Issue no: 1190/200
• OCTOBER 1 - 3, 2019
• PUBLISHED TWICE WEEKLY
PRICE: GEL 2.50
In this week’s issue... Weekly Entrepreneurial News @entrepreneur.ge NEWS PAGE 2
Tourism Products of Georgia Presented in Spain NEWS PAGE 2
Uneasy But Not Fearful: Prospects Of Global Slowdown And Geopolitical Tensions With Russia Affect Georgia’s Growth Expectations
Brock Bierman meeting with women entrepreneurs from across Georgia. USAID/Georgia
FOCUS
ON USAID
ISET PAGE 4
Brock Bierman on an agency trying to work itself out of a job
PAGE 5
Turnava: Flights with Russia May Resume in November BY THEA MORRISON
BUSINESS PAGE 6
Meet a Successful Entrepreneur in Growing Georgia’s Wine Sector BUSINESS PAGE 10
A Simple Story of the Zalkaliani-Lavrov Meeting
G
eorgia’s Minister of Economy and Sustainable Development, Natia Turnava, noted that direct flights between Georgia and Russia, suspended on July 8, 2019, may well resume this November. The Minister made the comment after the foreign ministers of the two countries had a meeting in New York on September 26, at the sidelines of the 74th session of the United Nations General Assembly (UNGA). Turnava said that November was named as the month when the suspended air traffic might be restored between Georgia and Russia.
UAE Set for 10th Annual Investment Meeting
POLITICS PAGE 11
Take the Road to Nenskra Valley - Chuberi CULTURE PAGE 11
Image source: reginfo.ge
"The first positive information that came was that direct air traffic between Georgia and Russia could be resumed this autumn. I have huge expectations that this will happen, because we already see the prerequisites for it,” she said, noting that the June 20-21 developments in Georgia, namely rallies and unrest in the capital that followed Russian lawmakers’ visit to the country’s parliament, had had a large-scale negative impact on the economy. “We have many times said that the Russian sanctions that followed the June developments brought much damage to Georgia. We hope for positive steps in this direction,” Turnava said, highlighting the GDP which fell by 0.8% and the economy which saw at least a $300 million loss. “Lifting these sanctions will be a positive step that will have a positive impact on expectations, on air traffic, and we expect the negative impact of the tourism sanctions on Georgia to soon be neutralized,” Turnava said. Continued on page 2
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2
NEWS
GEORGIA TODAY
OCTOBER 1 - 3, 2019
Tourism Products of Georgia Presented in Spain BY MARIAM MERABISHVILI
@entrepreneur.ge Gamarjoba! I’m the Editor-in-Chief of the Georgian edition of Entrepreneur magazine and I’m here to share the top weekly Entrepreneurial news with you: The idea of transforming a family tradition into a premium-class brand and introducing the wine of the region of Racha to the rest of the world came to young couple Levan Tsulukidze and his spouse Salome Bibilashvili. The winery is located in an historic area, adjacent to the Tsulukidze family fortress, and boasts a three-century-old wine cellar and Qvevris. The couple started the limited bottling of biologically pure Aleksandrouli wine just four months ago and it has already been introduced beyond the borders of their homeland, and wine enthusiasts in China can purchase the wine of Tsulukdze Wine Yards in a number of cities countrywide. The couple next plans to go global! In the modern cities, a lack of parking spaces is common. Drivers want a safe place to park their car or to rent out a space they have. The wePark app, launched by Giorgi Khoshtaria and Giorgi Moseshvili, who set a goal to resolve the widespread problem through digital means, offers an effective online system bringing together different parking services, decreasing the level of driver discomfort while searching for a parking space. At the first stage the application is to be available in Tbilisi and Batumi, however, it is also planned to launch the app on the global market, as the issue of car parking is significant worldwide. Grandpa Dato’s Toys offers popular eco-friendly wooden toys made by David Mosidze from Tsalenjikha. The 52-year-old entrepreneur is an engineer-constructor by profession and has arranged a special workshop in his house in the village of Mikava, Tsalenjikha municipality, where he makes different types of toys. Mosidze spent his 5,000 GEL win in the Produce in Georgia project on everything he needed to make his toy workshop. He wanted to make eco-friendly wooden toys to oppose the chemical-laden commercial varieties. His toys are made from different trees, guaranteeing their uniqueness. Follow the Entrepreneur Georgia Instagram page to get the latest updates from Georgian Entrepreneurs. For doing business with Georgian Entrepreneurs, write us on business@entrepreneur.ge
A
n important presentation was organized by the National Tourism Administration of the Ministry of Economy and Sustainable Development and the Embassy of Georgia to the Kingdom of Spain for Spanish tourism companies, media representatives and bloggers, seeing more than 120 guests in attendance. At the presentation, Mariam Kvrivishvili, Head of the National Tourism Administration introduced Georgian tourism products to the invited guests. She noted that demand and interest were very high, which gives Georgia hope and an opportunity to attract even more EU citizens and increase Spain's share in the country's tourism industry. “We are pleased to have held this kind of event for the first time in Madrid, providing an opportunity for up to 90 tour operators and up to 30 leading media
outlets to get to know Georgia's tourism potential and various tourism products, as well as discuss the importance of business tourism. After this event, Spanish tourism companies will know what they can offer Spanish tourists in Georgia, which is a four-season tourist destination with diverse nature and rich culture,” noted Kvrivishvili. Ilia Giorgadze, Ambassador Extraor-
dinary and Plenipotentiary of Georgia to the Kingdom of Spain, also addressed the guests. “I am pleased that such a successful event was held,” he said afterwards. “There was a lot of interest from Spanish companies and the media and it seems Spain's interest in Georgia is growing by the day. More Spanish tourists are now coming to Georgia and we hope even more will come next year.”
Turnava: Flights with Russia May Resume in November Continued from page 1 She also mentioned that Georgia is expanding its air traffic area by adding new destinations. “More people will come to Georgia if their travel costs are lower and there are more flights to choose from,” she said, and underlined that the next important step, both politically and commercially, is direct traffic with the US, noting that Georgia has already made very promising moves in that direction. “Flights with the US seem quite likely as we have received promising answers. While in the US, I met with the representatives of Delta and United Airlines. The dialogue has begun but it will take time,” Turnava said. Russian Foreign Minister Sergey Lav-
rov said his Georgian counterpart asked him about the resumption of direct flights between Russia and Georgia during their meeting. He said that Moscow made a decision to suspend flights with Georgia in response to an “embarrassing” move by the Georgian opposition during the InterParliamentary Assembly on Orthodoxy hosted by the Parliament of Georgia on June 20, when Russian lawmakers were visiting Georgia. "When we made this decision, it was announced that this is a temporary measure and that we would lift it once the situation was back to normal: when the Georgian leadership realizes the need to quell such incidents," Lavrov said. Russian President Vladimir Putin signed
a decree on June 21, which imposed a temporary ban on passenger flights to Georgia from July 8 for the “safety of Russian citizens.” The ban took effect on July 8 which sharply reduced the number of Russian tourists coming to Georgia and affected the economy, as Russian visitors amount to 70% of Georgia’s tourism market. In addition, Dmitry Peskov, Spokesperson of the President of Russia, expressed hope on the behalf of Official Moscow about the launch of all the necessary preconditions for lifting the flight ban on Georgia. “Air traffic has been suspended and not canceled forever. Thus, we hope that all the necessary preconditions will be set out in due time for the resumption of flights,” he stated.
4
BUSINESS
GEORGIA TODAY
OCTOBER 1 - 3, 2019
Prospects of Global Slowdown & Geopolitical Tensions with Russia Affect Georgia’s Growth Expectations BY DAVIT KESHELAVA AND YASYA BABYCH
I
SET-PI has updated its forecast of Georgia’s real GDP growth rate for the third and fourth quarters of 2019. Here are the highlights of this month’s release:
HIGHLIGHTS • Recently, Geostat has released the preliminary estimate of real GDP growth for the second quarter of 2019, which now stands at 4.5%. This is only 0.3 percentage points below ISET-PI’s recent forecast. • ISET-PI’s forecast of real GDP growth for the third quarter of 2019 stands at 7.1%—0.4 percentage points lower than last month’s prediction. The first estimate for the fourth quarter growth forecast stands at 5.5%. • Based on July’s data, we expect annual growth in 2019 to be 5.5%. Although the annual growth forecast equals the estimate of the previous report’s worst-case scenario, we still expect a downward correction of the annual GDP growth numbers towards the end of the year, since we have not fully taken into consideration impeded tourist inflows, deteriorated foreign direct investments and increased risk of negative external shocks. In addition, the National Bank of Georgia revised its expectation for real GDP growth down from 5% to 4.5% in 2019. According to the Monetary Policy Report, among the reasons behind the prediction’s downward revision is the rise of external sector risks.
The Georgian statistics office, Geostat, has released its preliminary estimate of GDP growth for the second quarter of 2019. Its estimated growth figure is 4.5%, which is 0.3 percentage points lower than ISET PI’s forecast. As a result, our projected real GDP growth for the third quarter of 2019 has been revised downward to 7.1%. According to Geostat, electricity, gas and water supply (11.5% yearly), hotels and restaurants (14.1% yearly), transport (17.9% yearly), communication (10.8% yearly) and real estate, renting and business activities (16.9% yearly) were the sectors with the largest contribution to the annual real GDP growth in the second quarter of 2019. While the mining and quarrying (-7.7% yearly), manufacturing (-4.5% yearly), construction (-4.6% yearly) and education (-7.9% yearly) sectors had a negative contribution to the Q2 growth figure. In addition, a number of variables demonstrated significant monthly and yearly changes in July. In particular, improved external statistics, depreciated real effective exchange rate, increased inflation, and increased volume of domestic and foreign currency deposits had a significant impact on the growth predictions.
IMPROVED EXTERNAL STATISTICS The second quarter of 2019 shows strong growth in the wider region. According to the estimates for Q2 2019, most of the countries in the region showed improvement compared to the same period in the previous year. The Armenian economy reached remarkable 6.6% annual growth. Furthermore, the economies of Russia and Kazakhstan advanced by
1.4% and 3.4% respectively. Meanwhile, Azerbaijan experienced 2.4% annual growth in the first half of 2019. Thus, improved economic conditions in the wider neighborhood stimulated the Georgian economy through the trade, remittances, and tourism channels. However, the effect of reduced tourism flows due to Russia’s prohibition of flights to Georgia still has not been reflected in the model’s database. Notably, exports grew by 17.5% year-over-year in July of 2019, driven by significantly larger exports/ re-exports of copper ores and concentrates to Romania and Spain, increased exports/re-exports of motor cars, alcoholic beverages and medicaments to Ukraine, and accelerated export of ferro alloys, mineral water, and centrifuges to Russia. However, exports of copper ores and concentrates to China declined notably. During the same period, imports declined by 4.4%, driven by reduced import of petroleum and petroleum oils, motor cars, medicaments, and cigars, cheroots, cigarillos and cigarettes. It is notable that the world prices of crude oil decreased by 13.9% yearly, which explains in part the reduced import of petroleum products. As a result, the trade deficit shrank by 16.1% compared to the same month in 2018, and reached 435.3 million USD. Both remittances and tourism showed significant yearly increases in July of 2019. Money transfers rose by 7% in the seventh month of 2019, driven by remittances from Kyrgyzstan (+98% or 0.7pp), Poland (+64.9%), Ukraine (+46.5%), Italy (+26.5%), Greece (+13.3%). Remittances from the Russian Federation and Turkey experienced a slight yearly decline and had negative contributions of 2.8 and 1 percentage points respectively to the total growth of remittances. Nevertheless, Russia remains the top country of origin for money inflows, accounting for 25% of total remittances. The share of money inflow from the European Union amounted to 35% of the total. The number of international visitors increased by only 4.3% in July, compared to the same month of the previous year, while the number of tourists increased by 1% annually and reached 65% of total international visitors. The negative shock of the prohibition of flights from Russia has already started to be reflected in the data, but the impact will be even stronger in the following reports of the GDP forecast. Overall, trade, tourism, and remittances had a significant positive contribution to the GDP growth forecast. Nevertheless, foreign direct investment (FDI) in Georgia amounted to 187 million USD in the second quarter of 2019, which is 53.7% lower than the adjusted data from Q2 2018. According to Geostat, the main reasons for decreasing FDI included completion of a pipeline project, reduction in liabilities to non-resident direct investors, and reduction of the amount of reinvestment. In addition, FDI experienced notable reductions in the energy (37.6% yearly), construction (91% yearly), transport (58.6% yearly), communication (162.3% yearly), real estate (63.7% yearly) and financial (-153.8% yearly) sectors, while FDI increased notably in agriculture (231.7% yearly [but still remains a very small part of overall FDI]) and manufacturing (97.3%). The recent trends in FDI are not taken into consideration in our model yet.
EXCHANGE RATE EFFECT AND INFLATION The real effective exchange rate (REER) depreciated by 4.1% monthly in July, and by 11.7% relative to the same month of the previous year. While the nominal effective exchange rate (NEER) depreci-
ated by 4% monthly and 11.7% yearly. The depreciation of the REER and NEER is typically associated with reduced value of domestic exports in the very short-run period and gaining competitiveness of export production in foreign markets later. Notably, the lari real exchange rate depreciated with respect to the national currencies of the major trading partners. The GEL/TRY and GEL/RUB real exchange rates depreciated compared to the same month of the previous year by 8.7% (depreciated by 6.7% monthly) and 14.3% (depreciated by 4.9% monthly) respectively. In addition, the lari real exchange rate experienced a notable depreciation against the US dollar and the euro (falling on average by 3.4% and 2.3% respectively in monthly terms). Overall, REER-related variables had a small negative contribution to the Q2 real GDP growth projections. In July, the annual inflation rate reached 4.6%, which is 1.6 percentage points higher than the targeted 3%. The main contributor to the annual price increase was the increased excise tax on tobacco (making the excise tax equal on filtered and unfiltered cigarettes) and increased food prices, which contributed to annual inflation by 0.9 and 2.2 percentage points respectively (it is worth noting that increased bread prices contributed 0.5 percentage points to annual inflation). However, one should note that this type of tax hike (excise on tobacco) can increase only the level of prices, not the inflation rate going forward (it is a one-time factor) and this effect is expected to be exhausted next year. Core inflation (inflation excluding the most volatile petroleum and food prices) remains at a low level of 1.9%, while the annual inflation of imported goods reached 4.8%. The recent lari depreciation with respect to the currencies of the major trading partners most probably will lead to increased prices of imported products, which would further exacerbate the upward pressure on prices and inflationary expectations emerge. Hence, the National Bank of Georgia increased the Monetary Policy Rate (MPR) by 0.5 percentage points in September, reaching a level of 7%, which restricts borrowing and is expected to have a negative impact on the future growth rate. According to the model, the inflation rate has a negative contribution to the growth forecast.
INCREASED VOLUME OF DOMESTIC AND FOREIGN DEPOSITS The other group of variables that experienced remarkable monthly and yearly changes and made a significant positive contribution to the Q3 and Q4 forecasts was the volume of domestic and foreign currency deposits in commercial banks. In particular, the total volume of domestic currency deposits increased by 10.2% annually, while the total volume of foreign currency deposits went up by 24.7% compared to the same month of the previous year. The growth of foreign currency deposits is mainly driven by the sharp depreciation of the national currency. Nevertheless, growth rates are still pronounced even after excluding the exchange rate effect. In the case of domestic currency deposits, growth is mainly driven by demand deposits and long-term time deposits. While in the case of foreign deposits, nearly all of the categories experienced notable annual growth. Deposit dollarization increased by 1.1 percentage points monthly and 0.7 percentage points yearly. The deposit-related variables had a positive contribution to the real GDP growth. Our forecasting model is based on the Leading Economic Indicator (LEI) methodology developed by the New Economic School, Moscow, Russia. We constructed a dynamic model of the Georgian economy, which assumes that all economic variables, including GDP itself, are driven by a small number of factors that can be extracted from the data well before the GDP growth estimates are published. For each quarter, ISET-PI produces five consecutive monthly forecasts (or “vintages”), which increase in precision as time goes on. Our first forecast (the 1st vintage) is available about five months before the end of the quarter in question. The last forecast (the 5th vintage) is published in the first month of the next quarter.
BUSINESS
GEORGIA TODAY OCTOBER 1 - 3, 2019
5
Brock Bierman on USAID Support for Georgia’s Economic & Political Development We’re confident that Georgia’s tourism sector will rebound from this year’s disruptions. We’re proud to support the sector to develop and diversify, so the Kremlin won’t be able to use tourism as a lever of influence in the future. And while greater diversification is a good thing, it’s important to remember that Russian tourists are still welcome in Georgia.
EXCLUSIVE INTERVIEW BY KATIE RUTH DAVIES
B
rock Bierman, Assistant Administrator for USAID’s Bureau for Europe and Eurasia, came to Georgia to speak at the Tbilisi International Conference (TIC) hosted by the McCain Institute and the Economic Policy Research Center. During a panel on disinformation, he discussed some of the methods the US Government uses to support Georgia and other countries grappling with disinformation and other forms of external pressure. GEORGIA TODAY spoke with Mr. Bierman to find out more. “In addition to delivering a message of support from the American people, I also came to listen,” he told us. “I heard from our government partners, USAID project beneficiaries, activists, and citizens who are working every day to build a more prosperous, democratic, and inclusive Georgia. I learned more about the challenges Georgia is facing, both economic and political, and we discussed the methods that USAID can use to further support Georgia’s economic and political development.
NEXT YEAR’S PARLIAMENTARY ELECTIONS IN GEORGIA WILL BE THE FIRST UNDER A FULLY PROPORTIONAL SYSTEM. ONE OF USAID’S FOCUSES IN GEORGIA IS SUPPORT FOR ELECTIONS AND POLITICAL PROCESSES. PLEASE TELL US MORE ABOUT IT.
YOU REPRESENT USAID ON THE REGIONAL LEVEL. HOW DOES GEORGIA FIT INTO THE US GOVT’S REGIONAL POLICY? WHAT IS USAID TRYING TO ACCOMPLISH IN THE COUNTRY? The US and Georgia have a long history of friendship. Georgia is strategically important as a bridge between Europe and Asia. The country’s geographic position puts it at the center of major regional energy projects and infrastructure initiatives. However, the real motivation behind US support for Georgia is the values that our countries share. Georgia is a developing democracy with a dynamic economy and a society that supports integration into Western political structures. The US stands with Georgia because it proves that a free society can flourish even in a region where authoritarianism has been the norm. As for what USAID is trying to achieve in Georgia, our goal is clear. We want to work ourselves out of a job. That means our assistance is designed to support Georgia to reach a level of economic and democratic development where foreign assistance is no longer needed. In the economic sphere, that means supporting market-oriented policy reform, helping stamp out corruption, and providing technical assistance and financing to emerging entrepreneurs. On the political side, it means strengthening accountable democratic institutions, supporting civil society organizations, and empowering citizens to participate actively and effectively in political processes. Georgia has come a long way. Significant challenges remain, but I’m confident the day that Georgian society can design and implement its own development agenda is not far off.
YOU PARTICIPATED IN A PANEL DISCUSSION AT THE TIC AND SPOKE ABOUT USAID’S COUNTERING MALIGN KREMLIN INFLUENCE DEVELOPMENT FRAMEWORK. TELL US A BIT ABOUT THE FRAMEWORK. WHAT DOES IT MEAN IN THE GEORGIAN CONTEXT? USAID announced the Countering Malign Kremlin Influence framework, what we commonly refer to as CMKI, in July. The malign practices the Kremlin uses to undermine the democratic and economic development and stability of other countries are fundamentally at odds with the interests of the people of Europe. Across the region, the Kremlin works to tip the scales in its own favor rather than engage its neighbors on mutually favorable terms. Why? Because at their core, authoritarian states like Russia are inherently flawed, unreliable development partners, offering a predatory model of development, treating assistance as a tool to transform nations into dependents, drained of their own choices and resources. Our approach is true assistance that offers partner nations the dignity associated with building their self-reliance from the country down to the individual. Just this week at the 2019 Annual Concordia Summit, Administrator Mark Green laid out USAID’s work in contrast from authoritarian models in the simplest of terms, saying, “What we try to offer is a chance for every man, woman and child around the world to have a taste of what we call the American dream, but is really the universal dream. And that's the chance to get a good paying job, to better oneself, to provide for one's family. That has to be, ultimately, what our assistance
Brock Bierman speaking about USAID’s Countering Malign Kremlin Influence development framework at the Tbilisi International Conference. USAID/Georgia
stands for.” The CMKI Development Framework responds to the challenge of Kremlin malign influence by strengthening economic and democratic self-reliance in partner countries across Europe and Eurasia, including in Georgia. This approach involves supporting Georgia’s private sector to grow in a self-sustaining manner that supports individuals, families and communities to develop greater resilience. A society where people have opportunities to pursue their dreams and provide for their families has strong defenses against disinformation, social division, and authoritarianism. USAID assistance helps Georgia to diversify its economy, particularly in the energy, export and tourism sectors. If Georgian businesses can access markets around the world, the Kremlin has less leverage to apply economic pressure, one of the most powerful tools currently in its playbook. CMKI also guides our programs in the media sector. In Georgia, we support local media partners and watchdogs working to counter disinformation and support fact-based media. That includes training local journalists and helping build the capacity of independent media outlets. Ensuring that citizens have access to media sources they can trust is crucial to Georgia’s democracy and its resilience to external threats. I can’t stress enough that this framework is intended to counter aggressive and authoritarian actions by the Kremlin. It is not directed against the Russian people. In fact, the Russian people are victims of the same system that threatens stability, democracy, and prosperity elsewhere in Europe and Eurasia.
FROM USAID’S VIEW, HOW SERIOUS ARE THE ONGOING RUSSIAN TRAVEL RESTRICTIONS TO GEORGIA’S ECONOMY? DOES USAID PROVIDE ANY SUPPORT TO GEORGIA’S TOURISM SECTOR? I have been visiting Georgia for almost 20 years, having forged ties in my earliest trips that remain strong today, and it is wonderful to see all the positive developments that have taken place in this beautiful country over that time. The travel embargo the Kremlin slapped on Georgia, banning direct flights between the two countries, creates a shortterm disruption in Georgia’s economy. Russian tourists, who are an important source of income for tourism operators, are always welcome in Georgia. Neither of the country’s citizens benefit from this unwarranted and unnecessary policy. At USAID, we’ve helped Georgia weather the short-term shock while supporting it to lay the foundations for long-term growth in the sector. First, we worked with the Georgian National Tourism Agency (GNTA) to develop a rapid response to tourism disruption. We supported the GNTA to develop a marketing strategy to attract tourists from the European Union. Bringing in more visitors from places like France and Germany can help Georgian tourism operators today. The real ben-
efits could be long-term, however, if Georgia continues to develop into a popular destination for European travelers. Also on a long-term level, USAID supports tourism development as a key economic growth value chain. The goal of our programs is to build a more developed tourism market, one that gives entrepreneurs the opportunity to build more profitable, self-sustaining businesses.
When we talk about Georgia building the capacity to design and implement its own development agenda, democratic development is a big part of that. For more than two decades, USAID has supported this effort through programs to strengthen political party platforms, ensure free and fair elections, and empower civil society watchdogs to apply oversight over democratic institutions and processes. This year, USAID launched a new four-year, $14 million program to empower Georgia’s citizens to make the most of recent electoral reforms, prepare for the 2020 and 2021 election cycles, and address the remaining gaps in the country’s political and electoral systems. This new program will provide Georgian voters the tools to demand more accountability from their elected representatives. Since we initiated our first programs to support elections nearly two decades ago, Georgia has built strong electoral institutions that serve as a model for the region. Over the next four years, we will work with grassroots civic organizations to empower citizens to better communicate with political parties, effectively advocate their interests, and hold parties accountable. Ultimately, our elections programming aims to strengthen Georgian democracy by supporting more opportunities for public participation.
6
BUSINESS
GEORGIA TODAY
OCTOBER 1 - 3, 2019
UAE Set for 10th Annual Investment Meeting
T
he Annual Investment Meeting (AIM), the world’s leading investment platform, an initiative of the UAE Ministry of Economy, held under the patronage of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, is gearing up to mark its 10th edition at Dubai World Trade Center on 24-26 March 2020. AIM 2020, themed ‘Investing for the Future: Shaping Global Investment Strategies,’ will offer delegates from around 150 countries a unique platform to keep abreast of the latest trends and best practices in investments worldwide. Registration for the major investment event, which marks a decade in 2020, will soon begin on https://www.aimcongress.com Commenting on AIM 2020, HE Eng. Sultan bin Saeed Al Mansouri, UAE Minister of Economy, said, “Breaking our tradition of focusing on FDI, this year we have diversified the AIM portfolio under five pillars to help countries meet challenges that hinder sustainable economic growth. Exploring the possibilities for new avenues of investment to boost the market is the need of the hour, and global economies have to join hands for the future.” In its latest edition, AIM is going bigger by adopting the multi-featured 5 Pillars – Foreign Direct Investment (FDI), Startups, Future Cities, Small & Medium Enterprises, Foreign Portfolio Investment – and One Belt, One Road event; and two community-based activities to
support Least Developed Countries. (See *infographics) The pillars aim at helping participating countries to maximize their opportunities through key features of AIM – Learn, Showcase, Network, Invest, Recognize and Socialize – which will have separate segments such as conferences, exhibitions, workshops, B2B, G2B, G2G meetings, investment roundtables, award distributions and a gala dinner.
KNOW THE 5 PILLARS FDI One of the 5 Pillars of AIM Meeting 2020, the FDI Pillar will help investors to learn more about investment opportunities around the world. As global economies seek new avenues for investment to boost FDI inflows, this pillar will help them explore avenues in traditional as well as new industries. It will also help investors to ensure smooth transition of economy in preferred locations.
FPI This pillar adds value to the entire AIM agenda as it gives investors a platform to diversify their portfolio and helps them to connect with local business organizations by attracting investments in terms of stocks and bonds. AIM believes FPIs can bridge the gap in investment flow by securing an infusion of assets from govt funds, sovereign funds, venture capitals or family businesses. Above all, it is risk-free for investors.
SMES This pillar will help SMEs find new
sources of financing solutions as well as access to markets worldwide. According to the World Bank report, there are around 445 million SMEs in the emerging markets, and they contribute up to 60% of total employment and up to 40% of gross domestic product in emerging countries. As SMEs are heterogeneous in nature, this AIM pillar will bring them under one roof.
STARTUPS As startups play a crucial role in strengthening new industries, this AIM Pillar helps investors to raise early stage venture capital or seed funding to start a business. According to reports, the unprecedented rise of startups in recent years will ensure economic growth and sustainability which in turn could support a 9.7 billion population by 2050. This pillar will help investors seeking new projects for investment, as well as governments looking for start-up projects to boost the economy.
FUTURE CITIES As the world gears up for a future identified by smart solutions, AIM has intelligently incorporated Future Cities as one of its 5 Pillars, enabling governments and investors to embrace disruptive innovation that will replace traditional services. As cities worldwide strive to introduce smart solutions to improve the lives of the people, this pillar will help investors, public and private sectors as well as countries.
ONE BELT, ONE ROAD
This AIM special event will unlock huge investment opportunities within China’s Belt and Road Initiative (BRI) projects. BRI, which was proposed by China in 2013 with the aim of increasing business integrations and increasing trade and stimulating economic growth, is expected to mobilize trillions of dollars for the infrastructure development in emerging market economies across Asia, Africa, Europe, Africa and even Pacific regions. Around 4.4 billion people are expected to benefit from the BRI, which calls for private-public partnership in key sectors.
BUSINESS SESSIONS & FORUMS AIM 2020 will have three Regional Focus Investment sessions for Latin America, Africa, and Asia regions and three Business Forums with a focus on Latin America-Middle East, Middle East-Asia, and Africa-Middle East, which will unveil the investment opportunities in these regions. It will also feature three Investment Reports in cooperation with United Nation Economic Commissions for Africa (ECA), Asia (ESCAP) and Latin America (ECLAC) which will give an overview of SMEs and Startups in emerging markets.
BOOSTING DEVELOPED COUNTRIES Adding more color to the business event, AIM 2020 will have two unique socializing programs to attract more participation from the general public as well as delegates.
The two fundraising activities Fun Run & AIM World Cup 2020 with community participation, mix business with entertainment at the 10th anniversary edition. Revenues generated from the events will go to the AIM Investment Fund aimed at supporting governments in developed countries. Fun Run will see UAE citizens and residents aged three and up uniting on March 21, 2020 and covering distances of 1.5km, 3km, 5km and 10km, at a walk or sprint. 16 teams, including investors from all continents will take part in the Football Investment World Cup that aims to facilitate socializing between members of Investment Promotion Agencies (IPA). Tickets will be made available for the public to watch the friendly tournament which will be held on 21 -22 March 2020. The Football World Cup will feature in all the future editions of the AIM, a common platform for investors and countries to discover the latest investment trends and opportunities around the world. The Annual Investment Meeting, the world’s leading investment platform, brings global economies together from 140+ nations, 150+ experts, and around 20K visitors.
BUSINESS
GEORGIA TODAY OCTOBER 1 - 3, 2019
Tbilisi to Welcome the Fitch Annual Conference
Image Source: Business Wire
BY LORRAINE VANEY
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he annual Fitch conference will take place in Tbilisi, at the Radisson Blu Iberia hotel, on October 1st. The event is an opportunity for international experts, local professionals and government officials to discuss the current and coming financial challenges for Georgia. This year, the panel will welcome Nikoloz Gagua, Deputy Minister of Finance of Georgia; Selim Cakir, Resident Representative in Georgia, IMF; George Paresishvili, Chief Executive Officer, Georgian Stock Exchange; Giorgi Laliashvili, Head of Financial Markets, National Bank of Georgia; and Levan Surguladze, Director, Georgian Pension Agency. Invitees include heads of major Georgian companies, senior executives of leading Georgian banks and nonbank financial institutions, and the representatives of international organizations, the global investment community and mass media. Fitch Ratings is one of the biggest international rating agencies, along with Moody’s and Standard & Poor’s. Its ratings describe each nation’s ability to meet its debt obligations, also called sovereign credits ratings. The highest is “AAA” (granted to the USA in 2018) and the lowest is “BB-”. It is especially important for developing countries, as it aids in accessing funding in international bond markets. Georgia is rated “BB” thanks to its governance and business environment, which are above the current medians of “BB” category peers. Georgia is moreover ranked 6th out of 190 in the 2019 World Bank Ease of Doing Business Indicator. Fitch predicts a stronger GDP growth for Georgia, leading to higher GDP per capita in the coming years. However, this, it says, remains highly dependent on the political environment and stability, both at the national and regional levels. The agency notes that although external actors such as the
International Monetary Fund are confident regarding the authorities’ economic strategy, Georgia's external finances are “significantly weaker” than the majority of 'BB' category peers. In August, in reaction to the Russian ban on flights to Georgia, Fitch predicted a negative impact on the recent rapid improvement in tourism revenues; rightly so, as revenues generated from tourism in August 2019 fell by 10% ($46.8 million) compared to August 2018. In a detailed article, the Financial Times highlights the influence of Russia over the overall improvement of economic indicators. As an example, although internal reforms are currently leading to a greater narrowing of the deficit and easing of pressure on imports, Russian sanctions on Georgian goods could easily weaken these lasting efforts. Internally, Fitch also underlines the political risks linked to the unresolved conflicts involving Russia in Abkhazia and South Ossetia for the economy and the possible instability associated with the coming election year. Additionally, the use of the dollar in addition to or instead of the domestic currency remains significantly high. In short, the big picture looks pretty blurry for Georgia’s financial stability and resilience on the global financial market at this stage. Natia Turnava, Georgia’s Minister of Economy and Sustainable Development, remains confident in the government’s strategy to answer the main challenges named by Fitch. "Due to these factors, Fitch has reduced Georgia's economic growth forecast by 0.3% points, but the Georgian government will do its utmost to complete 2019 at a high rate," Turnava said last month. The opposition is skeptical of the government’s explanation, which they see as mostly based on the Russian reaction to the recent protests in Georgia and the lack of political will to address lasting socio-economic issues in an efficient way. The conference topics will cover Georgia’s macroeconomic issues and an overview of the Georgian banking sector.
TBC Bank Awarded by Commerzbank for Excellent Partnership in 2018
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BC Bank has received an award for Trade Finance from Commerzbank, one of the largest German banks in the world, for the second time in a row. The recognition was awarded to TBC Bank for high-grade cooperation and outstanding partnership in trade finance. TBC Bank cooperates on trade finance with all major international banks and financial institutions worldwide. Within the framework of this partnership, TBC Bank has been able to offer a full range of products to its customers and consumers over the years. In the field of trade finance, TBC Bank has gained international recognition from multiple financial institutions, among them ADB, EBRD, and Global Finance. Commerzbank, one of Germany's leading banks, is TBC Bank's oldest trade finance partner. The
first international transaction between the two banks was carried out in 1999. Subsequently, TBC Bank and Commerzbank have conjointly had the opportunity to put forward and offer many projects to their customers.
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BUSINESS
GEORGIA TODAY
OCTOBER 1 - 3, 2019
Best Annual Report & Transparency Award
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he National Reforms Support Foundation for Accounting, Reporting and Auditing, with the support of the European Union - World Bank joint project on Financial Inclusion and Accountability, announces in autumn 2019 a competition aimed for GSE-listed companies. The success of Georgia’s economy will depend in large part on the ability of the private sector to attract investors from home and abroad. Georgia boasts an enviable 6th place in the World Bank’s global Doing Business rankings. But Georgia’s capital markets, including the Georgian stock market, are underdeveloped and need mechanisms and incentives to stimulate their growth. The Best Annual Report and Transparency Award is being launched by the National Reforms Support Foundation (RSF), with support from the European Union, the World Bank, the Georgian Stock Exchange (GSE), the National Bank of Georgia, the European Bank for Reconstruction and Development (EBRD) and others, to promote better reporting practices by companies listed on the GSE by awarding those listed companies that have the highest quality of reporting. High quality reporting practices, that conform with regulation and emerging global best practice, are intended to better inform and protect Georgian investors and encourage them to invest in Georgian listed companies. This will help the GSE grow by attracting new listings and investors.
EVALUATION PROCESS The awards will be based on a 3-step evaluation comprising initial screening, detailed evaluation of shortlisted companies, and finally a panel of judges, comprising local and international experts,
to decide on the award winners. The initial screening will involve identifying companies listed on the GSE that are compliant with current financial reporting requirements as demonstrated by their having an unqualified/clean audit report and submit their annual report to SARAS on time, which are published at www.reportal.ge. We anticipate that around 20 of the GSE’s 31 listed companies will meet the criteria. Companies that pass this initial screening will then be contacted and advised that they are short listed for the award. Award winners will be determined based on an evaluation of their management reporting, corporate governance statement, non-financial information (NFI) reporting-in accordance with Article 7 of the Law of Georgia On Accounting, Reporting and Auditing - and other (e.g., publication of reports on their website, timeliness of submission of annual report and quality of presentation of financial statements). In so doing the awards act to encourage compliance with legal requirements. Each company will be scored out of 100 / 100% in categories as shown in the table below. Georgian panel members, with support from local universities and consultants, will perform the scoring. The panel of judges will then convene to decide on a winner and runner-up for each award category – financial institutions (banks and other credit institutions), non-financial PIE with 500 or more staff and non-financial PIE with less than 500 staff. The awards will be made at an event in the latter half of December 2019. In future years the award scheme will be developed further; in particular, the scope of the award (that is those companies eligible for an award) will likely be increased and the evaluation made more
Type of Reporting
Financial Institutions (banks and other credit institutions)
Non-Financial Institutions Large (PIE with 500 or more staff)
Small (PIE with less than 500 staff)
Management
40
40
50
Corporate Governance
20
20
20
Non-Financial Information
20
20
10
Other
20
20
20
Total %
100%
100%
100%
sophisticated. Companies need to follow the below timetable for the submission of the information with SARAS: 1. Publicly announce the award scheme – September 2019 2. Reports to be submitted by companies - 1 October 2019 3. Reports to be published on reportal.ge by SARAS – 31 October 2019 4. Initial screening / shortlisting of enterprises with clean / unqualified audit reports – November 2019 5. Notify shortlisted companies – 15 November 2019 6. Evaluation – November – December 2019 7. Award ceremony event –latter half of December 2019
PANEL OF JUDGES The international panel of judges comprises experts from Georgia and overseas as follows: • Paul Thompson, Member, RSF Board Advisory Group and Director, European Federation of Accountants and Auditors for SMEs, Belgium (Chair) • Giorgi Tabuashvili, former Deputy Minister of Finance, Georgia and Executive Chairman, RSF, Georgia • Giorgi Rusiashvili, Director, RSF, Georgia • Irina Gordeladze, Senior Governance Consultant, World Bank and IFC, Georgia
• Kakha Kuchava, MP at the Parliament of Georgia, Chairman of the Committee Environmental Protection and Natural Resources Committee, Georgia • Nino Kurdiani, Chief Financial Officer, Georgian Stock Exchange, Georgia • Erik Vermeulen, Professor, Tilburg University, The Netherlands • Branko Ljutic, Partner in Charge, SFAI Montenegro, Montenegro • Tariel Gvalia, Board Member, RSF, Independent Directors Association, Georgia • Elizabeth-Nutsa Davitashvili, Principal Banker, European Bank for Reconstruction and Development, Georgia • Nikoloz Dumbadze, Managing Partner of Alternative Business Solutions (ABS) Consulting, Georgia • Ekaterine Papiashvili, CEO, CRESCO, Georgia • Sophia Kolbaia, Capital Markets Supervisor, National Bank of Georgia, Georgia • Giorgi Nakashidze, Investment and Pension Funds Supervision, National Bank of Georgia, Georgia • Philip Jungen, Chief Operating Officer yes.com AG, Switzerland and Chairman of the Audit Committee, Pensionskasse vom Deutschen Roten Kreuz VVAG, Germany The information about companies eligible to participate in the contest is given at https://gse.ge/en/securities
HUAWEI FreeBuds 3 Garner Best Ratings from Global Tech Media HUAWEI FreeBuds 3 – Best of IFA 2019 Awards BY MARIAM MERABISHVILI
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t IFA 2019, HUAWEI received 11 awards and strengthened its reputation as an industry leader in product design and innovation. At the event in Berlin, HUAWEI, as
always, came up with innovative products and captured the attention of the global consumer tech media. Depending on Experts all HUAWEI products that received awards at IFA 2019 are distinguished by a human-driven design philosophy that places the utmost importance on helping consumers experience high-performance products with superior connectivity. The "Best of IFA 2019" award was given to HUAWEI's latest wireless headphones. The flagship HUAWEI FreeBuds 3 boasts a sophisticated design and round body that match the shape of the ear, fits comfortably into it and offers the best sound. The headphones are available in black and white. HUAWEI FreeBuds 3 offers the ability to connect quickly to their smartphones and get impressive sound quality. In addition, FreeBuds 3 is the world's first wireless headset, equipped with a smart and active noise-cancellation system. HUAWEI FreeBuds 3 was awarded the "Best of IFA 2019" award from the following Global consumer tech media: Android Authority, Android Headlines, Gadget Match, Gear Diary, GEEKSPIN, SoundGuys, Popular Mechanics, Stuff, TalkAndroid, TechAdvisor and SlashGear. Ultimately, according to global tech media, FreeBuds 3 is a top quality audio device, with an active noise-cancellation and is innovative, coming in a modern case that can deliver an additional 20 hours of charge. At IFA 2019, HUAWEI, introduced the innovative, 7nm Kirin 990 with 5G technology, active noise canceling earbuds HUAWEI FreeBuds 3, the new HUAWEI P30 Pro and the high-speed WiFi Q2 Pro router. HUAWEI products and services are available in more than 170 countries and are used by a third of the world's population. There are 16 research and development centers operating worldwide in the USA, Germany, Sweden, Russia, India and China. HUAWEI Consumer BG is one of three business units of HUAWEI, mainly focusing on the production of smartphones, personal computers, tablets and cloud services. The HUAWEI Global Network is based on 20 years of experience in the telecommunications business and serves to the production of innovative technologies to customers around the world.
BUSINESS
GEORGIA TODAY OCTOBER 1 - 3, 2019
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New Checkpoint of Sarpi Customs Opens at Georgia-Turkey Border BY THEA MORRISON
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new passenger throughfare, equipped with modern infrastructure, was opened at Sarpi customs, in southwest Georgia on the border
with Turkey. Georgia’s Finance Ministry recognizes that modern customs infrastructure, unimpeded delivery of customs services and efficient handling of procedures play an important role for Georgian citizens, foreign visitors and businesses. “That is why we continue the process of developing customs infrastructure. Cooperation with neighboring Turkey, one of Georgia's major trading partners, is particularly important in this regard,” the Ministry stated. The new passage was opened by the Minister of Finance of Georgia, Ivane Matchavariani, the Deputy Minister of Trade of the Republic of Turkey, Gonca Ylmaz Batur, the Chairman of the Government of the Autonomous Republic of Ajara, Tornike Rizvadze and the Head of the Revenue Service of the Ministry of Finance, Vakhtang Lashkaradze. During the event, a bilateral meeting of the Georgian and Turkish delegations was held and Customs Officers were rewarded for their honesty and professionalism. Reconstruction works on the Sarpi customs checkpoint began in March this year to improve passenger traffic. Construction and renovation of the entrance hall and exit tunnels were carried out
and the territory adjacent to the customs checkpoint was also developed. The Georgian Finance Ministry says the upgraded infrastructure will facilitate the comfortable movement of citizens between the two countries, simplifying crossing procedures and harmonizing the customs services of Georgia and Turkey. The Sarpi border checkpoint opened in 2011 on Georgia’s Black Sea coast, on the border between Georgia and Turkey. It is primarily known for its unique architectural monument, a white, undulating sculptural building that suggests a towering stack of smooth beach rocks, and for the winding coastline where the small town of Sarpi lies. Sarpi not only facilitates trade through the transportation of goods between Georgia and Turkey, but also supports Georgia-Turkey relations economically, culturally and socially. It is expected that the renewed infrastructure will give rise to further trade and closer relations between the two countries. Minister Matchavariani said that Turkey and Georgia are not only friend states but major trade partners as well. “Today, it is well-known that the smooth operation of customs and high level services play a huge role in deepening economic relations between the two countries and the development of international trade. To do this, our government is constantly working to refine and simplify legislation, improve infrastructure and develop services,” he said. The Minister underlined that the new Customs Code in Georgia is fully harmonized with EU legislation and, along
with modern customs infrastructure, it meets the requirements of European standards. “Customs procedures between Georgia and the EU have been simplified. Georgian and EU businessmen have the same custom regulation environment, simple and fair rules. The expenses for foreign trade have been significantly reduced and today it is our task to fully implement the concept of digital customs, which implies providing customs services electronically,”
Matchavariani added. He noted that modern customs infrastructure, smooth delivery of services and efficient handling of customs procedures play an important role in the lives of Georgians and foreign visitors too. "Georgia has achieved great success in this regard. One example is the Sarpi Customs Checkpoint, where procedures are carried out on a one-stop basis in a short period of time," the Minister said, going on to underline that as a result of infrastructure works carried out at Sarpi,
the crossing capacity of the checkpoint has been significantly increased and border crossing has become more comfortable. “I would like to thank all those whose efforts made this project possible. We are ready to take even more energetic steps to deepen our relationship. Good luck to both our countries," he said. To note, in January-August 2019, Turkey was the top trading partner for Georgia ($1.14 billion), followed by Russia ($903.9 million) and Azerbaijan ($682.5 million).
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BUSINESS
GEORGIA TODAY
OCTOBER 1 - 3, 2019
Meet a Successful Entrepreneur in Georgia’s Growing Wine Sector INTERVIEW BY NINI DAKHUNDARIDZE
their success or maybe surviving their failures. That’s why it is very important for us to make good wine for our customers, high-quality for every occasion.
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WHAT IS YOUR WINEMAKING PHILOSOPHY?
he winemaking industry is ever growing in Georgia. You would expect nothing less from a country considered the ‘Motherland of Wine.’ As the rtveli season is upon us, GEORGIA TODAY went to talk to some up-and-comers in the traditional business, Beka and Nika Nasrashvili from the Nasrashvili Family Winery. Coming from Dedoplistskaro, Kakheti, the Nasrashvilis turned their beloved tradition of winemaking into a family business just last year. In 2019, they are already winning awards and becoming a wine lovers’ favorite at every wine festival they exhibit their product. Read on to find out more about the Nasrashvili Family Winery.
TELL US YOUR STORY, BEKA. WHY DID YOUR FAMILY GET INTO THE WINEMAKING BUSINESS? Just like every other family in Georgia, our family has always made wine. The amount and quality were really good but never enough. Plus, I’ve always loved wine a little bit more than that. Philosophy is my profession: I cannot name a better thing to do than drink wine and talk about philosophy. One day this idea came to me: why not make a wine that will have our name on it? So, I decided to return to my hometown and start a family winery. Wine is probably one of the most intimate products you can make. It’s like people are sharing their good, or sometimes even sad, moments with you as they are drinking your wine: celebrating
My philosophy is to make proper, highquality wines that people will enjoy and through which they can, perhaps, forget their everyday life for a bit. It’s not a very philosophical answer but that’s true. That’s the most important thing. Everything else is just the means and ways of how you do it. We also want to popularize Georgian traditional wines not just for foreigners but for Georgians as well. Not everyone knows Kisi, Tavkveri, Khikhvi, Chinuri, Shavkapito, etc. That’s why I planted those grapes in our vineyard. The meore you produce those lerss-known wines, the more people will know about it.
TELL US THE BEST AND THE MOST DIFFICULT ASPECTS OF WINEMAKING. The best part of being a winemaker is the joy and awe of my customers when they sip our wines for the first time. This satisfaction completely overshadows the hard work that winemaking requires which, I think every winemaker would agree, is the worst part. However, that hard work is necessary as it determines the quality of the wine, so really, I can’t complain about it.
proud I am of this 2018 Tavkveri. Every year, I will choose which wine will have Beka’s Wine label. I have not made my mind up yet, but for the 2019 harvest it might be Tavkveri-Muscat-Saperavi or Khikhvi. You’ll see next spring!
YOU HAVE DIFFERENT LABELS FOR YOUR WINES? WHY? Well, you should talk to my twin brother Nika about it. While I’m making wines, he’s trying to come up with ideas how to sell them. And it was his idea to make labels for specific wines rather than just for our winery. The idea is that sometimes wines are so different that a winery-oriented label cannot fully express the many unique characteristics of a wine. A specially designed wine-oriented label can. That’s what we are trying to achieve with our wines: individualistic taste and high-quality. Of course, it’s risky to have this many labels but, you know what, I am sure that people will remember our wine when they drink it. So, I’m optimistic about it.
that you have quality grapes, as they determine at least 80-90% of the quality of the wine. Then, after harvest, very long and sleepless nights come because you need to monitor your wines. You need to taste it, look at the color, control your temperature, test it in the lab and make sure that everything is as it should be. It’s not fancy, sometimes it gets really dirty, but that’s how you do it. Otherwise, you cannot make good wines.
DO YOU FILTER ANY OF YOUR WINES? It depends on the type of wine but usually not. Filtration reduces aromas and taste, so it’s better not to do it and to fully enjoy all the taste it has.
IT IS THE RTVELI SEASON IN GEORGIA. COULD YOU FILL US IN ON THE DETAILS OF HARVESTING?
FOR PEOPLE WHO WANT TO KNOW MORE ABOUT WINEMAKING, WHAT DO YOU RECOMMEND?
Harvest in Georgia usually starts in our region, Dedoplistskaro. Harvest 2019 for us started in late August and it was very smooth. It was not a great year for wines in Kakheti but we will see. I hope that our wines will be at least as good as in 2018.
Talk to winemakers, get to know them and of course, drink as much and as different wines as appropriate. You cannot understand wine unless you drink it, right? But you should remember that wine is not just an alcoholic beverage: it tells you a story and you should be open to listening to it. You can understand everything about it just by sight or one sip. You should be curious not just about the variety or terroir but about the winemakers as well.
WHICH IS YOUR FAVORITE WINE FROM YOUR PRODUCTION AND WHY?
WHAT ARE THE STEPS FROM HARVESTING TO BOTTLING?
It has to be Kvevri Tavkveri from our first harvest. In fact, I like it so much that we made a special line for it. It’s called Beka’s Wine and the label has my face on it. I cannot begin to express how
It’s a process where every step is as important as the previous or next. You need to make sure that everything is in order. You need to work hard in the vineyard literally every day to make sure
WHAT SUCCESS HAVE YOU HAD SO FAR?
Well, it’s our third month on the market but we participated in the Qvevri International Competition in July and all of the wines we presented got awards. Our Rkatisteli and Tavkveri got silver and Saperavi bronze. Given how new we are, it is a pretty big achievement at this moment, but not enough, of course. I’m sure that more achievements and awards are coming. Right now, we have some opportunities to export our wines to the US and Europe. I hope we get a chance to introduce Georgia to the public with our wines very soon.
AS NICE AS YOUR WINERY IS, IT IS QUITE SMALL. WHAT PLANS DO YOU HAVE FOR THE FUTURE? It is relatively small, but for the first year, our production is considerably large. We produced more than 20,000 bottles from our first vintage. This year it’s a similar amount. At this moment we don’t plan to expand. The important thing in the size of our wine production is to choose quality over quantity. We have everything necessary to produce high-quality wines at the amount. When the bottle is empty, you will be remembered because of the quality of the wine, not the quantity. We want to be a winery known for its good wines. We won’t jeopardize our wine quality at the expense of production. If we expand, we will do so that our wine quality is at least as high as it is right now.
Justin McKenzie Smith: Marks & Spencer Clothing #MadeinGeorgia BY NINI DAKHUNDARIDZE
T Image source: the Parliament of Georgia
he British Ambassador to Georgia, Justin McKenzie Smith, has published a tweet on his official Twitter page. The minimal yet informative post tells us that a piece of clothing of popular British brand Marks & Spencer was made in Georgia. “So, my wife’s birthday present from
Marks & Spencer in the #UK had a message inside about growing trade links with #Georgia... #დამზადებულიასაქართველოში [#MadeinGeorgia],” reads the British Ambassador’s tweet. The sewing factories in western Georgia produce clothing for international brands. Marks & Spencer – a British label known for its high-quality and style – is one of them. McKenzie’s tweet showing off the UK’s “growing trade links with Georgia” further emphasizes the context of the ongo-
ing three-month UK Season 2019 in Georgia. #UKGeorgia is a specially curated program of more than 60 events jointly presented by the British Council in Georgia and the British Embassy in Tbilisi. Through showing the similarities and common ties between the two countries, the UK/Georgia Season aims to show Georgia the culture of Great Britain and Northern Ireland. Additionally, the officials from the British Embassy Tbilisi have noted that the United Kingdom will be hosting a 'Georgian Season' in 2020.
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POLITICS
GEORGIA TODAY OCTOBER 1 - 3, 2019
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A Simple Story of the Zalkaliani-Lavrov Meeting BY EMIL AVDALIANI
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he Georgian and Russia Foreign Ministers (David Zalkaliani and Sergey Lavrov respectively) met for the first time in the 11 years since the outbreak of the Russo-Georgian war in 2008. As the meeting was unannounced, many in Georgia feared that State interests were at risk. While the opposition threw accusations at the ruling party, this level of dialogue should not be seen solely in negative terms. A “direct line” between the two FMs can limit the level of tensions existing between the two countries, particularly after the Tbilisi June protests against a Russian lawmaker addressing the Georgian Parliament in Russian. Following the Tbilisi protests, communication naturally needed to be made between Moscow and Tbilisi to deescalate the situation. Furthermore, lately there have been tensions along the occupation line in the Tskhinvali region where Ossetian separatists are creating additional military positions with a high concentration of military personnel.
However, it is not only about Georgian willingness to meet. The Russians too were interested, as despite direct flights between Georgia and Russia being banned as of July 8, Russian citizens have still chosen to enter Georgian territory- on land (the Kazbegi route) or via a third country (most often Armenia and Belarus). For Moscow, it was important to have assurances from the Georgian side regarding the security situation inside the country. At the same time, it is improbable that the two sides met to discuss larger, geopolitical issues such as Georgia’s accession to the EU/NATO. The meeting was most likely was convened because of smaller and much more immediate difficulties in bilateral relations. Even before the meeting, there were hints in Russian media that the flights between the two countries would be restored. The need to meet the Russians was well reflected in a cautious comment from Georgian PM Giorgi Gakharia when he said “…that this meeting, which was held at the headquarters of the UN General Assembly, will promote finding a solution to the most difficult problems between Georgia and Russia.” In fact, the meeting, whoever the ini-
The foreign ministers of Russia and Georgia, Sergey Lavrov and Davit Zalkaliani. Source: eurasianet.org
tiator, was welcomed by Georgia’s western partners. The United States showed support, while also emphasizing that it stood by Georgia’s sovereignty and territorial integrity, and urged Russia to end its illegal occupation and decrease tensions along the Administrative Bound-
ary Line (ABL). The EU also supported the initiative, stating that “dialogue is key for a peaceful dispute settlement, which the European Union fully supports.” Though, the larger issues were probably not discussed, the meeting is none-
theless an important event and it is possible that one of the outcomes will be a reinvigoration of the Geneva Discussions. Problems surrounding “the Geneva Talks” have been well-evident. Tens of meetings have been held on an annual basis, with few results. Thus, the first meeting of the Georgian and Russian FMs should not be considered as harmful to Georgian state interests: only small-scale problems were addressed, while large, geopolitical problems remain. One should also consider that since 2014, for Russia, Georgia is of rather second or even third tier importance. Ukraine and problems in the Middle East are attracting all of Russia’s attention, and developments on those fronts could influence Moscow’s approach to the South Caucasus. For the moment, there is a certain “imperial aloofness,” with Moscow in no rush to address the Georgian problem since it is unlikely that major progress can be made on Tbilisi’s accession plans to the EU/NATO. However, it is possible that the “Zalkaliani-Lavrov” meeting could set a precedence for future meetings between Georgian and Russian high level officials beyond the ill-mentioned Geneva format.
CULTURE
Take the Road to Nenskra Valley - Chuberi
S
vaneti is a distinguished part of Georgia with unique nature, mountains, culture and traditions. In order to visit old towers, archeological and historical monuments, most tourists go to Mestia and Ushguli, but Svaneti has another distinguished part, oft unjustly overlooked. On the road to Svaneti, as you cross the Sagergili Bridge, don't go straight on: take a left and head into Nenskra Valley and Chuberi. Chuberi is 80 kilometers from Zugdidi, nestled in the Nenskra Valley. It is surrounded by the Caucasus ridge and is home to 10 villages on the mountain slopes, the Nenskra River flowing between. There are two origins for the name Chuberi in Svaneti. According to the first, "Chubur" means hazelnut in Megrelian (a Georgian dialect) and as there are many hazelnut trees here, the location was named accordingly. According to the second version, the mountain from where the Nenskra river flows is named Azavchiber. That is why the locals call the Nenskra river Chubrula and the area "Chuberi." Today you will find 13 guesthouses functioning in Chuberi, including guesthouse "Nenskra" which was the first to host tourists. The hotel is run by 69-yearold Melor Tsindeliani together with his family. To the question what is the one thing visitors should not miss in Chuberi, Melor tells us: "Georgians, and especially Chuberi residents, believe that a visitor is from God. This village was the most
distinguished in the entire region. Although the Upper Svaneti villages have towers and good views, when people come down from there, they note that this place has better nature compared to other parts of Svaneti."
WHAT ELSE CAN YOU FIND IN THE NENSKRA VALLEY? • Tourist route to the Utviri Pass • Ltnari Lake • Lamkhatoba Lake • Tobuldari • Caucasian Ibex zones • Trout fishing areas • And, of course, beautiful nature Tobuldari, Lamkhatobi and Ltnari lakes are on the way to Utviri Pass. Tobuldari is 2300 m above sea level and you have to go another 5 km on foot to reach Ltnari Lake. Utviri Pass is located 2770 meters above sea level. Lamkhatobi Lake is much harder to reach, located at 3500 meters. The road to Tobuldari goes through the forest, with mountains on both sides and mixed forests on their slopes. Here everything has its own place: below the colorful flowers, then the wild nuts, on top deciduous trees and evergreen conifers. Along the way, you will also find naturally clear cold water coming out of the mountain. At the end of the forest there is a lowland - probably the only lowland you will find on the way. It is surrounded by mountains, with a view to a steep alpine zone in the north and forest-covered slopes on the other side. Here, you will find all the gradations of green and a wonderful place for camping.
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George Sharashidze COMMERCIAL DEPARTMENT
Commercial Director: Iva Merabishvili Marketing Manager: Sesili Tikaradze
GEORGIA TODAY
EDITORIAL DEPARTMENT:
Editor-In-Chief: Katie Ruth Davies
Members of the Transcaucasian Trail have been marking the way to the Utviri Pass for tourists. Will, from Britain, told us that his friends had recommended him to visit Georgia. He came here for the mountains and was surprised by the greenery and berries. For Dave, who came from America, Georgian culture, people and different foods represent a new life experience. He discovered Georgia through a small article on CNN three years ago and since then, hasn't stopped thinking about coming here. In addition, according to Megan, who is also from America, Utviri Pass is one of the most
Journalists: Tony Hanmer, Zaza Jgarkava, Maka Bibilashvili, Dimitri Dolaberidze, Vazha Tavberidze, Nugzar B. Ruhadze, Samantha Guthrie, Amy Jones, Thea Morrison, Ana Dumbadze, Ketevan Kvaratskheliya Photographer: Irakli Dolidze
beautiful places to see in Georgia. "I love Svaneti because it is huge, beautiful and diverse and I love Georgia, because people are kind, warm and hospitable. This way is sometimes hard to pass and we're trying to fix it so that more people will come and see this beautiful side of Georgia," she said. The village of Tita is ideal for those who love fish and fishing. In Tita, Gia Vibliani has a trout-fishing zone along with a family hotel. As he told as, those who do not want to catch fish make a wish and put “golden fish" back. He has been hosting visitors since 2008 and can
Website Manager/Editor: Katie Ruth Davies Layout: Misha Mchedlishvili Webmaster: Sergey Gevenov Circulation Managers: David Kerdikashvili, David Djandjgava
accommodate 40 tourists and provide meals. "When I opened my hotel, tourism was not developed at all, but our valley has great potential. It is a wonderful valley with natural lakes, beauty, Nenskra valley. It is a fascinating place for tourists with its glaciers and wild goat zones. We do not have towers and museums, but we have nature, tranquility, peace," said Vibliani. Locals offer hiking tours and horseriding tours while the season is right! So hurry there, before it gets too cold. Source: on.ge
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