Issue #1056 Business

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Issue no: 1056/133

• JUNE 12 - 14, 2018

• PUBLISHED TWICE WEEKLY

PRICE: GEL 2.50

In this week’s issue...

Georgia’s Famous Gudauri Resort to Be Extended NEWS PAGE 2

Sweet Little Lies – Things That Make Us “Happy” ISET PAGE 4

Young Leadership Program BUSINESS PAGE 5

FOCUS

ON COFFEE Starbucks is finally coming to Georgia!

PAGE 2

Image source: turitmo.com

Protest Rallies Resume in Tbilisi, Arrests Made

How the Right Investment Serves as a Primer for Georgian Agricultural Development

BY THEA MORRISON

BUSINESS PAGE 6

Z

Multiple Sclerosis: Major Cause of Non-Traumatic Disorders among Younger Patients

aza Saralidze, father of the murdered teen Davit, and Malkhaz Machalikashvili, whose son was killed in anti-terrorist operation in December, have resumed protest rallies at the old building of Parliament on Rustaveli Avenue on Sunday, under the campaign “Do Not Kill Me.” The protesters demand the resignation of Minister of Internal Affairs Giorgi Gakharia and Minister of Justice Tea Tsulukiani, blaming them for an incomplete and non-thorough investigation.

Saralidze stated he does not trust the investigation, adding the rallies will continue until all the offenders are punished.

He also says that the new Chief Prosecutor must be elected by people without the participation of the Minister of Justice.

Continued on page 2 Photo source: Imedi TV

BUSINESS PAGE 11 Prepared for Georgia Today Business by

Markets As of 08ͲJunͲ2018

Price

w/w

m/m

Bank of Georgia (BGEO LN)

GBP 19.91

+1,0%

Ͳ13,0%

Georgia Capital (CGEO LN)

STOCKS

GBP 11.12

+4,5%

na

GBP 2.80

Ͳ1,2%

GBP 17.04

+1,4%

GHG (GHG LN) TBC Bank Group (TBCG LN)

COMMODITIES Crude Oil, Brent (US$/bbl) Gold Spot (US$/OZ)

Price

Price

w/w

GEOROG 04/21

101.23 (YTM 6.27%)

+0,0%

Ͳ0,5%

GEORG 04/21

BONDS

106.61 (YTM 4.37%)

+0,3%

+0,1%

+5,5%

GRAIL 07/22

105.29 (YTM 6.26%)

+0,4%

Ͳ1,7%

+1,3%

BGEOLN 07/23

100.05 (YTM 5.99%)

+0,1%

Ͳ0,6%

CURRENCIES

Price

m/m

w/w

m/m

w/w

m/m

76,46

Ͳ0,4%

+2,2%

GEL / USD

2,4525

Ͳ0,8%

+0,3%

1 298,17

+0,4%

Ͳ1,3%

GEL / EUR

2,8833

+0,3%

Ͳ0,6%

GEL / GBP

3,2835

Ͳ0,2%

Ͳ0,8%

INDICES

Price

w/w

m/m

GEL / CHF

2,4784

Ͳ0,8%

+1,5%

FTSE 100

7 681,07

Ͳ0,3%

+1,5%

GEL / RUB

0,0393

Ͳ0,8%

+1,6%

FTSE 250

Ͳ2,9%

21 160,54

+0,8%

+2,7%

GEL / TRY

0,5478

+3,5%

DAX

12 766,55

+0,3%

Ͳ1,1%

GEL / AZN

1,4400

Ͳ0,6%

Ͳ0,4%

DOW JONES

25 316,53

+2,8%

+3,9%

GEL / AMD

0,0051

Ͳ

+2,0%

NASDAQ MSCI EM EE MSCI EM

+1,2%

+5,2%

GEL / UAH

0,0938

Ͳ0,6%

+0,9%

158,46

Ͳ0,4%

Ͳ1,0%

EUR / USD

0,8497

Ͳ0,9%

+0,8%

1 135,39

+0,5%

Ͳ0,6%

GBP / USD

0,7461

Ͳ0,4%

+1,1%

7 645,51

2 779,03

+1,6%

+4,0%

CHF / USD

0,9857

Ͳ0,3%

MSCI FM

2 833,38

+2,4%

Ͳ1,0%

RUB / USD

62,3238

+0,2%

Ͳ1,4%

GT Index (GEL)

1 582,68

Ͳ

Ͳ

TRY / USD

4,4732

Ͳ3,8%

+3,2%

GT Index (USD)

1 208,13

Ͳ

Ͳ

AZN / USD

1,6941

Ͳ0,0%

+0,0%

SP 500

Ͳ1,6%

2

NEWS

GEORGIA TODAY

JUNE 12 - 14, 2018

Georgia’s Famous Gudauri Resort to Be Extended

BY THEA MORRISON

G Starbucks to Enter Georgian Market

BY THEA MORRISON

A

merican coffee company Starbucks is about to enter the Georgian market.

Shaya Turkey, the group representing a portfolio of the world`s best known international brands in Turkey, managing their retail franchise operations in segments including Fashion, Food, Health & Beauty, will introduce the brand into Georgia.

Shaya Turkey's franchise portfolio includes Starbucks, Bath and Body Works, Le Pain Quotidien, Pinkberry, Shake Shack, The Body Shop, Victoria`s Secret and Victoria`s Secret Beauty & Accessories in Turkey.

Shaya Turkey operates Starbucks in Turkey and Azerbaijan, and now it is coming to Georgia.

Starbucks Corporation is an American coffee company and coffeehouse chain.

Starbucks was founded in Seattle, Washington in 1971. As of 2018, the company operates in 28,218 locations worldwide.

eorgia’s famous ski resort Gudauri is set to be tripled in size, becoming a wellplanned and developed destination with all necessary facilities, not only for skiers but for ordinary visitors as well.

The information was released by Georgia’s Prime Minister Giorgi Kvirikashvili at the latest government session.

The PM underlined that the country's proper spatial development is being given top priority, especially in winter resorts, “in order to prevent the chaotic development” of some projects and to plan from the onset spaces for residential areas, sufficient parking spaces, pedestrian areas, and trade and entertainment spaces.

“I believe that the work invested by the government in cooperation with Canadian ECOSIGN enables us to ensure the prudent development of Gudauri, a most important destination,” the Prime Minister stated.

Kvirikashvili noted that the development of Gudauri is of utmost importance, especially after the decision of the FIS Council Congress 2018, which stated that Georgia’s ski resorts Bakuriani and Gudauri will host the FIS Freestyle Ski and Snowboard World Championships in 2023.

The PM explained that Gudauri will be divided into three territories: 1) Central Gudauri;

Image source: Booking.com

2) New Gudauri, the resort's main pedestrian center, with tourism infrastructure on the first floor of each building in the settlement, including ski service centers, shops, food outlets, rest areas, conference halls, and more; 3) The Kobi-Gudauri Base Area that will improve access to the Gudauri skiing area and will enable Stepantsminda's residents and tourists arriving from the north to use gondola lifts.

The development of the ski resort’s northern slope will be planned, as, according to the PM, the northern slopes, given the position of the sun, can hold snow much longer.

“Gudauri will be three times the cur-

rent size, but it will be a prudently planned and developed destination with all necessary facilities, and not only for skiers.

It will also meet the current global trend of rapidly growing numbers of nonskiers visiting ski resorts,” he stated.

The 2023 World Championship in Bakuriani and Gudauri is a most important athletic event that will play a vital role in the development of Georgia’s winter sports, the promotion of a healthy lifestyle, and the development of infrastructure in line with international standards. In addition, hosting the World Championship will further enhance the country’s visibility and boost tourist interest in Georgia’s alpine resorts.

Business Sector Turnover up by 18.6% in Q1

Georgia to Host “Welcome Challenge” – Hospitality & Travel Industry Innovations Global Forum

BY THEA MORRISON

BY ANNA ZHVANIA

T

W

he turnover of the business sector in the first quarter of 2018 increased by 18.6% compared to the same period of the previous year and totaled 18 billion GEL. The information was released by the National Statistics Office of Georgia (Geostat), according to which the turnover of small and medium enterprises has increased by 20%. Among them, the turnover of medium enterprises increased by 20.5% and turnover of small enterprises by 19.6%.

Georgia’s Vice-Premier and Minister of Economy and Sustainable Development, Dimitry Kumsishvili, said the number of jobs in the business sector has increased by 5.3% since last year as a result of the increased turnover in this field.

“Compared to the first quarter of 2017, the average monthly salary this year has increased by 8%, amounting to an average 1106 GEL,” the Minister stated while presenting the data.

He added that the highest contribution to growth of jobs created in the business sector comes from trade 5.1%, construction 7.5%, the processing industry 3.7%, and transportation and warehousing 5.4%.

The Minister noted that turnover has increased in practically all fields: trade

This path can make it possible for Georgia to defeat poverty once and for all

Image source: becmaterials.com

turnover was up by 16.7%, art, entertainment and leisure saw a 57% increase, and a 16.7% growth was seen in manufacturing and 14.8% growth in construction.

Georgia’s Prime Minister, Giorgi Kvirikashvili, stated at the governmental session on Friday that the first quarter of 2018 continues quite positive trends in terms of turnover, production, and employment growth in the business sector.

“We are all very pleased that a significant economic growth rate has been recorded in the ongoing period of 2018.

A few days ago, the economic growth indicators for April 2018 were published, showing a 6.5% growth, while the average indicator of the economic growth in the first four months is 5.5%,” he added.

The PM noted that Georgia sees the results of an unprecedented growth of tourist inflow, adding the growing tourism trends have the greatest impact on the public.

“The State will do its best to invest greater effort in this direction. We are keeping last year's positive growth, and in the first five months of this year, the number of tourists is up 23.5%, which is a very important indicator. Revenues from tourism are up 28.4% in the first four months,” he stated.

“It is very important for our population to have the right and realistic hope that we are on the right track, and that this path can make it possible for Georgia to defeat poverty once and for all,” Kvirikashvili added.

elcome Challenge, an annual Global Forum for Hospitality and Travel Industry Innovations is to have Georgia as its host country this year on 24-26 October.

Dimitry Kumsishvili, the First Deputy Prime Minister and the Minister of Economy and Sustainable Development of Georgia, along with the organizers of “Welcome Challenge,” at the announcement event highlighted the growing dynamics of Georgia as a tourism destination. Georgia was identified as a host country for a reason: it is characterized as one of the most visited tourist places, with an accelerated growth in the number of incoming visitors. The Global Forum will gather innovative start-ups, leading experts, large international corporations and financial companies.

The aim of the Forum will be to give 25-30 start-ups the opportunity to participate in an innovative competition

within the tourism industry. An international jury will identify the winners, who will have the chance to receive grants of up to EUR 15,000 and sign contract agreements with potential investors. The Forum will also serve as a networking event for interested parties to meet investors and identify areas of collaboration as well as host a conference to emphasize the importance of innovation, education and related sectors.

Ahead of that event, a BootCamp will be organized in Zugdidi and Anaklia,

where start-ups will be selected to attend the Global Forum and participate in the competition. The Global Forum will bring various benefits to the country’s economy, expand tourism opportunities and offer vast resources within the tourism industry.

Event organizers: CBC Georgia Partners: Georgian Government and Creative Business Cup Supporter: UNWTO. The event will be held within the scope of Check in Georgia.

Protest Rallies Resume in Tbilisi, Arrests Made Continued from page 1 “There NGOs should should nominate a candidate that we can trust," he said at Sunday’s rally.

His comments reflect those of numerous NGOS which stated in early June, “The majority of reforms declared by the government in the system of lawenforcement and the judiciary has proven to be pro-forma and these reforms have done nothing to eliminate the public’s sense of deep injustice and vulnerability,” the NGOS stated. “Recent highprofile cases have clearly shown the problem of excessive use of authority by law-enforcement, which has not been followed by an effective investigation.”

Prime Minister Kvirikashvili responded

to the concerns at the time by stating, “I take it as my personal responsibility to get results in this case.”

This weekend, Georgian police arrested two men, former high-ranking officials of the Prosecutor’s Office, Mirza Subeliani and Merab Morchadze, on charges of failure to report a crime and exertion of influence on a witness, respectively.

Officers from the Police Department of the Ministry of Internal Affairs have since detained 19 persons at the rally being held on Rustaveli Avenue.

“Eight persons were arrested under Articles 166 and 173 of the Code of Administrative Offenses of Georgia, including Irakli Nadiradze, member of Tbilisi City Council, and members of the National Movement party. These persons violated

the public order, verbally insulted law enforcers and did not obey the legal requirements of the police. In addition, Nika Melia, a member of the National Movement, who was thought to have been arrested was not but was forced to leave Rustaveli Avenue in order prevent an offence,” the Chairman of Parliament Irakli Kobakhidze said at the Parliament Bureau sitting.

Zviad Kuprava was detained on Rustaveli Avenue and, alongside three others, was sentenced to 14 days administrative imprisonment.

"It is as important for the Ministry of Internal Affairs to be responsible for protecting the law as it is that freedom of expression is guaranteed,” the MIA statement read.

4

BUSINESS

GEORGIA TODAY

JUNE 12 - 14, 2018

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.

Sweet Little Lies – Things That Make Us “Happy” that businesses can avoid paying taxes by reducing the amount of sugar in their products and making them healthier.

Georgian consumers, who are well known for their unhealthy diets, obviously would need some time to adjust their tastes, but ultimately that should happen once their awareness about sugar’s harmful effects increases.

BY IA KATSIA, SALOME GELASHVILI

O

n May 17, 2017, the Georgian government adopted amendments to the Tobacco Control Law with 85 votes in favor, and only one against. This highly debated new regulation, which bans smoking in public places, was initiated by Parliament Member Ms. Guguli Maghradze who just recently discussed the obesity problem in Georgia, which is caused partly by excess sugar consumption. The Georgian public, which is familiar with statements turning into law, considered Maghradze’s statement as a prelude to enacting a sugar tax in Georgia. During an informal interview, Maghradze stated that for now the government is not planning to impose any tax on sugar, however, many people are still skeptical about this issue.

So, is there a need to impose a sugar tax in Georgia?

WHAT IS OBESITY? Obesity “is a medical condition in which excess body fat has accumulated to the

THE WAY FORWARD

are increasing significantly all over the world, because of its high correlation with poor dietary quality and obesity.

Obesity is an issue both for developed and developing countries; more than half of the EU population have weight problems. According to the American Heart Association, recommended sugar intake per day is 6 teaspoons for women

BMI classification

BMI

Classification

Less than 18.5

Underweight

18.5 - 24.9

Normal weight

25-29.9

Overweight

30 - 34.9

Class I obese

35 - 39.9

Class II obese

40 upwards

Class III obese

Note: you can calculate you BMI here: BMICalculator

extent that it may have an adverse effect on health.” (World Health Organization, WHO) According to the Body Mass Index (BMI), the most common measure of weight, a person is obese if BMI is equal to or higher than 30.

WHY CARE ABOUT SUGAR CONSUMPTION AT ALL?!

Concerns about high sugar consumption

and 9 teaspoons for men. However, the average American consumes 19.5 teaspoons every day, which is more than twice the norm.

According to WHO, poor diet and physical inactivity – the major risk factors for obesity - are at the same time the most common reasons for non-communicable diseases responsible for 68% of the world’s 56 million deaths in 2012. Generally, obe-

sity rates are higher among the lowest socio-economic groups, mostly women and ethnic minorities. (WHO, 2014) As to Georgia, according to the National Center for Disease Control and Public Health of Georgia, in 2014, 56% of females and 54% of males in Georgia were overweight (BMI of 25 or more), representing a slight increase since 2010 for both sexes. The prevalence of obesity (BMI of 30 or more) also increased between 2010 and 2014. More females (24%) were obese than males (18%) in 2014.

THE PROS AND CONS OF SUGAR TAX A sugar tax increases the price of sugary products, leading to a reduction in demand. Many countries have already adopted this regulation (some tax sugary drinks only, while others tax all types of sugary products), and some have already seen results. For example, in Mexico, introduction of 10% tax on sugary drinks in 2014 led to a 12 % reduction in the consumption of sugary drinks over the first year, while in Hungary, a sugar tax led to a 40 % decrease in the amount of sugar in junk food.

Since excess sugar consumption causes or in some cases aggravates not only obesity problems, but also diabetes, tooth decay, liver and kidney damage‚ heart

disease, and even some cancers, a sugar tax is going to have a positive effect on consumers’ health. Improving the health conditions of the population leads to lower government spending on health, higher productivity and better quality of life, which are additional arguments for imposing a sugar tax. Imposing a sugar tax will also lead to increased tax revenues for the government, which the state can use to fund public health initiatives, among other things.

While there are obvious benefits from reducing the consumption of sugary products, it should be noted that businesses engaged in the production, import and distribution of those products might see a reduction in sales and profits in the short-run. This might cause job losses, as well. Another argument against a sugar tax is that sugar is not the only source of calories and taxing it might be unfair. Some opponents of sugar taxes also claim that it will negatively affect marginalized, low-income groups, which consume more sugary products than high-income groups. In addition to this, an increase in the price of sugary products will lead to increased demand for substitute products and thus higher prices for substitutes.

While sugar tax opponents’ arguments make sense, it is important to consider

Given all the points above, while a sugar tax is one very good way to reduce sugar consumption, it is not the only way. There are other policies which can be implemented by the government that will also help change consumers’ habits.

Consumers should be well-informed about the health risks of sugary products and be able to make informed decisions.

The government and civil society play an important role in increasing consumers’ awareness about the health impacts of sugary products. This can be done through public health campaigns aiming at reducing the consumption of sugary products, and restrictions on the use of sugar in schools and preschools. Notably, the use of sugar and salt has been recently restricted in Georgia’s public kindergartens, and private schools are closely monitored for this matter as well.

Proper packaging of sugary products and effective monitoring of packaging are vital instruments in the process of reducing sugar consumption. Consumers should obviously have freedom of choice and consume whatever they are willing to and afford to consume, but “front-of-package warning labeling” allows them to make informed decisions.

Apart from proper labeling, there are could be regulations imposed on all media where children represent over 25% of the audience. Although Georgia does not have this type of regulation, some countries do.

While behavioral changes are the most challenging and take the longest to make, they pay off the most in the future since, as the Latin phrase states “there is a healthy mind in a healthy body." Hopefully, Georgian consumers will keep that in mind and change their habits in the nearest future.

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BUSINESS

GEORGIA TODAY JUNE 12 - 14, 2018

5

Young Leadership Program

BY SAMANTHA GUTHRIE

F

rom June 3-10, nine rising government leaders from former Soviet countries visited the United States as part of the first Young Leadership Program. The program was organized and sponsored by the Open World Leadership Center, Eurasia Foundation, and StrategEast. The program’s goal was to help promote closer ties between the West and PSNR (StrategEast founder Anatoly Motkin’s acronym, meaning “post-Soviet non-Russian”) countries by giving young PSNR deputy ministers the chance to see inside governmental mechanisms in the United States, deepening their exposure to the rule of law, free markets, and democracy.

During the program, participants met with Congressman Joe Barton, Ambassador John O’Keefe, Ambassador Beth Jones, Vice Chairman of the Newseum Shelby Coffey, and other government officials, and representatives from civil society and the private sector. The participants also spent several days in homestays with average American families – half the group in Philadelphia, PA and the other half in Richmond, VA. The program began with viewing one of the original Declaration of Independence copies at the National Archives in Washington, D.C., then went on to explore how a country operates on a foundation of the principals of the Declaration.

The participants are all deputy ministers, under the age of 40, who speak good English, and work in sectors which influence their countries’ economies. From Georgia, Deputy Minister of Environ-

Photo: StrategEast, Facebook

mental Protection and Agriculture Nino Tandilashvili participated in the program.

Throughout the week of meetings and trainings, Tandilashvili said she observed and absorbed a lot to take back to Georgia. She was particularly impressed by how US government officials seemed to take pride in their work and felt a sense of importance in representing their voters that she feels is missing in Georgia.

She described the government workers they interacted with on the program as “serious, responsible, and honest,” and working for the betterment of the people, and would like to see Georgian government employees expressing those

characteristics more frequently. Tandilashvili says that Georgian public officials lack a service mentality, and the country generally lacks the culture of public service seen in the US. A meeting with Philadelphia’s Inspector General, Amy Kurland, was particularly interesting for many program participants, as all of their countries have struggled with corruption, to varying degrees, since independence. With such a small group, the dynamic between participants was casual, intimate, and sociable. There were many shared experiences and challenges, but also room to share best practices and problem-

solving techniques. The program is envisioned as, in part, a networking opportunity and a bridge builder between PSNR countries and across the Atlantic.

Representatives from government, business and civil society have all expressed desire and openness to keep lines of communication open with participants for advice and discussion, and to work on potential collaborative projects.

Motkin is optimistic that the program will facilitate opportunities for participants and their local colleagues to inform US leaders about the events in their countries and share information.

Tandilashvili says it was encouraging

to meet the other participants and to see how young people can become high level decision makers.

When asked what Georgia can learn from the US, Tandilashvili said that “we [Georgia] share the principles of the US and Europe” – both are models for Georgia’s development. As she returns to Tbilisi, she plans to be more involved with promoting freedom of the press and meeting with activists and civil society representatives. She believes that government officials should more actively communicate with the people and sees sharing information as a critical component of an informed electorate and democracy. “This program should continue to give chances to young decision makers to see how civil society works and how institutions work in the United States,” says Tandilashvili. She advocates for more unofficial, non-working visits and exchanges, praising the multi-sectoral, deep dive model that the Young Leadership Program provided. Tandilashvili’s most significant take away from the program was an understanding of and respect for American values. “Every time I think about the United States, I think about three words,” she says, “We the people. Despite the challenges, I know the US will stay strong because of this.”

StrategEast hopes to continue the program, perhaps making it an annual event, or having a series of small events throughout the year. As the program came to a close, participants were left with three questions to ponder: what are the main challenges of the PSNR space? How can PSNR countries be helpful to each other in overcoming challenges? And How can US institutions be helpful in overcoming challenges?

6

BUSINESS

How the Right Investment Serves as a Primer for Georgian Agricultural Development

GEORGIA TODAY

JUNE 12 - 14, 2018

The International Chamber of Commerce Annual General Assembly

BY ANNA ZHVANIA

O

BY ANNA ZHVANIA

D

espite urbanization diminishing the number of workers in agriculture due to the migration of the regional population into Georgia’s cities, the growth of agricultural performance and increased productivity emphasizes the significance of the sector. Agriculture plays a vital role in Georgia’s economy and is a key element of a rapid development strategy. The respective sector has fostered local production, leading to investment opportunities, and as the country strives to create a stable business environment and increase employment opportunities, it is capturing the interest of new investors.

To aid the process, Georgian-Swiss company “Blauenstein Georgia” positively evaluated the promising business

environment of the country. Max Blauenstein, the founder of Blauenstein, recently announced during a meeting with Georgia’s Prime Minister Giorgi Kvirikashvili, that due to the favorable economic situation, he plans to further invest in the country.

Max Blauenstein indicated that the Georgian government’s initiative to stimulate local production and further aid the development of the agriculture sector serves as a primary method to attract and increase investment opportunities in Georgia. Currently, the total investment of “Blauenstein Georgia” amounts to GEL 27 million. According to the Prime Minister, such projects are of high importance, especially in the mountainous regions of Georgia. He noted that the business model set to be implemented in Racha could successfully apply to other regions, increasing employment opportunities and aiding the overall economic situation.

n June 8, ICC Georgia held its Annual General Assembly in Betsy’s Hotel, Tbilisi, the aim of which was to overview ICC objectives and elect nine new Executive Board members, the Chair and two Vice Chairpersons.

Fady Asly, Chairman of ICC Georgia, welcomed guests and overviewed ICC’s activities in 2017 and 2018, highlighting the major challenges and achievements.

Nona Mamulashvili, 2nd Vice Chairwoman and Treasurer, continued the Assembly and reviewed the budget for 2017-2018. 11 candidates had the opportunity to present themselves to the guests and shortly afterwards, the attendees were asked to fill in a bulletin and vote for nine new Board Members. The jury counted the votes and elected the winners: Aleksi Aleksishvili (PMCG), Fady

Asly (Agritechnics Holding), Zaza Bibilashvili (BGI Legal), Nikoloz Khundzikashvili (Efes Brewery, JSC Lomisi), Mehmet Kocak (Gurtiad), Nona Mamulashvili (Phillip Morris International), Michael Sounders (Free University), Kakha Sharabidze (BLB) and Maia Sidamonidze (The Terrace) will hold their respective positions within ICC Georgia.

The second officer election announced Fady Asly as Chairperson, Nikoloz Khundzikashvili as First Vice Chairperson and Maia Sidamonidze as Second Vice Chairperson and Treasurer.

The General Assembly held a cocktail reception after the elections where guests had the opportunity to congratulate the winners and network.

Czech Companies to Present Medical Equipment to Georgian Healthcare Providers

S

ix Czech companies producing medical equipment will visit Georgia 18-21 June to hold presentations of their products for Georgian companies and representatives of hospitals, clinics, the Ministry of Health of Georgia and the Ministry of Health

and Social Affairs of Adjara.

The presentations will take place both in Tbilisi and Batumi. The main goal is to demonstrate high quality Czech products in the field of medical equipment to their Georgian partners.

The Czech Embassy in Georgia invites everyone interested to come to the

presentations.

Batumi: 19th June, 10:30 – 12:30, Ministry of Health and Social Affairs of Adjara (119, Revaz Komakhidze Str.) Tbilisi: 21st June, 15:30 – 17:30 (followed by a reception), Czech Embassy, Tbilisi, (37, Chavchavadze Ave., block VI) For registration, call 577 79 70 92

8

BUSINESS

GEORGIA TODAY

JUNE 12 - 14, 2018

On EuroDIG 2018

BY KYRA DEVDARIANI

A

n annual conference "European Dialogue on Internet Governance (EuroDIG 2018)" was held on June 5-6 in Tbilisi. The EuroDIG was hosted by the Ministry of Economy and Sustainable Development of Georgia in co-operation with the Telecom Operators Association and the Georgian National Communications Commission.

We asked the MoESD Head of the Telecommunications, Information & Modern Technologies Dept., Eka Kubusidze, to comment on the choice of the host country. “The world has come a long way since the UN Secretary-General announced the establishment of the first Internet Governance Forum (IGF) for a multi-stakeholder dialogue on internet governance in 2006. Soon after, the EuroDIG started in 2008. We followed suit with a national Internet Governance Forum (GeoIGF), now in its 4th year and gaining regional recognition as stakeholders from our neighboring countries come to exchange views and experiences.”

For three days (there were some additional events on June 4, on the margins of the “proper” EuroDIG), Rooms Hotel was abuzz with delegates from different countries, agencies, regulatory bodies and NGOs, academia and civil society.

The spirit of inclusivity and the common goal, a free and honest exchange of experiences and challenges, brought together people of various backgrounds to discuss a wide range of issues, from trans-border cybercrime investigations to artificial intelligence, from challenges of e-commerce in Europe to regulating hate speech, from UNESCO internet universality to digitalizing Tusheti.

We sat down with the Head of Information Society of the Council of Europe, Patrick Penninckx, to find out more.

AS A POST-SOVIET STATE, GEORGIA

DOESN’T HAVE A LONG RELATIONSHIP WITH THE FREE MEDIA AND THE EUROPEAN APPROACH OFFERS SOLUTIONS LIKE AWARENESSRAISING, MEDIA LITERACY, AND CRITICAL ASSESSMENT OF CONTENT. IS GEORGIA READY FOR IT? Education is quite clearly one of the most important solutions, but at the same time, there are other stakeholders with important roles to play in tackling this problem. The government’s role is to regulate, to put barriers, to ensure that illegal or harmful content is removed. The Internet Service

Providers (ISPs) through which the majority of the disinformation, mal-information and misinformation circulates, have the responsibility for the content that is transmitted and multiplied.

The technical community dealing with the devices and algorithms has an important function of taking into account the human rights and data protection - not post-factum, but rather by design, in the process of developing the applications and products. The education system is a major stakeholder, but as yet, it is not sufficiently equipped to deal with the digital revolution that we’re facing. Civil society is not to be underestimated; its role is to warn users, to alert governments, to work with the ISPs. And then there’s the media itself, with the crucial task of debunking disinformation which comes through traditional media channels. So, I wouldn’t say that we focus exclusively on the users that need to be educated: there are different actors that are involved, and they have to be respectful of each others’ roles.

mental right, and legitimate requests to take down information that is perceived as discriminatory, hostile, inciting violence. The ECHR always applies a very restrictive definition of hate speech, as it is a very thin line to walk, and we have to be careful to adhere to pluralism in opinions.

This sentiment is echoed by Eka Kubusidze: “Even seasoned democracies of Western Europe are struggling when it comes to finding the right balance between the hate speech restrictions and keeping the freedom of speech, there is no single global standard that fits all. We’re currently working on the strategy, having asked the Council of Europe and the European regional office of ITU (International Telecommunication Union) to share their experiences in adopting guidelines on hate speech and on establishing regulatory frameworks.”

THE COE-COMMISSIONED A REPORT ON HATE SPEECH AND MEDIA REGULATION BASED ON EXPERIENCES AND CASES IN THE BALKANS, WHICH, LIKE GEORGIA, IS POST-SOVIET, POST-CONFLICT. RECENT NARRATIVES OF INTOLERANCE IN GEORGIA ARE VERY TROUBLING. HOW DO WE COUNTER THEM?

Hate speech is largely about the context, and that leaves a lot of room for interpretation. The regulatory environment that is being developed in a very specific context may be used by totalitarian or monopolistic regimes, adapted to their own purposes. They may say, ‘see, they’re doing this restriction on freedom of expression in Germany, they’re doing it in the UK, why shouldn’t we be able to do the same?’ So, the states with stronger democratic traditions have to be very careful about the possible impact of their legislation on other countries, how it might be used and interpreted in a completely different context, leading to a negative effect on the plurality of opinions.

Very often, this is a form of disinformation aiming for a certain outcome, and that outcome could be a political change, an uprising of nationalists, or an ethnic cleansing. Ultimately, it’s a question of power in a given political context. It is very often used by populists, e.g the whole question of the migration crisis in most of Western Europe. As for the counter-narrative, it is extremely difficult to promote, first, because people like the “juicy” stories that create the images. Second, it’s difficult to track to which extent the counter-narrative actually reaches people that have been affected by the original story. It’s a complex problem that is present in all of the Western European countries today, all of the former Warsaw Pact countries which are now part of the EU, where strong nationalistic leaders take the foreground, promoting the course of action that defects from fundamental human rights issues, and very often defects from the state’s existing international commitments. It’s a very worrisome development, not exclusive to Georgia at all, but rather a tendency whereby mechanisms protecting free speech are being used and abused throughout Europe.

THE REPORT NOTES CASES OF “CODED” WORDS AND EXPLICITLY INCITNG SPEECH DAILY FROM CERTAIN MEDIA OUTLETS. HOW DO YOU COMBAT THIS WHEN THERE IS NO GLOBAL DEFINITION FOR HATE SPEECH? On the level of the Council of Europe, we use the definition (https://www.coe.int/t/dghl/monitoring/ ecri/activities/GPR/EN/Recommendation_N15/ REC-15-2016-015-ENG.pdf) by the European Commission on Racism and Intolerance (ECRI) – it has the parameters of what is considered hate speech.

The European Court of Human Rights (ECHR) is always very careful in considering the balance between freedom of expression, which is a funda-

COULD CERTAIN AUTHORITARIAN REGIMES USE THE REGULATIONS: ASKING FOR THE REMOVAL OF HATEFUL CONTENT TO FURTHER THEIR GOALS?

LATELY, THE ISSUE OF DATA PROTECTION HAS COME TO THE FORE. WHAT IS HAPPENING IN THE REGULATORY LANDSCAPE TO ADDRESS THAT? IS THE AMENDMENT TO CONVENTION 108 THE ANSWER? There’s a Safe Harbor Agreement governing the exchange of data between the USA and the European Union. Then, the case brought forward by Austrian lawyer Max Schrems exposed deficiencies in the way Facebook collected and transferred his personal data, and eventually led to the invalidation of the Safe Harbor framework in September 2015. The EU-US Privacy Shield took its place, basically ensuring that the data protection of EU citizens in the United States was at an appropriate level. Additionally, there is the Generic Data Protection Regulation (GDPR), which came into force two weeks ago, also on the EU level. By contrast, Convention 108 is a global treaty which goes beyond the 47 states of the Council of Europe. The pan-European nature of the modernized Convention (https://rm.coe. int/16808ade9d) will allow us to do the checks and balances of data protection legislation in all of the countries which are party to the convention. It’s a crucial element that the amended version will provide the stable and predictable legal basis for data protection in the future. We’re working toward its opening for signatures globally, sometime in October 2018.

But this will be for the next EuroDIG to discuss – see you in Amsterdam in 2019!

10

BUSINESS

GEORGIA TODAY

JUNE 12 - 14, 2018

Calls to Raise the Status of the Trilateral Partnership

BY EMIL AVDALIANI

A

conference under the title “AzerbaijanGeorgia-Turkey: Global and Regional Determinants of Trilateral Cooperation” was held last week in Tbilisi.

This was the fifth consecutive event on trilateralism in the South Caucasus.

A number of interesting points were proposed on the nascent deep cooperation between Turkey, Georgia and Azerbaijan. All the participants at the conference agreed that the generally unstable region drives the three countries towards working with each other. Among them is the instability caused by separatism and international terrorism. Russia also played a role in the discussion. Moscow’s drive in the South Caucasus is of primary interest to the members of the trilateral partnership as all three have extensive economic and some military cooperation.

Turkey’s view at the conference was to point out how well customs works between Georgia and Turkey. It was also stressed that from a long-term geopolitical perspective, Turkey-Georgia-Azerbaijan cooperation will aggravate Armenia’s position as the latter will continue missing out on CaspianBlack Sea regional projects. This will inevitably lead to the further isolation of Armenia and continued dependence on Russia.

The Georgian experts were unanimous in stressing the need for the trilateral cooperation needs to be developed, claiming it falls short of being a fully-fledged alliance. They noted that the most viable way to move in that direction is to establish a trilateral council for strategic cooperation.

DURABILITY OF THE TRILATERALISM Over the past several years, since the trilateral cooperation was first introduced in May 2012 in

Batumi, engagement between the three countries has increased. The trilateral partnership is altogether noteworthy as is consists of NATO member and EU-hopeful Turkey, EU/NATO-oriented Georgia, and Azerbaijan, which up until now has avoided joining any large economic or military alliances.

However, despite the three countries’ evidently divergent foreign policy paths, the basis for trilateral cooperation has only increased. Every country of the three needs the others. Turkey wants a more stable Georgia with deeper economic and energy relations, while Azerbaijan, in the light of uncertainties regarding Nagorno Karabakh, needs Turkey’s backing. Georgia, in between, under pressure from Russia and dependent on transit, in turn needs both Turkey and Azerbaijan. Moreover, the two countries are Tbilisi’s biggest trade partners and investment sources.

The trilateral cooperation between Turkey, Georgia and Azerbaijan seems to be based on mutual interests and geopolitical challenges. The countries are less concerned with different religions, foreign policy vectors, etc. All three see how interdependent they are and there are clear imperatives (internal problems, foreign pressure) to increase the cooperation within the format.

From a global perspective, the trilateral cooperation helps to link two important regions: the Black and Caspian basins. To make the argument clearer, the two regions were connected before, but this was never possible to do without Russian consent. The Nobel brothers in the late 19th century managed to export Baku oil through Georgia’s Black Sea ports and their geopolitical view of the South Caucasus could be regarded as a herald to what Turkey-Georgia-Azerbaijan are witnessing nowadays – reconnecting the Caspian with the Black Sea. Geography and common geopolitical challenges drive the three countries together and these imperatives make the trilateral partnership a long-lasting one.

Reduction In Administration Costs Using Blockchain

T

he Georgian Finance Minister Mamuka Bakhtadze believes blockchain technology could help Georgia in reducing administrative costs and increasing citizen’s access to public services.

Speaking at the Constituency Meeting organized by the International Monetary Fund and the World Bank in Croatia, Mamuka Bakhtadze presented his views on existing possibilities and challenges with regards to financial technologies.

"Georgia was one of the first countries to introduce Blockchain in the public sector, but I think we could be even more ambitious in this direction,” Mamuka Bakhtadze said.

The IMF/World Bank annual Constituency Meeting aimed to discuss the current monetary, financial and development policy issues around the participant countries. It is also attended by the President of the National Bank of Georgia, Koba Gvenetadze.

The Constituency Meeting is held annually to discuss different topics influencing financial sectors globally and is attended by finance ministers and central bankers from 15 countries including Georgia, Bulgaria, Israel, Romania, Ukraine, Belgium, Luxembourg, Armenia, Bosnia and Herzegovina, Croatia, Kippurs, Macedonia, Moldova, Montenegro and the Netherlands.

BUSINESS

GEORGIA TODAY JUNE 12 - 14, 2018

11

EFTA Georgia: Trade Promotion Seminar

BY SHAWN WAYNE

T

he EFTA and Georgia jointly held a trade promotion seminar on 7 June in Tbilisi, organized in cooperation with the Georgian Swiss Business Association (GSBA) and the Embassy of Switzerland in Georgia. The EFTA – Georgia Free Trade Agreement (FTA) entered into force for Georgia, Iceland and Norway on 1 September 2017 and for Switzerland and Liechtenstein on 1 May 2018.

There is great interest in the new agreement and the seminar was well attended, with over 160 participants from private companies and government authorities.

The seminar brought together experts from the EFTA countries Switzerland, Norway, Iceland, Lichtenstein, and representatives of Georgia´s private and public sectors, to focus on the opportunities offered under the EFTA-Georgia Free Trade Agreement.

"We have facilitated the organization of such a seminar with the participation of EFTA experts to help the private and public sectors of Georgia to better understand the terms and conditions of the Free Trade Agreement signed with Switzerland, Liechtenstein, Iceland and Norway," said Alvaro Borghi, Deputy Head of the Mission of the Embassy of Switzerland. "The Agreement has improved

the framework conditions and now it is time for the private sector to take this opportunity and benefit from it."

The Seminar included a panel discussion where several Georgian companies with first-hand experience of trade with Switzerland shared their practical knowledge with the attendees.

EFTA speakers and experts presented the technical and practical aspects of accessing the EFTA markets, with a focus on the opportunities created by the Free Trade Agreement (FTA) for Georgian producers and exporters. Topics covered were customs issues such as rules of origin, proofs of origin and the verification procedure, as well as issues on sanitary and phytosanitary requirements and technical standards. Furthermore, experts explained to the Georgian participants how trade in agricultural products is addressed in the FTA. Presentations were also made on how to export to EFTA States and what producers should keep in mind when exploring export opportunities.

“It takes some time to enter these markets, but when you are in these markets and deliver good products, then you have a real chance at economic growth. It is difficult to compete for such a small nation like Georgia, but when you diversify with niche markets, there is a real chance of success,” said EFTA expert Roger Hafner.

With a combined population of around 13 million, and a combined GDP of USD 1.2 trillion, the EFTA States are the world’s 9th largest merchandise trader and the

5th largest trader in commercial services, as well as being significant actors in the area of foreign direct investment.

Merchandise trade between the EFTA States and Georgia has grown substantially over the last decade, from $36 mil-

lion in 2008 to $133 million in 2017, thanks in large part to increased EFTA imports from the Georgian gold mining industry and increased exports of pharmaceuticals and seafood. In 2017, EFTA’s exports to Georgia amounted to $60 million and

exports from Georgia to the EFTA States reached $73 million. EFTA’s key exports to Georgia were pharmaceuticals, fish and watches, while EFTA’s imports were dominated by gold, followed by apparel and hazelnuts.

Multiple Sclerosis: Major Cause of Non-Traumatic Disorders among Younger Patients

O

n May 30, the International Day for Multiple Sclerosis is celebrated. This year, Georgia joined the celebration. The purpose of the campaign being to raise public awareness of the disease and support patients suffering from it.

Multiple sclerosis is a chronic, progressive neurological disease and about 2.3 million people worldwide suffer from the disease. The first symptoms are revealed among 20-40-year-olds, with multiple sclerosis among younger patients seen as the main cause for non-traumatic disabilities. According to unofficial statistics, approximately 1,100 patients suffer with multiple sclerosis in Georgia.

Marina Janelidze, Professor of Clinical Neurology Department at Tbilisi State Medical University, spoke to us about the symptoms, challenges and problems regarding treatment.

“Multiple sclerosis is a chronic progressive disease of the central nervous system, characterized by immune inflammation, which includes brain and spinal cord white matter,” she tells us. “The disease is characterized by different clinical forms and symptoms. In the nervous system, the nervous fibrous membrane myelin, becomes damaged causing inflammatory demyelination which destroys the brain nerve cells.

The symptoms can be very diverse. The disease may begin with loss of feeling, pins and needles in the upper and lower limbs, loss of vision or balance, weakness and tension in the limbs and disrupted coordination. At the initial stage,

disease. There are more medicines that help stop the progression of the disease.

“Immunity modifier” drugs are a recent development to treat the disease, preventing recurrence of attacks and dramatically reducing development of the disease.

WHAT WOULD YOU ADVISE PEOPLE SUFFERING FROM MULTIPLE SCLEROSIS? WHAT TYPE OF LIFESTYLE IS RECOMMENDED? Sunbathing, saunas and other heat treatments are not recommended for people suffering from multiple sclerosis, as the heat causes an exacerbation of the symptoms. I recommend avoiding sun in summer and drinking as much water as possible. Moreover, seasonal infections should be avoided because it can provoke an attack. The main objective of treating multiple sclerosis is to reduce the incidence of the disease at an early stage and prevent the development of disabilities.

HOW AFFORDABLE IS THE TREATMENT?

these symptoms are characterized by a disruptive nature but regress after some time. Such an attack may be observed two or three times a year. In rare cases, multiple sclerosis can be characterized by chronic progressive symptoms.

Pathological, overwhelming fatigue is

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very characteristic to multiple sclerosis.

Over time, frequent attacks are accompanied by the development of disabilities. Inflammatory demyelination and neuron death can occur even when the patient does not express clinical exacerbation.”

Journalists: Tony Hanmer, Zaza Jgarkava, Maka Bibilashvili, Dimitri Dolaberidze, Maka Lomadze, Joseph Larsen, Vazha Tavberidze, Nugzar B. Ruhadze, Nino Gugunishvili, Thea Morrison Photographer: Irakli Dolidze

AT WHAT AGE DOES THE DISEASE DEVELOP AND HOW FEASIBLE IS IT TO MANAGE? The disease occurs among 20-40-yearolds and is seen 2-3 times more often in women. In the last 20 years, countries around the world have been fighting the

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In Georgia, patients suffering from multiple sclerosiscannotreceiveadequatetreatment as it is very expensive. Around 1000 GEL worth of medicine is needed monthly and funding is not provided by the state or insurance companies, as it commonly is internationally. It is crucial to treat this disease as of high importance since it affects hardworkingyouthandwomenatmaternity age. A State program is needed to treat multiple sclerosis in order for patients to receive high-quality treatment based on modern medical developments.

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