right regulatory and policy framework. I think Georgia’s strength is in these rare assets. And of course, there is the role of the government - creating a predictable, business friendly environment that encourages transparency and promotes economic development. The rest is a matter of aspiration of Georgian businesses and people. It is their decision what story they would like to tell to the rest of the world. Q.EPI is supporting several sectors in Georgia. From your point of view, which sectors need the biggest support in Georgia and why? A. Currently EPI is focusing on mandarin, hazelnut, open-field and heated greenhouse sectors in agriculture, and several manufacturing and services sectors like apparel, wine and MICE tourism, transport and logistics, paper packaging and information and communications technology. Together, the selected value chains constitute a substantial portfolio that will contribute powerfully to Georgia’s economic growth in terms of employment generation, export growth and attraction of foreign investment. For example, support of the apparel sector is important as it is the fastest way to introduce light manufacturing in Georgia that currently

represents a very small percentage of Georgian productive sectors. Apparel business can increase jobs and incomes for the Georgian population. This is especially critical for the rural population where a majority of the population is subsistence farmers. Since the beginning of our assistance, Georgian-owned apparel sector companies reported their first exports and overall sector exports increased by USD 5.6 million. Q. What do you consider the biggest achievement of EPI in Georgia? A. It is hard to focus on one achievement, since every single activity EPI does is committed to the revitalization of different sectors that, in turn, contribute to the economic growth of Georgia. Our programme activities have created an impact for broad groups of stakeholders - this past year alone we managed to reach almost 6,000 farmers, over 200 agribusinesses, and almost 600 businesses in the manufacturing and services sectors through our training and consulting activities. EPI also engaged over 130 agricultural and business service providers so that they increased their capabilities, building their long-term sustainability long after EPI ends - a key premise of the USAID Forward initiative. During this year, EPI engaged farmers and agribusinesses at EPI Knowledge Plots focusing on lowcost technologies that, when adopted, will significantly increase productivity. Overall, these increases in productivity resulted in increased sales of USD 12 million including exports, during the year. Accompanied by the project’s development and dissemination of feasibility and financial models for investors and financial institutions to better understand the returns, investment requirements, and investment facilitation services for interested investors, generated over USD 26.5 million in

domestic investments to establish or expand heated greenhouses, significantly increasing the industry’s capacity. Foreign investment outreach generated additional results, with USD 63.8 million in foreign investments currently being facilitated by EPI to establish heated greenhouses for this and the upcoming off-season vegetable production. Focusing on the export of agricultural products, EPI also provided targeted assistance to local testing laboratories to gain international accreditation by the American National Standards Institute. This will allow for the first time recognition of Georgian laboratories test results by buyers in European and other high-value markets, for such products as fruits, vegetables, hazelnuts, mineral water and wine. The estimated impact on hazelnut exports alone ranges from USD 7.5 million to USD 18.8 million per year. Another important area related to agriculture is our support in the development of the crop insurance industry in Georgia. Our assistance in the development of crop insurance products, tailored training programmes for the insurance industry on agricultural insurance, and a crop insurance pilot project have created 17-fold growth in the annual total sum insured to over USD 7.3 million in 2012, only two years since the project’s start. On the policy side, EPI garnered the support and resources of global shipping lines and port operators, Georgian railways, freight forwarders, the Customs and Data Exchange Agency to jointly implement a port community system similar to those of the most developed ports, such as Rotterdam and Singapore. The first releases of the system are already underway, which will create further trade efficiencies in cargo management, and position Georgia closer to its aspiration to become a regional trade hub. We also partnered with Sakpatenti and directly contributed to a sharp and sustained increase in trademark applications and at least USD 2.4 million in annual savings for public and private sector stakeholders through the development of an efiling system of Intellectual Property Rights applications. Also, through our assistance to the Revenue Service on a number of fronts to implement a risk-based approach to the tax audit and administration and a streamlined tax payments system, Georgia will have a more efficient tax environment for Georgian and international businesses. The estimated benefits for business include as much as USD 14.6 million in annual cost savings. Q. How would you evaluate the business environment in Georgia? A. Georgia has been rated as one of the best countries for doing business according to its business infrastructure, financial, legal and professional services, and its tax policy. This year Georgia climbed 11 ranks in the World Economic Forum’s 2012-2013 Global Competitiveness Report. With an overall score of 4.1 out of a possible 7, the country moved to 77th position out of 144 economies. According to the same report, the country has shown some positive indicators in relation to the removal of trade barriers and the burden of customs procedures and I am proud that EPI contributed to improvement in this area. Of course, Georgia still faces a number of challenges that need to be addressed to achieve economic prosperity. Predictable business environment, enforcement of property rights, and especially intellectual property rights to spur innovation, effective tax administration, sustainable environmental policy, fair competition and targeted educational and workforce policies, are among them. The new policy makers have a difficult task ahead of them and I look forward to being able to support Georgia through the EPI project in taking solid steps to improve the country’s competitiveness and achieve prosperity for Georgians.

CMYK

HEADLINE NEWS & ANALYSIS

U.S. Business In Georgia

FINANCIAL

5 November, 2012 | finchannel.com

“Georgia Didn’t Do a Sufficient Job in Attracting US Funds” Mamuka Tsereteli, America-Georgia Business Council, believes that business is waiting for more freedom in Georgia The FINANCIAL By Nana Mghebrishvili “The interests of US companies in Georgia are divided in to two areas: the first is interest in American exports of goods, technologies, equipment and services; and the second area is investments in the Georgian economy. At this stage we should expect interest in energy, transportation, agribusiness, tourism and financial sectors, but it is also important to state that any business that brings profit can be interesting for American investors,” said Mamuka Tsereteli, President of the AmericaGeorgia Business Council. On behalf of its members the America-Georgia Business Council (AGBC) promotes investment opportunities in Georgia and provides support for Georgian companies seeking export opportunities and international partnerships. AGBC relies on a deep understanding of the Georgian political and business landscape, direct access to high-level government officials and agencies, and diversified business contacts to deliver value and maximize opportunities in Georgia for our members. AGBC was formed in January 1998. AGBC continually seeks opportunities for increased business transactions between the two nations, defends the interests of its members, and serves as a platform for constructive dialogue on a myriad of issues related to the bilateral trade as well as the business climate in Georgia. “It is hard to talk about the results of the elections at this stage, but expectations are very high among the businesses that are already engaged, as well as among the Georgians who live in the US, that the business environment will change for the better, towards more freedom and more opportunities,” he said. Q. You were quoted in your previous interview as saying: “There are between USD 2 and 3 trillion of investment capital available in the US now sitting idle and expecting a destina-

tion for investments. With efforts focused on a marketing campaign and internal reforms some of this money may end up in Georgia.” Where has this money gone? Is it partially invested in Georgia? A. Most of this money is still not invested. Unfortunately Georgia didn’t do a sufficient job in attracting these funds. According to the World Investment Report of 2012, a large number of multinational corporations still have large amounts of cash reserves that they do not invest due to uncertainties in the world economy. With greater stability and predictability, an appropriate marketing campaign and better allocation of resources Georgia could attract part of these funds. Q. You have intensive contact with businesses in the United States. What is their perception of Georgia? A. In general awareness of Georgia in the United States is still limited. People know Georgia from news stories that are rarely positive and in most cases are related to conflicts with Russia. Promotion of a positive image of Georgia is very important. The previous government made some effort in this direction, but this effort was scattered and not strategic. The new government needs to focus on this issue. Awareness of Georgia will improve the competitive position of the country in terms of the attraction of investments or tourists, as well as in terms of the

sale of Georgian products thoughout the world. In general, the perception of Georgia among people who have visited the country is positive, so it is important to find ways to bring more people to Georgia. Q. How would you evaluate the general business environment in Georgia, has it been progressing from year to year? A. Georgia has most of the basic laws and regulations, as well as basic infrastructure, that is essential for business activities. Some of the areas of activities are open to competitive business activities. At the same time there are different barriers of entry in a few areas of business activities. The new Georgian Government promised to eliminate those barriers. They also promised to establish judiciary independence and an impartial dispute resolution system that should facilitate investments in the Georgian economy. This last point is particularly important since it was almost impossible to win tax or property related cases against the Government in the last several years. Q. How does the Georgian economic environment and legislation fit Americans’ requirements? A. The limited regulations that exist in Georgia are attractive for investors. I know there is a discussion in Georgia about revision of the labour law. I think that the new government should approach this issue with great caution: some basic principles should be in place, but the

labour law shouldn’t become prohibitive for businesses, otherwise businesses will not invest in Georgia. In general, the key problem of Georgia is not government regulations, but how the Government exercised its power vis-à-vis business, and how the Government approached property rights, as well as taxation of businesses. Q. Georgia is advertised by World Bank as the Top Business Friendly country in the world. It’s reported that Georgia is the best choice when it comes to the ease of doing business. Unfortunately this is having no significant influence on the investment volume from the US. Can you explain why? A. Doing Business ranks countries based on the written rules and regulations, not by their execution. It also limits its assessment by a limited number of indicators. Countries around the world learned how to make changes in written laws and regulations in order to get higher rankings. These changes are not always reflected in the realities of life. Again, a high ranking in Doing Business is good for the promotion of the country, but it is not enough: you need to have a well-developed, competitive market; independent judiciary and private properties need to be protected. Georgia had problems in later issues and if improvements are not made, problems with economic development and job creation will remain.

Q. Which significant deals would you outline from the US side in 2012-13? A. I hope that there will be some important deals in the hydro-energy area in 2013. The America-Georgia Business Council is working hard with several groups of potential investors to make this happen. I also expect that there will be some investments in agribusiness, if the USD 1 billion agribusiness fund, promised by the new government, is in place and if the fund decides to co-invest, or otherwise mitigate the risks of private investments in agriculture and agribusiness. We also facilitated small investment in the distribution of pharmaceutical products in 2012 which will facilitate the creation of a more competitive market for these products in Georgia. Q. What should the Georgian state or business sector do to expand US business in the country? A. The Georgian Government should have equal treatment for all the investors and create a competitive environment for Georgian, American, Turkish or any other investors. It is also important to have a stable and predictable legislative, regulatory and tax environment for many years to come. Particular sectors of the economy may require additional incentives, but the policy of infrastructure development and stability of environment should facilitate more American business coming and investing in Georgia. Again, raising awareness of the country is important. The Government needs to revitalize Investment Agency and Invest in Georgia conferences. The America-Georgia Business Council plans to host its fifteenth annual conference in Washington D.C. on 12 December to facilitate this process. Q. What are Georgian businesses’ prospects in the US? A. I have worked for many years on the promotion of Georgia wines in the US. Georgian wines are competing with producers from all over the world who are supported by their governments on the US market. Georgian producers have no such support. The Government needs to invest consistently for at least three to five years in the marketing of Georgian wines in the US and that will allow us to establish Georgian wines as a category on the US market. As a result every wine shop will have at least several shelves filled with quality Georgian wines. Wine represents the best that Georgia can offer to the world markets, and wine is also the best tool to raise awareness of Georgia. Wine could serve as a driver for other Georgian products as well.

United States is the 7th Largest Trading Partner The FINANCIAL By Tako khelaia

nited states is among the top trading partners of Georgia by turnover in January-September 2012 and holds the 7th place in the list with the turnover USD 341 282, 6 000. Total turnover of trading partners of Georgia from January to September this year was USD 7 594 551, 4 000. Turkey, Azerbaijan, Ukraine Germany, China, Russia, US, Bulgaria, Italy and Armenia share the list of top trading partners of Georgia by turnover, according to GeoStat. United States is on the 3rd place among top trading partners of Georgia by export from January-September this year with USD 176 594, 8 000 with 10% share. In the same

period last year USA was top trading partner by export with USD 118 428, 6 000 what is less by USD 581 662 000 in accordance with JanuarySeptember 2012. Total exports by trading partners of Georgia amounted to USD 1 770 419, 6 000 in January-September 2012 of which exports of Azerbaijan totalled USD 468 305 6 000, Armenia USD 186 374, 5 000, Ukraine USD 119 214, 000, Turkey USD 117 880, 8 000, Canada USD 72 966, 9 000, Bulgaria USD 51 473, 8 000, Belgium USD 48 539, 8 000, Kazakhstan USD 43 041, 7 000, Italy USD 36 809, 9 000 and other countries USD 449 217, 8 000, according to GeoStat. Compared to January- September 2011. The volume of export grew by 14 percent and reached USD 1770 million, while import increased by 17 percent amounting to USD 5824 mil-

lion. The trade deficit reached USD 4054 million and amounted to 53 percent of the total trade turnover. Total imports in Georgia from January-September 2012 amounted to USD 5 824 131, 8 000. Among top trading partners by imports of Georgia is Turkey with USD 1 051 474, 2 000, Azerbaijan USD 472 373, 7 000, Germany USD 428 871, 7 000, Ukraine USD 425 470, 8 000, China USD 418 399, 000, Russia USD 338 899, 5 000, Japan USD 228 703, 4 000, Italy USD 203 282, 2 000, Bulgaria USD 192 633, 8 000, Romania USD 179 272,1 000 and other countries USD 1 884 751, 6 000. Motor cars had 24,4% share among major commodity positions by exports in January-September 2012. Ferro-alloys 11,5%, fertilizers 5,9%, nuts 3,7%, gold 3,5%, spirituous beverages 3,5%, mineral waters 2,6%, bars 2,4%, wine 2,4%, ferrous waste

2,4% and other products 37,7%. Petroleum had 12,1% share of major commodity positions by imports in January-September 2012. Motor cars 8,5%,wheat 3,2%, gases 3,1%, medicaments 2,8%, telephones 1,4%, transformers 1,4%, automatic data processing machines 1,3%, structures 1,3%, tractors 1,1% and other products 63,8%. Index of export import of Georgia has quite increased for January-September 2012 in accordance with the last few years. Increase is mostly significant by export in compare with the year 2009 January-September. Export for this year January-September in compare with the year 2009 has increased by 116 %. For january-September this year Georgias external trade turnover with EU countris amounted to USD 2064 million what is higher by 22% in compare with the index of same

period last year from which Export totalled USD 260 million and import USD 1804 million. External trade with CIS countries in January-September this year totalled USD 2378million , up by 11% in accordance with the same period last year. Export from CIS countries amounted to ISD 910 million and import USD 1468 this year. For January-September 2012, share of 10 biggest trade partners of Georgia by external trades totalled 66%. the biggest trade partner of Georgia is Turkey with USD 1169 million, Azerbaijan USD 941 million and Ukraine USD 545 million, according to GeoStat. External Merchandise Trade (excluding nonorganized trade) of Georgia amounted to USD 7595 million in JanuarySeptember 2012, up 16 percent from the same period of the previous year according to GeoStat.

CMYK

FINANCIAL HEADLINE NEWS & ANALYSIS

U.S. Business In Georgia

finchannel.com | 5 November, 2012 November 5, 2012

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Gallery

Gallery “Vernisage” is pleased to invite you of Levan Varazi, Temur Kuliani, Zezva Archemashvili exhibition Gallery Vernisage 7, Brothers Zubalashvili Str. Tel: 299-88-08 till November 9 Personal Exhibition of Gia Gugushvili TBC Art Gallery 7, Marjanishvili Str. Tel: 227-27-27 Gallery’s working hours: Monday-Friday 12:00-20:00 till - December 1 The First Triennale - Offside Effect Sh. Amiranashvili Art Museum 1, Gudiashvili Str. Tel: 299-71-76 Museum is working everyday except Monday. From 11:00 till 17:00 till - November 20 Project “Pirosmani and Modern Arts”, IV international exhibition dedicated to Niko Pirosmanashvili and talks at “Pirosmani’s Table” Tbilisi Museum of History (Karvasla) 8 Sioni Str. Tel: 292-32-27 (Museum is working everyday except Monday. From 11:00 till 17:00) till - November 5 Lado Gudiashvili exhibition “Promenade” is presented at the Lado Gudiashvili Exhibition Hall 11 L. Gudiashvili Str. Tel: 293 23 05 Exhibition Hall is working every day, 11:00 - 18:30 except Mondays and official holidays. Entry: Adults - 5 GEL / People from 6-18 - 3 GEL / Students and pensioners (with ID) - 3 GEL / Admission is free for orphan groups (with proof of status) and for children under 6 http://lgexhibitionhall.info-tbilisi.com/ till - May 30 Dimitri Shevardnadze National Gallery will host the exhibition “Reframing the 80s: Georgian Art at the End of the 80s and the Beginning of the 90s” D. Shevardnadze National Gallery 11, Rustaveli Ave. Tel: 299-80-22 Gallery’s working hours: Saturday-Sunday 10:00-18:00 till - November 20 Exhibition “New Life of Eastern Collections”. On Exhibition will be presented masterpieces of eastern collections reserved in Shalva Amiranashvili Art Museum of Georgian National Museum Simon Janashia State Museum 3, Rustaveli Ave. Tel: 299-80-22 Museum is working everyday except Monday. From 10:00 till 18:00 till - December 30

November 6, 2012

Clubs, Pubs…

Restaurant is working 24 hours Entertainment at the restaurant “Mghvime” is colorful. Every evening from 20:00 inextinguishable star of Georgian Estrada Gia Suramelashvili. Estrada ensemble “Mghvime” (3 boys and one girl), tam-tam, violin. During weekdays: Singer, composer Kaki Bolkvadze and hot Georgian and Asian dances Restaurant “Mghvime” Address: Left bank of Mtkvari River (next to shop “Riverside”) Phone: 2 305 558/ 2 359 540; 599 56 60 72 21:00 - Band “Good Company”, DJ Datuna SkyyBar 22 Metekhi Str. Mob: 592 32-32-32 19:00 - Geishas dances Sushi Bar Samurai 9 G. Tabidze Str. Mob: 577-22-60 01; Tel: 240-29-99 20:00-23:00 - “Kalakuri’s Quartet” - with live performance of city songs, and also universal songs Restaurant “Kalakuri” 3 Shavteli Str. Tel: 2 365-365 Every day from 17:00 restaurant Bermukha is awaiting you with renovated hall and colorful show program. Music program starts from 19:00: Dato Archvadze’s quartet “Taoba”: Georgian folk and city songs. Estrada singers: Giorgi Tsiklauri, Nina Okroashvili, Giorgi Kakutia Restaurant “Bermukha” Agmashenebeli lane 13th km. Tel: 259 69 69; Mob: 598 59 69 69 20:00-23:00 - Georgian songs with live performance Restaurant “Dzveli Sakhli” 3, Sanapiro Str. Tel: 2 365-365 20:30 - Georgian folk ensemble “Urmuli”, georgian dances Restaurant “Maidan” 6, Rkinis Rigi Str. Tel: 275-11-88; 590 75-11-88 21:00-24:00 - Jazz Band Restaurant “Chardin 12” 12 Chardin Str. Tel: 293-15-56; Mob: 577 480-460 21:00 - Maia Kankava Café “Kala” 8/10 Erekle II Str. Mob: 599 79-97-37 21:00-24:00 - Band “Goblins” (Covers) Pub “Dublin” 8 Akhvlediani Str, Tel: 298-44-67

Cinema

Theatre

Rustaveli Theatre 17, Rustaveli Ave. Tel: 272-68-68 Host and Guest Director: Valerian Gorgoshadze Cast: Bacho Chachibaia, Manana Abramishvili, Ia Sukhitashvili, Levan Khurtsia, Gela Lezhava Duration: 135 minutes Hall: Small Stage Time: 19:45 Price: 8, 10 GEL Marjanishvili Theatre 8 Marjanishvili Str. Tel: 2 955-966 Naphthaline Director: Davit Sakvarelidze Cast: Guranda Gabunia, Ninaka Gelashvili, Temur Kiladze, Joseph Gogichaishvili, Alexander Getsadze, Maia Tatishvili, Beka Goderdzishvili, Zaza Goguadze, Vaja Kvitaishvili Hall: Big Stage Time: 20:00 Price: 4 - 10.50 GEL Marjanishvili Theatre 8 Marjanishvili Str. Tel: 2 955-966 Private Lives Director: Levan Tsuladze Cast: Irma Berianidze, Tamar Bukhnikashvili, Zaza Iakashvili, Nika Kuchava Duration: 90 minutes Hall: Theatre in Attic Time: 20:00 Price: 11 GEL Liberty Theatre 2 Rustaveli Ave. Tel: 298-58-21 The Kennel Director: Vano Khutsishvili Cast: Slava Natenadze Duration: 90 minutes Time: 19:00 Price: 5, 8, 10 GEL Pantomime Theatre 37 Rustaveli Ave. Tel: 299-63-14 Host and Guest Director: Amiran Shalikashvili Duration: 50 minutes Hall: Time: 19:00 Price: 7.50 GEL

Gallery

Gallery “Vernisage” is pleased to invite you of Levan Varazi, Temur Kuliani, Zezva Archemashvili exhibition Gallery Vernisage

7, Brothers Zubalashvili Str. Tel: 299-88-08 till November 9 Personal Exhibition of Gia Gugushvili TBC Art Gallery 7, Marjanishvili Str. Tel: 227-27-27 Gallery’s working hours: Monday-Friday 12:00-20:00 till - December 1 The First Triennale - Offside Effect Sh. Amiranashvili Art Museum 1, Gudiashvili Str. Tel: 299-71-76 Museum is working everyday except Monday. From 11:00 till 17:00 till - November 20 Lado Gudiashvili exhibition “Promenade” is presented at the Lado Gudiashvili Exhibition Hall 11 L. Gudiashvili Str. Tel: 293 23 05 Exhibition Hall is working every day, 11:00 - 18:30 except Mondays and official holidays. Entry: Adults - 5 GEL / People from 6-18 - 3 GEL / Students and pensioners (with ID) - 3 GEL / Admission is free for orphan groups (with proof of status) and for children under 6 http://lgexhibitionhall.info-tbilisi.com/ till - May 30 Dimitri Shevardnadze National Gallery will host the exhibition “Reframing the 80s: Georgian Art at the End of the 80s and the Beginning of the 90s” D. Shevardnadze National Gallery 11, Rustaveli Ave. Tel: 299-80-22 Gallery’s working hours: Saturday-Sunday 10:00-18:00 till - November 20 Exhibition “New Life of Eastern Collections”. On Exhibition will be presented masterpieces of eastern collections reserved in Shalva Amiranashvili Art Museum of Georgian National Museum Simon Janashia State Museum 3, Rustaveli Ave. Tel: 299-80-22 Museum is working everyday except Monday. From 10:00 till 18:00 till - December 30

November 7, 2012

Clubs, Pubs…

“Book Day” at Amarcord Bring your book with you to our Art-Cafe and exchange it to another book brought by someone else. You can also sell your books if you like. Visit us and help us making Amarcord a place for literature meetings! Price: for free Art-Café Amarcord 8, Janashia Str. Tel: 284-64-73 21:00 - Band “Good Company”, DJ Datuna SkyyBar 22 Metekhi Str. Mob: 592 32-32-32 20:00-23:00 - “Kalakuri’s Quartet” - with live performance of city songs, and also universal songs Restaurant “Kalakuri” 3 Shavteli Str. Tel: 2 365-365 19:00 - Geishas dances Sushi Bar Samurai 9 G. Tabidze Str. Mob: 577-22-60 01; Tel: 240-29-99 Restaurant is working 24 hours Entertainment at the restaurant “Mghvime” is colorful. Every evening from 20:00 inextinguishable star of Georgian Estrada Gia Suramelashvili. Estrada ensemble “Mghvime” (3 boys and one girl), tam-tam, violin. During weekdays: Singer, composer Kaki Bolkvadze and hot Georgian and Asian dances Restaurant “Mghvime” Address: Left bank of Mtkvari River (next to shop “Riverside”) Phone: 2 305 558/ 2 359 540; 599 56 60 72 Every day from 17:00 restaurant Bermukha is awaiting you with renovated hall and colorful show program. Music program starts from 19:00: Dato Archvadze’s quartet “Taoba”: Georgian folk and city songs. Estrada singers: Giorgi Tsiklauri, Nina Okroashvili, Giorgi Kakutia Restaurant “Bermukha” Agmashenebeli lane 13th km. Tel: 259 69 69; Mob: 598 59 69 69 20:00-23:00 - Georgian Dances Restaurant “Dzveli Sakhli” 3, Sanapiro Str. Tel: 2 365-365 22:00-01:00 - Group “Comic Condition” Tavern “Scarlet Sails” 25, Leselidze Str. Tel: 293-10-28 20:30 - Maidan Jazz Band Restaurant “Maidan” 6, Rkinis Rigi Str. Tel: 275-11-88; 590 75-11-88 21:00 - Live Band Café “Kala” 8/10 Erekle II Str. Mob: 599 79-97-37 21:00-24:00 - Band “Zarebi” (Covers) Pub “Dublin” 8 Akhvlediani Str, Tel: 298-44-67

Theatre

Marjanishvili Theatre 8 Marjanishvili Str. Tel: 2 955-966 Revisor Director: Gizo Jordania Cast: Davit Dvalishvili, Manana Kozakova, Nata Mjavanadze, Onise Oniani, Roland Okropiridze, Avtandil Mikadze, Zura Berikashvili, Davit Khurtsilava, Nodar Doghonadze Hall: Big Stage Time: 20:00 Price: 4 - 10.50 GEL Marjanishvili Theatre 8 Marjanishvili Str. Tel: 2 955-966 Woman with Dog Director: Levan Tsuladze Cast: Nika Tavadze, Nanka Kalatozishvili, Nata Kakhidze, Beso Baratashvili Duration: 120 minutes Hall: Theatre in Attic Time: 20:00 Price: 11 GEL Liberty Theatre 2 Rustaveli Ave. Tel: 298-58-21 Garden within the Conflict Zone Director: Avto Varsimashvili Cast: Sandro Margalitashvili, Vano Kurasbediani, Giorgi Jikia, Ani Aladashvili Time: 19:00 Price: 5, 7 GEL

Gallery

Gallery “Vernisage” is pleased to invite you of Levan Varazi, Temur Kuliani, Zezva Archemashvili exhibition Gallery Vernisage 7, Brothers Zubalashvili Str. Tel: 299-88-08 till November 9 Personal Exhibition of Gia Gugushvili TBC Art Gallery 7, Marjanishvili Str. Tel: 227-27-27 Gallery’s working hours: Monday-Friday 12:00-20:00 till - December 1 The First Triennale - Offside Effect Sh. Amiranashvili Art Museum 1, Gudiashvili Str. Tel: 299-71-76 Museum is working everyday except Monday. From 11:00 till 17:00 till - November 20 Lado Gudiashvili exhibition “Promenade” is presented at the Lado Gudiashvili Exhibition Hall 11 L. Gudiashvili Str. Tel: 293 23 05 Exhibition Hall is working every day, 11:00 - 18:30 except Mondays and official holidays. Entry: Adults - 5 GEL / People from 6-18 - 3 GEL / Students and pensioners (with ID) - 3 GEL / Admission is free for orphan groups (with proof of status) and for children under 6 http://lgexhibitionhall.info-tbilisi.com/ till - May 30 Dimitri Shevardnadze National Gallery will host the exhibition “Reframing the 80s: Georgian Art at the End of the 80s and the Beginning of the 90s” D. Shevardnadze National Gallery 11, Rustaveli Ave. Tel: 299-80-22 Gallery’s working hours: Saturday-Sunday 10:00-18:00 till - November 20 Exhibition “New Life of Eastern Collections”. On Exhibition will be presented masterpieces of eastern collections reserved in Shalva Amiranashvili Art Museum of Georgian National Museum Simon Janashia State Museum 3, Rustaveli Ave. Tel: 299-80-22 Museum is working everyday except Monday. From 10:00 till 18:00 till - December 30

November 8, 2012

Clubs, Pubs…

21:00 - Band “Band’a’roll”, DJ Datuna SkyyBar 22 Metekhi Str. Mob: 592 32-32-32 22:00 - Resident DJ Tako Lounge Bar “Kalakuri” 3 Shavteli Str. Tel: 2 365-365 Every day from 17:00 restaurant Bermukha is awaiting you with renovated hall and colorful show program. Music program starts from 19:00: Dato Archvadze’s quartet “Taoba”: Georgian folk and city songs. Estrada singers: Giorgi Tsiklauri, Nina Okroashvili, Giorgi Kakutia Restaurant “Bermukha” Agmashenebeli lane 13th km. Tel: 259 69 69; Mob: 598 59 69 69 19:00 - Geishas dances Sushi Bar Samurai 9 G. Tabidze Str. Mob: 577-22-60 01; Tel: 240-29-99 Restaurant is working 24 hours Entertainment at the restaurant “Mghvime” is colorful. Every evening from 20:00 inextinguishable star of Georgian Estrada Gia Suramelashvili. Estrada ensemble “Mghvime” (3 boys and one girl), tam-tam, violin. During weekdays: Singer, composer Kaki Bolkvadze and hot Georgian and Asian dances Restaurant “Mghvime” Address: Left bank of Mtkvari River (next to shop “Riverside”) Phone: 2 305 558/ 2 359 540; 599 56 60 72 20:00-23:00 - “Kalakuri’s Quartet” - with live performance of city songs, and also universal songs Restaurant “Kalakuri” 3 Shavteli Str. Tel: 2 365-365 22:00 - Maia Kvirkvelia & DJ Dachi Club “Kalakuri” 3 Shavteli Str. Tel: 2 365-365 20:00-23:00 - Georgian songs with live performance Restaurant “Dzveli Sakhli” 3, Sanapiro Str. Tel: 2 365-365 20:30 - Georgian folk ensemble “Urmuli”, georgian dances Restaurant “Maidan” 6, Rkinis Rigi Str. Tel: 275-11-88; 590 75-11-88 21:00-24:00 - Jazz Band Restaurant “Chardin 12” 12 Chardin Str. Tel: 293-15-56; Mob: 577 480-460 21:00 - Guliko Chanturia Café “Kala” 8/10 Erekle II Str. Mob: 599 79-97-37 21:00-24:00 - Band “Zarebi” (Covers) Pub “Dublin” 8 Akhvlediani Str, Tel: 298-44-67

Concert

Tbilisi V. Sarajishvili State Conservatory Grand Stage 8 Griboedov Str. Tel: 293-46-24 19:00 - Concert of Vocal Music Soloists: Irine Ratiani (Soprano), Sulkhan Gvelesiani ( Baritone) Concertmaster - Irine Aivazova - (Ticket Price 5 - 15 GEL)

Theatre

Rustaveli Theatre 17, Rustaveli Ave. Tel: 272-68-68 King Lear Synetic Theatre Director: Paata Tsikurishvili Hall: Grand Stage Time: 19:45 Price: 15 - 40 GEL Marjanishvili Theatre 8 Marjanishvili Str. Tel: 2 955-966 Kote Marjanishvili Director: Levan Tsuladze, Dimitri Khvtisiashvili Cast: Akaki Khidasheli, Eka Chkheidze, Manana Kozakova, Nino Dumbadze, Lile Pilpani, Lika Kobuladze, Zurab Berikashvili, Dimitri Tatishvili, Varlam Korshia, Roland Okropiridze, Nika Kuchava Duration: 180 minutes Hall: Big Stage Time: 20:00 Price: 4 - 10.50 GEL Marjanishvili Theatre 8 Marjanishvili Str. Tel: 2 955-966 Me, Grandmother, Grandfather and Demons Sokhumi State Dramaturge Theatre Director: Giorgi Tavadze Cast: Nugzar Chikovani, Nino Shavgulidze, Merab Brekashvili, Marina Solomonia, Nugzar Tserediani Hall: Theatre in Attic Time: 20:00 Price: 11 GEL Liberty Theatre 2 Rustaveli Ave. Tel: 298-58-21 Jeans Generation Director: Davit Doiashvili Cast: Marina Janashia, Nana Darchiashvili, Goga Chkheidze, Dima Merabishvili, Merab Kolbaia, Lela Metreveli, Jaba Kiladze, Mariam Nadiradze, Apolon Kublashvili, Sandro Margalitashvili Duration: 165 minutes Hall: Time: 19:00 Price: 5, 10, 12 GEL Tumanishvili Film Actors Theatre 164 Agmashenebeli Ave. Tel: 234-28-99 First Died then Married Director: Gogi Margvelashvili Cast: Goga Pipinashvili, Nineli Chankvetadze, Vano Tarkhnishvili, Eka Andronikashvili, Giorgi Kipshidze, Keti Asatiani, Gia Abesalashvili Duration: 140 minutes Hall: Time: 19:00 Price: 10 GEL V. Abashidze State Music and Drama Theatre 182 Agmashenebeli Ave. Tel: 234-80-90 Carmen Director: Kote Purtseladze Cast: Anne Aleksishvili, Ana Tsereteli, Ekaterine Demetradze, Gigi Karseladze, Giorgi Toriashvili, Bacho Chachibaia, Archil Sologhashvili Duration: 90 minutes Hall: Time: 19:00 Price: 10 GEL Akhmeteli Theatre 8 Vekua Str. Tel: 262-54-37, 262-59-73, 262-61-97 Black Sneakers Director: Dimitri Khvtisiashvili Cast: Tamar Tkemaladze, Ana Matuashvili, Tamar Bezhuashvili, Salome Tsurtsumia, Mamuka Mazavrishvili, Imeda Natroshvili, Kote Mzhavia, Vaso Shikhashvili Duration: 80 minutes Hall: Time: 19:00 Price: 7, 10 GEL

Gallery

Cinema

“Poker with Love Rules”; “Love with Accent”; “Hotel Transylvania” 3D (Ticket Price: 6,50 - 11,50 GEL) “Amirani” Cinema 36 Kostava Str. Tel: 299-99-55 “James Bond: Skyfall”; “Killing them Softly”; “Love with Accent”; “Hotel Transylvania” 3D (Ticket Price: 6,50 - 11,50 GEL) “Sakartvelo” Cinema 2/9, Guramishvili Ave. Tel: 230-80-80; 269-66-47 “James Bond: Skyfall”; “Poker with Love Rules”; “Love with Accent” (Ticket Price: 4 - 8 GEL)

Cinema

“Rustaveli” Cinema 5 Rustaveli Ave. Tel: 293-22-53, 2 555-000 “James Bond: Skyfall”; “Killing them Softly”;

Gallery “Vernisage” is pleased to invite you of Levan Varazi, Temur Kuliani, Zezva Archemashvili exhibition Gallery Vernisage 7, Brothers Zubalashvili Str. Tel: 299-88-08 till November 9 Personal Exhibition of Gia Gugushvili TBC Art Gallery 7, Marjanishvili Str. Tel: 227-27-27 Gallery’s working hours: Monday-Friday 12:00-20:00 till - December 1 The First Triennale - Offside Effect Sh. Amiranashvili Art Museum 1, Gudiashvili Str. Tel: 299-71-76 Museum is working everyday except Monday. From 11:00 till 17:00 till - November 20 Lado Gudiashvili exhibition “Promenade” is presented at the Lado Gudiashvili Exhibition Hall 11 L. Gudiashvili Str. Tel: 293 23 05 Exhibition Hall is working every day, 11:00 - 18:30 except Mondays and official holidays. Entry: Adults - 5 GEL / People from 6-18 - 3 GEL / Students and pensioners (with ID) - 3 GEL / Admission is free for orphan groups (with proof of status) and for children under 6 http://lgexhibitionhall.info-tbilisi.com/ till - May 30 Dimitri Shevardnadze National Gallery will host the exhibition “Reframing the 80s: Georgian Art at the End of the 80s and the Beginning of the 90s” D. Shevardnadze National Gallery 11, Rustaveli Ave. Tel: 299-80-22 Gallery’s working hours: Saturday-Sunday 10:00-18:00 till - November 20 Exhibition “New Life of Eastern Collections”. On Exhibition will be presented masterpieces of eastern collections reserved in Shalva Amiranashvili Art Museum of Georgian National Museum Simon Janashia State Museum 3, Rustaveli Ave. Tel: 299-80-22 Museum is working everyday except Monday. From 10:00 till 18:00 till - December 30

November 9, 2012

Clubs, Pubs…

21:00 - Agora Live Band, DJ Datuna SkyyBar 22 Metekhi Str. Mob: 592 32-32-32 22:00 - Resident DJ Tako Lounge Bar “Kalakuri” 3 Shavteli Str. Tel: 2 365-365 19:00 - Geishas dances Sushi Bar Samurai 9 G. Tabidze Str. Mob: 577-22-60 01; Tel: 240-29-99 Every day from 17:00 restaurant Bermukha is awaiting you with renovated hall and colorful show program. Music program starts from 19:00: Dato Archvadze’s quartet “Taoba”: Georgian folk and city songs. Estrada singers: Giorgi Tsiklauri, Nina Okroashvili, Giorgi Kakutia Restaurant “Bermukha” Agmashenebeli lane 13th km. Tel: 259 69 69; Mob: 598 59 69 69 Restaurant is working 24 hours Entertainment at the restaurant “Mghvime” is colorful. Every evening from 20:00 inextinguishable star of Georgian Estrada Gia Suramelashvili. Estrada ensemble “Mghvime” (3 boys and one girl), tam-tam, violin. During weekdays: Singer, composer Kaki Bolkvadze and hot Georgian and Asian dances Restaurant “Mghvime” Address: Left bank of Mtkvari River (next to shop “Riverside”) Phone: 2 305 558/ 2 359 540; 599 56 60 72 20:00-23:00 - “Kalakuri’s Quartet” - with live performance of city songs, and also universal songs Restaurant “Kalakuri” 3 Shavteli Str. Tel: 2 365-365 22:00 - Gio Khutsishvili & DJ Dachi Club “Kalakuri” 3 Shavteli Str. Tel: 2 365-365 20:00-23:00 - Georgian Dances Restaurant “Dzveli Sakhli” 3, Sanapiro Str. Tel: 2 365-365 22:00-01:00 - Group “Comic Condition” Tavern “Scarlet Sails” 25, Leselidze Str. Tel: 293-10-28 20:30 - Maidan Jazz Band Restaurant “Maidan” 6, Rkinis Rigi Str. Tel: 275-11-88; 590 75-11-88 21:00-24:00 - Jazz Band Restaurant “Chardin 12” 12 Chardin Str. Tel: 293-15-56; Mob: 577 480-460 21:00 - Maia Baratashvili Café “Kala” 8/10 Erekle II Str. Mob: 599 79-97-37 21:00-24:00 - Band “Zarebi” (Covers) Pub “Dublin” 8 Akhvlediani Str, Tel: 298-44-67

Cinema

Concert

Tbilisi V. Sarajishvili State Conservatory Grand Stage 8 Griboedov Str. Tel: 293-46-24 19:00 - Concert Soloist - Ani Takidze (Piano). Tbilisi State Opera and Ballet Theatre Symphony Orchestra. Conductor - Revaz Takidze - (Ticket Price - 5 - 15 GEL)

Theatre

Rustaveli Theatre 17, Rustaveli Ave. Tel: 272-68-68 Now do we look like refugees?! Director: Aleki Blight Cast: Marina Janashia, Temiko Chichinadze, Ketevan Svanidze, Edmond Minashvili, Lasha Okreshidze Duration: 60 minutes Hall: Experimental Stage Time: 19:00 Price: 6 GEL Rustaveli Theatre 17, Rustaveli Ave. Tel: 272-68-68 King Lear Synetic Theatre Director: Paata Tsikurishvili Hall: Grand Stage Time:19:45 Price: 15 - 40 GEL Marjanishvili Theatre 8 Marjanishvili Str. Tel: 2 955-966 Kakutsa Cholokashvili Director: Levan Tsuladze Cast: Nika Tavadze, Nika Kuchava, Lela Meburishvili, Ioseb Gogichaishvili, Gia Burjanadze, Zura Berikashvili, Dimitri Tatishvili, Zaza Iakashvili, Roland Okropiridze, Beka Goderdzishvili, Onise Oniani, Leo Antadze Duration: 180 minutes

Hall: Big Stage Time: 20:00 Price: 4 - 10.50 GEL Marjanishvili Theatre 8 Marjanishvili Str. Tel: 2 955-966 Tango with Illegitimate Director: Ketevan Kharshiladze, Guram Vashakidze Cast: Kote Tolordava, Ia Shughliashvili, Eka Nijaradze, Lile Philphani, Nino Gomarteli, Nino Dumbadze, Tamar Bukhnikashvili, Nikusha Chikovani Duration: 140 minutes Hall:Theatre in Attic Time:20:00 Price: 11 GEL Liberty Theatre 2 Rustaveli Ave. Tel: 298-58-21 Dolls’ House Director: Vano Khutsishvili Cast: Tamuna Nikoladze, Giorgi Zanguri, Bacho Chachibaia, Maia Khornauli, Nino Philphani, Devi Bibileishvili Time: 19:00 Price: 5, 7, 9, 12 GEL Tumanishvili Film Actors Theatre 164 Agmashenebeli Ave. Tel: 234-28-99 The Avalanche Director: Rusudan Bolkvadze Cast: Lia Kapanadze, Revaz Tavartkiladze, Ani Imnadze, Giorgi Kipshidze, Darejan Khachidze, Gia Abesalashvili, Laura Rekhviashvili Duration: 100 minutes Time: 19:00 Price: 7 GEL V. Abashidze State Music and Drama Theatre 182 Agmashenebeli Ave. Tel: 234-80-90 Carmen Director: Kote Purtseladze Cast: Anne Aleksishvili, Ana Tsereteli, Ekaterine Demetradze, Gigi Karseladze, Giorgi Toriashvili, Bacho Chachibaia, Archil Sologhashvili Duration: 90 minutes Date: Hall: Time: 19:00 Price: 10 GEL Akhmeteli Theatre 8 Vekua Str. Tel: 262-54-37, 262-59-73, 262-61-97 Pantheon Director: Dimitri Khvtisiashvili Cast: Mamuka Mazavrishvili, Tamar Bezhuashvili, Shalva Bakhtadze, Neli Badalashvili, Kakha Jokhadze Duration: 80 minutes Hall: Time: 19:00 Price: 7, 10 GEL Griboedov Theatre 2 Rustaveli Ave. Tel: 293-11-06 Thunder Director: Vakhtang Nikolava Cast: Mikhail Arjevanidze, Archil Baratashvili, Irina Meghvinetukhutsesi, Vano Kurasbediani, Sofia Lomjaria, Ana Arutunyan, Oleg Mchedlishvili Time: 18:00 Price: 5 GEL Pantomime Theatre 37 Rustaveli Ave. Tel: 299-63-14 Terenti Graneli - The Coriander Thrown to the Moon Director: Amiran Shalikashvili Duration: 60 minutes Hall: Time: 19:00 Price: 10 GEL

Gallery

Gallery “Vernisage” is pleased to invite you of Levan Varazi, Temur Kuliani, Zezva Archemashvili exhibition Gallery Vernisage 7, Brothers Zubalashvili Str. Tel: 299-88-08 till November 9 Personal Exhibition of Gia Gugushvili TBC Art Gallery 7, Marjanishvili Str. Tel: 227-27-27 Gallery’s working hours: Monday-Friday 12:00-20:00 till - December 1 The First Triennale - Offside Effect Sh. Amiranashvili Art Museum 1, Gudiashvili Str. Tel: 299-71-76 Museum is working everyday except Monday. From 11:00 till 17:00 till - November 20 Lado Gudiashvili exhibition “Promenade” is presented at the Lado Gudiashvili Exhibition Hall 11 L. Gudiashvili Str. Tel: 293 23 05 Exhibition Hall is working every day, 11:00 - 18:30 except Mondays and official holidays. Entry: Adults - 5 GEL / People from 6-18 - 3 GEL / Students and pensioners (with ID) - 3 GEL / Admission is free for orphan groups (with proof of status) and for children under 6 http://lgexhibitionhall.info-tbilisi.com/ till - May 30 Dimitri Shevardnadze National Gallery will host the exhibition “Reframing the 80s: Georgian Art at the End of the 80s and the Beginning of the 90s” D. Shevardnadze National Gallery 11, Rustaveli Ave. Tel: 299-80-22 Gallery’s working hours: Saturday-Sunday 10:00-18:00 till - November 20 Exhibition “New Life of Eastern Collections”. On Exhibition will be presented masterpieces of eastern collections reserved in Shalva Amiranashvili Art Museum of Georgian National Museum Simon Janashia State Museum 3, Rustaveli Ave. Tel: 299-80-22 Museum is working everyday except Monday. From 10:00 till 18:00 till - December 30

November 10, 2012

Clubs, Pubs…

21:00 - Veriko Turashvili & Live Band, DJ Datuna SkyyBar 22 Metekhi Str. Mob: 592 32-32-32 19:00 - Geishas dances Sushi Bar Samurai 9 G. Tabidze Str. Mob: 577-22-60 01; Tel: 240-29-99 22:00 - Resident DJ Tako Lounge Bar “Kalakuri” 3 Shavteli Str. Tel: 2 365-365 Restaurant is working 24 hours Entertainment at the restaurant “Mghvime” is colorful. Every evening from 20:00 inextinguishable star of Georgian Estrada Gia Suramelashvili. Estrada ensemble “Mghvime” (3 boys and one girl), tam-tam, violin. During weekdays: Singer, composer Kaki Bolkvadze and hot Georgian and Asian dances Restaurant “Mghvime” Address: Left bank of Mtkvari River (next to shop “Riverside”) Phone: 2 305 558/ 2 359 540; 599 56 60 72 Every day from 17:00 restaurant Bermukha is awaiting you with renovated hall and colorful show program. Music program starts from 19:00: Dato Archvadze’s quartet “Taoba”: Georgian folk and city songs. Estrada singers: Giorgi Tsiklauri, Nina Okroashvili, Giorgi Kakutia Restaurant “Bermukha” Agmashenebeli lane 13th km. Tel: 259 69 69; Mob: 598 59 69 69 20:00-23:00 - “Kalakuri’s Quartet” - with live performance of city songs, and also universal songs Restaurant “Kalakuri” 3 Shavteli Str. Tel: 2 365-365 22:00 - Merab Sephashvili & DJ Dachi Club “Kalakuri” 3 Shavteli Str. Tel: 2 365-365 20:00-23:00 - Georgian Dances Restaurant “Dzveli Sakhli” 3, Sanapiro Str. Tel: 2 365-365 22:00-01:00 - Group “Comic Condition” Tavern “Scarlet Sails” 25, Leselidze Str. Tel: 293-10-28 20:30 - Maidan Jazz Band Restaurant “Maidan” 6, Rkinis Rigi Str. Tel: 275-11-88; 590 75-11-88 21:00-24:00 - Jazz Band Restaurant “Chardin 12” 12 Chardin Str. Tel: 293-15-56; Mob: 577 480-460 21:00 - Keti Paresashvili Café “Kala” 8/10 Erekle II Str. Mob: 599 79-97-37 21:00-24:00 - Band “Rustavi 2” (Covers) Pub “Dublin” 8 Akhvlediani Str, Tel: 298-44-67

Cinema

Concert

A. Griboedov Russian State Drama Theatre 2 Rustaveli Ave. Tel: 293-11-06 One Act ballets 19:00 - Marguerite and Armand, P.Tchaikovsky Serenade, Reflections Cast: Nina Ananiashvili, Vasil Akhmeteli. Piano: Tamar Machavariani - (Ticket Price - 7 - 30 GEL)

Theatre

Rustaveli Theatre 17, Rustaveli Ave. Tel: 272-68-68 The Prince of Homburg Director: Gosha Gorgoshidze Cast: Irakli Macharashvili, Marina Janashia, Ia Sukhitashvili, Zura Ingorokva, Sandro MikuchadzeGhaghanidze, David Uplishashvili, Bacho Chachibaia, Bachi Lezhava, Beka Songhulashvili, Manana Abramishvili Hall: Grand Stage Time:19:45 Price: 6 - 15 GEL Marjanishvili Theatre 8 Marjanishvili Str. Tel: 2 955-966 As You Like It Director: Levan Tsuladze Cast: Manana Kozakova, Nato Kakhidze, Ketevan Shatirishvili, Ketevan Tskhakaia, Nata Murvanidze, Tamar Bukhnikashvili, Nikoloz Tavadze, Malkhaz Abuladze, Beso Baratashvili, Davit Khurtsilava, Nika Kuchava, Zurab Berikashvili Duration: 120 minutes Hall: Big Stage Time: 20:00 Price: 4 - 10.50 GEL Marjanishvili Theatre 8 Marjanishvili Str. Tel: 2 955-966 Landscape’s Lack of Warmth Director: Dimitri Khvtisiashvili Cast: Eka Chkheidze, Varlam Korshia, Lile Philphani, Dimitri Tatishvili Duration: 120 minutes Hall: Theatre in Attic Time: 20:00 Price: 11 GEL Liberty Theatre 2 Rustaveli Ave. Tel: 298-58-21 I Love You, I Love You, I Love You Director: Avto Varsimashvili Cast: Mariam Jologua, Apolon Kublashvili, Ani Aladashvili, Giorgi Jikia, Kakha Mikiashvili, Mamuka Mumladze, Sandro Margalitashvili Duration: 150 minutes Hall: Time: 19:00 Price: 5, 10, 15 GEL Tumanishvili Film Actors Theatre 164 Agmashenebeli Ave. Tel: 234-28-99 Bald-headed Singer Lady Director: Zurab Getsadze Cast: Nana Shonia, Temo Natroshvili, Vano Tarkhnishvili, Maia Gelovani, Giorgi Nakashidze, Nanuka Litanishvili Duration: 85 minutes Hall: Time: 19:00 Price: 7 GEL V. Abashidze State Music and Drama Theatre 182 Agmashenebeli Ave. Tel: 234-80-90 Macbeth Director: David Doiashvili Cast: Ana Aleksishvili, Imeda Arabuli, Buba Gogorishvili, Nanka Kalatozishvili, Tornike Gogrichiani, Giorgi Vardosanidze, Archil Sologhashvili, Tato Chakhunashvili Duration: 140 minutes Hall: Time: 19:00 Price: 10 GEL Akhmeteli Theatre 8 Vekua Str. Tel: 262-54-37, 262-59-73, 262-61-97 A Light in the Darkness Director: Nino Shotadze Cast: Marina Kharchilava, Vazha Tsitsiloshvili, Gvantsa Kandelaki, Akaki Khidasheli Duration: 80 minutes Hall: Time: 19:00 Price: 7, 10 GEL Royal District Theatre 10 Abesadze Str. Tel: 299-61-71 Streap-Tease Director: Nika Tavadze Cast: Paata Inauri, Data Tavadze Duration: 70 minutes Hall: Time: 20:00 Price: 7, 10 GEL Griboedov Theatre 2 Rustaveli Ave. Tel: 293-11-06 Killing a Man

Director: Giorgi Margvelashvili Cast: Irina Meghvinetukhutsesi, Valery Kharutchenko Duration: 150 minutes Hall: Time: 18:00 Price: 5 GEL

Gallery

Personal Exhibition of Gia Gugushvili TBC Art Gallery 7, Marjanishvili Str. Tel: 227-27-27 Gallery’s working hours: Monday-Friday 12:00-20:00 till - December 1 The First Triennale - Offside Effect Sh. Amiranashvili Art Museum 1, Gudiashvili Str. Tel: 299-71-76 Museum is working everyday except Monday. From 11:00 till 17:00 till - November 20 Lado Gudiashvili exhibition “Promenade” is presented at the Lado Gudiashvili Exhibition Hall 11 L. Gudiashvili Str. Tel: 293 23 05 Exhibition Hall is working every day, 11:00 - 18:30 except Mondays and official holidays. Entry: Adults - 5 GEL / People from 6-18 - 3 GEL / Students and pensioners (with ID) - 3 GEL / Admission is free for orphan groups (with proof of status) and for children under 6 http://lgexhibitionhall.info-tbilisi.com/ till - May 30 Dimitri Shevardnadze National Gallery will host the exhibition “Reframing the 80s: Georgian Art at the End of the 80s and the Beginning of the 90s” D. Shevardnadze National Gallery 11, Rustaveli Ave. Tel: 299-80-22 Gallery’s working hours: Saturday-Sunday 10:00-18:00 till - November 20 Exhibition “New Life of Eastern Collections”. On Exhibition will be presented masterpieces of eastern collections reserved in Shalva Amiranashvili Art Museum of Georgian National Museum Simon Janashia State Museum 3, Rustaveli Ave. Tel: 299-80-22 Museum is working everyday except Monday. From 10:00 till 18:00 till - December 30

November 11, 2012

Clubs, Pubs…

21:00 - Agora Live Band, DJ Datuna SkyyBar 22 Metekhi Str. Mob: 592 32-32-32 Every day from 17:00 restaurant Bermukha is awaiting you with renovated hall and colorful show program. Music program starts from 19:00: Dato Archvadze’s quartet “Taoba”: Georgian folk and city songs. Estrada singers: Giorgi Tsiklauri, Nina Okroashvili, Giorgi Kakutia Restaurant “Bermukha” Agmashenebeli lane 13th km. Tel: 259 69 69; Mob: 598 59 69 69 20:00-23:00 - “Kalakuri’s Quartet” - with live performance of city songs, and also universal songs Restaurant “Kalakuri” 3 Shavteli Str. Tel: 2 365-365 19:00 - Geishas dances Sushi Bar Samurai 9 G. Tabidze Str. Mob: 577-22-60 01; Tel: 240-29-99 Restaurant is working 24 hours Entertainment at the restaurant “Mghvime” is colorful. Every evening from 20:00 inextinguishable star of Georgian Estrada Gia Suramelashvili. Estrada ensemble “Mghvime” (3 boys and one girl), tam-tam, violin. During weekdays: Singer, composer Kaki Bolkvadze and hot Georgian and Asian dances Restaurant “Mghvime” Address: Left bank of Mtkvari River (next to shop “Riverside”) Phone: 2 305 558/ 2 359 540; 599 56 60 72 22:00 - Karaoke Party! Host - Salome Gogiashvili & DJ Dachi Club “Kalakuri” 3 Shavteli Str. Tel: 2 365-365 20:00-23:00 - Georgian songs with live performance Restaurant “Dzveli Sakhli” 3, Sanapiro Str. Tel: 2 365-365 20:30 - Georgian folk ensemble “Urmuli”, georgian dances Restaurant “Maidan” 6, Rkinis Rigi Str. Tel: 275-11-88; 590 75-11-88 21:00-24:00 - Jazz Band Restaurant “Chardin 12” 12 Chardin Str. Tel: 293-15-56; Mob: 577 480-460 21:00 - Live Band Café “Kala” 8/10 Erekle II Str. Mob: 599 79-97-37 21:00-24:00 - Band “Rustavi 2” (Covers) Pub “Dublin” 8 Akhvlediani Str, Tel: 298-44-67

Cinema

Concert

A. Griboedov Russian State Drama Theatre 2 Rustaveli Ave. Tel: 293-11-06 One Act ballets 15:00 - Marguerite and Armand, P.Tchaikovsky Serenade, Reflections Cast: Nina Ananiashvili, Vasil Akhmeteli. Piano: Tamar Machavariani - (Ticket Price - 7 - 30 GEL)

Theatre

Rustaveli Theatre 17, Rustaveli Ave. Tel: 272-68-68 The Prince of Homburg Director: Gosha Gorgoshidze Cast: Irakli Macharashvili, Marina Janashia, Ia Sukhitashvili, Zura Ingorokva, Sandro MikuchadzeGhaghanidze, David Uplishashvili, Bacho Chachibaia, Bachi Lezhava, Beka Songhulashvili, Manana Abramishvili Hall: Grand Stage Time: 19:45 Price: 6 - 15 GEL Marjanishvili Theatre 8 Marjanishvili Str. Tel: 2 955-966 As You Like It Director: Levan Tsuladze Cast: Manana Kozakova, Nato Kakhidze, Ketevan Shatirishvili, Ketevan Tskhakaia, Nata Murvanidze, Tamar Bukhnikashvili, Nikoloz Tavadze, Malkhaz Abuladze, Beso Baratashvili, Davit Khurtsilava, Nika Kuchava, Zurab Berikashvili Duration: 120 minutes Hall: Big Stage Time: 20:00 Price: 4 - 10.50 GEL Marjanishvili Theatre 8 Marjanishvili Str. Tel: 2 955-966 Extravagansa Finger Theatre Director: Beso Kupreishvili Cast: Zaal Kakabadze, Teona Maghalashvili, Giorgi Mebaghishvili, Elene Pirtskhalava, Tinatin Tsuladze Duration: 55 minutes Hall: Theatre in Attic Time: 20:00 Price: 11 GEL Liberty Theatre 2 Rustaveli Ave. Tel: 298-58-21 Beautiful Georgian Woman Director: Avto Varsimashvili Cast: Goga Barbakadze, Tamuna Nikoladze, Keta Lortkipanidze, Kakha Mikiashvili, Jaba Kiladze, Apolon Kublashvili, Mariam Jologua Hall: Time: 19:00 Price: 5, 10, 15 GEL Tumanishvili Film Actors Theatre 164 Agmashenebeli Ave. Tel: 234-28-99 One evening with poets “Naked theatre” Director: Avto Bakradze, Giorgi Giorgadze Cast: Nini Kvaskhvadze, Guram Laliashvili, Giorgi Maghaladze Hall: Time: 19:00 Price: 7 GEL V. Abashidze State Music and Drama Theatre 182 Agmashenebeli Ave. Tel: 234-80-90 Macbeth Director: David Doiashvili Cast: Ana Aleksishvili, Imeda Arabuli, Buba Gogorishvili, Nanka Kalatozishvili, Tornike Gogrichiani, Giorgi Vardosanidze, Archil Sologhashvili, Tato Chakhunashvili Duration: 140 minutes Hall: Time: 19:00 Price: 10 GEL Akhmeteli Theatre 8 Vekua Str. Tel: 262-54-37, 262-59-73, 262-61-97 In the Pitcher?!... Director: Otar Bagaturia Cast: Shalva Bakhtadze, Vako Mandzulashvili, Ana Matuashvili, Kote Mzhavia, Valeri Toronjadze, Lekso Turiashvili, Vaso Sikhashvili Duration: 80 minutes Hall: Time: 19:00 Price: 7, 10 GEL Griboedov Theatre 2 Rustaveli Ave. Tel: 293-11-06 Tale of King Saltan Director: Avtandil Varsimashvili Cast: Mari Kitia, Mikhail Arjevanidze, Apolon Kublashvili, Karina Kenia, Sopo Lomjaria, Ludmila ArtyomovaMghebrishvili Duration: 70 minutes Hall: Time: 12:00 Price: 5 GEL

Gallery

For more information, please, visit the following website:

www.info-tbilisi.com E-mail: afisha@info-tbilisi.com

CMYK

U.S. Business In Georgia

HEADLINE NEWS & ANALYSIS

FINANCIAL

5 November, 2012 | finchannel.com

Advertiser: Contact FINANCIAL Ad Dep at marketing@finchannel.com

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FINANCIAL HEADLINE NEWS & ANALYSIS finchannel.com | 5 November, 2012

| places we strongly reccommend to visit |

dining La Brioche

20 Telavi Str. Tel: 277 20 20 Fax: 277 21 20

www.sheraton.com/tbilisi

4 Kargareteli str. Tel; 2236278 www.kenari.ge info@kenari.ge

1 Brother Kakabadze Str.

15 Lubliana Str.

Tel: 251 00 01 Fax: 253 00 44 info@zarapxana.ge www.zarapxana.ge

AeroSvit Representative office in Georgia Address: 25 st.Leselidze Office 205 Tbilisi 0160, Georgia  Tel: 243 96 93 Fax: 243 96 93  tbilisi@aerosvit.com

37 Chavchavadze Ave. Tel.: 291 30 26; 291 30 76

Tel: 292 29 45; Fax: 292 29 46; tk@mcdonalds.ge

Addr: Batumi, Georgia, Parnavaz Mepe №25

Tel.: 260 15 36 info@piazza.ge, www.piazza.ge

Betsy’s Hotel 32-34 Makashvili Street, 0108, Tbilisi, Georgia

Tel.: 293 14 04, Fax: 299 93 11 info@betsyshotel.com www.betsyshotel.com

5 Chavchavadze Ave. 13, Rustaveli Avenue.; Tel.: 2 779 200 www.TbilisiMarriott.com tbilisi.marriott@marriotthotels.com

4, Freedom Square, Tel: 2 779 100 www.CourtyardTbilisi.com courtyard.tbilisi@marriotthotels.com

3 Vashlovani Str.; (“Super Babilon” oposit) Tel.: 298 90 86

Tel.: 222 44 17 577 22 99 22 plasticsurgerygeo.com

Hotel “O. Galogre” The tickets are available at tbilisi international airport freedom square 4 courtyard marriott hotel, 1st floor

Tel: 2400 400; 2400 040

Ice cream, coffee, blended drinks, pastry, salads… Open 8am-2am

36 Al. Kazbegi ave. Tbilisi, 0177, Georgia Tel/Fax: 229 43 43 info@intercontinental.ge www.intercontinental.ge

Tel: 888 222 2900 www.sheraton.com/tbilisi

Le Marais

Thai

(May-October)

8am-1am

(November-April)

Addr: 12 Eristavi Str. (at the round garden) 34 Leselidze Str. 7a Pekini Str. Phone: 299 03 99; 574 74 69 69 info@lucapolare.com www.lucapolare.com

Radisson Blu Iveria Hotel Rose Revolution Square 1 Tel.: 240 22 00; Fax: 240 22 01 info.tbilisi@radissonblu.com radissonblu.com/hotel-tbilisi

Erekle II str. Tel: 555 00 44 46

GEORGIA PALACE HOTEL

32 Abashidze Str. Tel: 222 40 83

26 May Square Tel: 2 30 00 99 www.hi-tbilisi.com

Addr: 35 Abashidze Str. Tel.: 222 17 70, www.thai.ge

50 Chavchavadze Ave. Tel: 2 91 52 42

www.hotelanaklia.com

13 Shavteli Str. Tel: 2439494 info@ambasadori.ge www.ambasadori.ge

6 Kavsadze Str. Tel: 2 25 15 45 2 55 44 55 www.lottravel.ge

For advertising please contact: 4 Freedom Square Tel: 2988 988, Fax: 2988 910 E-mail:gmt@gmt.ge, www.gmt.ge

Georgian Real Estate Management The Green Building, 6 Marjanishvili Street, 0102 Tbilisi Tel: 243 30 77, Fax: 243 30 79 www.firstbrokerage.ge E-mail: info@firstbrokerage.ge

Village Anaklia, Zugdidi, Georgia Tel: 2 60 99 90 2 60 99 91

275 Agmashenebeli Ave., Kobuleti, Georgia Tel: 2242400 Fax: 2242403

E-mail: info@gph.ge, www.gph.ge

8, Vakhtang Gorgasali Str. Batumi, Georgia Tel: +995 422 27 48 45 info@hotelgalogre.com www.hotelgalogre.com

577 741 700 marketing@finchannel.com

BusinessTravelCom Berika International LTD GSA for Czech Airlines in Georgia Tel.: 2227941, Fax: 2222941

Hotel and Airticket Booking: 2 999 662 | SKY.ge

CMYK

HEADLINE NEWS & ANALYSIS

U.S. Business In Georgia

FINANCIAL

5 November, 2012 | finchannel.com

The Long Road Bronco Bamma and Mitt Romney: Abigael’s Tears Guy de Fontgalland

Bank Republic Invites Students to a Masterclass

ank Republic invited the students of arts and humanities studying at Tbilisi Ivane Javakhishvili State University to the Dimitri Shevardnadze National Gallery for a Masterclass held my art expert Ketevan Kintsurashvili today. The topic of the Masterclass was the life and work of the prominent immigrant artist Vera Pagava. After a brief tour around the gallery, Ketevan Kintsurashvili sat down with the students in the exhibition hall, in the surrounding of Vera Pagava’s artworks, and spoke

about the uniqueness of her art. At the end of the Masterclass, the art expert answered the questions of the audience. The exhibition of the paintings of Vera Pagava at the National Gallery opened in Mid-September. The paintings were initially planned to stay in Georgia for a month. However, due to the high public interest, the decision was made to give the Georgian art lovers an opportunity to enjoy the artworks of Vera Pagava for a little longer. Teiko Kandelaki, Head of Corporate Communication Department:

“It is very important for Bank Republic, as a socially responsible banking institution, to maintain its close ties with students and future generation, and to participate in the formation of their value system. We have invited Ms. Ketevan Kintsurashvili, the art expert, to conduct the Masterclass for the art students. She knew Vera Pagava in person and was close to her works even in the early period. Bank Republic will be pleased to organize events for students in the future, contributing to having the young generation who appreciates genuine art.

Attracting foreign investment By Daan Harmsen, Financial Manager, GeoCapital Microfinance Organization

ince Georgia’s Rose Revolution in 2003, the investment climate has improved dramatically: doing business has become much simpler, and stability has increased. The country has witnessed especially massive investments by International Financial Institutions (IFIs), such as the European Bank for Reconstruction and Development, the Overseas Private Investment Corporation, and the World Bank. These institutions are often able to provide financing where private investors cannot or don’t want to: they have a higher tolerance for risk, because they are not necessarily looking for profit for their investors, usually fulfill political or social objectives set by their funders or shareholders. They often co-invest with private investors, because investors know that governments are less likely to interfere in projects that are backed by IFIs. However, as the economy becomes

more developed, Georgia needs to make the transition from depending on capital provided by multilateral institutions to seeking more private capital. For Georgia, one of the biggest barriers to foreign private investment is the perception of risk that is present among members of the investment community. “Didn’t the Russians invade them three years ago?” “Wasn’t Georgia part of the Soviet Union? No thanks.” These perceptions prevent many foreign investors from even considering the possibility of investing in Georgia. They simply think there is too much risk. No matter how safe Georgia actually is, and how much opportunity there is, unless the country manages to change some of these perceptions, it will be difficult to attract significant private investment. The fact is that many foreign-owned businesses in Georgia have operated in Georgia with relative ease, and have been able to profit from the abundance of opportunities that can be found in this country. We at GeoCapital have been doing business in Georgia for almost two years, and have found

the business climate to be conducive to foreign investment: regulations are generally business-friendly, and government services are often very streamlined. After the elections, investor confidence in Georgia suffered a temporary setback. While the relatively democratic transition of power is certainly positive, the investor community is still holding back slightly to see who the “new guy on the block” is, and what his government will do. Reputational damage has been done during the election campaign, but hopefully the new government will be able to show that they will continue the business-friendly policies of the past years and maintain stability. Georgia has benefited enormously from the investments of IFIs over the years, but now is the time to show the world how much it has achieved in terms of improving the business climate, and how many investment opportunities there still are. Georgia is not scary, and the world needs to know it: we are LONG Georgia. daan.harmsen@geocapital.ge

VTB Bank (Georgia) starts loan campaign for small and medium businesses.

rom October 31 VTB Bank starts campaign - loans at “minus 3%” for small and medium businesses. The main purpose of the campaign is credit refinance for small and medium businesses at a reduced up to 3 % of interest rate. Within a campaign, till October 30, with VTB Bank loans is possible to repay loans at other Banks or lending institution at a reduced up to 3 % of interest rate. • Loan amount is up to 250,000 Gel (or the equivalent in USD and euro) • Loan type – according to stan-

dard or seasonal schedule, credit line • Maximum period - 7 years The loan will be issued within 2 working days, the procedure is simplified, what excludes loss of time. To obtain a credit it is necessary to have a minimum 12 month of work experience. The existence of the current loan at other bank. JSC VTB Bank Georgia, head of the Department of small and medium-sized businesses Archil Chachkhiani declared: From today VTB Bank (Georgia) offers new profitable conditions to

the representatives of small and medium businesses, mentioned offer will give them an opportunity to repay the current loan, at a significantly reduced rate, moreover the loan will be issued within 2 days with simplified procedure. Reference: JSC VTB Bank Georgia is member of International Financial Group VTB. Today Group VTB operates at more than 20 countries. VTB Group universal model includes: corporate, retail and investment businesses. JSC VTB Bank Georgia has the highest credit rating of BB among banks operating in Georgia.

bigael Evans is a four-year old red haired, pinkish and highly sensitive kid from Colarado. She was travelling in a car, seated behind her mother at the steering wheel, and enjoying the ride just a few days ago when disaster struck. The National Public Radio station began the usual coverage of the US Presidential Election. Abigel burst into tears and sobbed uncontrollably. Her mother pulled the car into a public car park and asked Abigel what was wrong. The four-year old began to sob and cry, with her mouth pouted angrily and with tears rolling down her cheeks. Choking with emotion, Abigael moaned “ am tired of Bronco Bamma and Mitt Romney”. The mother obviously videoed the child’s outrage and within hours it hit the YouTube and major TV channels including mainstream channels such as CNN. Hearing of the kid’s mental trauma, the National Public Radio station responsible issued an apology: “On behalf of NPR and all other news outlets, we apologize to Abigael and all the many others who probably feel like her. We must confess, the campaign’s gone on long enough for us, too. Let’s just keep telling ourselves: “Only a few more days, only a few more days, only a few more days,” Perhaps, only in a country such as the United States, a Public Broadcasting company or any channel for that matter will take a child’s plea on a major global event seriously. The Broadcasting company’s response to Abigael’s sorrow is tantamount to saying that this noisy campaign where everything from Mitt Romney’s breakfast cereals to Bronco Bamma’s spirituality are viewed as having an impact on the ability to govern, may have indeed over-shadowed some of the real issues which need to be addressed. While those who have the power to elect the next President grapple with national issues of jobs and money, of religion and morals, those outside the United States whose lives are often affected by key American policies and initiatives can only wait and hope that the next President of the world’s biggest economy can build bridges and bring hope. A Hong-Kong-based AFP-Ipsos Poll recently found that 86 per cent of Japanese would like to have Barack Obama continue in power while 63 per cent Chinese would like to have the same incumbent President. Japan and China being too rather large economies, this does send a signal on what the thinking could be outside Washington. Mitt Romney’s anti-China statements related to currency manipulation, his forthright stance on beefing up the American military corridor in the Pacific, and his open and defiant stance where Russia is pitted as Enemy No.1 will not certainly sit well with the Asians who may view him as far too right of the centre. And given the contortions in the Middle East and the continuing destruction, the suffering and the destabilization of economies and societies, Asians would rather have a more positive and engaging American foreign policy which gives them a level of comfort and a certain insurance against man-made disasters. Barrack Obama did win a Nobel Prize for Peace. He admitted he did not deserve it and in fact he did not know why he was ever awarded a Nobel Prize. Probably the Prize was given to exhort him to seek and obtain global peace, across continents, using the staging power America has. Although his tenure in the Oval Office did not bring about any strategic or transformational change in the way one hoped as he was sworn in, he did

manage to keep to a broader agenda of disengagement from Iraq, Afghanistan while keeping the pressure on hunting down the terrorists across as number of countries. He also started his term as President with an American economy in dire straits, the global economy in tatters and a multitude of problems following him from nations which were American allies and sworn enemies. Throughout his term, coming to an end with the worst hurricane in American history, he could not have had an easy ride. Mitt Romney sees the world very much as a full-blooded American super-hero, not willing to take a chance on anything which will hurt American interests, at home or outside. It is his second shot at the Presidency. He was governor of a blue-ribbon state and understands the path to wealth creation as he has done for himself and his family. He envisions America as a nation which must continue to be the superman at all costs, with much more fire power. I believe that this is where Obama and Romney are adrift, not necessarily in the billions of dollars to be spent to maintain that power, but in the overall philosophy of engagement with other nations, especially those which are now showing much economic and political muscle, and are shifting the balance of power. I was a student of Joseph Nye and Michael Dukakis at Harvard where I took a keen interest in American Foreign Policy. Joseph Nye is a brilliant scholar with an in-depth understanding of leadership, power and powerdrivers. He had always argued that coercive power that subjects others to any form of fear or indignity would be counter-productive in the long term. I am still his disciple and I believe in his philosophy of engagement that reduces tensions, builds common grounds, builds bridges and constantly provides positive signals for understanding and cooperation. America, being a super power, has a great responsibility for actively setting a global agenda for peace which will last beyond the lifetime of any presidency. American voters also need to understand that, apart from pursuing their own limited gains at home, they need to show other nations that they are genuinely and devoutly conscious of freedom, democracy and economic prosperity elsewhere on earth. This cannot be achieved by extolling the virtues of freedom, democracy and economic prosperity, but in developing a long road map and milestones for achieving them, in every single nation. The world has become somewhat de-sensitized to human suffering only because the scale at which it happens both through wars, rebellions, suppressions and of course the rage of nature from Fukushima to New York. One sees, with vivid pictures on TV, the bombings, the bloodshed, destroyed homes and streets, death and torment of people fleeing for their lives with babes in arms. The Syrian catastrophe is almost 19 months old. The intensity of fighting by the rebels, the bombings by the government forces still go unabated. There does not seem to be an end in sight while the children lose their limbs, mothers bury their sons and daughters. Millions are caught in the cross-fire. America needs a more stubborn, unwavering and engaging foreign policy that does not double-deal with dictators and corrupt governments. It’s foreign policy signals must be undiluted, direct and convincing to those who may step out of line. Waging of wars must be the last resort against unjust aggression by a tyrant or a nation. There is too much at stake for people everywhere.

CMYK

FINANCIAL HEADLINE NEWS & ANALYSIS finchannel.com | 5 November, 2012

U.S. Business In Georgia

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HEADLINE NEWS & ANALYSIS

U.S. Business In Georgia

FINANCIAL

5 November, 2012 | finchannel.com

USAID Spent USD 52 Million U.S. in Georgia this Year Assistance to Georgia The FINANCIAL

By Mariam Papidze

he United States has provided over $3 billion in assistance to Georgia since its independence in 1991, including a $1 billion post-conflict assistance package in the aftermath of the 2008 conflict. U.S. assistance is critical to supporting Georgia’s progress toward democratic governance, a stable market-based economy, and Euro-Atlantic integration. U.S. assistance is designed to sustain, leverage, and build upon prior programs--especially those launched with the $1 billion assistance post-conflict package-and to further institutionalize gains made to ensure strong democratic and economic foundations for Georgia. The United States will continue to develop assistance projects that bolster democratic and participatory governance, develop institutions that uphold and enforce the rule of law, improve the quality and delivery of social services, promote integration with NATO and increased regional cooperation, lay the groundwork for a sustainable resolution of conflicts with the separatist regions based on Georgia’s territorial integrity, and achieve stable economic growth. Georgia was one of the first countries to receive a Millennium Challenge Corporation (MCC) Compact in September 2005. The 5-year $395 million Compact focused on enhancing regional infrastructure and energy security. Following completion of the initial Compact in April 2011, Georgia was one of the first countries selected as eligible for a second Compact. Ongoing U.S. support aims to help citizens exercise a more active role in their own democracy and to engage constructively in political dialogue and oversight over their government. Programs are designed to enhance the ability of civil society and independent media to enable informed civic participation and public debate, provide improved means of communicating citizen interests, and promote government accountability. U.S. programs also strengthen democracy and governance by enhancing institutional checks and balances. This includes assistance to strengthen the rule of law; increase government transparency, accountability, and responsiveness; and promote political competition and democratic electoral processes. U.S. assistance also supports economic growth by promoting private sector competitiveness and development of key sectors of the economy such as agriculture. Programs also provide technical assistance aimed at developing a business-enabling environment that will strengthen investor confidence and lead to widespread growth. U.S. programs continue to assist internally displaced populations and also seek to increase the standard of living of all Georgians through development and reform of the education and health sectors. U.S. assistance works to builds capacity in the security sector by enhancing the professionalism and capacity of the armed forces, furthering Georgia’s ability to secure its borders, improving law enforcement, and addressing cross-border challenges such as trafficking in persons and narcotics. The strength of U.S.-Georgia relations is codified in the U.S.-Georgia Charter on Strategic Partnership, signed in January 2009. The first meeting of the Strategic Partnership Commission, held in Washington, DC, on June 22, 2009, launched four bilateral working groups on priority areas identified in the Charter: democracy; defense and security; economic, trade, and energy issues; and people-to-people and cultural exchanges. Senior-level U.S. and Georgian policymakers lead yearly meetings of each working group to review commitments, update activities, and establish future objectives. Since the signing of the Charter, the United States and Georgia have strengthened their mutual cooperation based on U.S. support for Georgia’s territorial integrity and sovereignty, and its commitment to further democratic reform. Source: State Department

Conflict Mitigation and Reconciliation $0.5 1% Democracy and Governanc $19.9 38% Health and Education $7.4 14% Economic Growth $24.4 47% The FY2013 budget has not been finalized yet. USAID expects a modest reduction from 2012 levels. “There have been many successes in USAID’s nearly twenty year history partnering with Georgia,” ,” Stephen Haykin, the Mission Director for USAID programmes in Georgia, told The FINANCIAL. “After the August 2008 conflict, USAID assisted nearly 40,000 farm families, including all internally displaced persons, by improving crop yields on more than 36,000 hectares of land in conflict-affected areas. The Business Climate Reform project achieved significant results, which contributed to Georgia’s rise from 112th on the World Bank’s Doing Business 2006 survey to 12th on the 2012 survey. Energy programmes provided assistance to improve management and operations at the Government of Georgia’s largest regional energy distribution company. For many Georgians especially for those outside Tbilisi - these improvements meant consistent electricity in their homes and businesses for the first time in fifteen years,” he added. “The October 2012 parliamentary elections were widely viewed as the most competitive and peaceful in Georgia’s history. USAID support enabled the Central Election Commission (CEC) to increase election transparency and helped political parties develop campaign strategies informed by voter research. Assistance also supported international elections observer missions,” Haykin said. “USAID’s Applied Civic Education and Teacher Training Program has been improving the quality of school-based civic education in Georgia and encouraging participation of youth in civic and democratic processes. It has achieved a number of successes, including creating a 50-hour accredited training course for civic education teachers, establishing 200 school-based civics clubs throughout Georgia, developing civics curriculum materials on active citizenship, and forming a national forum of civics teachers to encourage the best practices in civic education,” he added. As for the upcoming programmes, in 2013, USAID intends to support democratic checks and balances and accountable governance, inclusive and sustainable economic growth, and a healthy, stable and integrated society. Q. Which fields were the most attractive for US and foreign business in Georgia this year? Could you forecast what fields will be interesting in 2013 as well? A. American investors are involved in a number of fields in Georgia, from communications to aviation, from hotels to food production. Generally, U.S. and foreign investors are interested in the same sectors the Georgian Government is promoting - hydropower, tourism, agriculture, and

Stephen Haykin, the Mission Director for USAID programmes in Georgia

logistics. I expect that this trend will continue in 2013, especially logistics. Businesses are looking to see what signals the new government will send and how the different political groups will work together. Our hope is that the incoming government will facilitate increased levels of private sector investment, development, and growth. Q. USAID is involved in the healthcare system and has a programme for improving the system. What are the achievements so far? A. When USAID began operating in Georgia twenty years ago, the original programme focus was humanitarian assistance in response to conflict in South Ossetia and Abkhazia through providing food, clothing, medicine and other equipment to those displaced by conflict. In health, our work started back in the second half of the ‘90s by supporting the routine essential immunization of all children in Georgia. After a decade of extensive support from the international community (USAID, UNICEF, Government of Japan, WHO, GAVI), we were able to graduate our assistance in immunization in 2007. Since 2006, USAID has provided technical assistance to the Government of Georgia to improve the healthcare system. Since 2009, USAID’s project contributes to these efforts by strengthening insurers’ capacity to provide quality health insurance services, providers’ capacity to manage and deliver quality healthcare services, and the government’s capacity to guide and monitor health reforms. The impressive 48% decline in the total abortion rate from one of the highest registered rates in the world (3.2 in 2005 down to 1.6 in 2010) was mostly due to the donor assistance, with USAID being a leading donor along with UNFPA. The total fertility rate increased from the below the replacement rate of 1.6 in 2005 to 2.0 in 2010, which is very important for the sustainable development of the 4.2 million population Georgia. USAID has also provided a loan guarantee to TBC Bank for an USD 8 million loan to a private hospital investor, for the construction and renovation of eight hospitals in West Georgia. Q. What were the main problems in the healthcare system before USAID started its project? A. The major problem that Georgia’s health sector faced was a lack of financial access to even basic healthcare services for most of the people, hurting the disadvantaged and vulnerable segments of the population most of all. Inefficiency of an over-expanded medical facilities network and low quality of medical services was another major drawback/challenge. The

total abortion rate in Georgia was documented as highest in world, with very little information about voluntary contraception available. The burden of TB and emerging HIV infection was almost unbearable for the poorly functioning state. Q. The US Government supported a nuts training programme in Georgia. What is Georgia’s potential in producing nuts and can it be profitable for the country? Will the nuts sector be an important source of revenue growth in agriculture? A. Georgia is one of the top six producers and exporters of hazelnuts in the world. Hazelnuts account for 24% of Georgian agricultural exports. The amount of land currently dedicated to Georgian hazelnut production is expanding, and for good reason. Hazelnuts have a clear-defined value chain, and they are a leading export crop for Georgia, as they continue to attract foreign confectioners such as Ferrero International among other international large companies. Due to the growing global demand for hazelnuts, large companies are able to choose suppliers who produce a large quantity of high quality of goods. Georgia is in a position to attract additional global buyers. The hazelnut value chain faces several key constraints: Georgian hazelnut yields are significantly lower than international averages, thus reducing net income, quantity available for processing by the Georgian hazelnut sector, and amount sold/exported on an international scale. Because of the fragmentation and small size of hazelnut producers, they have different varieties which they harvest at different times, and they use different production and storage technologies - which impacts quality. Georgian hazelnut processors typically sell directly to the European market on the basis of price or through Turkish suppliers. Other non-traditional buyers exist who will pay more for hazelnuts and who wish to develop long-standing relationships with consistent sellers. In partnership with AgriGeorgia LLC Ferrero International’s local subsidiary jointly implement hazelnut farmers training to increase farmers’ productivity. More than 800 farmers were already trained in orchard floor management, pruning, integrated pest management (IPM), and harvesting and post-harvest handling. For the next year the trainings will be provided to 1,000 farmers. In August and September 2012, USAID, in close cooperation with GIZ Private Sector Development Program South Caucasus in Georgia, carried out a series of meetings and workshops with hazelnut value chain actors operating in Samegrelo, Guria, and Kakheti regions to refine the understanding of the main gaps and challenges affecting the product quality across the hazelnut value chain countrywide. GIZ, USAID and the GOG, will provide relevant assistance to increase quality standards and quality infrastructure capacity. USAID, in collaboration with the Georgian Accreditation Center (GAC) and the American National Standards Institute (ANSI) has been working to improve Georgia’s capacity in accreditation and conformity assessment. Both areas are considered key technical barriers in increasing the export of Georgian products to international markets. Universally recognized and accepted test results and certificates from these laboratories will validate the quality of Georgian produce and enable Georgian exporters to have better access to more high-end markets such as

established supermarket chains. EPI’s impact assessment for the hazelnut sector alone indicates that this accreditation will result in increased export value between USD 7 to USD 14 million annually. Q. A lot of problems have been discovered in the court system. How does USAID help this system and what have the results been so far? In your opinion what are the main problems in the court system today, and how can Georgia solve them? A. According to the U.S. State Department’s 2011 Human Rights Report, “Shortfalls in the rule of law, such as concerns about ensuring the judiciary’s independent and even-handed application of due process protections” was named as one of the three most important human rights problems in Georgia. Some of the problem areas that consistently come up are lack of transparency of courts in general, lack of transparent and objective disciplinary proceedings against judges, opaque judicial selection, appointment and promotion rules and extremely weak role of individual judges and judges’ self-governance in administration of the judiciary. USAID’s current project in support of justice system reform is the Judicial Independence and Legal Empowerment Project (JILEP), implemented by the US organization East-West Management Institute. As a result of JILEP technical assistance and consultations, some important steps have been made towards the transparency of the High Council of Justice (HCOJ). JILEP supports nearly 30 nongovernmental watchdog organizations and media outlets that have pooled their efforts to advocate for justice system reforms through the Coalition for Independent and Transparent Judiciary. The creation of the Coalition is an important result itself, since it is not a frequent practice in Georgia for civil society organizations to join their efforts to strengthen their advocacy. Through JILEP, USAID has worked with both Transparency International and the Georgia Young Lawyers Association to build their capacity to undertake effective court monitoring activities. This is the first time in Georgia that NGOs have engaged in court monitoring and made their findings public. Both organizations publish their monitoring reports quarterly. Q. Due to the pre-election period and governmental changes in the country, some investors have lost confidence in doing business here. Some of them have suspended their business in the country. They are waiting for more political stability. What do you think about this? Will such a political situation be an obstacle for investors in Georgia? A. We have heard similar reports from foreign investors, many of whom were looking for signs of stability and a democratic election. I don’t think this is unusual or unexpected. Georgia faced a true test in its first democratic transition of power and so far, Georgia and its leadership are giving investors renewed confidence. So we remain optimistic. We look forward to further improvements in the business environment, including improvement in the administration of justice, increased competition and greater respect of international labour and environmental standards, all within the context of a privatesector oriented economy.

CMYK

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