Issue no: 1249
• JUNE 5 - 11, 2020 • PUBLISHED WEEKLY
FOCUS ON ISRAEL-GEORGIA CHAMBER OF BUSINESS Deepening cooperation with LAHAV, the leading Israeli business association
PAGE 3
PRICE: GEL 2.50
In this week’s issue... After the Pandemic, There’s No Going Back to Normal NEWS PAGE 2
June 5 Marks World Environment Day NEWS PAGE 3
Redjeb Jordania, Son of Noe, on Growing Up as an Émigré & What His Father Would Think of Georgia Now POLITICS PAGE 6
Beeline Georgia COO on COVID-19 and Looking Forward BUSINESS PAGE 7
EIB Regional Head Maciej Czura on EIB Support for Georgia
Thousands Around the World Protest the Death of George Floyd BY AMY JONES
T
he death of a black man, George Floyd, in police custody, sparked a wave of protests in the US and around the world this week. Floyd died in Minneapolis on 25 May after a white police officer pressed a knee into his neck for more than eight minutes. His death is another name added to a list of black men and women who have died because of police brutality. The day after Floyd’s death, protestors took to the streets in Minneapolis, with demonstrations soon spreading across the country and the world. The weekend also saw protests in Auckland, Barcelona, Brisbane, Calgary, Copenhagen, Dublin, Lagos, Paris, Montreal, Rio de Janeiro, Sydney, Toronto, Athens, Tel Aviv, and more. In Berlin, protestors gathered in front of the US Embassy under the slogan “Justice for George Floyd.” Thousands also demonstrated in Trafalgar Square in London, despite the ban on mass gatherings due to COVID-19. Continued on page 4
BUSINESS PAGE 7
Why Georgia's Forest Code is a Progressive Step Forward SOCIETY PAGE 9
“Corona Days” Artworks of Young Georgian Artists: Sandro Gvinashvili CULTURE PAGE 11 Prepared for Georgia Today Business by
Markets As of 29ͲMayͲ2020
Price
w/w
Price
w/w
Bank of Georgia (BGEO LN)
GBP 9.25
+9,2%
Ͳ9,1%
GEOROG 04/21
98.98 (YTM 7.93%)
+0,2%
+2,4%
Georgia Capital (CGEO LN)
STOCKS
GBP 4.60 +11,2%
+8,2%
GEORG 04/21
102.74 (YTM 3.61%)
Ͳ0,0%
+1,8%
GHG (GHG LN)
GBP 0.84
+1,2%
Ͳ6,7%
GRAIL 07/22
100.95 (YTM 7.25%)
+1,9%
+1,8%
TBC Bank Group (TBCG LN)
GBP 8.30 +13,7%
Ͳ4,6%
GEBGG 07/23
96.05 (YTM 7.42%)
Ͳ0,1%
Ͳ4,8%
CURRENCIES
Price
w/w
COMMODITIES Crude Oil, Brent (US$/bbl) Gold Spot (US$/OZ)
m/m
BONDS
m/m
Price
w/w
m/m
35,33
+0,6%
+56,7%
GEL / USD
3,1620
Ͳ0,9%
Ͳ1,5%
1 730,27
Ͳ0,3%
+1,0%
GEL / EUR
3,5109
+1,0%
+0,6%
m/m
+0,3%
Ͳ2,7%
GEL / GBP
3,8937
INDICES
Price
w/w
m/m
GEL / CHF
3,2774
Ͳ0,2%
Ͳ0,6%
FTSE 100
6 076,60
+1,4%
Ͳ0,6%
GEL / RUB
0,0451
+1,1%
+2,5%
FTSE 250
17 042,96
+3,9%
+1,2%
GEL / TRY
0,4632
Ͳ1,0%
+0,3%
DAX
11 586,85
+4,6%
+4,3%
GEL / AZN
1,8599
Ͳ0,9%
Ͳ1,5%
DOW JONES
25 383,11
+3,8%
+3,0%
GEL / AMD
0,0065
Ͳ1,5%
Ͳ3,0%
9 489,87
+1,8%
+6,5%
GEL / UAH
0,1177
Ͳ1,2%
Ͳ1,3%
146,09
+4,0%
+7,0%
EUR / USD
0,9006
Ͳ1,8%
Ͳ2,1%
NASDAQ MSCI EM EE
930,35
+2,8%
+1,2%
GBP / USD
0,8095
Ͳ1,5%
+0,9%
3 044,31
+3,0%
+3,6%
CHF / USD
0,9616
Ͳ1,0%
Ͳ1,2%
MSCI FM
2 067,62
+3,4%
+4,3%
RUB / USD
70,1542
Ͳ2,1%
Ͳ3,9%
GT Index (GEL)
1 582,68
Ͳ
Ͳ
TRY / USD
6,8240
+0,1%
Ͳ1,8%
GT Index (USD)
1 208,13
Ͳ
Ͳ
AZN / USD
1,7000
Ͳ
Ͳ
MSCI EM SP 500
2
NEWS
GEORGIA TODAY
JUNE 5 - 11, 2020
The News in Brief BY TEAM GT
G
eorgiahascrossedanuneasy threshold this week, with many spaces beginning to reopen after the coronavirus lockdown. All kinds of shops, open and closed produce markets and restaurants with outdoor seating areas returned to work on Monday. All facilities must abide by the rules established by the Ministry of Health, including daily sanitizing, social distancing practices and the use of face masks. In closed restaurants, tables must not be placed less than two meters apart, with no more than six persons at a table and no less than one-meter distance between them. Shopping malls should use heat screening thermometers to check the temperature of clients and personnel before they enter. Movie theaters, entertainment centers and food outlets in the malls remain closed. "We call on everyone to wear masks to take care of each other and to maintain the potential of our economy's recovery," Prime Minister of Georgia Giorgi Gakharia said at the Interagency Coordination Council meeting on Monday.
MARINA EZUGBAIA: DESPITE THE NEW COVID CLUSTER, THE SITUATION IS UNDER CONTROL Marina Ezugbaia, the Clinical Director of the Tbilisi Infectious Diseases Hospital, has said that the epidemic situation in Georgia is under full control. Despite the emergence of the so-called ‘Saburtalo
Cluster’, she added, all of the primary contacts have been detected and the research is ongoing. "The rise of infections in recent days has spurred concerns that the epidemic situation could become unmanageable, yet current data shows that everything remains under control. The contacts of the so-called ‘Saburtalo Cluster’ have been detected and put into quarantine. If symptoms emerge, whether it be temperature, cough, or respiratory failure, the contacts in question shall be tested immediately. PCR tests will be used along with serologic checks. With the use of these two methods, there is a very low risk of overlooking an infected patient," said Ezugbaia.
GEORGIA GETS READY TO HOST INTERNATIONAL VISITORS FROM JULY 1 “It is important that all infrastructure, including international airports, is prepared in accordance with international standards and meets the epidemiological safety standards in order to make it as safe as possible for tourists and our citizens to travel,” said Georgian Minister of Economy and Sustainable Development Natia Turnava. Minister Turnava visited Tbilisi International Airport this week to check on preparations for the safe resumption of flights, with Tamar Archvadze, the Head of the United Airports of Georgia, and Levan Karanadze, Head of the Civil Aviation Agency. The operator of the airport, TAV Georgia, has already met all requirements for the safe transportation of passengers at its airports, in full compliance with the international standards, having installed hand sanitizers, video scan-
ners to measure passenger body temperature, marking terminals with distancing markers, and installing protective shields at registration counters to prevent direct contact between passengers and airport staff.
GEORGIA’S REVIVAL PLAN On June 4, it was announced that the Georgian Prime Minister, in collaboration with leading experts Cambridge and London Universities, is working on Georgia's rapid economic revival plan. In an economic policy videoconference
with Cambridge and London University Professors Ha-Joon Chang, Christopher Cramer, and Jonathan D. Jones, the Head of Government and the world-acclaimed economists discussed ways to overcome Georgia's major economic challenges, like the current account deficit and the national debt. The meeting emphasized that one of the government's priorities is to ensure that post-crisis economic growth applies to each citizen.
MICRO GRANTS FOR SME BUDGET INCREASED
The budget of the already successful Micro Grants and Small Enterprise Support Programs has been increased to 40 mln GEL, while the minimum threshold for grants has been increased from 20,000 to 30,000 GEL. “This is direct support to those citizens who are ready to start a business even amidst the current uncertainties, to take on new projects, assume a certain risk and employ others. Everyone should understand that this initiative has not only social dimension, but a significant economic value," noted the PM.
After the Pandemic, There’s No Going Back to Normal BLOG BY LOUISA VINTON, UNDP GEORGIA
T
he COVID-19 pandemic has caused unimaginable hardship, fear and sorrow, particularly in countries that ignored science and took precautions too late to prevent soaring death tolls. But few would deny that lockdowns and work-at-home regimes also brought some unexpected pleasures. Skies cleared in normally polluted cities. Traffic and construction halted, and people rediscovered the beauty of silence. Wild animals, boars in Berlin, goats in Wales, coyotes in San Francisco, strolled city streets in solitude. Seeing images of crystal-clear canals in Venice or sea turtles laying eggs on empty beaches, people were stunned at the tangible evidence of how quickly nature could rebound, once given the chance. Here in Tbilisi, residents marveled at the sudden freshness of the air, undisturbed by the dust and fumes that had placed Georgia’s capital high on the infamous list of Europe’s most-polluted cities. Clear views of the distant Caucasus mountains revived a sense of the majesty of Georgian geography. Urban dwellers planted herbs and vegetables. Accustomed to the frustrating daily commuter crawl, my intrepid deputy savored the experience of bicycling down the middle of an empty Rustaveli Avenue. Now that countries like Georgia, that have successfully contained the virus, seek cautiously to reopen and restart the economy, it is important not to forget revelations like this that eased our lockdown deprivations. And as people race to reconnect with family and friends after weeks apart, however nostalgic we may feel, we need to digest that a return
to normal is neither possible nor desirable. On June 5, we mark World Environment Day, which is dedicated this year to the preservation of biodiversity. If the pandemic has taught us anything, it should be that we cannot continue to violate the limits of our natural world without risking our human health and well-being. Faced with the huge economic costs of pandemic shutdowns, many countries
will be tempted to ignore this lesson, and set aside their efforts to fight climate change and protect the environment in favor of a swift restoration of economic growth. However, at UNDP, we believe that a return to “business as usual” is simply not a realistic option. As UN SecretaryGeneral Antonio Guterres said, “We simply cannot return to where we were before COVID-19 struck, with societies
unneces sarily vulnerable to crisis. We need to build a better world.” Green needs to be the color of that better world. Our economies, our societies and we as individuals need urgently to rediscover how to live in harmony with nature. To avoid future crises, we need to persist in our efforts to meet the threats posed by climate change, through complex, multi-year efforts like the USD 72 million disaster prevention program
that UNDP is implementing in Georgia in partnership with the Green Climate Fund, the government, and the Swiss and Swedish development agencies. We need to devise low-carbon models for growth. We need to invest in renewable energy and realize the potential of energy efficiency. Particularly in countries like Georgia, we need to develop “green tourism” that generates income and livelihoods from protecting nature rather than consuming it. There is nothing new about these ideas, of course. They sit at the core of the Sustainable Development Goals and the Paris Agreement. But the pandemic has shown how urgent it is that we finally take action. The pandemic made the unthinkable real in many horrific ways, but also in some positive ones that showcased human ingenuity at its best; we need to retain this outlook as we emerge from our isolation. “Build back better” is a slogan traditionally applied to natural disasters. At UNDP, this has evolved into our motto for post-pandemic recovery. In addition to the destructive impact we have had upon nature, COVID-19 has exposed the many cracks in the walls of our economies and social protection systems. If we try to pretend that nothing has changed, we risk generating even more devastating catastrophes. But if we resolve to “build back better,” to seize the moment not just to paper over the cracks but to rebuild our economies and societies on more resilient, greener foundations, we stand a chance to forestall the next crisis … and maybe even find a way to enjoy as a “new normal”- the clean air, mountain vistas and bicycle-friendly streets that offered such a welcome respite during the pandemic. Louisa Vinton is the Resident Representative of the United Nations Development Programme (UNDP) in Georgia.
NEWS
GEORGIA TODAY JUNE 5 - 11, 2020
3
Increasing Business Cooperation: Israel-Georgia Chamber of Business with LAHAV, Israeli Business Leading Association
T
he Israel-Georgia Chamber of Business is deepening cooperation with LAHAV, the leading Israeli business association. As reported by the Israel-Georgia Chamber of Business, partnership with LAHAV is the best platform for developing bilateral business relations between countries. LAHAV, the Israel Chamber of Independent Organizations and Businesses, promotes the interests of the selfemployed and small and medium businesses (SMB). Today, this sector in Israel numbers over 530,000 independent breadwinners and entrepreneurs who employ over 700,000 salaried staff. In fact, the SMB sector constitutes 98% of all the businesses and employers in Israel, and thus is the main driver of Israel's economic growth. LAHAV works with state authorities to promote the rights of self-employed and small and medium businesses and to create an economic environment that supports their growth and prosperity throughout the economy. LAHAV currently represents over 56 independent and professional organizations in Israel, totaling some 130,000 members.
LAHAV is a member of the Economic Organizations Coordinating Bureau and is represented in the Bureau. The LAHAV President is Adv. Roee Cohen, who has been in office since October 2015. A well-known lawyer and economics analyst, Roee Cohen was named among the 100 most influential persons in Israel in 2018 and 2019, based on the survey of daily Israeli edition Maariv. The business association unites associations of almost all businesses, including lawyers, accountants, directors’ unions, media business consultants, designers, medical, education, tourism and hotels associations. In the near future, another meeting is scheduled between Itsik Moshe, the President of the Israel-Georgia Chamber of Business, and Roee Cohen, President of LAHAV. The topic of the meeting will be future plans and business forums in 2021. The President of the Israel-Georgia Chamber of Business notes that based on the agreement, in case of interest in the Georgian business environment, the Israel-Georgia Chamber of Business will provide all the business unions which are members of LAHAV with free professional consultations, and organize
their visits and business meetings in Georgia. At the same time, it will help Georgian businesses to share Israel's experience and pave the way for them in Israel. According to Yossi Hamami, a former vice-president of LAHAV and a member of the board of the Israel-Georgia Chamber of Business, the Israel-Georgia Chamber of Business already has experience working with LAHAV, and several companies that are members of LAHAV have
already invested in Georgia. At the end of the year, in December, the leadership of LAHAV will take part in a business forum organized by the Israel-Georgia Chamber of Business in Tbilisi, holding business meetings with representatives of the government's economic bloc and business unions. This event is in the framework of Israeli Week 2020. This year is also the 25th anniversary of the Israel-Georgia Chamber of Business.
Itsik Moshe claims that as the coronavirus pandemic has hit the economies of all countries, and 2021 will be a new stage for business, working with LAHAV will be a good opportunity for the IsraelGeorgia Chamber of Business to find potential investors. The Israel-Georgia Chamber of Business is a member of the International Chamber of Commerce (ICC Georgia) and The World Chambers Federation (WCF).
June 5 Marks World Environment Day Each year a country or Nation hosts WED. This year, it will be hosted in Colombia, in partnership with Germany. Colombia is one of the largest “Megadiverse” nations in the world, with 10% of the planet’s biodiversity. Since it is part of the Amazon rain forest, Colombia ranks first in bird and orchid species diversity and second in plants, butterflies, freshwater fish, and amphibians. World Environment Day can be celebrated in many ways, activities such as clear up campaigns are popular and will be prominent this year, also concerts, conventions and parades, tree planting, and lectures. Promotional materials for the day tend to be created using natural environmental colors.
BY ANA DUMBADZE
O
n June 5, World Environment Day is celebrated, an environmental awareness day run by the United Nations. The aim of the day is to raise awareness of the environment and specific environmental issues. World Environment Day (WED) was established in 1972 but first held in 1974, which shows that concern about the environment goes back several decades at least. 143 countries take part in World Environment Day, and the day focuses on environmental concerns ranging from pollution to global warming and sustainable food production to protection of wildlife. Every year there is a new main focus for WED. The theme for this year’s World Environment Day is “Celebrate Biodiversity,” a concern that is both urgent and existential. "Recent events, from bushfires in Brazil, the United States, and Australia to locust infestations across East Africa – and now, a global disease pandemic – demonstrate the interdependence of humans and the webs of life, in which they exist," the UN said in a statement.
HISTORY OF THE EVENT
Image: Stock Photo
The theme for 2019 was "Beat Air pollution" and the host nation was China. This theme was chosen as it has been
killing about 7 million people annually. Participants of WED include NGOs, governments, communities, individuals,
charities, organizations and celebrities, and together they raise awareness of environmental issues.
In 1972, the United Nations General Assembly established the World Environment Day on the first day of the Stockholm Conference on the Human Environment. "The celebration of this day provides us with an opportunity to broaden the basis for an enlightened opinion and responsible conduct by individuals, enterprises, and communities in preserving and enhancing the environment," says the United Nations.
POLITICS
A Divided Eurasia OP-ED BY EMIL AVDALIANI
G
lobal shocks caused by the outbreak of the coronavirus set out numerous unexpected developments in the economy, health sphere, and politics. Other trends were already in motion well before the pandemic. One such development was the emergence of an increasingly divided Eurasian. The continent which holds the key to global trade, politics and various earth resources is set to be a major battleground in the 21st c., with several states trying to attain a certain level of influence over their
neighbors or far-flung territories. The pandemic accelerated this trend, with the US and China cast as direct competitors. Along with China, other Eurasian powers are emerging, which aim to shift the post-Cold War balance of power. One interesting sphere where major Eurasian states are establishing zones of influence over their immediate neighborhoods is in the techno-economic sphere. Using technological prowess to achieve geopolitical aims might not sound an especially novel trend, but the current scale of the competition is far exceeding any previous developments. We are witnessing the emergence of socalled ‘techno-economic blocs’. This is when the coronavirus plays a defining
role, as its effects will likely speed up the decoupling of such emerging blocs. These emerging technological or technoeconomic blocs are based on competing technological platforms. Companies in the US, China, EU states, and Russia are creating new types of communication dependencies among the populations across the region, and among the governments that rule them. For example, Russian platforms like VK.com, Odnoklassniki. ru, Moi mir, Mail.ru, etc. are being turned into the same tools of geopolitical influence as the existing dichotomy of American and Chinese Facebook and WeChat, Amazon and Alibaba, Cisco and Huawei. Their aim: to compete over large swathes of Eurasia.
As argued above, this trend fits into a geopolitical constant of the emergence of spheres of influence coinciding with the pursuit, by a rising or re-emerging power, of higher status in international affairs. The South Caucasus is right in the midst of this accelerated trend, and is vulnerable to competition among regional and continental powers. Considering Russia’s increasing geopolitical ambitions in the South Caucasus, the use of and information spread via popular Russian social networks, Odnoklassniki.ru, VK.com and other platforms, in Georgia and the neighboring states, is of a particular importance. All these platforms aim to collect vital
security information (passwords, usernames) on as many people as possible, preferably in the neighboring states. Since there is a considerable shift in Russia to control the country’s advanced technological platforms through the state security apparatus, the personal information eventually could be used for geopolitical purposes. We are essentially entering an age of total control, not in the sense of the totalitarian state system seen in Soviet times, but in terms of the ability of state apparatus to collect information on millions of people living abroad. Put in the context of the intensified military and economic struggle, the technological competition gains crucial importance for all.
4
POLITICS
GEORGIA TODAY
JUNE 5 - 11, 2020
“Has Power Gone to His Head?” – Bernhard L. Mohr on Putin & His Russia INTERVIEW BY VAZHA TAVBERIDZE
I
n an inaugural interview of the new GISP series, titled “Insights on Putin’s Russia”, the Georgian Institute for Security Policy chatted with Bernhard Mohr, author of the acclaimed “Why Do Russians Vote for Putin?”, which has also been translated into Georgian and published by Artanuji Publishing House. Himself a Norwegian, Mohr spent considerable time in Russia, trying to solve several puzzles pertaining both to the country and the leader it is under. “Russia is a very big country and the biggest part of the Russian population is working class, living in cities that are huge in comparison to most European cities but relatively small in Russia, cities between 300,000-1 million inhabitants. This big group of working class people has quite a conservative way of life; their access to information is relatively limited because they don’t speak foreign languages, and they mainly watch State TV, which is very controlled. The big state media, they don’t do journalism, they do propaganda. To a certain extent, their voting for Putin is understandable. What is more puzzling is that the same applies to the urban middle class, constituting around 25% of the population. These are people with higher education that have traveled a lot in Western Europe, that have access to different sources of information, such as internet and are able to take different perspectives. I was interested in trying to understand why these people by far and large support Putin’s regime. I’ve come to see that after the Crimea annexation, their views somehow changed: even people that were in the liberal camp and were critical of Putin suddenly became fans of his policies and supportive of the regime. That’s why I wanted to write this book. In researching for the book, I did a lot of interviews with middle class Russians living mostly in Moscow and Saint Petersburg, but I also went to South Russia, to Rostov-na-Donu and Taganrog. At that time, in 2016-2017, the whole Crimea annexation and assertive foreign policy was tremendously popular, and almost everyone in Russian society supported their president in his aggressive, challenging foreign policies.”
DO YOU HAVE ANY IDEA WHY? WHAT IS THAT SECRET ELEMENT THAT DRIVES THEM INTO A PUTIN WORSHIPPING FRENZY? When I did the interviews for my book, a lot of people said, ‘we realize that what we did in Crimea was a breach of international law, but it was still the right thing to do. Crimea was traditionally Russian and we have the right to be a dominant player in this part of the world.’ And this was a sentiment even felt among the best educated. Partially, I think this can be explained by some sort of postimperial syndrome that Russian people seem to suffer from; where people cherished the fact that the Soviet Union was a big international player the USA had
to take into account. After that came the period of chaos under Yeltsin, and now people had to watch Russia again – for many, this proved to be a very comforting, soothing perspective. During and after the Crimea annexation people did not go to TV to get news, they went to TV to get appreciation or comfort. There’s background rationale for this strong effect: when Putin came into power in 2000, and between 2000 and 2012, the Russian economy grew extremely fast, driven mostly by oil prices, but in 2011, 2012, people came to the realization that this economic wonder would not last forever. In 2006-2007, we thought we would catch up with western countries and then realized, no, this wasn’t going to happen; so we needed something else, and this was the next best thing.
trades little with Russia. But Russia has its own troubles too: the biggest challenge for Russia is its economy, which is not growing. People are getting fed up. What people in Russia now ask is whether the state is interested in dialogue with the rest of the world. Russia knows it cannot develop its economy on its own, that it has to work more closely with its western partners. Small victorious wars like Syria, Georgia, and Crimea cost them a lot of Rubles.
AND ENTER GEORGIA IN 2008, A CLASSIC CASE OF A SMALL VICTORIOUS WAR.
I don’t think so, for two reasons. One is that Russia needs the West much more than the West needs Russia, and the second: the West has so much on its plate right now, we have to take care of ourselves, we don’t have time to care much about Russia. It’s about the status quo: keeping sanctions and demanding that Russia behave and live up to the Minsk agreements.
IS THERE A DANGER RUSSIA MIGHT WIN THE FATIGUE GAME BECAUSE THE WEST IS DIVIDED ON THE SUBJECT OF WHAT TO DO WITH RUSSIA, AND ISSUES LIKE GEORGIA AND UKRAINE MIGHT BECOME BARGAINING CHIPS?
True. And then 2014, a bigger victorious war. From 2015 – 2017, there was this rally around the banner because of the Crimea annexation; there was the narrative that Russia was entrenched by NATO bases all around the country and NATO was expanding. If you read the security documents, this is what they state. It created the icon of ‘enemy’ that is extremely convenient to manipulate Russian people with.
WHAT'S YOUR TAKE ON RUSSIA'S “MALIGN INFLUENCE” IN THE NEIGHBORHOOD? HOW TANGIBLE IS THE RUSSIAN INFLUENCE IN SCANDINAVIA?
IF THE FASCINATION WITH PUTIN IS TIED DOWN TO MENTALITY AND NATIONALITY, WHAT GOOD CAN COME FROM THE WEST’S CONTINUOUS ATTEMPT TO CONVERT RUSSIA TO LIBERALISM? This is a big question; I think the premise is only partially right, I think the more conservative side of Russian society is happy with a somehow authoritarian leader but there’s again 20-25% of the population which is well educated, this part of population is not entirely lost to the West; I am convinced about this because it’s my environment, I was there, I talked to people; since 2017 that effect has diminished. There’s a need for something else; there are very clear indications from social surveys showing that younger adults today, they don’t believe much more in the main narrative of Russia being entrenched by NATO and so on.
IN YOUR BOOK YOU SEEM DISAPPOINTED THAT THESE EDUCATED PEOPLE, ONCE FRIENDS, HAVE CHANGED THEIR VALUES. IS IT POSSIBLE THAT THESE YOUNG PEOPLE YOU ARE SO HOPEFUL ABOUT WILL ALSO BE THINKING THAT WAY IN TEN YEARS’ TIME? It’s a key question, and there’s no guarantee. I still think Russia might develop in a more democratic direction after Putin, but at the same time, Russia’s foreign policy may continue to be assertive. Even if you have a more open and democratic society, you may still have quite a hostile foreign policy. But what I see is that younger people in Russia will not accept living in conditions that are
severely worse compared to people of their age in the rest of Europe; I think they expect to have the same opportunities. Today’s twenty-year-olds don’t watch TV: they read foreign news; what they take in is from internet, and they know how the world works and aren’t as easily duped.
IS PUTIN THE ARCHITECT OF MODERN RUSSIA, OR DOES HE MERELY GIVE PEOPLE WHAT THEY WANT? I think it’s a mix. The Kremlin responded to changes in sentiments among the population; but also went to great lengths to centralize power, to get rid of alternative centers of power; immediately taking control of TV. Also, the courts don’t act independently, which was key to Putin from day one.
YOU SAID THAT RUSSIA MIGHT DEVELOP IN A MORE DEMOCRATIC DIRECTION AFTER PUTIN. BUT ISN’T “PUTIN FOREVER” A MORE LIKELY SCENARIO NOW? Until this spring most people expected Putin to step down as president when his fourth term ends in 2024. Some experts suggested that he would stay close to power, but in a new role, for instance like Nazarbayev in Kazakhstan,
who heads the State Council. But now, with the suggested “nullification” of his two last presidential terms, Putin can stay in power until 2036. It is hard to reveal Mr. Putin’s inner motivation for this move: Has power gone to his head, or are he and his closest allies truly convinced that his being in charge is vehement to Russia’s modernization? What we can say for sure, is that this step once and for all takes Putin’s Russia out of the category of “managed democracies” and into the “autocracy” category.
WHAT IS THE MOST FEASIBLE AND EFFECTIVE POLICY TO PURSUE WITH RUSSIA? IS A DIALOGUE-ORIENTED POLICY REALISTIC, OR IS THE RED LINE POLICY THE WAY? In Norway we try to do a mix of both. We collaborate productively with Russia in fields where we as neighboring countries have to work together, at the same time fulfilling our obligations as NATO members. Norway has been part of NATO since 1949. The Russo-Norwegian border was established in 1826, and there have never been any actions of war between the two sides. Russia and Georgia is, of course, a completely different history. Also, in terms of trade, I guess Georgia is dependent on Russia, whereas Norway
I write quite a lot about this in my new book. I don’t foresee any Russian military aggression towards Norway, but what we can expect to see is disinformation campaigns; when Norwegian secret services report on security threats to Norway, they always mention one of the biggest threats as being cyberattacks from great powers, Russia and China, and there have been quite a few attacks.
WHAT DO YOU THINK IS THE BIGGEST DANGER THAT COMES FROM RUSSIA AND PUTIN, AND WHAT WOULD YOU ENVISAGE AS AN EFFECTIVE INSTRUMENT FOR COUNTERING THAT THREAT? The Russian side doesn't believe much in collaboration with the West. They see the world as being embroiled in a constant fight between big powers and what we call the zero sum game: it doesn't matter what the other side gets, you just have to ensure that you get most. Russia has shown its willingness to take whatever measure to achieve its goals, using its military in Georgia, in Kiev; using hybrid measures and social media to influence the political debate in Western countries. I think the greatest threat is that in this situation, there's no faith in the other side.
Thousands Around the World Protest the Death of George Floyd Continued from page 1 Protestors call for the end of police brutality and anti-black racism, as well as justice for Floyd. Although mostly peaceful, some protests have turned into riots. As of June 2, thirteen people had died in incidents related to the protests. The US has been accused of using excessive force in an attempt to control
the protests. A New York Times article claims that “batons, tear gas, pepper spray and rubber bullets” were used against protesters, bystanders and journalists, with no warning or provocation. On Monday evening, Donald Trump threatened to send in the military against protesters before posing for a photo outside a church whilst holding a bible. This scene played out as
horse-mounted guardsmen used teargas and rubber bullets to keep away peaceful protestors. “The fascist speech Donald Trump just delivered verged on a declaration of war against American citizens,” Democratic Senator for Oregon Ron Wyden tweeted shortly afterwards. The Guardian newspaper ran a story likening Trump’s actions to those of an
authoritarian dictator. World leaders have criticized the US response to the protests and Donald Trump’s reactions. The Canadian PM paused for more than 20 seconds when asked about Trump’s threat to use the military to end protests. The protests could not come at a worse time for the US, as the country struggles to control the coronavirus pandemic.
The US is approaching two million cases and has suffered more than 100,000 deaths. The biopsy report on George Lloyd showed that he too tested positive for the virus. Many states have imposed curfews in an attempt to deter demonstrations, to no avail, while twenty states have seen an increase in coronavirus cases in the past days.
POLITICS
GEORGIA TODAY JUNE 5 - 11, 2020
5
Georgia’s Possible Positioning in a New Global Production & Trade System, Part 1 OP-ED BY VICTOR KIPIANI, GEOCASE CHAIR
A
s international political events of the 21st century followed each other, with some duplication, modification and alternation, economic integration followed a rising line. As a result, we ended up with a high-quality, interconnected and interdependent economy articulated along a spine of tightly intertwined links between the production, trade and services sectors of global centers. Frankly speaking, the fact that such a high-risk economic model was exposed should not be solely blamed on the current crisis—observers have long criticized its exuberant inclination towards “systemic shakes”—but we should not limit ourselves to theory, since the 2008-9 financial crisis presents us with a very clear illustration of this risk. Several quasi-global “mini-shocks” took place after this financial recession as well, but went unnoticed, mostly because their tectonics were far behind the 2008-9 recession. In short, states and businesses received enormous amounts of practical materials from which to draw the right conclusions, but except the measures carried out in the banking sector which contributed to its durability, these materials could not be translated into systematically correct decisions and measures. The networking of the global economy was therefore based upon an approach which made it easy for a collapse in a given hub to spread and “infect” other hubs, resulting in a systemic global recession. Huge rises in production and trade between 2001 and 2020 (U.S. exports to China alone increased by 500 per cent during this period) led the global economy towards harmful levels of dependence. As a result, since last March, the world is facing much more than an average recession, and instead a “great suspension” of the global economy. Nowadays, alongside epidemiological discussions of the severe threat the virus poses to public health, it has also become possible to openly discuss the vulnerability of the world’s economic health and the high possibility of it becoming infected due to the super-concentration and super-monopolization of production and trade in a handful of hubs. These circumstances are rendered even more inadmissible by the widespread use by various irresponsible actors of economic blackmail, threats and attempts to use political tentacles hidden within a variety of financial measures or loans in order to maintain or expand their geopolitical zones of influence, posing risks not only to the global economy but also to world peace and security.
CHINA AS A SOURCE OF GLOBAL REARRANGEMENT Nowadays we hear much about China’s economic expansion through a series of mega-projects on an unprecedented scale. Readers will be familiar with these projects and there is therefore no need to describe them again, but I would like to mention a few other less well known aspects that raise several issues. Let us begin with China’s economic potential. The main question here is: How healthy and self-sufficient is the Chinese economy considering its huge long-term global ambitions? Does it have the ability and sufficient capacity to strengthen existing results beyond the country’s borders and develop them according to Beijing’s stated wishes? It would be difficult to
give a positive answer to this question if we look beyond the official propaganda. In reality, the Chinese government is facing an acute dilemma between the inevitable need to reform the country’s economy and the political risks this poses. Economic progress requires the fresh air of political freedom and greater international openness, but China’s economy is burdened by a number of factors: the countless unprofitable state enterprises, the lack of transparency, the complete disregard for the toxic obligations held by her banking system, the artificial investment in unprofitable projects in order to stimulate production and increase employment, and the alienation and material imbalance between “inner” and “coastal” China. These challenges are so systemic in nature that they will never be resolved by mere cosmetic changes and grandiose global mega-projects whose long-term sustainability and real achievements are far from clear. All this is a “domestic politics” unknown variable within our complex equation, but there is another more geopolitical knot linked to the trade war between the United States and China and a few other developments that preceded the pandemic. Let us begin by mentioning the unsolved issue of the challenges of access of American companies to the promising Chinese market and the difficulties they face when trying to establish themselves in China. This is certainly not an easy task, since Western investments must satisfy a series of delicate legal and economic conditions in China, such as partnering with a Chinese company and sharing intellectual property. The Chinese government’s approach is quite understandable: in order to move up the production value chain, the country needs access to modern technologies that will make its economy more competitive. And beyond that, by producing technologically advanced products, China can finally compete with the West in markets where the latter has always enjoyed the advantage of greater scientific and technological knowledge. And in practical terms, if we develop this official Beijing line, entering new markets equals increasing China’s global economic and geopolitical weight. The administration of George Bush Jr. and later that of Obama tried to impose rules upon Chinese expansion. Their attempts took many different forms, however, and even a brief description would be beyond the scope of this interview. Before Trump became president, one of the White House’s main policies was to keep China at bay by activating the scrum mechanism of regionally important agreements. The final example of this policy was the so-called “TransPacific Partnership” (officially the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, CPTPP), initially signed by eleven countries of the region including the United States. The aim was clear to all: to ensure a level of transparency and unity in China’s vast neighborhood which would hamper the Chinese government’s efforts to pursue its narrow national agenda behind the backs of others or to exploit differences of interest in order to divide and rule. It is, however, still difficult to identify the advantages and disadvantages of this agreement, particularly as Donald Trump formally withdrew the United States from this agreement during his first day in office. That said, even without the United States, the “Trans-Pacific Partnership” continues to unite economies worth $14 trillion, but Washington’s
retreat has undoubtedly undermined its effectiveness. Another recent example of U.S.-Chinese confrontation in the region and beyond is their so-called “trade war”. This developed in several stages and mostly involved increasing tariffs in an effort to balance trade payments between the two countries. Perhaps the most decisive development of this confrontation was the signing of the so-called “First Phase” in January, shortly before the pandemic swept the world. With her signature, China committed herself to not only increase purchases of certain categories of U.S.-manufactured products, but also to reform her “rules of the game”, including those pertaining to intellectual property, and align them more closely with international demands. But then came the virus, and in its wake anxiety, insinuations and accusations around that famous triad of global healthcare, economy and international relations—and of course a brand new agenda, which has exposed the weaknesses of the pre-pandemic world’s networks of production and trade and its plans to rearrange and reorganize itself as well as specific outlines. Our desires and expectations are also linked to all this, and the hope is that Georgia will manage to grasp a better future in the window of opportunity this “perfect storm” presents and will play its part alongside the other advanced nations of the world based on a concrete plan.
MOVING FORWARD IN A NEW ECONOMIC SYSTEM According to a survey carried out by the United States Chamber of Commerce, even as the “tariff-trade war” was raging in Southern China (the richest part of the country), 85% of American companies were unhappy with the business environment, and 70% declared that they would not invest further in China and were thinking of relocating to another country. (It is extremely noteworthy, however, that only 1% of them were considering a move to the United States.) Such was the mood before the pandemic made the picture even darker, and it
should be noted that although European companies were not involved in this survey, their modus operandi and code of conduct very frequently imitates the American model for a variety of political and legal reasons. Setting aside interesting facts and circumstances, does this all mean a total “business alliance” between Americans and Europeans? Of course not. It would be practically impossible for the Chinese business landscape to be without foreign investment, and there are several main arguments to back up such a bold statement. First of all, the export diversity of many companies operating in China enables them to redistribute and digest financial losses caused by U.S. tariffs. Also, it is one thing to decide to relocate a business from one corner of the world to another—a process that might take 2-3 years in total—and quite another to be able to do so quickly and cheaply. The potential speed and affordability of such a move are partly defined by the availability at the destination of suitable infrastructure, of a qualified and affordable workforce, of a satisfactory regulatory environment and of mechanisms to prevent the internal market from collapsing. Today’s China meets most of these requirements. The country has a workforce of 650 million, 13 of the largest ports in the world and a developed system of production based on two essential elements of business— “operational effectiveness” (i.e. the capacity to rapidly produce large amounts of high-quality products) and a tightly integrated supply chain (which creates the so-called “timely supply” condition). Long-term opposition between the United States and China is impossible and counterproductive, and their stand-off will inevitably come to an end sooner or later. Yet the psychology of China’s ruling elite should also be taken into consideration, and it is questionable how ready Beijing might be to exchange its long-term visions into short-term concessions. In any case, it is impossible for the picture around this issue not to change, but how rigorous these changes will be
depends not only on the internal dynamics of U.S.-China relations, but also on the readiness and ability of other countries to offer attractive conditions to companies leaving China. In this respect, it is noteworthy that not only the recipient countries of new businesses (mostly and still from China’s neighbourhood and member countries of ASEAN) are on stand by, but also some of the countries that are interested in encouraging businesses to leave China and seeking to support this process. For example, the U.S. State Department openly declared that it will devote maximum efforts to decreasing reliance on supply chains going through China. Another possible solution could be the White House’s recently announced “Economic Prosperity Network” (Australia, India, Japan, New Zealand, South Korea and Vietnam), which should become a strong alternative to businesses relocating from China. This initiative is based upon a so-called alliance of “trustworthy partnership”, and my recommendation would be to thoroughly study practical ways in which to link to it. Obviously, other countries from Asia to Latin America are also considered as alternative playgrounds; I will not start discussing here who has what advantage, but I will mention two circumstances. One is that none of these countries possess all the necessary supporting elements. Secondly, countries keen to attract new businesses employ two main groups of measures: mostly fiscal, such as tax relief or exemptions, and other (non-fiscal) forms of support such as plots of land, a suitable workforce, etc. These processes should be systematically monitored in Georgia. Appropriate materials should also be gathered and analyzed in order to define a few important advantages for us. Later, these should obviously be carried out using both public and private sector resources, making use of, say, new Georgian “public-private” partnerships in order to establish our country’s position within global networks… Continued in next week’s GT.
6
POLITICS
GEORGIA TODAY
JUNE 5 - 11, 2020
Redjeb Jordania, Son of Noe, on Growing Up as an Émigré & What His Father Would Think of Georgia Now
Want to watch it LIVE? Scan here and enjoy!
EXCLUSIVE INTERVIEW BY KATIE RUTH DAVIES
L
ast week, Georgia celebrated the 102nd anniversary of the Democratic Republic of Georgia- independence was declared on May 26, 1918, and the government led by Noe Jordania until February 25, 1921, when Soviet troops annexed the fledgling First Republic. Jordania’s government left the country and lived in exile in France, where they continued to work tirelessly towards restoring Georgia as an independent state. GEORGIA TODAY, via GT LIVE INTERVIEWS, met the 98-year-old son of the First President and Head of the Democratic Republic of Georgia, Redjeb Jordania, who is based in New York with his family, but who has been self-isolating in Florida during the coronavirus pandemic, close to the sea- one of his life’s greatest loves.
YOU GREW UP OUTSIDE GEORGIA. HOW CONNECTED DO YOU FEEL WITH IT, AND HOW DO YOU KEEP UP RELATIONS? I was born in Paris in 1921, just after my parents were obliged to come to France after the [Russian] invasion. I grew up in Paris. Upon reflection, it was a life typical of children of political émigrés, which are not the same as migrants: we expected to be there only temporarily. I went to French schools, spoke French, but my real friends were Georgian children. My connection with Georgia was through them, and my father, and through being brought up in Paris in a Georgian colony. The first time I went to Georgia
was in 1990. Before that, it wasn’t possible, but Glasnost opened up that possibility. After that, I was in Georgia many, many times. In the 90s, I saw the situation there and thought: what can I do to help? I decided to help Georgia connect with the Western world, which seemed to be what they wanted most. And my way of doing it was to organize summer courses in the American-English language. We recruited a bunch of American volunteer teachers and ran it for about 6 weeks each summer over several years. After that, Georgia got better organized and the teaching of English was made official, and they didn’t need me anymore. I always kept contact with Georgia and the Georgian colonies in the US and Paris. Now, I’m 98 years old and I no longer have those childhood friends. My Georgian is very shaky. My mother was Russian. My parents met in Paris in 1902, and at home would speak mostly in Russian together. My father would speak to me in Georgian, my mother in Russian, and I would always answer them in French.
TELL US ABOUT NOE JORDANIA, YOUR FATHER, AND WHAT HE ACHIEVED FOR GEORGIA 102 YEARS AGO. Before 1918, there was, so to speak, no “Georgia”. For centuries, it had been splintered into kingdoms, until the Russians took over. My father wrote in his memoirs that at the end of the 19th century, the Georgian concept of “belonging” was to belong to one’s family, one’s village and most of all to one’s province, but the concept of Georgia as a country was practically non-existent. It took a lot of work by many Georgian patriots, and at the grassroots by the social democrats, to recreate a concept of Georgia. The 1918 creation of the Georgian First
Republic was the creation of a modern Georgia after centuries of disarray.
WHAT WAS LIFE IN TBILISI AND GEORGIA LIKE IN THOSE THREE YEARS OF INDEPENDENCE? In the times of Noe Jordania, there was a big upheaval; civil wars all around, the Ottoman and Persian world disappearing. Russia signed the Treaty of Brest-Litovsk and abandoned 500,000 Russian and Polish troops on the border between Georgia and Turkey- all these soldiers had to be fed and repatriated. There were fights all over. But life in Tbilisi was like an “island of relative peace,” very active both politically and artistically. A lot of Russian artists descended on Georgia as a haven of peace, and you have to remember that in those times, Georgia was an agrarian society, no industry to speak of. Peasants made the country work. The creation of the first social democracy in the world relied greatly on the peasants, and that’s how life was. In the times of my father, there was greater production that I have seen in my lifetime. When he was born, there was practically no electricity. No cars. The most advanced thing was the steam engine and gaslight. By the time he died, we had radios and television and everything. According to all my Georgian friends, it seems that life in Georgia consisted mostly of supras, though the word we used back then was “keipi”.
WHAT WAS THE MOST DIFFICULT ASPECT FOR YOUR FATHER BEING AWAY FROM GEORGIA? I realized only later that it was the cultural aspect of being away [that was most difficult for him]. In the 1920s, everyone expected the communist system to collapse. Wealthy Russian émigrés would spend money like water because they expected to be able to go back and recuperate their riches. As we know, it didn’t happen, and the Soviet Union continued for a long time. My father was always struggling and working to protect Georgia on the international level, but after the end of World War Two, he realized the Soviet Union was there to last. At that point, he advised all those Georgians who were able, to return to Georgia. A number of them, including the parents of some of my friends, did so, and it was ok for them.
WHAT WAS YOUR FATHER LIKE AS A PERSON?
He was 53 years old when I was born, therefore he was more like a grandfather than a father. He tried to bond, but there was no playing in the fields- fathers playing with their children was not the done thing back then, it’s a fairly modern concept. He was a rather distant person [to me], though, even as a child, I knew he was someone important, because all the important people would come to visit him, deferring to him, and naturally, I was greatly impressed.
DID YOU GROW UP WANTING TO GO TO GEORGIA? No. There wasn’t even the possibility of it. And somehow, I felt I was in Georgia. We had Georgian food, Georgian songs, Georgian meetings, Georgian friends. Outside of Paris is the Leuville Estate, given to the Georgian government by France, and we all spent almost every weekend there. There was a Shevardeni club at a gymnasium in Paris, and we
kids met there every Tuesday night.
DO YOU THINK YOUR FATHER WOULD BE HAPPY WITH WHERE GEORGIA STANDS TODAY IN ITS POLITICAL MENTALITY? It’s difficult to answer for him now. He was not against a good relationship with Russia. He knew that Georgia could not stand on its own feet without strong alliances, and we have to realize that in the geopolitical reality, Russia is next to us and is going to be there forever, so, we’d do better to have some sort of different relationship with them. It’s already 30 years that Georgia is independent. It’s the longest the country has been independent since the times of Queen Tamar. Altogether, I think my father would say Georgia is doing pretty well, despite the difficulties. Download ‘All My Georgias’ by Redjeb Jordania from amazon.com.
BUSINESS
GEORGIA TODAY JUNE 5 - 11, 2020
7
Beeline Georgia COO on COVID-19 and Looking Forward channels. In addition, it took us just a few days to get the whole company into a remote work mode, including the call center. We can boldly say that it was not difficult for us to adapt to the new environment, as Beeline has been implementing the so-called Be Free approach, which involves working from a desired location and is an integral part of corporate culture. Another important challenge was to continue the technical works to improve the network, which was carried out unhindered as a result of the efforts of our technical team, in full compliance with security measures.
INTERVIEW BY TEAM GT
T
he pandemic has had a significant impact not only on Georgian but also on the world economy, including the telecom sector. “Telecom’s revenue has been growing at a rapid pace since the beginning of 2020, however, with the spread of COVID19, growth rates in the first quarter not only slowed down, but also declined compared to the 2019 figures, a result of several factors,” Lasha Tabidze, COO (Chief Operating Officer) of VEON Georgia, tells GEORGIA TODAY. “First of all, the closure of international traffic among countries has led to the nullification of revenues received from both tourism and roaming services. In addition, the lockdown was followed by a decline in both local sales and activities and mobility, which was directly reflected in the consumption of mobile internet, in particular, users concentrated on using WI-FI. “However, this sharp impact on business is short-term and medium-term for telecom, and we expect that the telecom business will start normalizing from the fourth quarter of this year. “COVID-19, on the one hand, has had a sharp medium-term negative impact on income, but on the other hand, it has significantly increased the consumption of digital products and channels. “The role of telecom in the digital world has become even more important, and we expect business growth in this direc-
HOW DID THE COMPANY SWITCH TO A REMOTE WORK REGIME, AND DID IT AFFECT LABOR PRODUCTIVITY? We are almost fully switched to remote operation, except for the special departments that ensure network operation and continuous operation of the service. As we’ve mentioned, the Be Free approach in the company has been ongoing for a long time and therefore the productivity and efficiency of the work has been fully maintained.
tion in terms of both revenues and digital product users.”
WHAT WERE THE MAIN CHALLENGES BEELINE HAD TO FACE AND HOW DID IT RESPOND TO THEM? COVID-19 has challenged each of us and the business sector. In the case of Bee-
line, several major challenges were identified: first and foremost, it was the safety of employees and customers, to which we responded quickly and efficiently. As soon as the coronavirus was detected in Georgia, we closed the shops in the airports, and later across Georgia. We offered all our products and services to customers through digital and other remote
HOW DID CONSUMERS AND EMPLOYEES ADAPT TO THE NEW ENVIRONMENT AND WHAT HAS CHANGED IN THIS DIRECTION SINCE THE REGULATIONS WERE EASED? For many years, the development of digital products and channels has been an integral part and priority of Beeline's strategy. Accordingly, the majority of
our customers had already been using our digital products (application, website, chat bot, online assistant, etc.) and in this regard, it was quite easy to adapt to the new reality. All products and services are available online and we have successfully coped with the coronavirus-related challenges in this regard. After the restrictions were lifted, the stores opened with full compliance with safety measures, although most business operations are still in digital channels and we think we can offer even more products and services to customers in this direction.
WHAT’S YOUR VIEW ON THE PERSPECTIVE OF DELIVERING SERVICES AND WORKING REMOTELY? WILL IT RISE IN THE FUTURE? Regulations related to the pandemic have shown that it is possible for the vast majority of the company’s employees to work remotely, and this will have a positive impact on labor productivity. Today, the world lives in a completely different reality. Beeline responds quickly to challenges and adapts to the new environment. This is confirmed by the "work from anywhere" policy, which means that our employees have the opportunity to continue working from a place convenient for them, and if desired or, if necessary, come to the office in accordance with a schedule, in compliance with safety measures. Our goal is to give employees the freedom to choose a place to work, and if they choose to come to the office, we will obviously provide them a safe environment.
EIB Regional Head Maciej Czura on EIB Support for Georgia EXCLUSIVE INTERVIEW BY TEAM GT
T
he European Investment Bank (EIB) is the bank of the European Union, owned by EU Member States. It is the lending arm of the European Union and, based on its lending volume, the largest multilateral financial institution in the world. EIB is also one of the largest providers of climate finance. Activities of EIB aim at helping the economy, creating jobs, promoting equality and improving lives for EU citizens and for people in developing countries. The EIB works closely with other EU institutions to implement EU policy objectives. EIB provides finance and expertise for sound and sustainable investment projects, which contribute to furthering EU policy objectives. The EIB Group comprises also the European Investment Fund (EIF), the EIB’s subsidiary specializing in project financing of small businesses and midcaps. EIF is active in the EU countries and some selected partner countries. In Georgia, EIF implements portfolio guarantees for small and medium businesses under the EU4Business and InnovFin EU Finance for Innovators initiatives. It has been present in Georgia since 2007. Since then, its lending commitment reached some EUR 1.8 billion. EIB opened a Regional Office for the South Caucasus in Tbilisi in 2015. GEORGIA TODAY spoke to Mr Maciej Czura, Head of EIB’s Regional Representation for the South Caucasus, to find out more.
WHAT ARE THE KEY SECTORS OF ACTIVITY OF THE EUROPEAN INVESTMENT BANK WORLDWIDE AND IN GEORGIA? EIB focuses on six areas: climate and environment, development, innovation
and skills, small businesses, infrastructure, and cohesion. In Georgia, like in other Eastern Partnership countries, EIB’s operations are based on the External Lending Mandate of the European Union, and focus on development of social and economic infrastructure, support to private sector development, in particular small and medium enterprises (SMEs), and climate change mitigation and adaptation. We support projects that are beneficial for both the partner countries and their relationship and connection with the European Union.
TELL US ABOUT THE RECENT PROJECTS FINANCED BY EIB IN GEORGIA. Since 2007, the EIB has supported operations in different sectors of the economy at a steadily growing pace. Following the signing of the Association Agreement with the EU and creation of the Deep and Comprehensive Free Trade Area between Georgia and the EU, the EIB stepped up its support, effectively doubling its lending portfolio in the country. The most recent projects include the East-West highway, as the main part of the country’s transport infrastructure, several municipal infrastructure projects across the whole country, including recovery projects after the 2015 flood in Tbilisi, and numerous operations supporting micro, small and medium enterprises. In the latter case, several operations blended EIB funding with grants provided by the EU under EU4Business and InnovFin initiatives.
WHAT ARE THE PROSPECTIVE PRIORITIES OF THE EIB IN GEORGIA? The EIB will further support the upgrade of municipal infrastructure in Georgian cities, as well as environmental infrastructure. We are ready to work towards increased unlocking of the renewable energy potential of Georgia, and ensuring its energy security, as well as financ-
ing projects related to the digital economy, education, and healthcare. Development of the private sector, and in particular micro, small, and medium size enterprises, will remain a key objective of the EIB in Georgia, as the private sector that is the key driver of economic growth, job creation and innovation in Georgia. Such projects are particularly important now, due to the worldwide economic crisis caused by the coronavirus pandemic. The latter has re-organized the development priorities worldwide, in particular in the short and medium term.
WHAT IS THE CURRENT EIB RESPONSE TO COVID-19 CRISIS IN GEORGIA? The European Investment Bank Group announced a comprehensive response package to the coronavirus pandemic outside the EU that will provide up to EUR 5.2 billion in the coming months. This financing is part of the Team Europe response and is supported by guarantees from the EU budget. It will both strengthen urgent health investment needs and accelerate long-standing support for private sector investment which reflects financing needs in more than 100 countries around the world, including Georgia. In Georgia, this support will be translated into the re-allocation of funds towards the immediate Covid19 response in the healthcare sector as well as potential new projects aimed at the long-term resilience of the healthcare system. In the private sector domain, EIB is enhancing its actions supporting access to finance for MSMEs.
8
BUSINESS
GEORGIA TODAY
JUNE 5 - 11, 2020
Real Estate Market Highlights | January-March 2020
I
n comparison to Q4 2019, the Georgian real property market contracted by 21.2% in Q1 2020 (from 34,602 units sold in Q4 2019 to 27,273 in Q1 2020) while an annual decrease was observed at 4.3% (YoY) compared to Q1 2019. Tbilisi dominated the real property market with a 42.8% share in total sales in Q1 2020. The Tbilisi market was followed by Kakheti and Adjara, with a respective 12.6% and 8.8% of GEO sales.
Graph #1. Quarterly Dynamic of Average Sale and Rent Prices for Residential Property in GEL and USD
Graph #2. Average Sale and Rent Prices by District in USD
RESIDENTIAL PROPERTY PRICES In Q1 2020, the Sale Price Index (SPI) for residential properties experienced an increase of 5.8% (QoQ) reaching 1.14 index point (index equals 1 in base period, Q3 2015), while the Rent Price Index (RPI) increased by 3.6% (QoQ) and settled at 0.91 index points. During this quarter, the Average Sale Price per sq.m. (ASP) varied between 930 USD and 1041 USD per m2 (monthly average), and the Average Rent Price per sq.m. (ARP) was between 7.3 USD and 7.5 USD per m2 (monthly average). The quarterly average is 983 USD for ASP and 7.4 USD for ARP. For Q1 2020, the ASP in USD increased (YoY) in all districts of Tbilisi. The greatest increases are observable in Chughureti (+20.0), followed by Isani (+17.9%), and Mtatsminda (+16.2%). The ARP in USD also increased (YoY) in all districts of Tbilisi, with greatest increases in Gldani (32.8%) and Nadzaladevi (21.8%). In Q1 2020, comparatively the most and least expensive districts by ASP were: Mtatsminda (1,255 USD) and Samgori (624 USD); and by ARP: Mtatsminda (8.8 USD) and Gldani (5.0 USD).
Graph #3. Quarterly Dynamic of Average Sale and Rent Prices for Commercial Property in GEL and USD
COMMERCIAL PROPERTY PRICES The SPI for commercial properties decreased by 21.2% (QoQ) in Q1 2020, reaching 0.75 index points (index equals 1 in base period, Q3 2015). The RPI decreased by 4.8% (QoQ) and settled at 0.99 index points. Throughout Q1 2020, the ASP varied between 1,145 and 1,154 USD per m2, and the ARP between 8.7 and 10.1 USD per m2. In Q1, the ASP for commercial properties increased by 17.3% (YoY) and reached 1,148 USD per m2. While the ARP increased by 6.1% (YoY), and reached at 9.4 USD per m2.
BATUMI & KUTAISI RESIDENTIAL PROPERTY In Batumi, the SPI for residential property in Q1 2020 increased (+35.5%, QoQ), reaching 1.5 index points. Whereas, the SPI for residential property in Kutaisi decreased by 1.9% (QoQ), and settled at 1.36 index points. The ASP of residential property in Batumi increased by 9.0%, and decreased in Kutaisi by 9.8% (QoQ), amounting to 837 and 459 USD per m2, respectively.
Graph #4. Quarterly Dynamic of Average Sales Price for Residential Property in Batumi and Kutaisi, GEL and USD
SOCIETY
GEORGIA TODAY JUNE 5 - 11, 2020
9
Why Georgia's Forest Code is a Progressive Step Forward
F
or decades, deforestation in Georgia has been putting the livelihoods of communities at risk. It has not only led to an increase in the impact of natural disasters, but has also deprived communities of clean running water. Clean water supply for a majority of Georgia’s regions depends on forests, as does agricultural productivity, which is dependent on the health of forest ecosystems. Forests regulate water quality and mitigate the risk of flooding and flash flooding caused by precipitation run-off. Prolonged, unplanned, and unsustainable forest resource consumption has led us to scenarios with potentially catastrophic results. On May 22, 2020, World Biodiversity Day, the Parliament of Georgia approved a new Forest Code. The document serves as a basis to regulate a balanced use of forest resources and diversify its functions and benefits, i.e. widen its scope of socio-economic benefits while maintaining and protecting biodiversity and the ecological functions of forests. The Code draws on a progressive approach in that it considers all the actors involved and affected by the forest, and sets a precedent for their involvement in management functions. The document reiterate the principle that everybody is free to access forests for non-commercial purposes, regardless of the form of forest ownership (state, communal, private). The document was largely based on the National Forest Concept document prepared with financial and expert support from Austria. It aims to bring the management of the country’s natural resources in line with its environmental, economic, energy, and social policies and development programs, so that the policies complement and do not undermine each other, especially those that were developed in parallel with the Forest Code and under the European Association Agreement. The Forest Code is an important and progressive document that responds to the complex problems that have arisen from many years of poor forest management. Here’s why:
THE ABOLITION OF SOCIAL FELLING Preparing firewood using unsustainable methods, a practice that began in the 1990s in Georgia and to this day remains a primary source of heating for those living in regions, represents one of the main functions of forests around the country, and as a result inflicts significant damage on the country’s natural landscapes. This mode of heating homes in winter results in millions of trees being cut down and the irreversible degradation of hundreds and thousands of hectares of unique ecosystems. With the new regulations, firewood will remain a primary source of heating for the rural population, but will be gathered and processed based on its evaluated potential: the resources will be used rationally, and, most importantly, these activities will be conducted by qualified forestry staff. The implementation of these procedures will not only create further opportunities for economic and ecological sustainability, but will also ensure labor safety, an issue that has led to many deaths in the past.
INTRODUCING MULTIFUNCTIONAL FOREST USE The Forest Code introduces the multifunctional management of forests. This means that each district is assigned a category as either a Protective, Protected, Recreational or Agricultural forest, based on its natural value and socioeconomic factors. Depending on the category the forest falls under, it will have its own
Photo: Davit Khelashvili
corresponding management method that is relevant to its contextual needs. For example, a forest that is mainly recreational will focus more on regulating the flow of tourism.
INCLUSIVE FORMS OF FOREST MANAGEMENT Diversifying the ways in which and by whom the forests are managed is an integral part of this document, which basically calls for the creation of necessary conditions so that different players in the sector are taken into consideration – this means that the forests are not solely managed by the governmental institutions but also considers the community, municipality, private agricultural entities or the Church as potential parties involved in the management. However, irrespective of the parties involved,
all must comply with the government mandated protective functions that protect the forests and their ecological balance. All forms of ownership or management are equally regulated by the code or any other legislation related to forest resources, i.e. no form of management is exempt from them. The authorized management institutions will be supervised, just like every other forest manager (communal, private, etc.), by an institution responsible for state control. All plans must be agreed upon with the government.
A FOREST’S NON-TIMBER RESOURCES OFFERED AS A FORM OF INCOME GENERATION The Code draws on the potential of nontimber resources. As opposed to traditional forestry practices that were based
solely on cutting down trees, it introduces a new variety of products that are increasingly in demand for modern markets, including non-timber resources such as fruits, medicinal plants, etc. The new law now includes the commercial use of numerous products that were until now only permitted for personal use. This effort helps in the eradication of poverty, job creation, and suits the requirements of multifaceted, local economic development.
AN INTEGRATED APPROACH The document has provided a good framework that allows forest issues to be integrated into various programs and policies, leading to a better economic impact. For example, it can be adapted to eco-tourism: the forestry agency can follow the example of the protected ter-
ritories, which have seen to double both the number of tourists and the resulting income every year. The document can be easily integrated into rural development strategies and action plans, and offer additional income for communities. This demonstrates that the document is a product of a multidisciplinary approach and cross-sectoral collaboration. GEORGIA TODAY spoke with CENN’s representative Rezo Getiashvili, Project Coordinator for Sustainable Forest Management for Rural Development, about the new Forest Code. “The code had strong international support. During the process of agreeing on the sectoral or inter-agency political decisions, the document relied on the best European practices, during the analysis and modeling of which we involved European organizations and the experts themselves. For example, the Forest Zoning Directive, developed with the support of the Austrian Forestry Services, became the basis for the multifunctional management regulations of forests. A participatory process also allowed the public to initiate new political decisions, examples of which are the correction of the process of transforming the National Forest Agency into a Ltd. company, the legalization of the commercial use of non-timbre resources, and prioritizing the importance of forest tourism, for which our project mobilized Georgian, Austrian, Slovenian, and Finnish experts. Ultimately, we can say that a document was developed that champions consistent reforms of the sector.”
10
SOCIETY
GEORGIA TODAY
JUNE 5 - 11, 2020
Walking in Circles, 2: Svaneti BLOG BY TONY HANMER
L
ooks like I have to buy a new tent for the tour after all: the fabric of the old one is actually starting to rot. Fortunately, there are several good-looking outdoor equipment shops in Tbilisi, browsable online, with a variety of tent choices. Size, quality, brand. There’s even one which pops up all by itself, thanks to built-in poles tensed ready for action. You just throw it in the air and it lands open. I like the look of this one, if it’s not just a toy. A good tent is worth spending money on, to have for decades. At least the waterproof match holder from my 1989 set is still useful. So are the 2 nesting rectangular pots with foldout handles; and a tiny stove which uses all sorts of liquid fuel, from white gas to diesel or kerosene and more. Not sure about this one, though, because I might find a much more updated one in the shops which uses wood or other combustibles instead, meaning we won’t have to lug any extra liquid. On this trip of about 400 km, every spare gram counts! I wanted to have some form of dried meat, for which the main candidates would be American style beef jerky, or South African biltong. Neither of these seems to be available in Georgian shops, though there are excellent recipes for making your own online. However, a third version reminds me of itself: Armenian basturma. Ready-made and certainly able to be found, it can be cut into thin slices or even grated, as I sometimes do with sausage when cooking at home. The aim is to minimize food preparation during the trip, with as many ingredients as possible already cut or otherwise made ready in advance. Why take a cutting board?!
My friend Jan Richard Baerug’s other recent book, which I also have, The Essence of the Caucasus-Svaneti, features an amazing 96 tours originating from his hotel in Becho. By foot, on skis, horseback or by bike, from short and easy to long and difficult, some putting you on certain mountain peaks, others showing you the famous ones together in one landscape, such as Elbrus, Shkhara, Ushba and Tetnuldi. I am poring over this lavishly photo-illustrated, exhaustively detailed tome to find all possibilities which might be useful on our trek. We likely can’t take the actual book with us, but I might photograph the necessary pages and have them on my phone, or print them, or both. I also really wanted to take something from the first walk I did, in summer of 2007, for continuity. This will likely be the two double-walled steel mugs we bought just for that trip, not quite big enough to fall into and drown, light enough to consider, able to keep coffee or tea hot by insulation. A certain TV station at which a friend of mine works might take on our journey as a subject; they are considering this at the moment. We would upload new material from our phones daily (almost the whole route has good internet connection). They would edit this into useable form, possibly adding from the huge collection of videos I started shooting soon before the original walk and through my first winter stay in Ushguli. One could make many comparisons from then until now: the road, the infrastructure, tourism, even our current world crisis and how it affects everyone. Fingers crossed that this will work: it will be my first TV appearance which originated in a pitch from me, instead of from the TV side. The excitement continues to build in me at the thought of the upcoming adventure. We will start in as soon as two
weeks, with plenty of further planning to go through until then. More details to come. Tony Hanmer has lived in Georgia since
1999, in Svaneti since 2007, and been a weekly writer and photographer for GT since early 2011. He runs the “Svaneti Renaissance” Facebook group, now with nearly 2000 members, at www.facebook.com/
Hunger & Poverty OP-ED BY NUGZAR B. RUHADZE
T
he deplorable duo of hunger and poverty, constituting one of the gravest of the everlasting global problems, has remained throughout the duration of human history, if only becoming worse at times. It continues plaguing hundreds of millions all over the world, and has its own effect on Georgia too. This is an officially declared status quo, corroborated not only by the actual facts, but by the promises of every Georgian government to fight and defeat the curse. Our politicians dwell upon
Image source: weforum.org
the issue on every convenient occasion, especially when the opposition wants to incriminate the government, using any opportune topic of the day. The feuding sides’ figures of hunger and poverty, quoted in their speeches, happen to be so contradictory that we cannot even know which side to put our confidence in. One of them likely boosts and the other likely minimizes the available data. Yet, it is not important whether the quoted figures are true or false: what matters is if there really is hunger and poverty in this country. It has always been a problem to know the truth, because the truth is not very easily accessible except for studies carried out by the
national statistical service. Even if we wanted to set out to glean genuine information about hunger and poverty in Georgia, how would we identify every individual who is hungry or poor? My doubts about the national situation regarding hunger and poverty arise from what I see happening around me on a daily basis: the fuel-tanks full of gas, the streets full of cars and the cars full of passengers, ready to have fun. This is just one episode from our local social series. The other describes the food stores which have never been devoid of hungry but not very poor customers, even in times of the corona stupor and the consequential price jumps. The same can be said of all kinds of eateries, only
in virus-free times of course. The way our people like to dress in the same way in both urban and rural areas could be the third example. I have a fourth too: thousands of country houses in the vicinity of the capital city and beyond, with several cars parked in front of each cottage. How about the expensive private schools, educating thousands of kids – that should be number five! The sixth picture: you talk to any ethnic Georgian, male or female, youthful or advanced in years, famished or sated, indigent or well-to-do, and you will sense a conceited personality, gushing like a fountain of pride and self-confidence. This feature of character cannot be typical for the poor and hungry! Our
groups/SvanetiRenaissance/ He and his wife also run their own guest house in Etseri: www.facebook.com/hanmer.house.svaneti
My doubts about the situation regarding hunger and poverty arise from what I see happening around me on a daily basis people hate to be recognized as hungry and poor in general, although I am sure we have a considerable number of men, women and children who wouldn’t say no to an offered hand from their relatives, friends, neighbors and passersby, or the occasional financial assistance from the government. And again, I am tripping over the scandalous controversy between the permanently sweating government and its outrageously exasperated opposition about whether the pandemic-based onetime financial assistance is being handed out to the crisis-stricken citizenry or not. We will never know! Each of those sides is feeding us its own truth, and we have no way to accost every presumable beneficiary of the governmental economic facility and ask them what in reality is happening. So there is only one way to stay contented when attacked by our doubts concerning the officially promulgated information about our governmental deeds. And that is the possibility that both sides are to be trusted and believed. How? Only via self-educating ourselves in matters political, and enhancing the public consciousness so much that all of us politicians and electorate believe with equal sincerity in the Republic’s Constitution, just as a believer believes in the Bible.
CULTURE
GEORGIA TODAY JUNE 5 - 11, 2020
11
“Corona Days” Artworks of Young Georgian Artists: Sandro Gvinashvili artist didn’t say much about his works, and not many words were necessary: the lines and contours flirt with incompleteness because the emotions they carry cannot be limited to strict forms… “These works were done fast, in one sitting. They merely depict the emotions felt at the moment and carry no ideological meanings. Impressions, and feelings, that’s all there is to it,” Sandro says, shrugging it off. “These pieces created during the pandemic, like all the other works created at all the other times, express the transformations of the soul that we go through every minute, whether we want to or not, being selfish humanoid creatures that we are. And love, of course. It’s love that we cannot live without,” Sandro adds. Although Joy Division would disagree – they sing about love tearing people apart – it’s love that the world is in great need of right now. It’s love that we cannot live without, and if that fact had been more widely realized, the grim hate that George Floyd fell victim to would not have existed. We need justice, peace, love, and art in today’s world.
BY NINI DAKHUNDARIDZE
T
he year 2020 has not been the best of years so far: the social, political, and economic situation has the world worried, to say the least. On top of that, we’re six months into a global pandemic. Standing firm in our belief that art can more often than not be the best therapy, GEORGIA TODAY is continuing its collaboration with BI Auction, presenting artists taking part in the online exhibition ‘Artworks @Corona Days.’ This week, we give you Sandro Gvinashvili, a young Georgian artist constantly re-defining himself in his art in Tbilisi. A graduate of the Tbilisi State Academy of Arts, Sandro is the art world Socrates: he believes he knows nothing. Born in Russia and now based in Tbilisi, brought up in the family of a sculptor and an actor, Sandro has been busy growing himself as an artist. The art world was at Sandro’s fingertips the minute he was born: he started painting even before he learned how to say his first ‘dada.’ But that’s not all. The artist tells us he paints even when he’s not painting. How, he doesn’t know. He sees hard work as the only way towards selfdevelopment. Sandro believes creative self-expression and knowing one’s self is transcendental: “That’s why I’ve not received any professional education. Although I graduated the Tbilisi State Academy of Arts, I think I know nothing of art and history.” Believing that he knows nothing of art will be much harder after you catch even a fleeting glimpse of Sandro’s paintings. In unexpected honesty, Sandro shared with GEORGIA TODAY that the coronavirus has not, in fact, affected him or his creative process. “To be honest, the pandemic had no effect on me, nor on my creativity. This is just a natural process, and I believe
nature knows better how to take care of itself.” “What of the post-pandemic art world?” we ask him.
“The post-pandemic art world, too, shall pass, much like the pandemic,” Sandro answers laconically, this time, in very unSocrates fashion.
Unbothered with the unprecedented times, Sandro entered a number of his works into the BI Auction-organized competition. A man of few words, the
About BI Auction ‘for ART’: BI Auction is the first Art Auction Company of Georgia, established in 2016. The company’s aim is to promote Georgian art and artists and enlarge the market. In four years, BI Auction ‘for ART’ has organized seven auctions and presented more than 400 paintings from 120 Georgian painters. In every auction, the collection is selected from among a thousand paintings from the well-known legendary artists of Georgia and also from promising young artists. For more information, please contact biauction1@gmail.com
Forbes Names Georgia among 7 Countries Expected to Become 'Rising Stars' in Travel BY JARED RANAHAN
F
orbes has named Georgia among the Top 7 countries with the potential to become major tourist destinations in the post-COVID period. "As the global tourism industry struggles in the midst of this unprecedented downturn, many nations around the world are preparing for a boom in international visitors once travel is more feasible. For some countries, this could be their first opportunity to establish themselves as a prominent regional force for tourism.
While the following countries have yet to become world-class destinations, the ingredients are all there: pristine natural beauty, historic ruins, and fascinating cultural experiences can be encountered in abundance across all seven of these highly underrated nations," reads the article by contributor Jared Ranahan. The author notes that the Top 7 tourist destinations in the post-COVID world are: Ethiopia, Iran, Myanmar (Burma), Georgia, The Philippines, Slovenia, and Tunisia. The Forbes article writes the following about Georgia: "Though it is sometimes confused with the Peach State, the country of Georgia
PUBLISHER & GM
George Sharashidze COMMERCIAL DEPARTMENT
Commercial Director: Iva Merabishvili Marketing Manager: Natalia Chikvaidze
GEORGIA TODAY
EDITORIAL DEPARTMENT:
Editor-In-Chief: Katie Ruth Davies
is well on its way to becoming one of the Caucasus region’s most idyllic destinations. Begin your journey in the nation’s capital, Tbilisi: this charming city is home to a cobblestone-laden Old Town packed with ancient churches and restaurants lining the Mtkvari River. While urban Georgia is spectacular, don’t miss out on the country’s natural beauty: the rolling pastures and idyllic small towns to the west are a must-see, and be sure to sample your fair share of wine while exploring. "Georgia is one of the oldest wine regions on earth, with evidence of a booming wine industry dating as far back as 6000 BCE."
Source: Forbes Image: Svaneti, Ushguli, Georgia/GETTY IMAGES
Journalists: Ana Dumbadze, Vazha Tavberidze, Nini Dakhundaridze, Tony Hanmer, Emil Avdaliani, Nugzar B. Ruhadze, Beka Alexishvili, Elene Dzebizashvili, Photographer: Aleksei Serov
Website Manager/Editor: Katie Ruth Davies Layout: Misha Mchedlishvili Webmaster: Sergey Gevenov Circulation Managers: David Kerdikashvili, David Djandjgava
ADDRESS
1 Melikishvili Str. Tbilisi, 0179, Georgia Tel.: +995 32 229 59 19 E: info@georgiatoday.ge F: GeorgiaToday ADVERTISING & SUBSCRIPTION
+995 555 00 14 46 E-mail: marketing@georgiatoday.ge
Reproducing material, photos and advertisements without prior editorial permission is strictly forbidden. The author is responsible for all material. Rights of authors are preserved. The newspaper is registered in Mtatsminda district court. Reg. # 06/4-309