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Issue no: 946/78
• MAY 16 - 18, 2017
• PUBLISHED TWICE WEEKLY
PRICE: GEL 2.50
In this week’s issue... China Increases Spending on the Silk Road
NEWS PAGE 2
Best Pedagogy for Georgia! ISET PAGE 4
FOCUS
ON CHINA
The deal is signed: let the tax-free trade begin!
PAGE 2
cnbc.com/GettyImages
Waving off the First Direct Flight from Tbilisi to London since 2013 BY KATIE RUTH DAVIES
World Bank Presents Trade in Transition, the Latest Economic Update for Europe & Central Asia PAGE 8
Retail FPI | Hard Times For Caffeine Lovers PAGE 9
T
he first Georgian Airways flight left Tbilisi for London Gatwick direct on Monday, the first direct flight from Tbilisi since British Midland ceased operations in Georgia in 2013. British Airways and its franchise partner British Mediterranean Airways (BMED) served the route between London Heathrow and Tbilisi until October 2007 when the business was bought by bmi British Midland. The latter continued to serve the route, offering services via Yerevan from October 2008 and then via Baku from March 2010, until its own sale to British Airways, who resurrected non-stop flights in October 2012 until the route ceased in March 2013. Continued on page 2 Source: tes.com
Natural Wines from the 8th Floor: Introducing Bina 37 SOCIETY PAGE 10
Winery Khareba Wins Gold Medal at Decanter Wine Awards SOCIETY PAGE 11 Prepared for Georgia Today Business by
Markets As of 12ͲMayͲ2017
STOCKS Bank of Georgia (BGEO LN) GHG (GHG LN) TBC Bank Group (TBCG LN)
COMMODITIES Crude Oil, Brent (US$/bbl) Gold Spot (US$/OZ)
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2
NEWS
GEORGIA TODAY
MAY 16 - 18, 2017
China Increases Spending on the Silk Road BY DIMITRI DOLABERIDZE
C
hina intends to allocate an additional 100 billion Yuan (about $14.5 billion) to the Silk Road Fund, said the President of China, Xi Jinping, at the recent Forum of Silk Road countries in Beijing. In addition, according to Jinping, China's Import and Export Bank is ready to allocate a targeted loan of 130 billion Yuan for the development of
the “One Belt - One Road” project. “Another 250 billion Yuan from the State Development Bank of China will go to support other projects of the new Silk Road,” he added. In 2013, China announced the new "One Belt - One Road" strategy for economic development aimed at creating infrastructure and establishing links between the countries of Eurasia. The idea of a new Silk Road is based on the example of the Great Silk Road, which in ancient times was one of the most important trade routes in the world.
Georgia, China Sign Free Trade Agreement BY THEA MORRISON
G
eorgia and China finalized free trade negotiations by signing the agreement on May 13 in Beijing, China. The agreement was signed by Giorgi Gakharia, Minister of Economy and Sustainable Development of Georgia, and Zhang Shan, Minister of Commerce of the People's Republic of China. After the Free Trade Agreement with China takes effect, the world's largest market, which unites approximately 1.4 billion customers, will be opened for the goods and services of Georgia. Within the frames of the agreement, 94% of Georgian goods imported to China will be free from any goods taxes.
Wine, nuts, honey, mineral water, beer, non-alcoholic beverages, jams, juices, all kinds of vegetables, fruits, chocolate products, tea, fish, and other sea products will be on the list of Georgian goods for export to China. “We see a lot of potential in signing a free trade regime with countries like China, because we believe that Georgia should be the most favorable, comfortable and attractive platform for trade between large economies,” Minister Gakharia said. “Georgian producers will have the opportunity to import products onto the Chinese market without any additional customs fees”. The first Vice-Premier and Finance Minister of Georgia, Dimitry Kumsishvili also attended the signing ceremony. “We have advanced the relations between the two countries to a new level. I want to congratulate both Georgian
and Chinese businesses on this important agreement,” he said. So far Georgia has signed free trade agreements with the European Union, Turkey, the Commonwealth of Independent States (CIS), and the European Free Trade Association. Negotiations are also underway to make an agreement with India. China has signed 14 free trade agreements with more than 24 states and regions of the world. Free trade negotiations between Georgia and China were launched in 2015. The Memorandum of Free Trade Agreement was signed in October 2016 and after only seven months the deal has been finalized, which makes Georgia the first country in the region to have such an agreement with China.
Waving off the First Direct Flight from Tbilisi to London since 2013 Continued from page 1 Richard Maslen, writing for routesonline.com in 2015, stated, “Our analysis of Sabre Airport Data Intelligence demand statistics shows that up to 21,000 bidirectional O&D passengers a year were flying between London Heathrow and Tbilisi when the route was in operation, with a base demand of around 14,000 last year, despite no direct flights. The strongest passenger flows were with Turkish Airlines via Istanbul, but with notable flows with LOT Polish Airlines and Lufthansa.” Georgian Airways will fly from Tbilisi International to London’s Gatwick Air-
port every Saturday and Monday. Flights will leave Tbilisi at 19:25 and arrive in London at 21:50 local time. Return flights leave at 22:55 from London and arrive in Tbilisi at 06:35 the following day. “Direct flights between Tbilisi and London operated by Georgian Airlines are great news for us,” Mako Abashidze, Director of the British Georgian Chamber of Commerce (BGCC), told GEORGIA TODAY. “The BGCC is to have a very active marketing and advertising campaign in the UK to promote this flight for business and leisure. There is an increasing interest for Georgia as a holiday destination as well as a potential investment opportunity - having direct flights will give us
an opportunity to organize regular business trips and roadshows to Georgia,” she said, adding that they will be working very closely with Georgian Airlines to support and promote the flight. Ekaterine Maisuradze, CEO at IRC Travel, BGCC’s exclusive partner in Georgia for bespoke travel packages to the UK and Georgia, also highlighted the benefits the direct flight is expected to bring. “IRC Tour is a branch of the International Relations Center Ltd, a holding company successfully operating on local and international markets. Our specialized departments offer a diversity of services and in our 10 years of operation, we’ve become a brand signifying
quality and reliability,” she said. “Our exclusive partnership with BGCC helps us to offer our loyal customers competitive prices. The new direct flight will help us to offer more comfortable tour packages to meet our client needs and will prove beneficial for everyone- for both Georgian and English travelers and for us at IRC Tour, too”. “I welcome the opening of a new Georgian Airways flight to London with great enthusiasm as new possibilities of links between UK and Georgia. A direct flight opens up real potential for more tourism, more trade and more investment in both directions,” Tamar Beruchashvili, Ambassador of Georgia to the UK, told
GEORGIA TODAY. “The first quarter of 2017 saw a 26% rise in the number of British visitors to Georgia. The new travel routes will also help increase this inflow of tourists from the UK. Moreover, they will encourage businesses to invest in Georgia, given that together with a very attractive business climate, business travel becomes more convenient and less time-consuming,” she said. “This new Georgian Airways flight comes at a significant moment in a changing world: a world in which global links and ease of travel to do business are ever more important. I wish Georgian Airways every success with their new opening,” the Ambassador concluded.
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Safe Environment
Fitness Center
Event Hall
Swimming Pool
Green Area
Kindergarten
For the safety of residents, the whole territory of Tbilisi Gardens is fenced and controlled by security staff.
A 25-meter and children’s pool are located within a total area of 1100 m2, where you can relax and enjoy a healthy lifestyle the whole year through.
A 375m2 fully equipped gym with experienced trainers is available 24/7.
Italian designers have been working to create the green area of Tbilisi Gardens. The location of the building in the garden is idyllic, while the selected trees guarantee the quietness and green environment.
An event hall and magnificent terrace is the right place for louder events and meetings.
A colorful space and caring teachers will always be there for the smallest residents of Tbilisi Gardens.
4
BUSINESS
GEORGIA TODAY
MAY 16 - 18, 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.
Best Pedagogy for Georgia! BY LAURA MANUKYAN & FLORIAN BIERMANN
G
iven Georgia’s dysfunctional educational sector, it is impressive how many Georgians excel intellectually. For example, ISET regularly sends some of its graduates to the best Ph.D. programs of the world, proving that many Georgians succeed in realizing their intellectual potential despite unfavorable conditions. At the same time, we notice that a considerable share of students who get enrolled at ISET are not well-endowed with essential knowledge and competencies, lacking, for example, presentation skills, writing proficiency, and resourcefulness in discussion and argumentation. During their two years at ISET, these students must undergo a difficult and often painful catch-up process, and not everyone is up to this enormous pressure: about 50% of admitted students leave the program within the first year. Smart and motivated young Georgians are often exceptional intellectual achievers, yet it seems that they succeed despite the Georgian education system, not because of it. While the best minds also excel under adverse conditions, for the less brilliant students the Georgian educational system is a liability. Indeed, there is no doubt that Georgian schools
and universities are largely not generating the kind of human capital needed in the 21st century, as proven by the fact that the Georgian educational institutions are often not producing the kind of graduates employers are looking for. The result is an unfavorable situation of simultaneous unemployment and shortages in qualified personnel. This is but a disaster for a country that aspires to catch up with the economically developed world within the next decades. Out of pure necessity, within a few years from now, Georgia will have to carry out sweeping reforms of its educational sector, and the decisions made in this context will set the course for Georgia’s economic success for a long time to come. But what is available on the menu of educational approaches, and what is suitable for Georgia?
INDIVIDUALIZATION OF LEARNING One of the newest trends in the never-ending search for the best pedagogical approach is the idea to set up an individual curriculum for each student. The Khan Academy, founded by educational inventor Salman Khan, offers a platform that sets new standards in this regard. The learning content is subdivided in very small portions, called modules, and each module (“dividing fractions”, “graphing functions” etc.) ends with exercises. A student completes a module if s/he correctly solves a sufficient number of exercises in the module. Once a module is finished, the student can decide where to go next on the “knowledge map”, which consists of inter-
Public school in the village of Shashiani. Georgia's economic future is decided in the classrooms. Source: Wikimedia commons/Nani Mtiulishvili
connected modules – only modules are available for which the preliminary modules were already taken (e.g., one cannot learn logarithms before one has mastered exponents). Some of the modules are mandatory for class accomplishment, some are optional, and the students can choose their individual paths through the knowledge map according to their own preferences. But what is the role of the teacher in this system? As the exercises are served and solved online, the teacher of the class can monitor the self-paced progress of each student. If a student is lagging behind or shows difficulties with particular subjects, the teacher can tutor (usually online) the student and target the very problems sh/e is facing at that moment. A similar but less internet-dependent approach to achieve individualization is pursued by the Steve Jobs School in Amsterdam. Each child has its individual development plan (IDP), and parents, “coaches” (not teachers), and the children regularly evaluate their plans and readjust them, based on their achievements. Maurice de Hond, the school's founder, says: "Based on the outcome of the IDP, the child is offered new personal learning challenges and instruction moments to choose from." Like the system offered by the Khan Academy, the school emphasizes the importance of every child going at their own pace. While these ideas seem convincing at first sight, it still has to be seen whether extreme individualization of the learning process will stand the test of time. What to do, for example, if a child is heavily demotivated and does not progress in any modules in the Khan system? In a regular school, a demotivated child – if attendance is obligatory – will still be exposed to the classroom environment and pick up something just by being there. Moreover, the rather joyless experience of not performing well in a group of pupils with whom one is sitting in a room, being one of those who “do not get it”, may create some healthy pressure to catch up with the others. If, on the other hand, a child is just sitting in front of a computer screen, the negative feeling of being an underperformer may be rather abstract, easily forgotten when the child dulls their mind with the next computer game. This problem is not as severe in the Steve Jobs School, but also here there is a risk that extreme individualization reduces competitive pressure and gives every student the feeling that s/ he is doing well when pursuing their individualized curriculum. Yet, the merciless ranking of different students according to the same standards and curriculum, showing some children very bluntly that they are not doing well, may have its merits, too.
MAXIMAL INTERACTION The second author of this article experimented in one of his courses with the so-called “flipped classroom” approach, where the information absorption is done at home by the students independently by watching videos and reading texts. The time in the classroom is filled with discussions, group work, and problem solving. There is definitely something ingenious to this approach, yet it turned out that also here, practice may not always live up to the promises of the abstract concept. For example, students were not necessarily eager to read at home. They did not always see great benefit in a classroom discussion or group work, in particular in view of the upcoming exams, where
the emphasis was put on formalized and replicable skills and knowledge. There are definitely students who just want to get stuff explained in a rather straightforward manner, with the interaction limited to the possibility of asking questions if something was not well-understood. It is also interesting that at ISET, there is hardly any connection between the innovativeness of pedagogical styles and the teaching evaluations – lecturers with very conservative, classical approaches get good grades, and innovative approaches which emphasize debate, creativity, and critical thinking, are often not honored by the students.
SOFT SKILLS RULE? Melamed and Salant (2010) identify the so-called “21st Century Skills”: informational literacy, higher order thinking, communicate and cooperate, technological competence, and learning how to learn. Informational literacy refers to the ability to gather, edit, analyze, process, and connect information. Higher order thinking is about problem solving, argumentation, and the competence to criticize. The meaning of the other skills is self-explanatory. It is noteworthy that none of these skills refer to formal knowledge about a subject matter. Moreover, given their nature, the 21st century skills can be, and need to be, conveyed throughout the whole educational career of a person, which today starts at preschool education and ends at retirement age (the so-called “lifelong learning”). Finland, which has for many years dominated the PISA tests, has recently been putting more and more emphasis on soft skills at the expense of learning facts. Finnish schools encourage discussions, try to avoid mere lecturing, and there is less homework and fewer examinations. Moreover, teachers in Finnish schools have the freedom to innovate and experiment with new approaches to improve learning to develop thinking skills, ICT skills, skills for working life, and skills to thrive in multicultural contexts (these are the priorities of the Finnish new national core curricula). The OECD calls these changes an “outstanding education reform on an international level”. Yet, is it clear that soft skills trump conventional literacy? It is an interesting observation that Sweden implemented similar reforms and dropped dramatically in the PISA ranking, and also Finland has dropped in the PISA ranking in the last years since it put emphasis on “multicultural contexts” instead of math.
THE DEBATE MUST BEGIN! The debate over optimal education is very old. Many ideas, from Montessori to Steiner (Waldorf Schools) to Summerhill, have been discussed and tried out since the 19th century, yet there is still no consensus on the most effective way of teaching. At the same time, classical teaching is all but dead – even Soviet style learning has experienced a revival with the Russian Schools of Mathematics, which are mushrooming throughout the USA, offering “best practices of math schools in the former Soviet Union, adapted to the US educational environment.” It remains an open question which pedagogical approaches the Georgian education system should follow, and the answer should be grounded in the specifics of the Georgian economic, cultural, and infrastructural context. It is high time, however, that the debate begins!
6
BUSINESS
GEORGIA TODAY
MAY 16 - 18, 2017
Outlook Vake New Apartment Complex Building in Tbilisi
BY NINO GUGUNISHVILI
E
ver since its foundation in 2014, development company Outlook Vake has been an active player on the Georgian real estate market, with a number of successful projects already realized throughout the country. Today, the company is working on the massive and ambitious Outlook Vake project: a brand new apartment complex
situated in the center of the city, at 33 Chavchavadze Avenue, Tbilisi, to be completed by December 31 and consisting of two ultra-modern tower buildings. The first (Block A) having 25 floors, four underground floors for parking and two floors for commercial space, while Block B is a 27-floor building, with the same structure of four floors of underground parking and two additional floors for commercial use. Block A will have two separate elevators, one panoramic and another regular, produced by well-known Finnish company Kone. As we sit in the Outlook Vake’s office talking to Alexandre Dundua, Head of the Outlook Vake team and its sales manager, among the many advantages of the new apartment complex we heard about were the glazed glass doors and windows to be installed in all the apartments, provided by REHAU directly from Germany, and the fact the buildings are to have “ventilated facades,” completely insulated and energo-effective, clad with composite tiles with a wood texture and the color of concrete. “Smart facades are quite a novelty for Georgia, mainly because they are very expensive. The facades of many newly constructed buildings in Tbilisi are often of a very low quality,” Dundua tells us. Concerning the apartment types provided, Alexandre says that after working intensively on the apartment concepts and planning for almost a year, Outlook Vake is now offering 15 different types
of apartments to its clients, tailored to the needs, expectations and tastes of any client segment. “There will be a focus on top quality construction materials and technologies,” Dundua affirmed. The future inhabitants of Outlook Vake complex will receive apartments in a standard “white carcass” state. At the same time, the company offers to individually work with their clients, offering a team of architects, constructors and designers to those wanting their apartments ready to move into. Apartments are flexibly and carefully planned, from 35 sq. meters upwards, and made to suit anyone “from a student to a large family.” Outlook Vake will have an adjacent 3500 square meter recreational green zone near the complex, fully rehabilitated and restored by the Outlook Company, giving the apartment holders and the wider public a chance to benefit from an ecologically healthy environment. One of the major concerns the company wanted to address while bringing to life their concept for the project was the problem of insufficient parking space in the city. “The four-floor underground parking lots in each of the apartment blocks is one of the key differences that makes the Outlook Vake project stand out,” Dundua tells us. “Even with almost 292 apartments available, there will be enough parking space for everyone, with six elevators to ease movement through the blocks”. The Outlook Vake Complex will have two entrances, one from
Chavchavadze Avenue, and another from the Vake – Saburtalo direction. While thinking about the Outlook Vake Complex concept, its central location was one of the key priorities. As the team wanted it to be in the heart of the city, but not on the avenue itself, they chose a calm place in a very close proximity to Chavchavadze Avenue, surrounded by green area. Another advantage of the Outlook Vake tower complex, their sales manager says, is the panoramic views of the different parts of Tbilisi from every apartment of each of the towers. In addition, the ter-
ritory infrastructure will be fully developed, bringing all possible amenities to one place, from kindergarten and beauty salon, to a café. Dundua tells us he believes that the Outlook Vake project will be one they will surely be proud of, adding that in every project they realize, Outlook Vake is responsible and fully provides all the services themselves, from construction process and construction materials to apartment design. Outlook Vake’s next project is ongoing in Bakuriani, with cottages being built near Mitarbi.
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BUSINESS
GEORGIA TODAY
MAY 16 - 18, 2017
World Bank Presents Trade in Transition, the Latest Economic Update for Europe & Central Asia
Mercy Tembon, World Bank regional Director for the South Caucasus, and Hans Timmer, Chief Economist, World Bank during the launch of the Economic Update
BY NINO GUGUNISHVILI
H
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ans Timmer, World Bank’s Chief Economist for the Europe & Central Asia (ECA) region, presented Trade in Transition, the latest Economic Update for Europe and Central Asia, at a media launch held in the World Bank Tbilisi office on May 11. Alongside Tbilisi, chosen to host the presentation and media launch, other World Bank offices also participated in the discussion online. “After a period of uncertainty, Georgia’s microeconomic fundamentals are back on track, contributing to an improved economic performance and we’re really eager to hear from Hans how Georgia and other countries in the region are doing,” Mercy Tembon, World Bank Regional Director for the South Caucasus said as she introduced Hans Timmer, and gave a brief introduction to the newly published economic update. “While the ECA is a very diverse region, there are still general trends,” Timmer noted in his opening remark during the media launch. He then went on to summarize the most common of these, focusing on the role of trade, and analyzing how these general trends are reflected on countries. The first observation introduced by Timmer was that despite a lot of political uncertainty and political tensions within the region, the European Union struggling with Brexit, and anxiety among sections of population, the economic news is more optimistic than it was six months ago, and the situation has even “upgraded” for most countries. “The South Caucasus is an exception to that, where we somewhat downgraded the forecast, but the general picture is optimistic. If you look at the western part of the region, unemployment is rapidly reducing. In many countries, unemployment is lower now than it was before the 2008 crisis. We see that labor participation is higher than it was 10 years ago and when we look at inflation, we see a normalization of the picture in Western Europe, most countries having inflation around 2%,” Timmer said. “Examining the east of the region, and especially the oil exporters, a very sharp increase in prices is no longer found and inflation has come down in most countries, with a normalization of the cyclical phase, which in policy terms means that countercyclical fiscal stimulus is no longer needed in most of the countries,” the World Bank Chief economist emphasized. Moving on to the second observation from the latest economic update, Timmer noted that despite all the positive tendencies, difficult structural challenges remain. Most countries need to restructure their economy because the old growth model, in which there were large inflows of resources, either through high revenues or remittances, no longer works. “Those inflows are substantially lower now and will remain so, meaning that countries can no longer grow through importing a lot, stimulating their domestic demand by growing through their
After a period of uncertainty, Georgia’s microeconomic fundamentals are back on track
Labor participation is higher than it was 10 years ago construction and non-tradable sector. The big challenge is to change it and to create jobs in what we call the ‘tradable’ sector, the sectors that are competing with other countries. For that, it’s important not to continue with the countercyclical fiscal policy, because that tends to reinforce the old structure,” he underlined, going on to describe the second challenge, which, as he mentioned, because of the technological changes, the growth of ICT sector, digital development, labor relations, production methods and even the way we trade across borders, is changing dramatically- something that “the countries will have to adapt to”. “They will have to change the way the labor market is organized,” Timmer stressed, noting that despite a lot of pessimism and concerns seen throughout the world regarding trade, the recent economic update shows that there is no slowdown in trade for Europe and Central Asia. On the contrary, trade in goods and services in the ECA is on the up. According to the report, the reason for that is the global numbers dominated by the change in growth in China. At the same time, Timmer says, “trade has also been a very positive force in the ECA in changing the domestic economy”. “The shift from trade in goods to trade in services, a shift that is happening globally, sees more and more services becoming tradable across borders. Tourism is very important and is growing, but also in sectors like education, cross-border trade is increasing,” he said, highlighting the need to be open to the global markets, and especially to integrate more into the Asian markets. Georgia, according to the report, in some ways differs from most countries in the region, because, as Timmer explained, the external shock from the oil prices came later than the shock from the financial crisis for other countries, meaning the negative impact came later, too. It was a difficult shock for Georgia as it resulted in a decline in remittances and export opportunities. “There’s less emphasis on countercyclical fiscal stimulus; growth comes from the sectors where it should and the recent data is very promising- there are lots of opportunities for new jobs in new sectors and there’s a very promising growth in tourism; lots of start-ups in information and technology and all focused on creating new opportunities for trade across borders. [Georgia’s] recent signs are very positive and I see that Georgia is going forward and really fits the picture that we’re seeing for the region as a whole,” Timmer concluded. Georgia’s economic growth is forecasted to reach 3.5 % in 2017 according to the economic update, compared to 2.7 % in 2016, with the potential to grow in future to 4.0% in 2018 and 4.5 percent in 2019. Poverty, according to the report, is “expected to decline modestly in 2017 as economic growth recovers and translates into higher labor income”. “Continued disturbance in some of Georgia’s main exports market and the longer-term stagnation in the EU” are listed as among the key risks and challenges, along with a slow-down in poverty reduction, though rural poverty risks are still to remain high “if agricultural productivity does not increase and non-agricultural employment opportunities do not continue to expand”.
BUSINESS
GEORGIA TODAY MAY 16 - 18, 2017
www.ibf.ge BY OTAR KIRIA
C
reating a team in the contemporary world is dramatically different from what it used to be in the past. Unity as its fundamental base obviously hasn’t changed, but the main difference lies in the fact that today it is more diversified, multifaceted, digital and dynamic. But what is it that doesn’t change over time and how do successful teams adapt to it? Identifying the effectiveness of teamwork academically was first pursued by J. Richard Hackman, an American scientist who studied organizational behavior. It was he who decided to study TeamWork as a subject in 1970. After 40 years of research he came up with an insight that teamwork is determined not by people or behavioral styles, but with simple “activating conditions”. Today, three of Hackman’s factors are as critical for successful teams than ever before. The conceptual model of Hackman’s factors is known as 4-D Teams and is about leading teamwork according to four set factors.
COMPELLING DIRECTION Direction is the irreplaceable foundation of any team as it orients its members, fully drifting them into the process and feeding them with energy. You can’t
inspire a team without them knowing what is that they are trying to achieve. To keep the team inspired and the vision of their goals vivid, these should be challenging, but not unattainable. Moreover, consistency is very important as people like achieving goals which give the extrinsic award, added values like recognition, salary or opportunities for development. Many scientific works reveal that in the process of pursuing a goal intravenous factors like emotions and satisfaction become secondary. Generally speaking, every company has a goal to serve their clients, but how it is perceived varies around the globe, not only at the level of geography, but also at that of government. For instance, in Norway, quality determines the best type of service despite the costs, while a 75% offered solution is enough for the product to be perceived as that of quality by the client in the UK, where the price tag gains more weight.
STRONG STRUCTURE Teams need a specific number of members and the right mix of optimally determined objectives and processes, and norms which correctly determine the area of their activities. As a rule, a high performance group is created by the correct balance of various skills. Each member does not have to own the highest technical or social skills individually, but the mix of both is principally important for any team. Diversity
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The Secrets of Teamwork in age, race, gender, religion, knowledge, skills and perspectives guarantee successful performance. Members from various backgrounds see the future differently, thus their leader always has the luxury to make the right decision. Researchers Martine Haas and Mark Mortensen have been researching the World Bank and its regional branches in various countries. While “cosmopolite” members of a team usually manage issues considering multiculturalism that they have acquired during their work in different countries around the world, the remainder perceive things locally. And the best decision is made by blending these two. In which case an additional responsibility of communication arises: if a company or an organization has a network, the risk of uncontrollability is raised higher. Strong institutions solve this with the right structure, where first of all ethnocentric factors are considered. Ethnocentrism is the tendency of placing one culture over others. The barrier it creates can be overcome with a SRC (Self Reference Criterion), which is often determined by subconscious hints about one’s cultural values, knowledge and experience during decisionmaking process. This is why a company might take a different decision to solve the same problem abroad than it would take in its home country.
SUPPORTING CONTEXT The right support is the third crucial
A company or an organization operating a network at a country or international level has a concept of “us vs. them” – meaning “our team and their team”. At a first glance this is competitiveness is healthy, but on the other hand, it carries the risk of violating heterogeneity. Marriott can’t be of “one” sort in Tbilisi and of “other” in Washington. Heterogeneity in branding (espe-
cially in the service sector) is fundamental. Many studies reveal that it is resources that determine the increase of risk factors rather than cultural variations. Also human capital is one of such resources and in which case fixated mindset is unacceptable. Candidates during job interviews in leading companies and institutions often receive questions that seem hardly connected with their future work or experience. In reality, HR specialists are trying to figure out if the person has a fixated mindset or a developing one. The first type of person believes that knowledge and skills are most important and their behavior is based on these things. While the other is in constant development and doesn’t fear challenges. The leader of a strong team always tries to reach a shared homogenous mindset, where most importantly everyone is tuned in for development. These principles are analyzed very well by Sean Fitzpatrick. A rugby legend and former Captain of New Zealand’s National Team All Blacks, who was made an Officer of the New Zealand Order of Merit In 1997. He is also author of best-selling book - the Winning Matter. On May 22-23rd, Mr. Fitzpatrick will visit the Euphoria Hotel in Batumi for a two-day international business forum hosting 6 world-class speakers and 800 delegates. He will be sharing his unique experience with the audience and talking about winning strategies.
one of its major ingredients – sugar - is still imported into Georgia. Higher world price of sugar might be contributing to the increased Coca-Cola price.
Thus, the most popular caffeine containing drinks have become more expensive in April, hitting the budgets of caffeine lovers.
factor for successful teamwork, which includes maintaining a reward system; technical facilities and working conditions; accessibility to data that is vital for creative process and transparency. Global institutions and companies creating digital products face additional barriers, as accessibility to resources and technical assistance are cardinally varied according to location. Let’s compare product delivery from an online shop in New York with that in Tbilisi or Tbilisi and Kutaisi. Keep in mind that in this case not only technical facilities should be considered but perception also matters. Numerous studies show that the development of technologies requires development of the customer as well, as the latter should be able to overcome the behavioral stereotypes in the process of decision-making and purchasing. The supportive context in a team means adding relevant information and offering trainings for every member.
SHARED MINDSET
Retail FPI | Hard Times For Caffeine Lovers
B
y the end of April, food prices increased by 4.0% on an annual basis (that is, compared to April 2016) but decreased by 0.9% on a monthly basis (that is, compared to March 2017). During the last two weeks of April, onions, potatoes and tomatoes showed the biggest increase in prices by 23.2%, 13.5%, and 10.1%, respectively. In the meantime, the prices of cucumber, eggplant and greens dropped by 45.1%, 17.6% and
13.9%, respectively.
DRINKS IN THE SPOTLIGHT While the overall y/y increase in prices was 4.0%, the gain in value was particularly noticeable for some products. Coffee is a good example, with its price increasing by 16.0% in April 2017, compared to the same month of 2016, in spite of last year’s 2.0% drop (April 2016 compared to April 2015). One explanation for the higher coffee prices lies in the fact that Georgia is
importing coffee, and its depreciated currency puts upward pressure on coffee prices. At the same time, coffee became more expensive on international markets as well, and showed a 10.3% increase on an annual basis in April. Another drink exhibiting the same trend in prices is Coca-Cola. Last year’s price was 0.8% lower (April 2016 compared to April 2015), but this year it increased by almost 2% (April 2017 compared to April 2016). Unlike coffee, Coca-Cola is produced in Georgia and is not imported, however,
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SOCIETY
GEORGIA TODAY
MAY 16 - 18, 2017
Natural Wines from the 8th Floor: Introducing Bina 37 INTERVIEW BY NINO GUGUNISHVILI
O
ne man, inspired by the growing popularity of natural wine, decided to give it a try himself- and the fact he lived in a flat on the eighth floor did nothing to deter him! GEORGIA TODAY went to meet Zura Natroshvili, owner of Bina 37.
HOW DID YOU COME UP WITH THE IDEA OF CREATING SUCH A SPACE? The recent development in natural wine growing changed my attitude towards wine culture consumption and led to the desire to start winemaking myself. Two years ago, I bought 4 tons of grape and made wine on the eighth floor of my apartment building. We introduced two of our wines at the
annual New Wine Festival under the Bina 37 brand. After positive feedback from the festival, instead of a classical wine cellar, I decided to create a degustation space and a wine cellar on the 8th floor, adapting the apartment and terrace to the right style. Today, in the wine cellar on our terrace, we have 43 Qvevri (wine amphora), more than 10 wine varieties and an indoor and outdoor space to accommodate 150 persons.
WHAT IS THE TYPICAL FIRST REACTION OF GUESTS? The first reaction is surprise…and excitement. They are usually interested how the idea was generated and developed.
TELL US ABOUT YOUR WINE As we don’t have our own vineyard, we get our grapes from trustworthy vine growers. We use the traditional Georgian method of winemak-
ing, while we make Chacha through maceration of the pomace. The process of wine fermentation in Qvevri typically takes six months. At the moment, we offer several types of wine: Rkatisteli and Kakhuri Mtsvane, Kisi, Saperavi, Guruli Mtsvane, Chinuri, Tsitska, Tavkveri, Tsolikouri, Krakhuna, and, as I said, we also make Chacha.
WHO CAN VISIT BINA 37? Bina 37 is open to anyone who loves natural wine, tasty food and a homely atmosphere, right in the city center. We work daily from 12 to 23.00. WHERE: 5a Soprom Mgaloblishvili Str., Building 2, Flat 37 (Vedzisi district), Tbilisi
HOW DO YOU PAIR YOUR FOOD AND WINE? We try to pair our food and wine very carefully, making suggestions to our guests as they order food. Only with the correct food and wine pairing can the best gastro-enological result be achieved. One of the easiest methods is to pair food and wine according to the geographic principle. For more savvy guests, we offer set menus in which several types of dishes are already paired to several types of wine.
NDI Polls: Georgians View Russia as Biggest Threat to their Country BY THEA MORISON
R
ecent poll results released by the National Democratic Institute (NDI) and CRRC Georgia reveal that 63 percent respondents from the post-Soviet country Georgia believe that neighboring Russia represents the biggest threat to the country, while a significant majority (78 percent) view Russia as a threat to neighboring countries, and almost half of Georgians believe that Russia has had a negative impact on Georgia’s economy (41 percent), security (41 percent), and politics (42 percent). The NDI poll results reflect data collected from April 7 to April 28 through face-to-face interviews with a nationwide representative sample of Georgia’s adult population, excluding the Russian occupied territories of Georgia – Abkhazia and Tskhinvali (South Ossetia) that included 2,493 completed interviews. Furthermore, 47 percent of those interviewed say that Russian propaganda exists in Georgia, propaganda which takes place primarily through Georgian television, political parties and social media. Despite these views, Georgians are divided on whether the dissolution of the Soviet Union was a good or bad development for the country (48 percent and 42 percent) respectively. The results also show that the older population, people living in minority settlements, people with lower education, and those that see fewer benefits in visa liberalization are more likely to lament the end of the Soviet Union. Non-English speakers and those who do not believe that Russian propaganda exists in Georgia are also more likely to believe that the dissolution of the Soviet Union was a bad thing. To the question: “What is the top threat to Georgia’s national security?” The majority of Georgians named Russian military aggression (34 percent), occupation of Abkhazia and South Ossetia (16 percent), Russian propaganda (5 percent), economic dependency on Russia (2 percent), and energy dependency on Russia (2 percent). All Russian factors combined make up 60 percent. Moreover, half of Georgians (52 percent) agree that Georgia is a secure country, while half disagree. The survey shows that Georgians’ support for the
European Union (EU) has risen to 80 percent from 72 percent since the November 2016 survey. As in previous polls, this support is lower among older people (70 percent compared to 84 percent of youth) and those in minority settlements (54 percent). Reasons for supporting Georgia’s membership are largely related to economic and employment concerns, although supporters also believe membership would strengthen security and democracy. For those who do not support EU membership, 43 percent believe it would cause conflict with Russia, while 24 percent believe that EU membership would weaken the country’s cultural identity. The majority of Georgians (92 percent) is aware of the recent visa liberalization to most EU countries, although this percentage is significantly lower in minority settlements, at 64 percent. A large majority (78 percent), however, agrees that even with visa liberalization, “ordinary people” will not be able to travel to the EU. Most Georgians, 64 percent, say they have enough information on the rules and procedures surrounding visa liberalization. Despite this, 67 percent state that many Georgians will emigrate. NDI says that NATO support is strong, with 68 percent of Georgians approving membership. As with the EU, this approval is lower among older and in minority settlements. Those who support NATO membership believe it will provide greater security (71 percent), while 30 percent believe membership will benefit the economy. The vast majority of Georgians who disapprove of NATO membership feel that membership would bring a high risk of Russian aggression toward Georgia. Misinformation about NATO is evident. A quarter of Georgians (23 percent), for example, thinks that the country is already a NATO member. “Georgians continue to demonstrate resilient support for the country’s EU and Euro-Atlantic goals, but the impact of disinformation campaigns is clear through the views and misinformation prevalent among segments of the population, particularly the narratives that the EU and NATO will lead to Russian aggression and weaken the country’s culture and identity,” says NDI senior director Laura Thornton. However, she added that leaders and stakeholders devote more energy and information towards vulnerable segments of society – older, rural, and minority populations, and continue to build “strong, preemptive messaging to counter misinformation.”
SOCIETY
GEORGIA TODAY MAY 16 - 18, 2017
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Winery Khareba Wins Gold Medal at Decanter Wine Awards Nika Zautashvili, General Director of the Winery Khareba
BY NINO GUGUNISHVILI
R
ed Dry Wine, from the 2012 harvest by Winery Khareba, won a gold medal at the Decanter Wine Awards this month. Coming from the Kakheti region, the award-winning wine is made from a blend of Saperavi kept in oak barrels. The result is a dark pomegranate color and a fine fruity bouquet, rich, pleasant velvety aroma and full, fresh, and harmonious taste. While best served chilled,
it is recommended as a perfect pairing to hot salads, meat dishes and fresh vegetables. You can find it in Winery Khareba branded shops for GEL 58.30. The Decanter Wine Awards is considered among the world’s largest and most prestigious wine competitions, seeing numerous top international wine experts participating. Nika Zautashvili, General Director of the Winery Khareba, says that winning the top prize in the category at the Decanter Wine Awards, as judged by world-renowned wine experts, is global recognition for Winery Khareba and opens many more opportunities.
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“First of all, it gives us a special status and a chance for export growth. We plan to increase our export to strategic markets like China, Europe and Russia. We’re also very actively working on the US market,” Zautashvili says. Producing high quality Georgian wines, Winery Khareba uses ancient methods as well as modern technologies in winemaking. The company owns 1000 hectares of land on which both Georgian and European wine species are cultivated. Winery Khareba wines are produced in various regions of Georgia: Kakheti, Imereti and Racha-Lechkhumi.
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