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Issue no: 960/85
• JULY 4 - 6, 2017
• PUBLISHED TWICE WEEKLY
PRICE: GEL 2.50
In this week’s issue...
Kuwait Wataniya Airways to Launch Regular Flights to Tbilisi NEWS PAGE 2
TBC Bank Signs Memorandum with Tbilisi State University
FOCUS
PAGE 5
ON FLEECE
A look at developing the wool sector to increase export and reduce waste
PAGE 4
CARTIER GOLDEN FLEECE NECKLACE
Trans Caspian Forum - East-West Trade & Transit Corridor Held in Washington PAGE 6
Gov’t Offers Free Medicines to Socially Vulnerable with Chronic Diseases
Stadler Rail AG to Invest in Georgia
BY THEA MORRISON
See, Discover, Respond: Tendence 2017 in Messe Frankfurt
F
rom July 1, the Ministry of Labor, Health and Social Affairs launched a program which offers free medicines to around 200,000 socially vulnerable people who suffer from concrete chronic diseases: Cardiovascular diseases, lung chronic diseases, thyroid diseases and type II diabetes (non insulin-dependent). Only socially vulnerable individuals who have no more than 100,000 points in the Database of Socially Vulnerable are eligible to benefit from the program. Continued on page 2
PAGE 6
PAGE 9
Denis Volkov on Sanctions, Putin, Abkhazia & South Ossetia POLITICS PAGE 11 Prepared for Georgia Today Business by
Markets As of 30ͲJunͲ2017
STOCKS BGEO Group (BGEO LN) GHG (GHG LN) TBC Bank Group (TBCG LN)
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NEWS
Gov’t Offers Free Medicines to Socially Vulnerable with Chronic Diseases Continued from page 1 The Ministry of Health reports that socially vulnerable individuals will have to pay a symbolic fee, maximum 1 GEL, for the necessary medicaments which can be bought at the pharmacies of the tender-winning PSP. To kick off the campaign, five branches of PSP will serve the target group of individuals, with that number to increase with time. At the first stage, socially vulnerable persons will be able to get 13 kinds of international standard medicine. Zaza Sopromadze, Deputy Health Minister and Director of the Social Service Agency, personally met the pharmacy employees and beneficiaries. He explained that in order to benefit from the project, socially vulnerable people should have a prescription from their family doctor, and then should register at the Department, after which they will receive the necessary medicines for a symbolic price. “This project is one of the most important. The four categories of diseases were chosen based on statistics which say that 60-70 percent of people in Georgia have these diseases,” Sopromadze stated. Georgia’s Ministry of Health activated new criteria in the state-led Universal Healthcare Program from March 2017, part of which envisaged renewing the database of the program, which had not been updated since 2013, ensuring that only uninsured people can benefit from the Healthcare Program and perfected healthcare packages, and introducing selective contracting, which means that the Ministry will co-operate only with high-standard hospitals and clinics which meet certain criteria.
GEORGIA TODAY JULY 4 - 6, 2017
NGOs Call on President to Veto SelfGovernment Code Bill BY THEA MORRISON
A
fter filing a lawsuit in Kutaisi City Court, Georgian nongovernmental organizations (NGOs) requested the President of Georgia, Giorgi Margvelashvili, veto the SelfGovernment Code amendments adopted by Parliament on June 30 with the third reading, which envisages reduction of self-governing cities. The NGOs are protesting the decision to abolish the status for seven self-governing cities and reduce the number of municipalities. Among 14 municipalities, seven are self-governing cities (Zugdidi, Ozurgeti, Gori, Telavi, Akhaltsikhe, Mtskheta and Ambrolauri), which will lose their status and be transformed into municipalities. Moreover, the number of self-governing cities will be reduced from twelve to five. This means that during the local elections scheduled for this October, mayors will only be elected in Tbilisi, Batumi, Rustavi, Kutaisi and Poti, while the remaining cities will be
left without a mayor. As a result of the planned changes, there will be five self-governing cities and seven municipalities in the country. At the parliament session, 83 MPs voted for the amendments to the organic law with 5 against. The NGOs sent an open letter to the President, asking him not to support the amendments and expressing their readiness to discuss the issue in detail with him. “The reduction of self-governing cities is directly linked with the reduction of the quality of local democracy,” Zviad Devdariani, Executive Director of NGO CIDA, stressed. The organizations claim that the ruling Georgian Dream (GD) party, which has a supermajority in Parliament with 116 MPs, made the decision unanimously, without holding any consultation with the population. The organizations believe that this action will be a step backwards for the country. “It is unacceptable to abolish the self-governing entities formed after 2014,” they say. Ana Dolidze, Parliamentary Secretary of the President of Georgia, responded to the NGO appeal, noting that the
appeal is important as the fundamental changes refer to self-governing cities, and that the President will take it into consideration. "From the very beginning, the President of Georgia was skeptical about the changes concerning the self-government and self-governing cities,” she said. Giorgi Kakhiani, Chair of the Procedural Issues Committee of Parliament, says that the decision was made within the law and observing all procedures. “The court will make a decision on the issue,” he added. The opposition parties also share the
position of the NGOs and claim that after the changes to the Self-Government Code, the local population will be less involved in the decision-making processes. “The implemented changes reject the interests of locals and, on the financial side, the unified municipalities will face serious problems,” member of the opposition United National Movement, Giorgi Botkoveli, said. However, the majority believes that by reducing the number of self-governing cities and municipalities, they will reduce expenses from the state budget.
Kuwait Wataniya Airways to Launch Regular Flights to Tbilisi BY NINO GUGUNISHVILI
R
egular flights between Kuwait and Georgia are to start from July 11 and run until October 29, with Wataniya Airways’ Airbus A320 to fly three times a week every
Monday, Tuesday and Friday. The consultations on regular flights between the two countries were carried out by the Civil Aviation Agency of Georgia and the Director General of the Civil Aviation of the state of Kuwait. The agreement was signed in 2012. In 2012-2016, charter flights between the two capitals were carried out by Georgian Airways.
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GEORGIA TODAY JULY 4 - 6, 2017
THE ISET ECONOMIST A BLOG ABOUT ECONOMICS AND THE SOUTH CAUCAUS
www.iset-pi.ge/blog
The ISET Policy Institute (ISET-PI, www.iset-pi.ge) is an independent think-tank associated with the International School of Economics at TSU (ISET). Our blog carries economic analysis of current events and policies in Georgia and the South Caucasus region ranging from agriculture, to economic growth, energy, labor markets and the nexus of economics, culture and religion. Thought-provoking and fun to read, our blog posts are written by international faculty teaching at ISET and recent graduates representing the new generation of Georgian, Azerbaijani and Armenian economists.
Georgian Wool: Can It Become the “Golden Fleece” Again? BY RATI KOCHLAMAZASHVILI AND PATI MAMARDASHVILI
B
ack in 2014, Georgia and the European Union (EU) signed an Association Agreement, which included the Deep and Comprehensive Free Trade Area (DCFTA) between the EU and Georgia. While this agreement creates new opportunities for Georgia’s agricultural exports, high food safety standards in the EU market make it difficult to fully utilize these opportunities. This is particularly true for products of animal origin, which are subject to strict regulations. The necessary standards were successfully met last year for Georgian wool (fleece), and it became the first animal product to be exported from Georgia to the United Kingdom market (which is still a member of EU – for now). This is success, indeed!
GLORIOUS PAST AND CURRENT CHALLENGES Wool production was an important source of income for Georgian sheep farmers in the past. During the Soviet era, Georgia had more than 2 million sheep (around twice today’s sheep population), which used the winter pastures along the Caspian Sea. Wool processing and the textile industry were well-developed, and the price of greasy wool was 12-15 Manet per kg. After the dissolution of the Soviet Union, Georgia experienced a shortage of winter pastures, because it lost access to pastures along the Caspian Sea; moreover, the country also lost the traditional Soviet market for sheep products. Like many other industries, wool manufacturing collapsed. Today, the main source of income for sheep farms is the sale of lambs and sheep cheese (specifically for Tushetian shepherds), while wool plays an insignificant role in income generation for farmers (Kochlamazashvili et al, 2014). There are only two operational processing factories in Georgia, with old, Soviet
era machines… According to Geostat, Georgia produced 2,000 tons of wool in 2016 (on average, 2.4 kg wool per sheep). From the total amount of sheared wool in 2016, more than 50% (1,062 tons) was exported as a greasy wool to the following countries: Turkey (77%), Ukraine (10%), India (9%), the United Kingdom (2%), and Pakistan (2%). Prices differed across export partners. The United Kingdom paid the highest price ($773/ton) in 2016, followed by Ukraine ($694/ton), India ($641/ton), Turkey ($463/ton) and Pakistan ($389/ ton). On average, the exported wool price in 2016 was $507 per ton. Five wool exporter companies operated on the Georgian market in 2016, and two of them hold a market share of 78%. The rest of Georgia’s wool was partly used domestically to make woolen garments, while big chunks of wool were wasted (either burnt or trashed). This waste of resources is not only an economic problem, but also harms the environment…
SOME SUCCESS STORIES, BUT NOT ENOUGH! Even though there has been some success in increasing and diversifying Georgia’s greasy wool exports, including in the EU, the price of Georgian wool has been on a decreasing trend. According to the head of the Shepherds Association of Georgia, Beka Gonashvili, farmers are getting 30-40 tetri per kilogram of greasy wool, which does not cover even the cost of shearing and transportation. This demotivates farmers to produce good quality wool, and even worse in some cases - farmers burn or throw away the wool. The situation can only be changed if price of wool becomes higher… How can this be done?! One wool-processing factory, “Tusheti,” has partly managed to break this vicious circle. This company pays one lari per kilogram of good quality wool, and farmers are motivated to deliver a high-quality product. However, currently this factory can purchase only 25-30 tons a
Source: National Statistics Office of Georgia (*5 months of 2017)
year, which is a drop in the ocean, considering total wool production in Georgia. “There is more demand for processed wool (washed, dyed, yarn, felt, etc.), however, we cannot meet the demand due to our limited capacity for wool washing and our drying facility (as well as the old machinery used for spinning and yarn making),” says the director of Ltd Tusheti, Dito Arindauli. According to Kochlamazashvili et al (2014), wool industry development can bring jobs and income for rural people and less environmental damage to Georgia’s nature. Tushuri sheep breed has coarse wool, which provides good material for carpet and felt-making (however, price of coarse wool is low on the international market). Wool processing techniques are very old, and still a widespread tradition among rural women in Georgia. In addition, colleges and schools make wool products for sale - woolen socks, hats, souvenirs, traditional thick felt, etc. The demand for semi-processed wool is on an upward trend, because woolen clothes and accessories are becoming popular among Georgians, as well as tourists. Georgian wool products are also getting international attention. For instance, two Georgian sisters from Tusheti, opened a woolen garment making school named “Shepherd’s House” in Rome, Italy. Their felt cloaks with icons on it are used by the Patriarch of
10 Galaktion Street
Georgia, Ilia II, and Pope Francis, the Bishop of Rome. Moreover, the Kotilaidze sisters recently worked with FrenchItalian designers to create the bag brand TL-180 for the Mercedes-Benz Fashion Week Tbilisi. In addition, new technologies suggest that coarse wool is a good material for the construction industry. Not only is it a natural fiber, it has good thermal insulation qualities, which makes it energy efficient. The Heidelberg Cement Georgia has already been cooperating with the wool processing company Tusheti for several years.
WAY FORWARD… The government and donors should help this sector in developing new products and new markets that would add value to Georgian wool. After creating valueadded products, equally important is that this value is fairly distributed across the value chain actors. As with all agricultural value chains, the key is better coordination and cooperation between actors. For example, both adding value and fair distribution of margins could be addressed by forming wool cooperatives. Farmers in such cooperatives might be able to shear, collect, classify, process and market the wool together, which would
potentially lower their costs and/or create higher value. Joint marketing will also create better bargaining power and prices for the farmers. So far, there are not many wool cooperatives in Georgia. One example is the wool shearing cooperative that was established in the Tushetian community with the support of Caritas Czech Republic a couple of years ago. In order to address the coordination failure along the wool value chain actors, this donor recently decided to facilitate the entire value chain development – to support the wool processing company Tusheti, as well as connect it with wool shearing cooperatives and later to woolen garment making enterprises, in order to produce added value products locally, according to the project manager at Caritas, Anzor Gogotidze. Those initiatives should be accelerated to avoid wasting wool. Increased wool export (including export to the EU market, which was highly facilitated by another donor, Mercy Corps) and the development of the wool processing and textile industry could bring this wasted resource back into the economy, creating more jobs and income for the country. Let’s hope that Georgian wool will become the “Golden Fleece” again, as it was in the famous myth on Jason and Argonauts, told of the gold-haired winged ram held in Colchis (one of the earliest Georgian formation). *Kochlamazashvili, I., Sorg, L., Gonashvili, B., Chanturia, N. and Mamardashvili, Ph. (2014): Value Chain Analysis of the Georgian Sheep Sector. Study elaborated for Heifer International.
Tel: (995 32) 2 45 08 08 E-mail: info@peoplescafe.ge
BUSINESS
GEORGIA TODAY JULY 4 - 6, 2017
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TBC Bank Signs Memorandum with Tbilisi State University BY NINO GUGUNISHVILI
O
n June 29, a memorandum of cooperation was signed between TBC Bank and Tbilisi State University, marking the start of their cooperation towards jointly implementing numerous educational and social projects planned within the memorandum framework. Popularization and promotion of the Georgian language under the 'Write in Georgian" (#წერექართულად) project, providing access to thousands of electronic books at the Saba online electronic library, carrying out special education trainings and employment programs for students, the creation of a special online branded shop for the university and realization of joint social activities and projects focused on the younger generation are just a few of the future projects already planned. “Today is a special day for Tbilisi State University as we start our partnership with TBC Bank,” said George Sharvashidze, Rector of Tbilisi State University, prior to signing the memorandum. “The format of our cooperation is new for Georgia and among the many projects planned, it entails internships for students, and promotion and preserva-
Blaze Destroys Part of Eliava Market, Tbilisi tion of the Georgian language, which is very important for us. We hope that our collaboration will set an example of successful social and corporate partnership. I believe that the existing synergy between our two institutions will bring more and more new perspectives”. Aside from the projects planned within the memorandum, TBC Bank will share its experience in the direction of marketing communication and branding with the university. The creation of banking products tailored to the needs of the younger generation is also in the pipeline. “We- TBC Bank and TSU- share the same values and we would like to assist them as partners,” said Badri Japaridze, Vice-Chairman of the Supervisory Board, TBC Bank, “We would like to jointly realize social projects, be it the preser-
vation of the Georgian language, within our ‘Write in Georgian’ initiative, or giving university students access to the Saba Electronic Library, helping them in their study process. Of course, there will be lots of other initiatives which we will be actively supporting”. “It’s a great responsibility for us and we will do our best to assist Tbilisi State University towards developing and applying modern innovative technologies and practices,” said Vakhtang Butskhrikidze, Director of TBC Bank. “We hope it will be a very interesting partnership and collaboration, setting an example not only for the region but also internationally”. The memorandum of cooperation was signed by George Sharvashidze, Rector of Tbilisi State University and Vakhtang Butskhrikidze, TBC Bank Director.
BY THEA MORRISON
A
round 2300 square meters of territory burned in an extensive fire that broke out on Sunday evening in a three-story building at Eliava Market which sells auto parts, tires and paints. Eliava market, located near Vakhushti Bridge in Didube district is one of the largest markets in Tbilisi, selling a wide range of goods, including construction materials and household appliances. 17 fire brigades spent several hours extinguishing the fire, while police blocked the entrance to prevent affected vendors from entering the territory. One person is known to have been
taken to hospital. The affected vendors allege that the fire was deliberately set. They were also dissatisfied by the work of the fire brigades, which resulted in a confrontation between the vendors and law enforcers. However, the situation was soon defused. Didube Governor Irma Zavradashvili arrived at the scene and called on the vendors to remain calm. “Fire brigades arrived quickly and within 30 minutes believed they had extinguished the fire. However, due to the number of inflammable materials, the fire broke out again,” the governor stated, adding that “the investigation will determine the cause of the fire”. The total loss caused by the fire is as yet unknown and will be calculated by a special commission once the location has been declared safe.
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BUSINESS
Peter Spuhler, President, owner and CEO of Stadler Rail Group, and Giorgi Gakharia sign the memorandum of understanding
Stadler Rail AG to Invest in Georgia BY NINO GUGUNISHVILI
S
tadler Rail AG, a leading Swiss company in train manufacturing, is exploring the possibility of building a factory in Georgia. A memorandum of understanding was signed by Giorgi Gakharia, Minister of Economy and Sustainable Development of Georgia, and Peter Spuhler, President, owner and CEO of Stadler Rail Group, on June 30. The memorandum signing was attended by Giorgi Kvirikashvili, Prime Minister of Georgia. Stadler representatives will be examining the market in Georgia, while the project implementation entails the production of new wagons and trains as well as repair works on the territory of Georgia. As the Ministry of Economy of Georgia states, Stadler management assesses Georgia’s investment potential positively and is exploring the possibility of building a factory in Georgia in the future. “We signed a memorandum in which
future steps are described in order to produce railway technologies of the latest, modern standards in Georgia. The process of modernization in Georgia has moved quickly in recent years and we’re delighted with the possibility to develop our production here,” Spuhler said after the signing. “It is essential for us to have Stadler in Georgia- a company that manufactures trains, wagons and will also conduct reparation works,” said Gakharia. “The localization percentage is important, which can’t be high from the beginning, but which we expect to achieve. The importance of export potential is also worth noting”. “Stadler comes with new technologies and management, and what’s even more crucial, a brand of the highest qualification and trust has chosen to enter our country,” Konstantine Guntsadze, Chairman of the Supervisory Board of Georgian Railway, said. “This will create an additional factor to increase export potential and to enter the regional market”. Production is expected to start by the end of 2018.
GEORGIA TODAY JULY 4 - 6, 2017
Trans Caspian Forum East-West Trade & Transit Corridor Held in Washington BY THEA MORRISON
T
he Embassy of Georgia, together with Azerbaijan, Tu rkey, K a za k h s t a n , Afghanistan and Turkmen embassies, with the participation of the Eliot International Relations School of George Washington University, held the second annual Trans Caspian Forum - East-West Trade and Transit Corridor in Washington on June 26-27. The official partner of the forum was the United States (US) Chamber of Commerce. The Trans-Caspian East-West Trade and Transit Corridor brings together the Central Asia, Caspian and Black Sea strategic regions to form a viable trade and transit corridor between East and West. Connecting trade, people and economies, the modern trans-Caspian corridor has an extensive and integrated network of infrastructure, special economic zones, harmonized customs, cross-border procedures and more. The US plays an important role in the development of the Trans Caspian EastWest Trade and Transit Corridor. Development of regional infrastructure projects such as the C5+1 transport corridor (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan and the United States) and the Baku-Tbilisi-Kars Railway, are currently ongoing with a total
value of $50 billion. The forum presented the large transit routes for large American companies operating in Asia and Europe and to familiarize them with the commercial potential in the region. Expansion of the regional transport network along the trans-Caspian corridor gives new possibilities for transcontinental transport and innovative services, as well as a consumer market of 150 million. Participants of the forum described the infrastructure, business investment,
trade and transit opportunities of their countries for the interest of attending representatives of American business, political and expert circles, as well as representatives of various international companies. The acting director of Georgian Railway, Eldar Pertsuliani, took part in the forum and talked about the transit potential of Georgian Railway, emphasizing the possibilities that will be given to the Railway after completion of the Georgian Railway Modernization and the Anaklia Deep Sea Port projects.
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GEORGIA TODAY JULY 4 - 6, 2017
Business Forum Women in Business Held by BUSINESS GEORGIA
O
n June 28, at the Biltmore Hotel Tbilisi, BUSINESS GEORGIA and Bank of Georgia organized a Business Forum ‘Women in Business’. The event's main goal was to emphasize the role of women in business, their achievements and the challenges faced. Providing access to resources and support of female entrepreneurs is key to ensuring women’s economic participation, as well as to closing the gender gap. The forum was an opportunity for the exchange of knowledge, experience, and connectivity among women business owners, setting the stage for new opportunities and promoting social dialogue among women entrepreneurs and business leaders. The forum was divided into three sections. In the first, the role of women in Georgian society’s economic growth and the social and economic empowerment of women at the community level was discussed. The second section was designed for women as entrepreneurs. Despite facts and statistics, there were disputed factors about reducing risks when
starting a new business. Also presented was a guide for startups to obtain financial resources. In the third part, the role of women in managing businesses was discussed. At the conclusion of the forum, participants had the opportunity to engage in a panel discussion, ask questions and receive useful information. “The forum is an important platform for business women in Georgia, because at the event, aside from meeting inspiring role models, participants received useful information about programs, grant opportunities and governmental initiatives that will help and empower them with the knowledge and skills to grow their business and develop their career,” said Ana Gogishvili, General Director of BUSINESS GEORGIA. “We hope to be facilitators in helping women to achieve their ambitions regardless of what sector or size of business they are in”. Over 300 participants attended the forum, including high level government officials, non-governmental organizations, commercial and international sector representatives, women entrepreneurs and successful start-ups.
5 Ways to Manage Your Digital Footprint BY DAVID MONGAZON
T
he internet revolutionized the way people work, get informed, entertain themselves or even shape their life experience. It is a fact: internet is an essential tool for a very large number of people worldwide. It enables fast, not to say immediate, sharing of information and goods. However, the ubiquitous nature of internet makes it a double-edged sword. When surfing online, everybody leaves footprints- usually unconsciously. You can be the most careful person, yet what you are doing in virtual space is always stored on physical servers that won’t erase anything, even if you delete your history. Nothing is private anymore. Your information can be used for many purposes, including commercial, which is raising many ethical questions these days. The goal of this article is not to discuss these issues, but to tell you how to protect your virtual identity in order to prevent it from becoming a burden, professionally or even socially speaking. Many social media tools have been introduced to counter the lack of control over identity protection. Yet, Facebook, Google and other major websites that serve a high number of internet users, don’t make an effort to advertise these tools, or intentionally make them hard to use so that users abandon them quickly, even if their will to control their virtual identity is strong. The difficulty finding information to change individual practices was the main purpose of a workshop organized at Impact Hub Tbilisi on June 29, presented by Dodie Kharkheli, who works on ChaiKhana, an information website. The result of this workshop was five easy steps to regain control of how you look virtually. 1. Google your name Type your name into the search bar of the world’s most-used browser, Google, which will most likely be used by employers or any person interested in you. Do it in ‘incognito mode’, as the search engine is based on your personal preferences, which enables you to surf without any virtual background. You can also type your name in different alphabets, especially in a country like Georgia, where your name can be written in Latin, Russia or Georgian. 2. Visit security settings There are no secrets. If you don’t know how your favorite websites work in terms of privacy, you won’t be able to change your virtual profile. Very few people read the terms and conditions when signing up to a website, and thus go through the default settings instead of building their own ones
for a better experience. All information on privacy settings is accessible on all websites. However, it is often hidden or hard to understand at first glance. Therefore, it is up to you to dig up this information and clean up your own profiles. 3. Remember old passwords When googling your name, you might come across an old blog from your teenage years which contains sensitive information on your background, especially awkward when searching for a job. The best way to get rid of this is to simply remove your blog. That means having your very old password to hand, or even your teenage email address, which in many cases didn’t suit professional use and which you changed when you became a young adult. If you kept it, lucky you, if not, go to step 4. 4. Replace bad footprints with good ones If you can’t make any changes to the bad footprints you find on Google, fear not! Browsers function on novelty and content- so override the old ‘bad profile’ with fresh material. Add to the blog with updated information; create content that emphasizes your most recent works and which underlines your skills and interests. This will throw back your sensitive content to the next pages of Google, those that nobody reads. Also, use preferably trustworthy websites, such as LinkedIn. 5. Contact Google If none of these steps resolve your problem, don’t panic. Certain countries have already adopted laws to enable the public to completely remove their personal information, even on public services and social media, but many countries still face this “juridical unthought”. This is why the major websites are ahead of these issues, being the first concerned but also facing huge criticism for it in recent years, with the development of practices such as “revenge porn” and the complexity of preventing it. However, Google recently conceived a program that fights it, as well as introducing “removal policies” which still remain little-known and mean you can contact the browser through its forum in order to remove sensitive information about you. The disadvantage is that it means showing this content in order to get it removed. The browser also introduced “Google Alerts”, which enables you to get notified when someone mentions you online. You just need an email address to subscribe from.
BUSINESS
GEORGIA TODAY JULY 4 - 6, 2017
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See, Discover, Respond: Tendence 2017 in Messe Frankfurt was among the most distinguished, especially Swedish manufacture. The concept of reusable bags is really very popular nowadays because of a desire to protect the environment. The Hinza bag is a Swedish-made plastic bag and excellent for storage – a colorful, stylish alternative for keeping things organized at home, in the office, at the market and in the car. The Hinza bag provides easy access to your crafts, tools and toys and is perfect for shopping, hobbies and gardening jobs as it is sturdy and easy to clean. The bag is made of hardwearing polyethylene plastic and can be recycled 13 times. Bags are long-lasting, lack ornaments and are easily recognizable. Aside from art and crafts were a variety of seasonal production on display. Even Christmas could be seen decorating the halls: lights, stars, decorations, toys, patterns, snow, and snow globes made up the most part of the Winter Season Hall. Of course, a summer green environment, gardens of flowers, trees and autumn leaves were also represented at the exhibiton.
GEORGIA’S SECOND VISIT!
BY MARIAM MERABISHVILI
S
ee new products earlier, Discover new knowledge earlier, Respond to the future earlierthese are the main reasons Tendence 2017, Frankfurt, is so popular and distinguished. Messe Frankfurt is the world’s largest trade fair, congress and event organizer with its own exhibition grounds. With some 2,400 employees at 30 locations, the company generates annual sales of over EUR 640 million. A comprehensive range of services, both online and onsite, ensures that customers worldwide enjoy consistent high quality and flexibility when organizing, planning and running their events. The four–day event, which took place from 24-27 June, attracted 54 nations to present their companies and collections, all of whom saw they and their companies’ percentage increase on last year at Germany’s most international order venue. The wide-ranging product portfolio covers the fields of home furnishing, gifts, jewelry, fashion, accessories, tableware, home textiles, seasonal designs, crafts and outdoor living. Visitors gathered to find the latest trends and enjoy a vibrant atmosphere throughout the three days. If you ever wanted to see all seasonal decorations, designs and daily necessities in one time and place – this kind of exhibition is perfect for you. The extensive range of products is aimed at the retail trade and includes a supplementary section for bulk buyers. To attract more consumers, companies really need to have competitive retail trade, a good environment, attendance at high-profile
events, a large territory and so on- all of which can be found at Messe Frankfurt.
SAYS THE REPRESENTATIVE OF POLAND CERAMICS, KAROLINA BEDNORZ.
“OUR STRATEGY FOR TENDENCE IS BEARING FRUIT. WITH 1,125 EXHIBITORS, THE FAIR HAS GROWN BY OVER 20 PERCENT COMPARED TO LAST YEAR. OUR PRIMARY OBJECTIVE WITH THE NEW TENDENCE IS TO OFFER VISITORS INNOVATIVE SOLUTIONS FOR A COMPETITIVE FUTURE,” SAYS DETLEF BRAUN, MEMBER OF THE EXECUTIVE BOARD OF MESSE FRANKFURT.
One of the most interesting projects presented in handmade art was initiated from the Dutch government; a project for marketing Asian and African countries. The organization chose three main countries (Cambodia, Laos and Myanmar) where they teach native people European style trends, art, craft and so on. Traditional art in Myanmar is a kind of glass made of horse hair (traditional skill) from outside combined with golden leafing and added to soft bamboo. Natives do the work then the organization helps them to export it. “If I have really good feedback, we’ll get a 4-year contract with these countries,” says the representative. In Laos, indigo plants with different shades are used in the making of cushions and scarfs made from their culture and to European taste. In Cambodia, we see cotton, looms and so on. The main purpose of this project is to help these countries do a better job, export beyond their current local tourist markets and help in management. It’s not only about relying on export but the real priority is encouraging the local market. Indian tradition in modern crafts was also represented at Tendence 2017. Cages, baskets, boxes and ornamental art patterns were distinguished, all handmade by experienced workmen using wire. Coloring happens by blowing up a balloon and spraying the outside. Everything is handmade, designed in a traditional way. Vases appear in Indian tradition too, also handmade, just as it was 200 years ago- made using a soft hammer, piece by piece. If something is valuable, people spend money on it, says design professor Hansjerg Maier-Aichen. Creative ideas have to be combined. With these ideas comes art using lights. The manufacturer, who now lives in Germany, first worked on ceramics, sculpture and now on lights and shadow. “I don’t think it’s a design- it’s a sculpture which glows with 6w LED lights,” says the owner. The lights are in stones and are specially found then bought to Spain because of their material and color. Clay is colored with the stone colors and the stones put on the sculpture with many holes. These holes are handmade, which is the main wow-factor, because if it was done by machine it would be really easy. This whole structure is created when the stones are wet. One piece needs approximately 20 hours to complete. In arts and craft, Scandinavian design
Every year this exhibition is distinguished from previous years. The main novelty of this year was new themes, especially in arts and crafts: both traditional and modern, with new quality and local material. One of the most unusual combinations in art presented at the exhibition was the Poland-Korea combination, both of which have faculties in their countries and teach students how to think, draw and learn in academic training. Poland is a leader in ceramics, with students learning three types of work: ceramic design, glass design and compact design. The same happens in Korea.
“WE APPROACH THE REAL MARKETS. STARTING WITH AN ONLINE SEARCH, CONTACTING GALLERIES, EXHIBITIONS AND SO ON. WE HAVE A CATALOGUE IN WHICH WE DESCRIBE WHAT THE ACADEMY DOES. IN GERMANY, I MET KOREAN ARTISTS AND REALLY LIKED THEIR NEW MATERIAL, NEW TECHNOLOGY- THAT’S WHY WE STAND HERE TOGETHER,”
This year, the Georgian delegation was presented at Messe Frankfurt for the second time thanks to the Ministry of Culture and Tbilisi State Academy of Arts. Irine Saganelidze (Deputy Head of Art and Educational Department at the Ministry): “Georgia participated in the international exhibition Tendence for the second time. Traditional Georgian craftsmanship is one of the main priority directions of our department and when we talk about development of the creative industry, it really implies creating
and implementing artworks and souvenirs according to the modern standards. Last year, we represented only traditional Georgian Blue Tablecloth, from the workshop “Blue Tablecloth” with the help of the Tbilisi State Academy of Arts. We also presented a number of handmade objects with different techniques, for example: porcelain, glass, enamel and so on. This year, we paid attention to different types of accessories: various functional jewels and objects like notebooks, packaging for little jewels and other accessories. All the Georgian objects were handmade and really attracted European attention.”
“THE MAIN PURPOSE FOR US BEING HERE IS TO GET GEORGIAN HANDMADE OBJECTS ON THE EUROPEAN MARKET AND TO ATTRACT FOREIGN INTEREST,“ SAYS IRINA SAGANELIDZE. The presentation of Georgian products at Tendence was something new and interesting for European visitors, raising a lot of questions about the technology, the methodology, the tradition, the development, and so on. Such exhibitions are oriented to deepening contacts, and Georgia is hoping that the four days will reflect well on traditional craftsmen’s work, income, development and so on. “I want to thank the representatives of Messe Frankfurt in Georgia, for their help and efforts in our executing this project,” says Irina Saganelidze. Tendence 2017 is over and plans are already underway for next year- make sure you don’t miss out!
Official Representative of Messe Frankfurt Exhibition GmbH in Georgia and Armenia Deutsche Wirtschaftsvereinigung (DWV) German Business Association 24 Rustaveli Avenue, 0108 Tbilisi T: +995 32 2205767 E: info@georgien.ahk.de E: info@georgia.messefrankfurt.com
10
BUSINESS
GEORGIA TODAY JULY 4 - 6, 2017
Kvirikashvili Meets with Dafang International Group President
BY NINO GUGUNISHVILI
G
eorgia’s Prime Minister Giorgi Kvirikashvili met with the President of Dafang International Group to discuss partnership possibilities within the free trade agreement, that aims to bring greater potential to deepening economic relations between Georgia and China. The Geor-
gian PM presented Georgia’s investment and business climate to the company representatives. Based in Hong Kong, the Dafang International Group is involved in implementing large scale infrastructure projects in the region, in collaboration with the Chinese government, within the public private partnership (PPP) framework. During the meeting with Georgia’s PM, the company representatives expressed their interest in logistics center development projects in the cities of Tbilisi and Kutaisi.
Georgia’s VisaFree Regime: Disappointing Preliminary Results OP-ED BY DIMITRI DOLABERIDZE
I
t's been more than two months since the EU granted citizens of Georgia a visa-free regime. For the pro-Western elite (and there is practically no other in Georgia), this was really an achievement, once again proving the maximum degree of loyalty to its ‘brothers’ in the West and making it easier to face the voters with a victorious smile, for the benefit of which the powers had "worked tirelessly". Nevertheless, a few sober skeptics have tried to outshout those drums pounding out a victory dance to draw public attention to the fact that, for the most part, the abolition of the visa regime will change little. For the overwhelming majority of the Georgian population, the abolition of the visa regime was not political, but primarily economic. It is no secret that a good half of Georgia's population is abroad, where it is engaged in the most difficult and underpaid work. It is also no secret that despite joyfully optimistic reports of all governments without exception about ever new economic successes, it is the hard work of Georgian migrant workers that gives their families remaining in Georgia a way to cope with poverty. We can now safely say that these people have received nothing from the visa-free regime, since the European Union protected itself in advance with a number of iron conditions. First of all, the time of stay of Georgian citizens abroad is limited to 90 days within 180 days. In addition, they are not given the right to work and for such violations there is an unavoidable punishment in the form of a fine of EUR 3,000, followed by immediate deportation with a five-year ban on entry into EU countries. EUR 3000, in Europe is a decent enough amount but for an ordinary citizen of Georgia is a fortune. As for the preconditions for safe entry to the territory of the European Union, a citizen of Georgia must carry insurance, hotel reservation (or confirmation of the address of residence) and a return ticket, and money to the calculation of EUR 50 per day of stay in the EU and Schengen Zone. Such conditions can only cause a smile: a citizen of Georgia, having EUR 50 a day, would not leave his country, because life here is several times cheaper than in Europe, and a person with such money would be in paradise already, as well as in his native land. For almost three decades, people, humble, forgetting their dignity, readily agree to any dirty and
degrading work in order to feed their families. The Brussels-based high-ranking officials obviously believed that the Georgian population raves about travel and lives only with the dream of visiting European capitals and spend money in its museums, theaters, fashionable resorts and restaurants. It is possible that the Georgian elite also share these beliefs. For a citizen of Georgia, Europe is interesting as a means of survival for him/her and his/her family, and Europeans are a law-abiding people and keep their word firmly. As proof, from March 28 to May 18, 192 Georgians were deported from Europe, according to the Georgian Interior Ministry. The geography is extensive - 73 Georgians were deported from Germany, 16 from Spain, 12 from France, 11 from Belgium and Greece, 10 from Sweden and Switzerland, 9 from Poland and Italy, 6 from Austria and Lithuania, 5 from Denmark and Portugal, 4 from the Netherlands, 3 from Norway, and one each 1 from the United Kingdom and Finland. As can be seen from this list, most European countries had a part in the deportation. We can only sympathize with these poor people: consider the cost of the trip and that to pay the fines, someone has probably had to get into debt or even sell their home. And consider that the above is official data, which does not always accurately reflect reality- the actual number of deportees may be greater. Speaking of migration from Georgia, something else should be noted. Along with honest labor abroad, crime also ran high. The Georgian authorities can rightly be proud of the fact that the criminal situation has improved noticeably, and the criminals in the country are fewer than before. Moreover, it is possible to fight them in different ways. Nevertheless, against the background of the impoverishment of the Georgian population, the Georgian criminals, in order not to die of hunger, also ran to the rich EU countries. But deportation among criminals is extremely low as they prefer to spend their time in comfortable European prisons. If the West tries to provide someone with a heavenly life, it is, first of all, itself. Unable to provide visa-free communication to another post-Soviet country, Ukraine, Western politicians are already seriously considering its abolition and Poland, neighboring Ukraine, has recorded an increase in attacks by local residents on Ukrainians. Well, the holiday of the grand opening seems to be coming to an end, and a bitter and heavy hangover looms ahead.
POLITICS
GEORGIA TODAY JULY 4 - 6, 2017
11
Hard Reality Behind the Denis Volkov on Sanctions, Putin, Rhetoric ahead of the Abkhazia & South Ossetia Trump-Putin Meeting INTERVIEW BY VAZHA TAVBERIDZE
I
t takes time and effort for an expert and a think tank from Russia to earn a trustworthy tag from Western media and analytics. Denis Volkov and Levada Center both enjoy this kind of reputation. As he was attending the Konrad Adenauer Foundation’s conference on the Eastern Partnership at the end of June, GEORGIA TODAY and Panorama TV Show seized the opportunity to pepper the well-liked Russian sociologist with questions on Putin’s popularity at home and abroad, the weight on sanctions and the perception of Georgia’s breakaway regions in Russian society.
SANCTIONS HAVE BEEN PROLONGED AGAINST RUSSIA, BOTH IN THE US AND EUROPE. WHAT ARE THEIR LONGTERM IMPACTS AND HOW IS RUSSIA COPING WITH IT?
Source: Refinery29
BY EMIL AVDALIANI
W
orld leaders of G20 will gather in Hamburg on July 7-8 to discuss world affairs ranging from the economy in Europe to the military situation in the Middle East. The questions have until now been quite often on the agenda of similar world events and therefore should not be considered as a particular surprise. However, what is more urgent is the upcoming meeting between Trump and Putin on the sidelines of the Hamburg Summit. It will be the first face-to-face encounter between the leaders since Trump’s election. Relations between Russia and the US are at their lowest since the end of the Cold War and both presidents have at least rhetorically expressed their hope to improve them. However, both Putin and Trump also see the heavy burden of making progress in bilateral relations. As realists, they both see a whole spectrum of problems ahead, ranging from Ukraine and Syria, military build-up in Eastern Europe to Russian movements in Georgia’s breakaway territories. These divergences make it highly unlikely that the parties will find even a partial solution to their conundrum in the near future. Indeed, as I wrote a week ago, Ukraine remains a sore point between Moscow and Washington due to Russian military and economic support of eastern Ukraine’s breakaway territories. Any progress on the issue will be unlikely to happen as Russian and US interests are highly divergent, with both pursuing their own geopolitical goals. For Russia, Ukraine is important both economically and strategically: even without Poland or the Baltic States, Russia retains the status of a “Eurasian Empire”. Without Ukraine, Russia will increasingly become a state with more borders in Asia than in Europe. This will in turn make Russia more heavily involved in long-term Islamic conflicts along its entire southern border. Although there have already been several examples of Slavic countries (Slovenia, Poland, Czech Republic, etc.) joining the EU and NATO,
Ukraine following their path will irreversibly undermine the notion of the so-called “Slavic Union” and would leave Russia with just its Belarus brethren. For the US, keeping Ukraine is a strategic imperative as it tries to prevent the resurgent Russia from projecting its influence in its immediate neighborhood. Restoration of Russian influence over the Ukraine territory would increase Moscow’s projection of power over the Black Sea and the South Caucasus, and will threaten Eastern European security. In Syria, Moscow and Washington remain entangled in what is essentially a proxy war. The Kurds are now playing a more important role with American arms, while Iran is increasing its rhetoric against the White House. Moscow and Washington are on different sides of the war, making it very difficult to find a solution. Russia also failed to use its involvement in the Syrian war as bargaining chip in the negotiations on other issues such as Ukraine. Even in Georgia, which does not feature high in relations between Moscow and Washington, differences remain as deep as ever. The country remains prowestern and the US has been open in its support for the country’s territorial integrity. Moreover, US Vice President Michael Pence’s visit to Tbilisi, as a part of a journey across Eastern Europe, is yet another sign of support. For the US, keeping the Georgian transit corridor is vital as it serves as potential to at least challenge the EU’s Russian energy issue. Both countries also have different visions about the Black Sea region, where Russia continues to build up its naval capabilities and project its power through the Crimean Peninsula. The US, on the other hand, pursues a policy of providing Black Sea states with arms to support their defense potential. Allowing the Black Sea to fall entirely into the Russian orbit will create fundamental problems for the US’ policy of containment of Russia in the Eurasian heartland. Despite the positive rhetoric of the US and Russian presidents of the past six months, it will be very difficult to see any meaningful progress on any issues which were outlined above. Geopolitical differences will remain paramount behind positive statements in Hamburg.
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GEORGIA TODAY
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I’m not an economist, I’m a sociologist. But what we see is that the economic crisis which we had for 2.5 years is more or less over. According to our data, according to the feelings of the people, the deterioration of living standards ended somewhere this spring. We’ve also been seeing a rise in social and consumer optimism over the past several months. Speaking specifically about sanctions. I’d say it’s more psychological and the majority says they’d like Russia to go with the sanctions and counter-sanctions because it’s a matter of national pride. They say we should not give in, and at the same time say they want to see the end of sanctions, to get along with the West, but only if the west starts first. According to the government and majority of the population, the West is to blame. Putin said that Crimea was just an excuse for the West to impose sanctions. The majority agrees.
HOW POPULAR IS PUTIN IN RUSSIA AND ABROAD? I will start with Putin’s popularity in Russia. We have different measurements. We do them on an almost monthly basis. One is the approval rating of the president and it is really high, about 80%. At the same time, you can’t compare it to
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the approval ratings of western leaders where there is competition or criticism on TV- which doesn’t happen in Russia. There are no attacks on these ratings and around half the population is ready to vote for him. There was a dramatic change after the annexation of Crimea because it was seen by the majority of the public as a revival of Russia’s greatness, that we can do anything despite western criticisms. We saw then a huge increase in popularity. That said, only about 8% like Putin very much, while the majority has more or less neutral acceptance of the status quo. So, Putin is not bad guy. One third of the population says I cannot say anything bad about Putin. What kind of popularity is that? As for the West, as I understand, it is more about dissatisfaction with the US, maybe with Europe, where the people are dissatisfied with western politicsthere Putin is very popular. Putin and Russia are seen as a person and country that defy the West. If you don’t like the West, Putin’s got appeal. If you agree with the West and see its policies as being beneficial to the given country, Putin is usually unpopular.
IN ALEXEI NAVALNY’S RECENT INTERVIEW, HE SAID HE SEES ABKHAZIA AND SOUTH OSSETIA AS INDEPENDENT COUNTRIES. WHAT SHOULD GEORGIANS EXPECT FROM HIM IF HE EVER BECOMES A MAJOR POLITICAL FIGURE IN RUSSIAN GOVERNANCE? I think he’s acting like a very cunning politician. He would not defy the majority. He really wants to be popular in Russia, he wants to be president one day. I think he’ll follow the mass attitudes. As regards his statements on Abkhazia and South Ossetia, I think it’s a populist move and it’s again what the majority of
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the public opinion think about Abkhazia and South Ossetia. I think about half the population says they are independent and should be independent and there are 1/5 of them who say that they should be incorporated into Russia. It changed after Crimea because the sanctions that followed were seen as a bad move and hurt Russia in some sense. After that, public opinion changed, seeing fewer people ready to welcome Abkhazia and South Ossetia into Russia. But still, there was a conflict and this explains why the majority sees them as independent.
THE KREMLIN RECENTLY ANNOUNCED A MAJOR CUT IN THE REGIONAL BUDGET FOR THE TWO BREAKAWAY REGIONS. HOW DO YOU THINK THIS WILL AFFECT THEM? It will be harder for them. These territories heavily depend on Russian support. Of course, without it, more tensions will be seen and more questions will be asked. As there was a war, it is a very hard topic and there is a long to go for reconciliation for both sides.
TSKHINVALI SEEMS TO BE ADAMANT ON SEEING THROUGH THE REFERENDUM ON JOINING RUSSIA. HOW FEASIBLE IS THAT? Russians would prefer the existing status quo. It will only happen if decided so in the Kremlin. I don’t know whether the Kremlin wants this to happen right now. Maybe if it feels frustrated with the West, for example if it tries to approach Trump to no avail and then feel ‘we have nothing to lose, let’s take this step’. But my general understanding is that the Kremlin doesn’t want the joining right now because they still seek some kind of negotiation or reconciliation. Because again, those sanctions hurt.
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