Issue #1006 Business

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Issue no: 1006/108

• DECEMBER 12 - 14, 2017

• PUBLISHED TWICE WEEKLY

PRICE: GEL 2.50

In this week’s issue...

Prime Minister Speaks at NATO Liaison Office Georgia Year Roundup Event NEWS PAGE 3

FOCUS ON AWARDING NEW BUSINESSES

This weekend saw TBC and Geocell recognising the best new and developing Georgian businesses

ISET PAGE 4

IMF to Release $42.4 Million to Georgia BUSINESS PAGE 6

PAGE 8

Wizz Air Wins Aviation 100 European Airline of the Year

W

Do You Have Questions About the Upcoming Pension Reform? Here Are Some Answers

izz Air, the largest low-cost airline in Central and Eastern Europe, last week won the Aviation 100 ‘European Airline of the Year’. The award was received by Owain Jones, Wizz Air’s Chief Corporate Officer, at the Airline Economics Growth Frontiers London 2017 conference gala dinner in London.

Aviation 100 praised Wizz Air for its outstanding year of growth, which has seen the company deliver record passenger numbers, further expand its far-reaching network, and announce a game-changing order of 146 Airbus A320neo Family aircraft at the Dubai Airshow.

Continued on page 2

Following Irakli Kobakhidze’s Visit, Israel Starts Cooperation Series with Georgia

BUSINESS PAGE 7

10th Anniversary of the German Business Association (DWV) in Georgia BUSINESS PAGE 9 Prepared for Georgia Today Business by

Markets As of 08ͲDecͲ2017

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

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

INDICES

Price

w/w

m/m

BONDS

Price

w/w

m/m

GBP 33.56

+2,7%

Ͳ7,1%

GEOROG 04/21

107.68 (YTM 4.28%)

+0,1%

+0,4%

GBP 3.50

+2,9%

+3,9%

GEORG 04/21

112.40 (YTM 2.94%)

+0,1%

Ͳ0,1%

GBP 16.29

+4,4%

Ͳ6,1%

GRAIL 07/22

112.47 (YTM 4.69%)

+0,3%

+0,6%

BGEOLN 07/23

104.44 (YTM 5.08%)

+0,1%

+1,1%

Price

w/w

m/m

63,40

Ͳ0,5%

Ͳ0,1%

CURRENCIES

Price

w/w

m/m

1 248,49

Ͳ2,5%

Ͳ2,6%

GEL / USD

2,6650

Ͳ1,4%

+1,2%

GEL / EUR

3,1405

Ͳ2,9%

+3,4%

Price

w/w

m/m

GEL / GBP

3,5668

Ͳ2,1%

+3,2%

FTSE 100

7 393,96

+1,3%

Ͳ1,8%

GEL / CHF

2,6875

Ͳ3,1%

+1,8%

FTSE 250

19 992,54

+0,7%

Ͳ1,5%

GEL / RUB

0,0451

Ͳ1,7%

+2,0%

DAX

13 153,70

+2,3%

Ͳ1,7%

GEL / TRY

0,6951

+0,8%

+2,6%

DOW JONES

24 329,16

+0,4%

+3,2%

GEL / AZN

1,5683

Ͳ1,4%

+1,7%

6 840,08

Ͳ0,1%

+0,8%

GEL / AMD

0,0055

Ͳ1,8%

+1,9%

NASDAQ

GEL / UAH

0,0983

Ͳ1,6%

Ͳ0,1%

MSCI EM

1 110,78

Ͳ0,5%

Ͳ2,1%

EUR / USD

0,8494

+1,0%

Ͳ1,5%

SP 500

2 651,50

+0,4%

+2,2%

GBP / USD

0,7472

+0,7%

Ͳ2,0% Ͳ0,7%

MSCI EM EE

159,32

Ͳ0,7%

Ͳ1,9%

2 104,99

Ͳ0,0%

Ͳ2,7%

CHF / USD

0,9927

+1,7%

MSCI FM

2 897,90

+0,6%

+1,5%

RUB / USD

59,1269

+0,4%

GT Index (GEL)

1 582,68

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Ͳ

TRY / USD

3,8353

Ͳ2,0%

Ͳ0,8%

GT Index (USD)

1 208,13

Ͳ

Ͳ

AZN / USD

1,6999

+0,1%

+0,1%

MICEX

Ͳ0,2%

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NEWS

GEORGIA TODAY

DECEMBER 12 - 14, 2017

Wizz Air Wins OSCE Group of Friends Adopts Statement in Support Aviation 100 of Georgia European Airline of the Year

BY THEA MORRISON

Continued from page 1 Winners of the high-profile awards, which recognize the year’s most outstanding performers in the aerospace industry, are decided primarily by an industry-wide survey sent out to a global distribution list of more than 10,000 names over a two-month period.

Nominations for each category are also accepted, and are judged using a combination of points awarded for specific criteria. Aviation 100 ranks the top ten performers in each category and the winner receives a coveted outstanding achievement award.

"We are proud to receive this prestigious award which once again confirms that Wizz Air is a great business as well as a great airline,” said Jones.

“2017 has been a very exciting year for Wizz Air, as we delivered outstanding growth of over 24% as well as record passenger numbers, increasing our route network to over 550 routes across 43 countries and introducing a number of innovative enhancements to our customers’ experience. Our order of an additional 146 latest-technology Airbus A320neo family aircraft will enable us to continue to grow

over the upcoming decade, meaning ever-more low-fare travel opportunities across Europe and beyond as we continue our drive to become Europe’s undisputed lowest cost airline. In 2018, we intend to remain focused on stimulating customer demand and making low-cost air travel accessible for all, while delivering a great experience on-board one of the youngest aircraft fleets in Europe”.

Wizz Air is the largest low-cost airline in Central and Eastern Europe, operating a fleet of 87 Airbus A320 and Airbus A321 aircraft, and offering more than 550 routes from 27 bases, connecting 145 destinations across 43 countries.

At Wizz Air, a team of approximately 3,500 aviation professionals delivers superior service and very low-ticket prices, making it the preferred choice of 23.8 million passengers in the financial year ending 31 March 2017. Wizz Air is listed on the London Stock Exchange under the ticker WIZZ and is included in the FTSE 250 and FTSE All-Share Indices. Wizz Air is registered under the International Air Transport Association (IATA), Operational Safety Audit (IOSA), the global benchmark in airline safety recognition.

T

he OSCE Group of Friends of Georgia, which includes Canada, Estonia, Latvia, Lithuania, Poland, Romania, Sweden, Czech Republic, the United Kingdom and the United States of America, has adopted a joint statement which supports Georgia’s sovereignty and territorial integrity within its internationally recognized borders.

The statement was adopted at the 24th OSCE Ministerial Council in Vienna, Austria, in which Georgian Vice-Premier and Foreign Minister, Mikheil Janelidze also participated.

The statement expresses full support to the “strong determination of Georgia” in its aspirations of European and EuroAtlantic integration and commends the commitment shown by the Georgian government in this regard.

“The Group of Friends congratulates Georgia on the successful conduction of the 2017 local elections, with full respect for fundamental human rights and international commitments,” the statement reads.

It also expresses its support for peaceful resolution of the conflict and highlights the difficult humanitarian situation in Georgia’s occupied regions of Abkhazia and Tskhinvali (South Ossetia).

“The statement condemns the mass

destruction of houses in the breakaway South Ossetia village of Eredvi within the framework of Russian investment programs,” the Group of Friends stated.

The declaration, adopted on December 8, reaffirms the need to achieve progress at the Geneva International Discussions, including on the non-use of force, creation of international security arrangements and right of IDPs and refugees to return to the places of their origin in safety and dignity.

The OSCE Group urges the Russian Federation to reverse its recognition of Georgia’s occupied regions, to withdraw its military forces, and to fulfill its commitments, including those under the 12 August 2008 ceasefire agreement medi-

ated by the EU. Minister Janelidze stated that the adoption of such a statement is a strong political message and a clear example of support for Georgia from the international community.

“It clearly demonstrates that the issue of the Georgia-Russian conflict is very active on the agenda of the international community, who believe that a peaceful resolution is vital,” he stated.

“The statement clearly underscores Georgia’s democratic progress and very important steps on the path of democratic consolidation. It is very important for the OSCE and in line with the values of this organization," the Minister added.

NEWS

GEORGIA TODAY DECEMBER 12 - 14, 2017

Prime Minister Speaks at NATO Liaison Office Georgia Year Roundup Event

BY NINO GUGUNISHVILI

P

rime Minister of Georgia Giorgi Kvirikashvili spoke at the NATO Liaison Office Georgia’s year-roundup event held on Friday. Attended by Georgian government representatives, international organizations and diplomatic community members, the meeting was dedicated to the Head of the NATO Liaison Office, Mr. William Lahue, who has completed his term in the post.

“Today’s gathering is a combination of two important events; on the one hand, we celebrate another year of very successful and productive NATO-Georgia cooperation and partnership, on the other hand, this event has a definite touch of sadness as we say goodbye to our friend William and his wife Milagros, and wish both of you success in all of your future endeavours,” Giorgi Kvirikashvili said.

“Since its foundation in 2010, the NATO Liaison Office has been strongly committed to deepening our relations with its Alliances through significant advice and assistance to the Georgian government, as we work forward to our aspirations of getting closer to the NorthAtlantic Alliance. Throughout these years, Mr. William Lahue has been a vocal supporter of Georgia’s Euro-Atlantic aspirations, and has played an important role in our achievements,” the Prime Minister of Georgia stated.

Protesters at the Rose Revolution Square in Tbilisi. Source: netgazeti.ge

Protest Rallies Against Drug Policy Held in Three Major Cities of Georgia

BY THEA MORRISON

T “We’ve said more than once that there was more to be seen of Georgia in NATO and more NATO in Georgia, the fruition of this is largely thanks to the dedication and rigorous efforts of all of you, our friends and partners involved in this challenging but also rewarding process and journey,” he noted, adding he is pleased to see such steady progress in implementing the substantial NATO-Georgia package, which will be crucial in bringing Georgia’s security and defense sector fully in line with NATO standards and criteria, and prepare Georgia for future NATO membership.

“Thanks to the support from our allies

and friends, Georgia has turned into a true regional leader in consolidating democracy, ensuring human rights protection, rule of law and good governance.

We are well aware that our democratic transformation is an important milestone for our advancement towards NATO, and of course it is as important as fulfilling our obligations in terms of improving Georgia’s interoperability with NATO troops advancing Georgia’s defense capability.” The PM stressed, going on to personally thank William Lahue, for his “important, but also emotional contribution to Georgia’s development during these very important years.”

3

he Non-Governmental Organization (NGO) White Noise Movement held a massive protest rally against the “repressive” drug policy in Georgia, asking for a more human attitude towards drug consumers.

The protest rallies were held in Georgia’s three major cities Tbilisi, Kutaisi and Batumi, on December 10, when the whole world marks Human Rights Day. The main slogan of the rally was: End the Repressive Drug Policy!

White Noise explained that they are not asking for the legalization of drugs in Georgia. They believe some restrictions and sanctions should remain; however, the drug policy should be transferred from a punitive to a caring one, which implies the creation of special services for drug addicts for their rehabilitation and re-socialization.

The demonstrators called on Parliament to adopt the already-initiated draft law which would mean people would not be imprisoned for personal consumptions of drugs. The draft was made by the Health Committee, together with the National Platform for Drug Policy, in spring, but the issue has yet to be put on the parliamentary agenda.

One of the leaders of the movement, Beka Tsikarishvili, stated that the government promised the issue would be discussed at the autumn session of the parliament but so far no steps have been taken in this regard.

“The aim of our protest is to push parliament to start discussions on the draft in order to change the repressive drug policy this year,” Tsikarishvili said.

He added that around 30 inmates who are serving their sentence for consuming drugs went on hunger strike in order to join the protest.

“We call on the President to pardon such people before the New Year,” he stressed.

In parallel to the protest rally of the NGO and the supporters of a liberal drug policy, clergymen, with members of the Church parish and the Orthodox Parents’ Union held a silent demonstration with the slogan: Drugs – the Road to the Hell.

The clerics said drug addiction is a great sin, and Georgian society should not be loyal to the fact. Georgia’s new Public defender, Nino Lomjaria, commented on the issue, saying a strict narco-policy cannot produce results.

“Drug-addiction is a serious problem in Georgia. Studies have shown that a strict drug policy brings no positive results. I think it is time to start serious discussions about reforms in this field,” she added.

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BUSINESS

GEORGIA TODAY

DECEMBER 12 - 14, 2017

THE ISET ECONOMIST A BLOG ABOUT ECONOMICS AND THE SOUTH CAUCAUS

www.iset-pi.ge/blog

The ISET Policy Institute (ISET-PI, www.iset-pi.ge) is an independent think-tank associated with the International School of Economics at TSU (ISET). Our blog carries economic analysis of current events and policies in Georgia and the South Caucasus region ranging from agriculture, to economic growth, energy, labor markets and the nexus of economics, culture and religion. Thought-provoking and fun to read, our blog posts are written by international faculty teaching at ISET and recent graduates representing the new generation of Georgian, Azerbaijani and Armenian economists.

Do You Have Questions about the Upcoming Pension Reform? Here Are Some Answers

BY NORBERTO PIGNATTI

O

ver the past months, we have been asked questions several times about the upcoming pension reform.

Here are some answers.

FOR WHOM IS THE CONTRIBUTION TO THE FUND MANDATORY? WHO CAN JOIN/ CONTRIBUTE TO THE FUND? All those individuals who receive their salary net of taxes because their employer pays the income tax for them are automatically enrolled in the fund. Those who are self-employed and pay their own income taxes, can also choose to join the fund. No one else can join and/ or contribute, even if he/she wants. This includes inactive, unemployed, workers receiving a salary unofficially (on which the employer is not paying taxes), and self-employed not paying taxes.

I AM AN EMPLOYEE. BY HOW MUCH WILL MY MONTHLY SALARY DECLINE? I FEAR MY EMPLOYER WILL TRANSFER THE COST OF HIS/HER CONTRIBUTION TO ME. The law prohibits the employer from decreasing your current salary to offset his/her contribution to your pension account. So, let’s assume that your employer will not cut your salary to transfer the cost of the employer contribution to you. Assuming you have a monthly gross income of 1000 GEL, you currently receive 800 GEL, net of taxes.

After the introduction of the reform, 20 GEL of your gross income will go to the pension fund. Your employer will add another 20 and the government will do the same. Your taxes (20%) will be calculated on the remaining 980 GEL. This means that at the end of the month, you will receive 784 GEL instead of 800 GEL. The decline in your net disposable income will therefore be 16 GEL out of 800. To be fair, this is not a real cost, because the amount in the pension fund is still yours. Actually, if you consider also the amount in the pension fund (60 GEL) your total net labor income will increase from 800 to 844 GEL.

is, and the higher the number of individuals with significant savings in the pension fund, the lower the risk of such a development will be.

As time passes (when you sign a new contract or when you change jobs), however, an employer may consider contribution costs when deciding what salary to offer. This means that your salary may grow less than it would have in the absence of the pension reform. The final outcome will depend on your bargaining power, and on the employer’s. In the worst-case scenario (the employer reduces gross salary enough to be in the same position, salary-wise, as he was pre-pension reform), the decline in your monthly salary will be higher. If you were receiving 800 GEL net before, your net disposable income now would fall to 772 GEL. However, now you also have 59 GEL in the pension fund (for a total of 831).

BY HOW MUCH WILL MY MONTHLY EARNINGS DECREASE AFTER THE INTRODUCTION OF THE TAX IF I AM A SELF-EMPLOYED? Assuming you have a monthly gross income of 1000 GEL, currently you receive 800 GEL net of taxes. After the introduction of the reform, 40 of your 1000 GEL will go to the pension fund (with the government adding another 20). Your taxes (20%) will be calculated on the remaining 960 GEL. This means you will receive 768 GEL instead of 800 GEL. However, now you have 60 GEL in the pension fund, for a total of 828 GEL.

WHAT WILL BE MY MONTHLY PENSION AT THE TIME OF RETIREMENT? The value of your monthly pension at the time of retirement will depend on many factors: the investment choices of the asset managers, the performance of government bonds and stocks in the domestic and international markets, the number of years you will have been contributing to the pension fund, your monthly labor earnings, your life expectancy at the time of retirement, and the amount of the flat state pension paid by the government. If you want to have an idea of the value of your monthly payment from the fund (in today’s GEL) you can go check it on ISET-PI’s website. We have prepared a calculator to answer this question.

Once you know the estimated value of

WHAT HAPPENS TO THE MONEY I HAVE IN MY PENSION ACCOUNT IF I DIE BEFORE RETIRING? If somebody dies before reaching the retirement age, the amount will go to their heirs. This happens also in case the death of a beneficiary occurs before his or her individual account’s capital is totally distributed.

HOW LARGE WILL THE COST BE FOR THE GOVERNMENT?

the monthly payment that you should expect from the fund at retirement, add the current value of the state pension (180 GEL) to have an estimate of the overall pension you can expect.

WHEN I GET TO PENSION AGE, IF I RECEIVE MONEY FROM THE PENSION FUND, WILL THE GOVERNMENT STILL PAY ME THE FLAT STATE PENSION? In the draft law there is no indication that the government will stop paying the flat state pension to those receiving payments from the pension fund.

WILL THE MONEY I PUT IN THE FUND BE INDEXED TO INFLATION? The return on the money invested in the fund will depend on the performance of the assets that will be bought by the fund managers, and from the amount of the management fees paid to the fund managers. It is fair to say, however, that in normal market conditions you can expect the return on your investment to exceed the inflation rate, especially if you consider the government contribution and that of your employer (to the extent that the cost is not “transferred” back to you), which already constitute gains for you.

CAN I BE CONFIDENT THAT I WILL HAVE BACK

10 Galaktion Street

AT LEAST THE CAPITAL I INVESTED IN THE FUND? At this stage the draft does not include any information about whether the investment strategy of the fund will be designed to ensure capital is always protected, or whether the government will take this risk upon itself. However, as mentioned above, the risk of loss of the invested capital can be considered relatively low.

IS THERE ANY GUARANTEE THAT THE GOVERNMENT IS NOT GOING TO STEAL MY PENSION, LIKE HAPPENED WITH SOVIET PENSION ACCOUNTS? There can never be such a guarantee.

The current government is doing what it can to make it as difficult and unlikely as possible that your money could be stolen, by creating a separate fund, not managed by the government, in which each contributor will have an individual account. Because it is an individual account, it becomes your personal property. Of course, there is still the (remote) possibility that a government in the future will decide to change the law regulating the pension fund, reducing the benefits or even expropriating the fund’s assets. This, however, would require a very strong government and (likely) the support of most of the population. The more successful the reform

First, we have to distinguish between monthly gross incomes up to 2,000 GEL, and monthly gross incomes between 2,001 GEL and 5,000 GEL. Nominally the government pays 2% of the gross income the employee or self-employed person receives, up to 2,000 GEL of monthly gross income. In reality, the impact on the public budget will be larger, because of the non-taxable nature of the contribution to the pension fund. The reduction in tax revenues associated with this provision will cause the government to lose an additional 0.8%, for a total budget burden equal to 2.8%.

The negative impact on the government budget associated with each GEL exceeding 2,000 GEL and up to 5,000 will be 1.8% (because both the employee and the employer will continue paying 2% - and getting a 0.4% tax credit – while government’s direct contribution will decline to 1%).

The cost for the government will be even higher for public employees, as the government will have to pay both its share and the employer’s share. In this case, the costs for the government will amount to 4.4% of gross monthly salaries up to 2,000 GEL, and 3.4% of gross monthly amounts between 2,001 and 5,000 GEL. In aggregate terms, this reform will definitely increase government expenditures in the short and medium term, as tax revenues will decline and payments to the pension fund will increase.

1

Professor, ISET and ISET PI.

Tel: (995 32) 2 45 08 08 E-mail: info@peoplescafe.ge

6

BUSINESS

GEORGIA TODAY

DECEMBER 12 - 14, 2017

JICA Georgia Office Seeking National Staff (Clerk)

IMF to Release $42.4 Million to Georgia

D

T

eadline: December 29, 2017

JICA Georgia office is pleased to announce an opening for the position of National Staff (Clerk) Job description: ** Assisting to make accounting documents and payment; ** Conducting secretarial work for Resident Representative; ** Making document registration, circulation and filing; ** Arranging business trips - reserving tickets, accommodation, etc.; ** Dealing with official letters and distributing received letters; ** Procuring office supplies and disposal of unnecessary items; ** Supporting PR activities, including arrangements for journalists and publishing newsletter; ** Other tasks given by Resident Representative; Skills and requirements: ** University degree; ** Highly proficient in spoken and written Georgian and English (regarding English proficiency, certificate is necessary); ** Knowledge of Russian is preferable; ** Computer literacy (Word, Excel, Power Point, etc) and troubleshooting; ** At least three years’ work experience in a similar field; ** Analytical, open-minded, honest character;

** Excellent communication and interpersonal skills; ** Well-organized; strong sense of responsibility; hard working; ** Willingness to go on field trips.

Preferable but not mandatory skills: ** Familiarity with terms related to engineering and finance is preferred; ** Japanese language skill is preferred.

Term: From February 1, 2018 until January 31, 2019, with possible extension (Probation period is 1 month. The employer will be able to terminate the contract depending on the performance during the probation period).

Salary: US$700-800/month without taxes (actual amount will be adjusted based on the past work experience and will be paid in GEL).

Working hours: Monday – Friday, 9:30 – 18:00 (with lunch break from 13:00 – 14:00).

Next step: Only shortlisted persons will be notified by email and invited to an interview.

Interested candidates are required to send a CV (in English) with the contact information from teo previous workplaces/schools and copies of certificates to: gg_oso_rep@jica.go.jp and w284637@hotmail.com; no later than December 28, 2017.

BY NINO GUGUNISHVILI

he International Monetary Fund’s Executive Board completed its first review of Georgia’s performance within the three-year extended arrangement under the Extended Fund Facility (EFF) on a lapseof-time basis, on December 6.

The completion of the review enabled them to release of SDR 30 million (about $42.4 million), bringing the total disbursements under the arrangement to SDR 60 million (about $84.8 million).

The extended arrangement for SDR 210.4 million (about $297.5 million or 100% of quota) was approved by the Executive Board on April 12 this year.

As noted, “The economic recovery [in Georgia] is gaining momentum, inflation is projected to decline starting early 2018, and the external position has strengthened.”

The information in the IMF statement also points out that although Georgia’s economic performance has improved, “risks remain”.

“Revenue overperformance provides room for additional capital spending and VAT repayments in 2017. The banking sector remains liquid, profitable, and well capitalized. Despite the positive outcomes, the authorities need to remain vigilant and sustain reform efforts to address structural obstacles to growth,” it says, adding that, “The 2018 budget appropriately targets further fiscal consolidation, envisaging a further decline in the deficit while allowing for an increase in capital spending.”

The IMF then recommends Georgia

Photo: IMF. Photo source: GPB (Georgian Public Broadcaster)

further strengthen revenue administration, in order to “prevent the buildup of VAT claims.”

Another recommendation from IMF following Georgia’s three-year performance review is for Georgian authorities to “bolster efforts to further contain current spending, for instance, by containing the wage bill, improving the targeting of social programs, and reducing subsidies and equity injections to stateowned enterprises (SOEs).” It is also states that the “mid-term fiscal commitments should be completed as currently envisaged and require progressing with institutional fiscal reforms”.

According to the review, “The NBG’s monetary policy stance is appropriate, but the authorities need to remain vigilant on monetary and financial developments, including those related to credit growth. The inflation targeting framework, combined with the floating exchange rate regime, has served Georgia well. Foreign exchange intervention should remain limited to smoothing excessive exchange rate volatility and

building reserves. The NBG’s steps to strengthen liquidity management, dedollarize the economy, and improve communication will help strengthen the monetary framework.”

“Continued efforts to advance structural reforms are key to achieving higher and more inclusive growth. Upgrading infrastructure and strengthening trade integration will boost growth prospects. The new insolvency law for non-financial corporations and the Business House will help improve the business environment.

The pension reform will increase the availability of domestic savings to support investment, as long as contributions are enforced. Improved capital market infrastructure, by facilitating mobilization of funds, will support capital accumulation. To further support growth, Georgia also critically needs to advance on education reform,” the IMF’s statement reads. http://www.imf.org/en/news/articles/2017/12/06/pr17463-imf-boardcompletes-the-first-review-of-the-extendedarrangement-under-eff-for-georgia

Passenger Traffic Increases by 44% in Georgia’s Airports

BY THEA MORRISON

T

he Civil Aviation Agency of the Ministry of Economy and Sustainable Development of Georgia reports that during 11 months of the current year, the passenger traffic in Georgia’s airports has increased by 44.48%, amounting to 3,816.538 passengers. Last year, the number of passengers was 2,641.539.

Tbilisi International Airport served 2,943.417 passengers, which is 40.89% (854,293 passengers) more compared to the number of passengers transferred in 11 months of 2016.

Batumi airport saw over 484,527 passengers transported in 2017, 59.11% (180,012) more passengers compared to the same period of 2016- 304,515 passengers.

Passenger traffic in Kutaisi International Airport has increased by 55.80%.

The airport served 243,918 passengers in 11 months of 2016; while, in 2017,

this indicator reached 380,026 passengers which is 136,108 more passengers.

The local destination airport in Mestia served 6,881 passengers during 11 months this year, a 72.80% increase compared to 2016, and Ambrolauri Airport, receiving passengers for the first time this year, from mid-January to the end of November welcomed 1,687 flight users.

During the 11 months of 2017, 5.399 more flights were carried out in Georgian airports than in 2016.

Photo source: TAV Georgia

BUSINESS

GEORGIA TODAY DECEMBER 12 - 14, 2017

7

Following Irakli Kobakhidze’s Visit, Israel Starts Cooperation Series with Georgia

C

hairperson of Parliament of Georgia Irakli Kobakhidze met the President of Israel and Speaker of the Knesset in October this year. The visit held in Israel was an important step towards strengthening cooperation between Israel and Georgia.

Tbilisi is to now host two delegations from Israel on December 14, led by the Georgia-Israeli Chamber of Business and ‘Israeli House’ . Members of the delegation are Georgian partnership group deputies, business circles, analysts and leading mass media journalists from Israel. The visit is organized by ‘Israeli House’ and aims to popularize Georgia and endorse bilateral ties between the two nations. The main issues of the meeting are to be hasbara, education and youth.

The Israeli delegation will visit a Georgian Parliament Library exhibition, which is also organized by ‘Israeli House,’ attend the opening of the first Hebrew Library in Georgia and enjoy a Hanukkah candle lighting ceremony, which will be followed by a concert of Jewish songs sung

by Georgian singers.

Library ‘Sarah’s fund,’ in cooperation with ‘Israeli House,’ has already bought several hundred books in Hebrew, English and Russian. The main theme of the literature in the library is Israel: from ancient to modern history, Zionism, Judaism, Theology, Foreign Affairs of Israel, and high school and university material for learning Ivrit.

Around 500 books will be added later. It is also part of the agreement to create a Georgian Library in Israel.

Agreements between Israel and Georgia will also be signed in the National Library. The delegation will meet the Chairperson of Parliament of Georgia.

On December 17, some members of the delegation will attend the opening of the construction of a new modern hotel which is made up of art galleries, cafes and a façade decorated as a Geor-

gian ornamented carpet.

The net worth of said construction project is $12 million and through it Tbilisi will have a high class hotel in a historical district.

‘Israeli House’ Founder and Chair, Itsik Moshe, believes that this occasion has tremendous importance in the history of Georgia-Israeli partnership. “We are summing up the last 25 years and

planning future connections in numerous spheres,” he said. “Israeli House is actively working on giving a realistic idea of Israel to Georgian society. We aim to improve awareness and I believe that our partnership will be productive in various directions and, first of all, in mutual understanding, economic ties and sharing best experiences”.

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BUSINESS

GEORGIA TODAY

DECEMBER 12 - 14, 2017

Grand Ceremony of Business Award 2017 Held for 2nd Time in Georgia Giorgi Zagareli’s amazing duo.

In the nomination of Business of the Year, the winner was announced as Dio, a leading company producing high-quality windows, doors and accessories in Georgia. Mamuka Khazaradze, Co-Founder and Chairman of TBC Bank Group, personally awarded the prize to Tamaz Daushvili, CEO of Dio. “This is a very significant day for us, since we were awarded the main prize,� Daushvili said. “Our company counts 21 years’ experience and over these years we’ve offered our customers high-quality products. Our products are in many households throughout Georgia and this prize will motivate us even more to meet the needs of our customers.�

Georgian company Kula, producing various fruit

BY LIKA CHIGLADZE

W

ith the slogan #Shareyoursuccess, the largest-scale business award in the history of Georgia took place in Tbilisi for the second time. The event was initiated and organized by TBC Bank and Geocell and has proven in these two years to be an extremely successful project, aimed as it is at promoting the creation of new businesses in the country and supporting the development of the existing ones. With the chief motto #Shareyoursuccess, the organizers gave an opportunity to both new and well-established companies to uncover their success stories through social networks and media.

In total, 661 companies joined the project, of which six finalists were selected by the judges in six nominations. The closing ceremony was hosted by Radisson Blu Iveria hotel’s new venue where all the participants, owners of both small and largescale businesses in Georgia, were invited. The official ceremony was opened by celebrated Georgian DJ Kordz, Alexandre Kordzaia and musician and vegetable products, gained the title of Georgian Product of the Year. The company was given the prize by Dimitry Kumsishvili, First Vice Prime Minister and Minister of Economy and Sustainable Development of Georgia. “We are proud of our prize, since we have the ambition to offer the best quality Georgian products. Our core aim is to expand production and let the whole world know that Georgia produces natural and high-quality food!� said Vano Goglidze, Director of Kula.

The title of Agro Business of the Year was given to Niba 2008 Ltd., a local farm meeting European standards. Levan Davitashvili, Georgia’s Minister of Agriculture, congratulated and handed the prize to a representative of the company.

Dasta Records Management claimed the title of Small

Business of the Year. It is the first modern records management company in Georgia offering document storage, digitization and secure document destruction.

Hotel Kabadoni won the nomination of Touristic Business of the Year and another Georgian company, Fina, a software development and consulting company, was named Innovative Business of the Year. “We are organizing this extremely interesting Award ceremony for the second time already,�

TBC’s Khazaradze said. “The number of participants has increased significantly, which means many new innovative companies are emerging on the market. Our main strategy is to support and share the success of these young entrepreneurs and startupers with their groundbreaking ideas, since these new businesses build tomorrow’s Georgian economy.�

Hippie, a handmade accessories shop, claimed the award of Startuper of the Year. The winner in this nomination was revealed by public voting which lasted from November 28 - December 6 on the Business Award web page. “We make handmade decorations as well as accessories from real flowers and natural stones,�

- Demetre Markhvaidze, co-founder of Hippie, told GEORGIA TODAY. “The most in-demand items are our painted bags, wallets and notebooks. We launched our startup two years ago and since then we have been gradually developing and expanding our assortment and production. This prize serves as a big stimulus to us, since it means that our efforts and hard work have paid off. I remember standing in the freesing cold waiting for customers, and now I see that we succeeded only because we refused to give up and kept waiting patiently.

Right now, there are only two of us in the companyLali Tvaliashvili and me - but in critical situations our friends always help us out.�

This year’s Award had an additional focus on a developing trend in social entrepreneurship in Georgia, with promotion during the project supported by Geocell. The winner in this nomination was revealed by a special jury and announced as handmade crafts workshop EthnoDesign, which was granted the special prize by Georgia’s First Lady Maka Chichua, who is a big supporter of social enterprises in Georgia.

Winter Season Opens in Gudauri

BY NINO GUGUNISHVILI

T

he winter season officially opened in Georgia’s Gudauri resort on December 10, and the resort is already packed with local and foreign tourists.

One of the most popular ski resorts

FIRST BRAND HOTEL IN KUTAISI UNDER BEST WESTERN INTERNATIONAL Within the framework of the Georgian Hotels’ Regional Network Development Project “12 hotels in 12 regionsâ€? by GHYHORSPHQW FRPSDQ\ Âł6LPHWULD´ WKH ÂżUVW EUDQG KRWHO KDV been opened in Kutaisi under the Best Western International brand.

The hotel accommodates 45 guest rooms, including 40 standard rooms and 5 suites. The hotel was designed taking into consideration special conditions and safety for guests with disabilities.

Address: 11 Grishashvili Str., 4600, Kutaisi, Georgia TEL 219 71 00 info@bwkutaisi.com

Three mobile conference halls are available with a total capacity of about 100 persons.

(XURSHDQ FXLVLQH FDQ EH HQMR\HG LQ WKH JURXQG ÀRRU FDIp and a grill-bar menu in the roof top restaurant with panoramic views over the city.

The International Hotels Management Company “T3 Hospitality Management,� providing the hotel management, has 20 years’ experience in hotel management in different countries globally.

in Georgia, Gudauri, starts its new winter season with 14 ski lifts and 22 slopes totaling 70-kilometers, designed for all categories of skier. A Mountain Patrol is there to ensure safety on the slopes.

An artificial snow system now available at the resort enables Gudauri to be independent from natural climate conditions and to start the longawaited skiing season on a fixed date every year.

BUSINESS

GEORGIA TODAY DECEMBER 12 - 14, 2017

9

10th Anniversary of the German Business Association (DWV) in Georgia

A

t the celebration of the 10th anniversary of the German Business Association, Georgian Vice Prime Minister and Minister of Foreign Affairs, Mikheil Janelidze, praised DWV´s commitment to Georgian-German business relations and the German contributions to linking Georgia closely with the European Union.

The ceremony, with 350 attendees, took place in the Tbilisi State Opera and Ballet Theater, which, in addition to its many Georgian elements, is based on a German architectural design and uses German stagecraft. As part of the program, and exclusively for this event, the Georgian State Ballet performed the masterpiece “Concerto Barocco” of Georgian

choreographer George Balanchine, with music from German composer Johann Sebastian Bach.

According to the chairman of DWV´s board, Dr. h.c. Sascha Ternes, the Association has developed into the second largest bilateral business agglomeration in Georgia over the last ten years, achieving a more than tenfold increase in the number of memberships. DWV also represents the world´s third biggest trade fair company Messe Frankfurt and Senior Expert Service, an internationally highly respected provider of distinguished experts to companies and institutions in Georgia. DWV has facilitated various major German investments into Georgia and serves thousands of addressees all over the world with information about

business opportunities with Georgia each year.

The German Ambassador to Georgia, Dr. Heike Peitsch, acknowledged the valuable dedication of many DWV members and the extensive network of the German Business Association. The event

was sponsored by HANSA-FLEX Georgia, Insta, KNAUF and HeidelbergCement Caucasus, as well as Arvato BERTELSMANN, BARTH+CO SPEDITION, CAPAROL Georgia, IVERMEDI, Lufthansa, Messe Frankfurt, Orient-Logic and Unimedi. It was supported by

Sparkassenstiftung and Schuchmann Wines Georgia. The economic development agency of the Federal Republic of Germany, Germany Trade & Invest (GTAI), distributed specific analyses about the Georgian economy and its business sectors.

10

BUSINESS

GEORGIA TODAY

DECEMBER 12 - 14, 2017

Official Opening Event of NEW YORKER’s 3rd Store, Now in the Heart of the City at Galleria Tbilisi

ADVERTORIAL

O

n December 23 at 6 PM, NEW YORKER will hold a public official opening ceremony of its third Georgia-based store, now at Galleria Tbilisi.

Join them for a delightful evening hosted by actress Ninutsa Makashvili, and Zura Balanchivadze, finalist of Georgia’s Got Talent.

To celebrate the occasion, and on this

day only, a 20% discount on NEW YORKER’s full collection will be offered to guests. Don’t miss your chance to get into the Christmas spirit and buy something new for your wardrobe with NEW YORKER’s new trends, special offers and surprises.

NEW YORKER is a German clothing production company which has been constantly expanding its business since 1971. It has 1000 stores in 40 countries and the opening of its third store in Tbilisi marks its fifth year on the Georgian market.

NEW YORKER is a youth-targeted

brand. While producing models, the company always takes the customers' interests into consideration to create readily available and good-quality products. It also creates trends in the manufacture of young women's and men's clothing, shoes and accessories.

The opening event guarantees to interest and entertain all who come!

Join us at the new trendy shop in the center of the city.

Get their first to find the newest trend for the weekend!

NEW YORKER – Dress for the moment!

BUSINESS

GEORGIA TODAY DECEMBER 12 - 14, 2017

11

Winter Wine Events at Poliphonia Restaurant Hosted by John Wurdeman On A.I. & Building Success: The First Georgian to Graduate Harvard EXCLUSIVE INTERVIEW BY TOM DAY

A

rchil Cheishvili is the first ever Georgian to graduate from America’s prestigious Harvard University. Since then, he has been working at the largest hedge fund in the world - Bridgewater Associates and is CEO of his own company ‘Palatine’, which develops next-generation A.I. technology. The company gathers data about employees through peer-to-peer employee feedback and polls and then predicts their future performance. GEORGIA TODAY met with him this weekend to talk about getting into and studying at Harvard, his company and his thoughts on the future.

HOW DID YOUR LIFE IN GEORGIA LEAD TO STUDYING AT HARVARD? In elementary school, some people want to become police officers, doctors or astronauts, but I dreamed about one thing: business, business, business! I wanted to create a global company that would reshape the world. I wanted to have an impact on people’s lives. I realized that a good education would help me to get there and started researching schools in America and, with the help of God, family, teachers and friends, I ended up going to Harvard. My class was very competitive, I remember losing the college president election twice before winning it. Losing those elections gave me a burning desire to become 1% better every single day.

HOW DID YOU LEARN A SUFFICIENT LEVEL OF ENGLISH TO PREPARE FOR STUDY IN AMERICA? Languages have never been my strong point. It took me many years and countless hours to study English. To do well at my American university entrance exams, I had to focus on developing my reading and writing abilities. I learned how to read and comprehend one page of material in under 15 seconds, and learned how to write long essays in less than 30 minutes. However, I was didn’t have a lot of practice speaking, so, initially I had trouble speaking English.

HOW DID YOU FIND STUDYING IN A FOREIGN COUNTRY IN A DIFFERENT LANGUAGE AND DIFFERENT EDUCATION SYSTEM?

It read “enter to grow in wisdom”. When I graduated, I left through that same gate which [on the other side] read: “depart to serve better thy country and thy kind”. Harvard gave me the inspiration to use all the resources around me to create something meaningful.

N

atural Wines from the New World December 23 Natural wines from the New World, a creative tasting menu paired with wines from Chile, New Zealand, Australia, USA, and South Africa.

7PM 125 GEL per person

between Petiullant Natural, Prosecco, Champagne, and offer an eclectic selection of Georgian examples to taste.

7PM 130 GEL per person

Natural Sparkling Wines January 2 Kick off the New Year in style by comparing bubbles from around the world on “Bedoba”, the Georgian day of luck. Enjoy a tasting menu of local and foreign natural sparkling wines paired with specially created dishes by the Poliphonia kitchen exclusively for that event! We will discuss the differences

Magical Megrelian Wines February 24 Taste rare natural wines of Megrelia, hosted by Zaza Gagua, and Keti Ninidze. Tasting will involve mature wines together with premier tasting of the new juice, paired with rare Megrelian dishes and Megrelian folk songs.

7PM 95 GEL per person For reservations, contact: Magda Liparteliani +995 557637143 magdapoliphonia@gmail.com Facebook: Poliphonia

TELL US ABOUT YOUR COMPANY I’m working in a company called Palatine Analytics that develops next generation Artificial Intelligence technology. We’re planning to revolutionize the ‘people analytics’ field by building an intelligent software machine that is smart, unbiased, and which can synthesize millions of data points and predict the future. Currently, we have companies using our software around the world and have two offices: one in Boston and one in New York City. Our web-platform collects data about employees, providing feedback to fellow employees, goalsetting and completing weekly moral surveys. Then, our statistical models analyze data and provide insights regarding the employees’ present, past and future performance; 75% of times, we predict this accurately.

WHAT ARE YOUR THOUGHTS ON THE FUTURE OF YOUR BUSINESS? We would like to create A.I. that is so smart, it can predict employees’ future performance accurately 90% of the time or more, making it the employees’ personal coach which assists them in their daily work. This will result in smarter and fairer promotions, whilst helping employees to reach their full potential. We envision a world where promotions and terminations are made accurately by a machine that is intelligent, fair and unbias.

WHAT ONE PIECE OF ADVICE WOULD YOU GIVE TO ACHIEVE SUCH A HIGH LEVEL IN BUSINESS? In order to achieve a high level of success in the business world, you should set ambitious goals, realize the mistakes you are making and don’t accept them. Understand what the root causes of those mistakes are, come up with a way of fixing them, and have the discipline to work through them.

Dealing with the weaknesses will be tough, but it’s the only way to truly succeed. The burning desire to achieve your goals is a necessary prerequisite for being able to execute your plan.

The first month was challenging and I had no idea how well I would do on the mid-term exams, though I was preparing for them day and night. I recall telling my two brothers that if I continued this way, then I would probably be seeing them a lot earlier than anticipated! It was hard to get used to the American education system. However, after I did, I overcame barriers and started to love it.

I recall my first day at Harvard: I walked through the gate which has a message inscribed at the top.

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