Issue #1030 Business

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Issue no: 1030/120

• MARCH 13 - 15, 2018

• PUBLISHED TWICE WEEKLY

PRICE: GEL 2.50

In this week’s issue...

Georgian PM's Appeal to Russia Causes Diverse Reactions in Tbilisi NEWS PAGE 3

Market Highlights from the Real Estate Market Laboratory

FOCUS

ISET PAGE 4

ON INT'L RELATIONS Georgia spends the week strengthening global contacts

PAGE 2-3, 5-6

Tbilisi City Hall to Renovate Botanical Garden

BY THEA MORRISON

Anaklia Deep Sea Port Terminal Operator SSA Marine’s Vice President Bob Watters Had a Business Visit in Georgia BUSINESS PAGE 7

Georgia, Azerbaijan Sign Bilateral Cooperation Plan 2018

T

bilisi City Hall is to renovate one of the most famous tourist attractions in the capital – the Botanical Garden.

The Tsavkisistskali Gorge Development Project, which envisages arrangement of adventure routes, cycling and hiking trails, was presented by Tbilisi Mayor Kakha Kaladze.

The Mayor stated the renovations, including the setting up of a visitors' center, will help to attract more tourists to the capital. The Tsavkisistskali River gorge is partly is located in both the National Botanical Garden of Georgia and the Abanotubani (bath) district in Old Tbilisi.

Kaladze believes the Botanical Garden has a lot of potential which should be maximally used for the promotion of tourism in the capital.

Continued on page 2

BUSINESS PAGE 8

Georgian Literature to be Presented in Run-Up to Frankfurt Book Fair SOCIETY PAGE 10

Georgian President in Washington POLITICS PAGE 11 Prepared for Georgia Today Business by

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NEWS

GEORGIA TODAY

MARCH 13 - 15, 2018

IMF Lists Georgia’s Tax Reform Among 5 Best Worldwide

Alyiev: Azerbaijan is Georgia's Top Investor

BY THEA MORRISON

A

zerbaijan’s President Ilham Aliyev says Azerbaijan has been Georgia’s top investor since 2012 and recognizes the rich investment climate in Georgia.

Alyiev made the statement at the meeting with the Prime Minister of Georgia Giorgi Kvirikashvili in Baku, on March 12.

“Trade turnover between Georgia and Azerbaijan is growing every year and the cooperation between our countries is advancing,” Alyiev told Kvirikashvili.

The President of Azerbaijan also underlined the importance of the Prime Minister's visit and high level bilateral relations between the countries.

“I am sure your visit will contribute to the development of Georgia-Azerbaijan relations. We successfully cooperate in many different fields,” Ayliev added.

He also highlighted that Georgia and Azerbaijan are cooperating in regional projects like the TransAnatolian Natural Gas Pipeline (TANAP) and BakuTbilisi-Kars (BTK) railway project, opened in October.

“This year TANAP's realization will take our cooperation to a higher level. Our relationship is not only on a regional but also on a global level, and our success is further strengthened by our friendship and brotherhood,” Alyiev stated.

The Georgian PM thanked the President for his warm welcome.

“We are very happy that economic relations between our countries are on the path to prosperity. Last year there was a significant increase in bilateral trade-economic relations. Azerbaijan is the first investment partner of Georgia and, according to statistical data, Azerbaijan is also in first place by the number of tourists,” he said.

Kvirikashvili congratulated Alyiev on the 100th anniversary of the announcement of the first republic.

Georgian PM arrived in Baku on Monday. An official welcoming ceremony was held at Heydar Aliyev International Airport in Baku, with the national anthems of Georgia and Azerbaijan performed. Prime Minister Giorgi Kvirikashvili was greeted by First Deputy Prime Minister of the Republic of Azerbaijan Yaqub Eyyubov.

Kvirikashvili will also meet his Azerbaijani counterpart Artur Rasizade, followed by wider-format negotiations between members of the two countries' governments.

BY BENJAMIN MUSIC

T

he International Monetary Fund has praised Georgia’s tax reform in its new report Balancing Act: Managing the Public Purse. It says it can serve as an impressive exemplar of successful tax reform implementation for other countries.

The report evaluates tax reforms in low-income and emerging market economies between the years 2004 to 2015, with it listing the largest revenue gains after reforms have been implemented. The other four countries are Cambodia, Guyana, Liberia, and Ukraine.

Bernardin Akitoby, author of the IMF report notes, “we focus here mainly on Georgia. By analyzing what worked in that country, we can draw lessons for what strategies other countries should consider.”

He pinpoints Georgia’s 2004 tax reform as the main reason for this evaluation, as it simplified the tax system through the reduction and removal of low and superfluous local tax-rates generating only small revenues.

The ‘E-Government’ has been another important measure implemented by the Georgian government, allowing citizens to pay taxes more effectively and decreasing corruption opportunities.

The report highlights how “the improvement in the country’s ability to mobilize revenue between 2004 and 2011 is all the more impressive given the sharp reduction in tax rates.”

One example can be found in the reduction and removal of the social security contribution tax.

Initially reduced from 33% to 20%, it was eventually eliminated. The tax reform resulted in a situation where only 7 out of the initial 21 taxes remained.

Some tax-rates, however, experienced an increase through the reforms, such as the former progressive personal income tax. Previously ranging between 12-20%, it was replaced by a flat rate of 20%.

Similarly, the corporate income tax was put at 15%, while the VAT tax rate was reduced from 20 to 18%.

Despite tax removals, the reason for the revenue increase was the implementation of a broader tax base coupled with stricter enforcement and compliance laws.

Occupants Release Two Georgians Detained with Tatunashvili

BY THEA MORRISON

T

he de facto regime of Georgia’s Russian-backed, occupied Tskhinvali region (“South Ossetia”) have released two Georgian citizens, Levan Kutashvili and Ioseb Pavliashvili, who were kidnapped alongside Archil Tatunashvili, who died in unclear circumstances during his detention.

The two men left occupied Akhalgori late on March 11, after spending 18 days there.

Georgia’s Ministry of Internal Affairs (MIA) reports that the released men show no signs of having been tortured.

Deputy Interior Minister, Kakhaber Sabanadze, Minister of Refugees, Sozar Subari, and Reconciliation and Civic Equality Minister, Ketevan Tsikhelashvili, met Kutashvili and Pavliashvili in the Mtskheta-Mtianeti police department.

Sabanadze says the Georgian side has launched an investigation under articles 108 and 143.

“We are actively working to transfer Tatunashvili’s body from the occupied territory,” the Deputy

Interior Minister stated.

According to Subari, the released men will return to their families. He added that there is no news regarding Tatunashvili.

Archil Tatunashvili, Levan Kutashvili and Ioseb Pavliashvili were detained in occupied Akhalgori on February 22. The next day it was reported that Tatunashvili had died. Official Tbilisi has been demanding the handover of Tatunashvili’s body since then, however, the de facto authorities claim they need to carry out forensic expertise.

Tbilisi City Hall to Renovate Botanical Garden Continued from page 1 “After the implementation of the project, the botanical garden will have an alternative entrance with a parking area. Bicycle lanes will also be laid, giving cyclists a four-kilometer track running along a beautiful gorge in the center of the city. I am sure many people will be happy with this project,” he stated.

The mayor added the project will be wholly funded by the Cartu Charity Foundation, established by tycoon Bidzina Ivanishvili, founder of the ruling Georgian Dream party and former Prime Minister of Georgia.

“The main and most important thing is that this is a gift from the Cartu Foundation for which I would like to thank Bidzina Ivanishvili,” said Kaladze.

According to Nikoloz Chkhetiani, Chair of the Cartu Bank Charity Foundation, the foundation has already implemented several projects in the Botanical Garden.

“Cartu Foundation has been providing financial support for the Tbilisi Botanical Garden for the last 20 years...Implementation of this project will increase the tourism potential of the garden and the income gained from it,” said Chkhetiani.

Arranging an adventure route in Tsavkisistskali Gorge and utilization of its potential is among the recommendations of international experts, envisaged in the Botanical Garden Development Strategy Plan.

At present, the Botanical Garden covers 97 hectares, part of of which is the Tsavkisistskali Gorge.

NEWS

GEORGIA TODAY MARCH 13 - 15, 2018

3

Georgian PM's Appeal to Russia Causes Diverse Reactions in Tbilisi

BY THEA MORRISON

S

hameful and cynical - is how some of the Georgian opposition parties and Non-Governmental Organizations (NGOs) spoke of Georgian Prime Minister Giorgi Kvirikashvili’s appeal to the Russian authorities.

The Georgian PM’s address reads that Moscow's recognition of the independence of Georgia’s two breakaway regions of Abkhazia and South Ossetia (Tskhinvali) has brought to a deadlock all prospects of possible normal relations between Georgia and Russia.

Kvirikashvili reminded the Kremlin that the coming August marks the 10th anniversary of the August 2008 War, after which Georgia cut all diplomatic ties with Russia for backing the two separatist regions and recognizing them as independent states.

“Today, we are facing a choice: meet this anniversary with mutual accusations and harsh statements, of which there has certainly been no lack throughout these years, or take sensible steps, even small, to lead our relations out of this vicious circle,” the letter reads.

Kvirikashvili also underlined that Georgia is ready for direct dialogue with the Abkhazians and Ossetians, noting that a constructive approach from the Russian side would be welcomed in this context.

The main reason for the PM’s appeal was the tragic incident in occupied Tskhinvali, which saw a Georgian man,

Archil Tatunashvili dying in unclear circumstances two weeks ago.

“Tatunashvili’s body has yet to be handed to his family, despite much effort to that effect from the Government of Georgia, the Catholicos-Patriarch, and the international community,” the letter reads, adding that this undermines the prospects of regulating Georgia-Russia relations.

“I urge the leadership of the Russian Federation to take joint steps to resolve this complicated situation, while fully embracing our responsibility to the present and future generations,” the PM added.

The United National Movement (UNM) opposition believes that Kvirikashvili should not have had such a “calm and constructive” tone in his letter to the occupant neighbor.

They think the idea of the appeal belongs to tycoon Bidzina Ivanishvili, Georgia’s former Prime Minister and the founder of the ruling Georgian Dream (GD) party, who is often accused of serving the Kremlin’s interests.

“When we are refused the opportunity to have our citizen’s [Tatunashvili’s] body back, the PM is voicing Ivanishvili’s ideas that a policy of compromise is the only way to deal with Russia,” the UNM’s Salome Samadashvili stated.

Another parliamentary opposition party, European Georgia, also believes the PM’s statement was improper, claiming that “it will not bring any results.”

“The policy which this government has towards Russia has brought only negative results. I believe that sending such letters will not improve the situation or change Russian policy. All we

need is a long-term and consistent policy within and outside the country,” Giga Bokeria, a leader of European Georgia, stated.

However, a leader of Russia-affiliated Alliance of Patriots of Georgia (APG), Irma Inashvili, took Facebook to criticize all political forces which had slammed Kvirikashvili for his appeal.

“In the current situation, the appeal of the Prime Minister of Georgia to the Russian authorities is a crucial political step and a statement with very specific messages. Those who criticize Kvirikashvili for this statement are the enemies of our country!” Inashvili’s post reads.

The GD majority says the PM’s decision was a “wise step” aimed at defusing current tensions.

“This is a statement of a responsible leader. I believe this is an approach approved by the international commu-

nity,” Deputy Parliament Speaker, Gia Volsky said.

Meanwhile, Georgia’s Vice-Premier and the Minister of Foreign Affairs, Mikheil Janelidze, expressed hope that Russia will fulfill not only Georgia’s requirements but also the obligations undertaken before the international community.

The Russian Federation has yet to respond to Kvirikashvili’s appeal.

STATEMENT FROM THE PRIME MINISTER OF GEORGIA FOR THE RUSSIAN FEDERATION: “This coming August marks the 10th anniversary since the war of 2008. This dramatic event has made a tremendous mark on the Georgian people’s minds and Georgia-Russia relations.

“Diplomatic ties have been severed.

Moscow’s recognition of independence

of Abkhazia and the Tskhinvali Region has brought to a dead end all prospects of normal relations between our states.

“Today, we are facing a choice: meet this anniversary with mutual accusations and harsh statements, for which there certainly has been no lack throughout these years, or take sensible steps, even small, to lead our relations out of this vicious cycle.

“We have stated before, and we reiterate our interest in reaching tangible progress in the Geneva International Discussions, and I have reaffirmed my commitment to personal involvement to this end. We are also ready for a direct dialogue with the Abkhazians and the Ossetians, and a genuinely constructive approach from the Russian side would be welcome in this context. With political will in place, we believe it feasible to take other sensible steps as well.

“Unfortunately, we are facing a difficult reality today. Although we have restored bilateral trade and economic relations, a chain of tragic events continues. This undermines the prospects of regulating Georgia-Russia relations.

The latest tragic example is the death of our citizen, Archil Tatunashvili, in unclear circumstances in Tskhinvali, whose body has yet to be handed to his family, despite much effort from the Government of Georgia, the CatholicosPatriarch, and the international community.

“I urge the leadership of the Russian Federation to take joint steps and resolve this complicated situation, while fully embracing our responsibility to the present and future generations.”

4

BUSINESS

GEORGIA TODAY

MARCH 13 - 15, 2018

Market Highlights from the Real Estate Market Laboratory

I

n terms of sales, the Georgia real property market grew by 10.6% in 2017, in comparison with 2016.

An annual increase was observed in all quarters, with the highest jump in Q2, 14.2% (QoQ) and 20.0% (YoY).

TBS, with a 40.7% share in total sales in 2017, dominated the Georgia real property market. The TBS market was followed by Adjara, with 11.6%, and Kakheti, with 9.9% shares in Georgia sales. Adjara experienced the highest annual increase in sales number (34.1%). With an 84.3% share, real estate market growth in Adjara was mostly driven by an increase in transactions recorded in Batumi (32.4%).

In 2017, TBS real property sales grew by 15.6%, while overall the market outside TBS grew by only 7.5%. More than half of Georgia sales were registered in the three largest cities: TBS, BAT & KUT.

804 new buildings with total area of 1,244 thousand sq.m were completed in Tbilisi during 2017. The real property supply in Tbilisi grew with respect to number of buildings (+5 % YoY), but declined with respect to total area of buildings (-13.9% YoY).

For two consecutive years, the supply of properties increased in the 3rd quarter of each year.

Growth in total supply has been driven by a 12 % growth rate (YoY) in the sup-

ply of commercial buildings (179 units with total area of 411 k sq.m). 625 units with a total area of 832 K sq.m have also

For 2017, the TOP 3 regions by sales in Georgia were: TBS (39 801 units, 40.4%) Ajara (11 471 units, 11.6%) Kakheti (9 790 units, 9.9%) For 2017, the TOP 3 districts by sales in Tbilisi were: Saburtalo (9 995 units, 25.1%) Vake (7 282) units, 18.3%) Samgori (3 994 units, 9.9%)

REAL PROPERTY SUPPLY

been added to the residential property supply in Tbilisi.

RESIDENTIAL PROPERTY PRICES IGHLIGHTS In 2017, Sales Price Index (SPI) for residential properties mainly trended downward, with only a slight increase in Q4 17 (0.2% QoQ). Rent Price Index (RPI)

also moved downward after slight increase in Q2 2017 (2.2% QoQ).

During 2017, Average Sales Price (ASP) varied between USD 791and USD 866 per sq.m (quarter average), and Average Rental Price (ARP) was between USD 7.0 and USD 7.4 per sq.m (quarter average). After reaching the highest point in Q1 2017, both ASP and ARP have trended downward, except for Q4 2017.

Due to the new law requiring pricing of real estate in GEL, prices in local currency stabilized starting in Q3 2017, while prices in USD became more volatile, reflecting exchange rate fluctuations.

In 2017, the most expensive and cheapest districts of Tbilisi were, by ASP: Mtatsminda (USD 1,012) and Gldani (USD 535); by ARP: Mtatsminda (USD 8.5) and Gldani (USD 4.3) Compared to 2016, ASP declined in

10 Galaktion Street

almost all districts of Tbilisi, while ARP was more stable.

COMMERCIAL PROPERTY PRICES After a stable increase of SPI for three consequent quarters, a high point of 1.100 in Q2 2017 was reached, but it has been trending downward since. The largest decline was recorded in Q4, -16.4 % (QoQ) and -23.1% (YoY) Seemingly, RPI started to decline only after Q3 2017, reaching 1.020. The highest increase of RPI was recorded in Q3, 2017, at 7.4% (QoQ) and 10.8% (YoY).

During 2017, ASP varied between USD 1,032 and 1,074 per sq.m, and ARP between USD 9.4 and USD 10.4 per sq.m. Average ASP for commercial properties in 2017 declined by 3.2%, and dropped to an historical minimum of 1,032 USD per sq.m in Q4 2017.

Likewise, ARP in 2017 declined by 2.8%, and dropped to an historical minimum of 9.4 USD per sq.m in Q4 2017.

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

BUSINESS

GEORGIA TODAY MARCH 13 - 15, 2018

5

Can GeorgianRussian Relations Improve?

OP-ED BY EMIL AVDALIANI

R

ecent statistics showed that in January 2018, Russia became the biggest export partner of Georgia ($28,665 mln), while overall in trade balance, the country is currently second ($94 mln) only after Turkey ($112 mln) and slightly ahead of Azerbaijan – $91 mln. This is an interesting development: while tensions between the countries are high and the 10th anniversary of the Russo-Georgian military conflict is imminent, Moscow and Tbilisi, in fact, enjoy pretty intensive economic activity.

However, as will be shown, despite these positive economic trends, the relationship between the two countries will be difficult to improve as Tbilisi and Moscow share some fundamental differences in foreign policy.

Although the majority in Georgia regard Russia negatively, its geographic proximity to Georgia forces the latter to talk and have economic relations.

Georgia’s geographic position allows Tbilisi to be more active as a regional transit hub, and not be oriented towards one country (hypothetically Russia).

However, this also does not preclude

Georgia and Russia from talking to each other and fostering economic relations.

The non-existence of diplomatic relations as well as fundamental differences regarding the Abkhazia and South Ossetia regions would not stop the Georgian government from creating closer economic contacts with Russian businesses.

It is a fact that Russia is Georgia’s neighbor, and it would be impossible not to talk to Moscow on a permanent basis.

To that end, the current Georgian leadership is doing so rather cleverly. The recent statement from the Georgian Prime Minister Giorgi Kvirikashvili on breaking the deadlock in bilateral relations between the two countries is based on the reality that you cannot avoid Russia in this region.

It could be argued that Georgia is pursuing a clever strategy of positioning itself not as an anti-Russian state, but also not abandoning its pro-western course. The ideal scenario for Tbilisi would be when all the neighboring countries have a stake in the security of Georgia. In addition, large players, such as China with its Belt and Road Initiative, the EU, the US and others would also be involved in the economics of the country. This might create a certain balance in the region.

Countries might be enemies, but geo-

politics can at times dictate otherwise.

Governments may be attacking each other diplomatically, but economic relations can only thrive. In the modern world, where economic competition is intense, and the globe is becoming an increasingly interconnected place, rarely do neighboring countries negate any economic cooperation because it is at times impossible to do so.

Economic interconnectedness through supply chains eventually breaks down large geographic and man-made barriers like those, for instance, created between the Tskhinvali region (“South Ossetia”) and the rest of Georgia. Russia-Georgia economic cooperation proves that economic progress tramples geopolitics. In other words, the economic interconnectedness through the creation of supply chains and corridors (via new railways, sea ports and pipelines) could replace geopolitics as a primary driver of relations between the countries.

Then, what is the Future of GeorgianRussian Relations? How far can possible cooperation go? Is Georgia simply being forced by the realities of the geopolitical situation in the Caucasus to become more open to Russia, or it is a continuation of the policy the current Georgian government has pursued throughout

the past several years: pro-Western foreign policy and maintaining contacts with Russia? Too large questions to answer for the moment, but it nevertheless shows that Tbilisi and Moscow have much to talk about. Both could cooperate in the security realms as well as deepening economic ties.

At the same time, this potential limited cooperation would not mean a rosy picture for the future of Russia-Georgia relations. Moscow is very unlikely to give up on its policy towards South Ossetia and Abkhazia, while Tbilisi will remain principled towards its territorial integrity. Moreover, Russia has issues

with Georgia’s foreign policy moves, its pro-western course, which would mean that Russia’s geopolitical aims in the Caucasus are in danger.

These fundamental problems will prevent any significant improvement, but the two states could talk over at least some differences in order to decrease tensions. This brings us back to the Georgian PM’s statement on reaching a breakthrough in relations with Russia. Indeed, a “breakthrough” here does not signify anything overly important, it just emphasizes the fact that there exists the need for engaged Georgia-Russia talks.

Cozy 2-room apartment (1 bedroom) for rent in M2 near Old Hippodrome park. Elite, quiet and secure complex, located close to Delisi Metro station and Medical University (Saburtalo).

The apartment is located on the 4th floor, and comes fully furnished. It has a balcony, heating system, AC and Internet.

The apartment is PWD adapted, under 24 hrs Security. The M2 complex has a big courtyard with a safe children's playground and small stadium. Parking is available in the courtyard.

Price: 1600 GEL (or 600 USD p/m). TEL (+995) 593 92 10 86.

6

BUSINESS

GEORGIA TODAY

MARCH 13 - 15, 2018

Kyiv Begins Inventory & Seizure of Gazprom Property

BY DIMITRI DOLABERIDZE

K

yiv, Ukraine, has begun inventorying and seizing the property of Gazprom for the company’s allegedly failing to comply with the Stockholm arbitration and violating the antimonopoly legislation of Ukraine.

Ukraine’s Prime Minister Vladimir Groisman released a statement to this effect on the website of the Government of Ukraine. In addition, he ordered Naftogaz and the Ministry of Justice to investigate the seizure of assets of the Russian company “around the world.”

Russian Energy Minister Alexander Novak and European Commissioner for Energy Affairs Maros Shefovich last week discussed Ukraine's intention to seize Gazprom property. Novak himself had previously told reporters that litigation between the Russian and Ukrainian concerns is based on commercial obligations, so they will decide on supplies. In this regard, Novak found that there is no need for a tripartite meeting.

The Government of Ukraine chose to begin seizure of assets after Gazprom refused to begin deliveries to Naftogaz

on March 1. Yet it is impossible to legally coordinate this procedure without a direct meeting of the parties, which has

not yet happened. The Deputy Chairman of the Board of the Russian company, Alexander Medvedev, drew atten-

tion to this, and also said that in early March he had offered Naftogaz a date for the meeting to discuss the conditions for the commencement of deliveries and to review the decision of the arbitrators.

Ukraine needs to settle the issue of gas prices in order to get IMF approval for the next tranche of financial assistance, but the government has yet to reach a compromise on the issue.

“The price of gas for the population should be the same as that paid by importers. Otherwise, the market has a backlog for corruption: you can buy gas at a lower price for the household, and then sell it at a higher price for the industry, pocketing the difference,” said the head of the International Monetary Fund (IMF) in Ukraine, Jost Ljungman in an interview with the magazine ‘New Time.’

“The starting point is to sell gas at a market price in order to use the additional proceeds from the sale to wealthy households to strengthen the system of public subsidies,” Ljungman explained.

“It is important to make sure that the beneficiaries are secured.”

Wall Street Journal Azerbaijan, Georgia Work Together to Strengthen Start-ups Writes about Georgia's NAPR

BY BENJAMIN MUSIC

T

BY NIA PATARAIA

N

ew York’s Wall Street Journal published an article on the National Agency of Public Registry of Georgia, among other related subjects, dedicated to the development of technology.

The article, published by Wall Street Journal on March 6, reviews the National Agency of Public Registry, the implementation of blockade technology and the projects that are set to use the blockade technology in real estate deals in Sweden and the United States in future.

Over the last year, the National Agency of Public Registry has used Blockchain technology to store information on real estate, including purchase / sale of property or mortgage registration.

The next goal of the Agency is to introduce smart contracts that will ensure real estate transactions in digital format.

“This gives us the opportunity to offer the service to citizens abroad,” said Papuna Ugrekhelidze, Chairman of the National Agency of Public Registry. “The country has recently adopted a law on electronic signatures and is working on other regulations related to blocking technology,” he was quoted as saying in the Wall Street Journal.

he largest start-up initiatives in Georgia and Azerbaijan have signed a Memorandum of Cooperation to promote the exchange of knowledge and technology needed for successful business ideas.

Baku Business Factory (BBF) Director, Alovsat Muslumov, and Georgia’s Innovation and Technology Agency Chairman, Giorgi Zviadadze, aim to accelerate the process for start-ups to become profitable. The memorandum focuses on closer cooperation in non-oil sectors by directing attention to rising industries such as ICT, but also pushing collaboration in the sectors of science, engineering and agriculture.

Start-ups are always on the lookout for potential investors to provide the necessary funding to boost new innovations, thus, promoting forums and conventions to attract “Angel” or “Venture” investors need to be more commonplace. Muslumov and Zviadadze understand the importance of a strong market to sell future products and agreed to push for bilateral entry liberalizations for startup companies.

The agreement aims to foster not only cooperation, but sees the organization of numerous events and meetings for rising businesses of both countries to expand their network and disseminate their ideas.

BBF Director Muslumov emphasized the importance of foreign partners on the scene: “We have done a lot of work in this direction. Since the last quarter of 2017, we’ve had meetings with several international organizations, representations, companies and embassies. The main topic of our discussions is benefiting our start-ups from local and foreign sources of missions based in our country, experience-sharing, and benefiting startups while travelling to Azerbaijan with opportunities created in the BBF.” Well-known Azerbaijani businessman, Anar Alizade, founder of the Union Grand Energy PTE Group of Companies, established the Baku Business Factory in May 2015 with the goal of creating a co-working and incubation space for business ideas and start-ups. Its mission is “to develop business-thinking of young peo-

ple with business ideas and provide them with a financial base in order to form new business skills in our country.” Alizade believes in the importance of social responsibility and is trying to spur a young and dynamic start-up scene in Baku, which otherwise lacks the support network needed to generate a profitable business.

Georgia’s Innovation and Technology Agency is incorporated with the Ministry of Economy and Sustainable Development and was established in 2014. It focuses not only on support of the rising start-up scene but runs elaborated strategies to commercialize innovations and technology stemming from all sectors in Georgia’s economy. Over the past years, GITA’s strategies have involved the setting up of infrastructure which also facilitates the dissemination of venture capital and research projects.

BUSINESS

GEORGIA TODAY MARCH 13 - 15, 2018

7

Anaklia Deep Sea Port Terminal Operator SSA Marine’s Vice President Bob Watters Had a Business Visit in Georgia INTERVIEW BY NIA PATARAIA

O

ne of the largest operators in the world, the SSA Marine operates on more than 250 strategic terminals and serves 27.2 million containers annually on five continents. The modern, innovative development of its design, operation and projects are motivators by which company has established itself in the world. SSA marine was chosen and appointed as a container terminal operator for the Anaklia port due to its significant experience as one of the largest terminal operators in the world. The agreement provides SSA Marine with operating rights to the port’s container terminal for the next 20 years.

Bob Watters, Vice President of Port Terminal Operator SSA Marine, visited Georgia to discuss matters related to the construction of the Anaklia port. Representative of the SSA Marine held negotiations with representatives of government agencies and "Anaklia Development Consortium". Watters held meetings with the Consortium members, the Minister of Infrastructure Zurab Alavidze and the representatives of the Ministry.

The technical and legal issues of construction, operation of Anaklia Deep Sea Port and future cooperation plans were discussed at the meeting.

Vice President Bob Watters shortly answered some questions related to Anaklia Port and its future development.

HOW WOULD YOU DESCRIBE YOUR VISIT IN GEORGIA AND WHAT WAS THE MAIN PURPOSE OF IT? We are continually to work with on behalf of ADC with the government, to work out some details about the project and also to work on the engineering

for the designing of the facility.

WHAT IS SSA MARINE’S CONTRIBUTION TO THIS PROJECT? We are both equally participants as well as we are terminal operators for the facility. Furthermore we are strategic investors. Here we operate and we see very good commercial opportunities.

Within the SSA Marine Operation, it will be responsible for the full cycle of transportation-carrying out of the customs duty starting from the entry of the ves-

sel. After we did our analysis, we saw that there is a very strong market and for us it is very appealing for business growth as well as for drawing foreign direct investment. This project is very ambitious because of its scale: nine different phases over time.The goal is to grow from 8 million TEU unit to 100 million twenty-foot equivalent unit and in my opinion this is very enthusiastic and progressive in a long run. I think this can be achieved over the time-frame that it’s looking at. But eventually the growth we are talking about is very tense.

WHAT IS YOUR GENERAL OPINION ABOUT SEZ AND HOW DO YOU SEE ITS DEVELOPMENT? I think special economic zones are critical to a project like this. I think the opportunity that we have here in Georgia with free trading reliance with both China and the EU is an ideal situation for SEZ and what that will do is generate more volume for the port, greater economy and more jobs for Georgia. It is really a critical element in making the whole project successful for enhanc-

ing the entire corridor. By which I mean new maritime corridor between China and Europe and this will be a great contribution to national economic growth.

Bob Watters also held negotiations with the "Anaklia Development Consortium" in relation to the professions that will be prompted immediately after the launch of the port. The qualification training of Particularly local population of Samegrelo in demanding professions is planned within the framework of the Training Center "Anaklia Development Consortium".

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BUSINESS

GEORGIA TODAY

MARCH 13 - 15, 2018

Georgia, Azerbaijan Sign Bilateral Cooperation Plan 2018

BY THEA MORRISON

T

he Azerbaijani and Georgian Defense Ministries have signed a plan of bilateral cooperation for 2018 in Baku.

The agreement was signed by Georgia’s Defense Minister, Levan Izoria and his Azerbaijani college, Zakir Hasanov.

The sides exchanged views on the prospects for cooperation in military, military-technical, militaryeducational, military-medical spheres, holding of joint military exercises, working meetings and issues of mutual interest.

Stressing the vital role of the friendly relations between the Azerbaijani and Georgian presidents in the development of ties between the two countries, Izoria emphasized the importance of such

meetings in terms of expanding cooperation.

Noting that the two countries cooperate in the military sphere by ensuring the security of regional economic projects, programs implemented both bilaterally and within NATO, as well as in the Azerbaijan-Turkey-Georgia military format, Hasanov also stressed the need to expand cooperation.

Izoria also met Azerbaijani President Ilham Aliyev.

The sides expressed mutual support of the sovereignty and territorial integrity of the two states and discussed cooperation, as well as regional issues.

Aliyev hailed the long-term successful development of bilateral cooperation in a variety of fields, including military sphere, adding that Izoria`s visit to Azerbaijan created a good opportunity for discussing cooperation prospects in this area.

Touching upon Georgia-Azerbaijan-Turkey cooperation, the Georgian Minister described it as a notable factor in strengthening regional stability.

One Belt, One Road: Kazakhstan Expands Its Transit Potential for Europe

BY DIMITRI DOLABERIDZE

L

ocated on the Eurasian continent, Kazakhstan is not only an important stronghold of the economic belt of the Silk Road, but also an important member of the Eurasian Economic Union. China and Kazakhstan are inextricably linked. Since they established relations of comprehensive strategic partnership, business cooperation in all areas has achieved fruitful results. In short, Kazakhstan is becoming a model for the construction of the ‘One Belt, One Road’ initiative.

The Silk Road is a common historical heritage of China, Kazakhstan and all countries along its path.

Four years ago, Chairman of the People's Republic of China Xi Jinping, in Kazakhstan for the first time, announced to the world the grandiose concept of joint construction of the ‘One Belt, One Road.’

Kazakhstan actively responded to this and is fast becoming a key link in one of the most ambitious initiatives in the world.

Last Wednesday, the port of Amsterdam hosted a solemn ceremony of sending the first-ever freight train from the Netherlands to China. The freight train, owned by Dutch Transport and Nunner Logistics, will travel 11,000 kilometers in 16 days and deliver cargo to the city of Yiwu in eastern China.

“Almost 3,000 kilometers of that journey will see the train traveling through the territory of Kazakhstan,” Kazakhstan's Ambassador to the Netherlands, Magzhan Ilyassov, said.

The train, with 41 freight containers, will deliver equipment, mineral fertilizers, pharmaceuticals, medical products, optical devices and technical equipment to China.

Three trains will be sent from Amsterdam to Yiwu each week, and by 2020, the total number of trains sent annually from the EU to the PRC is expected to reach 5,000.

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SOCIETY

GEORGIA TODAY

MARCH 13 - 15, 2018

Author Spotlights Georgia through British Eyes at London Book Launch

BY ROBERT EDGAR, LONDON

K

atie is a prominent author, journalist and supermum.

She’s an expert in many things, including vampires!

- was Ambassador Tamar Beruchashvili’s affectionate introduction to Katie Ruth Davies’s talk at the cozy, semi-detached Georgian Embassy to the United Kingdom in London.

Our editor has embarked on a frenetic tour of the United Kingdom in order to promote her new Young Adult fiction book – Angel - to the UK market, and to stimulate interest in Georgia, not just as a holiday destination, but its history, institutions, and culture.

Her engaging talk on the country was a whistle-stop overview illustrated with photographs by Katie and GEORGIA TODAY’s Tony Hanmer. It came from a particularly authoritative perspective, utilising a wealth of stories and anecdotes amassed over eleven years by someone with her finger on the pulse of the country. Her work as Editor-in-Chief of this newspaper, author, editor of Where. ge, and English teacher ensures that she is in a better position than most to understand how the diversity in climate, religion and culture cohere into what is a unified and proud nation.

She packed a lot of information into a 40-minute presentation, managing to touch on ancient history, citing Skull 5, the myth of the Golden Fleece, and St Nino who brought Christianity to the country, and praised the tolerance of modern-day Georgia by using a square kilometer in Tbilisi containing a church, a synagogue, and a mosque as a piquant example.

The most effective part of her talk overall was a distillation of conversations with taxi drivers who - by and large -

cannot seem to fathom why a Brit would fall in love with Georgia, especially given the widely-held (and incorrect) belief that “the streets are paved with gold” in the UK. Katie gave examples of the food (“a minute on the lips, a lifetime on the hips”), the nightlife, and the outstanding beauty of the country as being just a few of many rebuttals to her taxi-driving archetype.

There was criticism too, with reference to the poverty in rural areas and the backstreets of the capital lying just behind

its glittering façade. Factories are being built, but not at a sufficient rate, and both the Tbilisi traffic and pollution, we were told, are typical bugbears for locals and visitors alike. These were not the grumblings of a spoiled tourist; the criticisms were constructive and in a spirit of civil engagement from someone who truly does feel that her home is Georgia. Katie’s salient point was that economic progress has to be – and is being - made, and more alignment with the West is positive, but prosperity should not come - Macbethlike - through sacrifice of the Georgian soul.

Trying to sell a country, whilst also selling your own young adult novel is quite a tall order but Angel (book one of the new Dark Wings series) is the first of Katie’s books to be set in Georgia and is written specifically for her Georgian fans. There is a glut of translated literature available but very little written specifically with Georgian teens in mind; as Katie said, “they’re reading American, British, French and German books which are very good, but they don’t have anything that they can relate to their own experience.”

So what’s it about? The story concerns Eliso, a 16 year old Georgian girl who was ditched by her British mother and raised by a distant Georgian father and a driver-cum-bodyguard. She has a guardian angel, who only she can see and all

is well until a family of demons come to town and “everything gets turned upsidedown”. As well as a supernatural tale in the manner of her other books, Angel features a number of familiar vignettes of Georgian life.

Whilst it is targeted at Georgians, the book works to introduce foreign teenagers to the fascinating Caucasian country.

This, alas, is necessary; Katie made the point that most Westerners tend to mistake it for the American state whose name it shares, and I myself have had people ask how I came to be contributing to a Russian newspaper (yeesh!).

To that end, an event at Primrose Hill Community Library the following evening worked very well. Katie gave a pared down version of her talk at the embassy, before being interviewed by a (British) teenager who had read an advance copy of the book. She was asked pertinent questions about her career as an author, her inspiration and her technique, before the floor was opened to questions from the rapt audience.

Katie is continuing her tour of the UK and if these first two events are anything to go by, then I shouldn’t be surprised if Wizz Air notices a sharp rise in passengers travelling from London to Kutaisi, all clutching well-thumbed copies of this first book in the much-awaited new series

by Georgia’s leading Young Adult fiction author.

Georgian Literature to BUSINESS be Presented in Run-Up TBC, ISET Discuss Capital Market to Frankfurt Book Fair Development at ‘Reformer’

BY TOM DAY

G

eorgia is to be the 2018 Guest of Honor at the Frankfurt Book Fair, which runs from 10 to 14 October, and in anticipation, the Caucasus nation has launched a program of literary events and activities in German-speaking countries.

A total of 29 nations, including Germany, Austria and Switzerland, will welcome some of the most prestigious Georgian authors to meet book-lovers and to present their works at around 450 literary events.

Alongside the events and activities, Georgian literature will be showcased at 20 international festivals preluding the Book Fair. Music, film and art will be exhibited at these festivals, too. During March, Georgian writers will travel to seven cities with 22 translated titles being presented in the German language.

The first event of this program took place in January in Georgia, when the capital hosted around 15 international publishers, more than half from Germany, for a literary forum.

This was followed by a Georgian author being the first in history to pitch a book in the literary branch of the Berlin Film Festival in February.

Recently, a residency program was set up to house Georgian-to-German translators at the Writers’ House of Georgia as part of the program.

Three of them have been using the residency to bring three well-known Georgian works into their own language.

The next event in the program is a presentation to be held at the March Book Fair in Leipzig about the country’s participation in the Frankfurt book Fair and will be led by the Georgian National Book Center and the Ministry of Culture of Georgia. The event in Leipzig will see works by 23 Georgian writers presented.

BY NIA PATARAIA

O Image source: blogs.bodleian.ox.ac.uk

n March 12, the ISET research institute and TBC Capital hosted an event in the framework of the project ‘Reformer’ to discuss the development of the capital market.

Vice-President of the Georgian National Bank, Archil Mestvirishvili, attended the event alongside Deputy Minister of Finance, Nikoloz Gagua, Regional Director of European Bank for Reconstruction and Development (EBRD), Bruno Balvanera, and representatives of private sector and academic circles.

According to the National Bank's data, 67.7% of the Capital Market Reform Plan approved in 2016 is now fulfilled. Last year, the index was 51%. Along with other important events during the last year, the rating agency Scope was added to the list of agencies recognized by the

National Bank as a trusted agency for National Securities Ratings. With the help of experts from the International Monetary Fund, a package of tax reforms has been developed to consider taxation of various financial instruments according to the best international practices.

The representative of the National Bank opened the meeting by presenting a short brief of the reforms, followed by ISET Economist Eric Livny, who reviewed the general economic situation in Georgia and ISET’s contribution to Georgia’s democracy.

“We need to be involved in how decisions are made, in monitoring the implementations of these decisions, and to be able to suggest improvements when possible,” he stated.

Deputy Minister of Finance Niko Gagua spoke about the importance of the reform, presenting the vision of the Ministry to the audience.

“The Ministry of Economy and the National Bank are actively working in

this regard. The development of the capital market is vital, and we see it as one of the highest potential tools Georgia has to be able to fulfil the function of regional hub,” Gagua said.

EBRD Regional Director of European Bank for Reconstruction and Development Bruno Balvanera spoke about the importance of transparency and capital development.

“In many countries, capital is not yet developed. In small countries like Georgia, this issue is especially well known.

Generally, capital market development is a difficult and ambitious process. The results should be expected in the longterm. For the proper development of this reform, it is necessary to coordinate between the government, the National Bank, donor organizations and others.”

‘Reformer’ is a project of the ISET research institute and is implemented with the support of G4G USAID, aimed at assessing the progress of economic reforms twice a year.

POLITICS

GEORGIA TODAY MARCH 13 - 15, 2018

11

Georgian President in Washington

BY BENJAMIN MUSIC

P

resident of Georgia Giorgi Margvelasvili has left Brussels to fly for a state visit to the United States. Most of his time will be spent in the US capital, Washington, D.C. Margvelashvili recently visited top diplomats in Brussels, including EU officials. His stay included a discussion on closer cooperation between Georgia and the EU as well as vital integration questions, including economic and social liberalizations.

He is expected to meet NATO top officials in Washington to discuss recent success in closer integration into NATO. Margvelashvili wants to foster the relationship between NATO and Georgia, highlighting Georgia’s Russian occupied territories. Russia is in control of roughly 20% of Georgia’s territory, a situation condemned heavily by the international community.

In Brussels, President Margevlashvili met with US Congressmen and Senators to discuss security

issues on a national and regional level. He held a meeting with the Secretary General of the North Atlantic Treaty Organization (NATO) Jens Stoltenberg, to discuss Georgia’s prospective integration to the Alliance, dynamics of the current cooperation and future plans.

At the meeting, Stoltenberg invited President Margvelashvili to NATO 2018 Brussels Summit.

Georgia will attend the Summit as an aspirant country and a valuable partner of the Alliance.

The US is concerned by the meddling of Russian

forces in the Caucasus region which is said to be driving a wedge between the different ethnic groups in Georgia, Azerbaijan, and Armenia.

Through the meetings in Washington, the Georgian President hopes that US politicians will raise their voice for Georgian security issues at the upcoming NATO summit.

Additionally, in Washington, representatives of the Atlantic Council, the National Democratic Institute (NDI) and the International Republican Institute (IRI) will give a public lecture at the US-

Georgia Partnership conference at Georgetown University, which the Georgian President is expected to attend, followed by a roundtable discussion at Hudson University. Margvelashvili is also expected to deliver a speech at the Heritage Foundation.

Besides the diplomatic appointments, he has reserved time to meet representatives of the Georgian diaspora in Washington.

The President is expected to return from the US on March 16.

Chocolate Alliances OP-ED BY ZAZA JGARKAVA

A

lthough another election awaiting us in autumn, and considering the fact that since 1990 there has never been an election is awaiting us in autumn, considering, we can hardly regard it simply as “another” because we have to admit that like the others, this one too will be crucial and decisive.

The election campaigns have yet to begin, benefits can already be seen and it is becoming increasingly clear who is with whom, who supports whom, and who is fed from which sources and how, though we can’t really apply this to the political parties themselves yet. The only way to foresee who will take which side and to which extent, is by considering the current regrouping of the media. Rustavi 2 and the United National Movement are yet again like an inseparable Twix bar: together, yet alone, just as they were 15 years ago. At that time too, during President Eduard Shevardnadze’s reign, all media was pro-government, while Rustavi 2 stood with the UNM at the other side of the barricades.

Despite this solitude, Rustavi 2 is such a “well-oiled colt” that it was still be able to attain a lot. The revolutionary atmosphere that proved a turning point in autumn 2003 was created precisely by this broadcaster. However, it is hard to foretell whether it will be able to trigger a revolutionary spark this time as well. If we use classics as a guidebook, then it all “depends”. For now, the “main television broadcaster” and the main opposition party are busy selecting a UNM presidential candidate.

Unlike the pro-governmental media, who paid attention to Mikheil Saakashvili’s call for unification of the oppositional front and agreed on a single presidential candidate – absurd.

Consider European Georgia, the division of the UNM, and its media channels Tabula, Prime Time, TV Pirveli, who actively promote the utopianism of unification, but also actively cover midterm elections in Khoni, where Gigi Ugulava, the leader of European Georgia, is running for the post. On its part, the Georgian Dream’s government appreciates the contribution and famous “constructive-

ness” of that party. Hence Mr. Ugulava, surrounded by his electorate, can be seen more and more often on the governmental media channels like Imedi, Georgian Public Broadcasting and TV Palitra. To put it simply, European Georgia refuses to take part in a unified reign against Ivanishvili and is satisfied with Ugulava’s mandate as an MP, apparently a prize which the GD government will award the latter by the end of April.

Like Tabula and Prime Time, TV-Obiektivi is also actively propagating the utopianism of the union of opposition. But the fact the channel belongs to the Alliance of Patriots means it demands not just the unification of the oppositional front, but a court trial of the UNM. The government’s media resources Imedi, GPB, Palitra and countless other informational agencies simultaneously and unanimously argue that unification of the opposition is impossible, especially around the UNM. NDI’s recent study, published in January, revealed that Georgian Dream is supported by 27% of the Georgian population, United National Movement by 10%, European Georgia by 3% and all other oppositional parties taken together by 7%. Obviously, the overall score of the opposition is quite behind than that of governmental supporters, but considering the army of the remaining 53%, it might be quite easy to fill out the difference.

The current political spectrum is significatly behind Georgian Dream in terms of financial, administrative or organizational resources, except for intellectual, which quite frankly is the only trump card of the opposition for the upcoming autumn battles. Hence, we can assume that in order to avoid losing a vote given to one of the oppositional candidates automatically, the opposition will most likely agree to choose a single candidate anyway.

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