Issue #1066 Business

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Issue no: 1066/138

• JULY 17 - 19, 2018

• PUBLISHED TWICE WEEKLY

PRICE: GEL 2.50

In this week’s issue...

Georgian Parliament Approves Reshuffled Cabinet NEWS PAGE 2

Average Hotel Prices in Georgia and Hotel Price Index (June 2018)

FOCUS ON NEW

BUSINESS PAGE 4

Batiashvili’s New Plans for Georgian Education

ECONOMY PLANS The new Minister of Economy announces his first ideas for Georgia's economic development

BUSINESS PAGE 5

PAGE 2

Georgian Watermelon a Health Risk?

BY THEA MORRISON

W

atermelon season has truly kicked off in Georgia, but this year amid concerns that the juicy, refreshing summer fruit hides health risks.

Last week the organizations under the Consumer Rights Protection Association of Georgia examined several samples of Georgian watermelon and melon and stated they contain excessive amounts of nitrates, which can lead to food-poisoning, irritability, sleeplessness and respiration problems.

During the presentation of the results, the United Nations Expert and Ecologist Khatuna Akhalaia underlined that the level of nitrates in the watermelons and melons examined by them is 3-4 times higher than the permissible norm.

This statement has led to citizens losing trust in their favorite summer fruit, with some markets refusing to sell it.

Popular hypermarket Agrohub was the first to ban watermelons on the basis of their containing too many nitrates.

“We refuse to sell watermelon in our store because it contains more nitrates than is permitted,” the hypermarket’s Facebook post reads.

The statements angered Kakhetian farmers, Kakheti being the region where the largest

The Highest Interest Rate on the Market and Deposit Porting at Terabank BUSINESS PAGE 6

French Institute in Georgia on Developing Partnerships BUSINESS PAGE 10

Russia, US Try to Revive Relations

Photo source: Hub pages

amount of watermelon is grown.

The farmers say that the information about excessive nitrates in watermelon has negatively affected their business and now no one wants to buy their harvest.

“We demand that the representatives of the Agriculture Ministries come here and check the level of nitrates in our watermelons. I can assure you that our product is healthy and does not contain excessive amounts of nitrates, as stated of late,” Kakhetian farmer Khvicha Khimshiashvili said.

Specialists of the National Food Agency (NFA) are currently carrying out a study on the market for nitrates in watermelon and melon. Samples are being taken in different spots, both in large supermarket networks and at agrarian markets.

According to the NFA, about 30 fruit and vegetable samples have already been examined for

nitrates in the accredited laboratory.

“As a result of laboratory research, the level of nitrates does not exceed the permissible indicator in fruit. Overall, about 70 samples are to be examined this year. We usually study nitrate content annually. According to the monitoring results of 2017, a violation was observed in only one case,” the statement says.

The statement of the NFA means that Georgian watermelon and melon are safe and can be consumed by the population without any hesitation.

In themselves, nitrates in watermelon are almost non-toxic, but with excessive intake of nitrates, the human body can begin to show signs of acute poisoning.

Excessive use of fertilizers is commonly the main source of a higher level of nitrates in fruit and vegetables because they are prone to absorbing harmful substances easily.

SOCIETY PAGE 10 Prepared for Georgia Today Business by

Markets As of 13ͲJulͲ2018

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BONDS

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Bank of Georgia (BGEO LN)

GBP 18.56

+3,2%

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GEOROG 04/21

101.57 (YTM 6.12%)

+0,3%

+0,6%

Georgia Capital (CGEO LN)

STOCKS

GBP 10.43

+2,7%

Ͳ3,0%

GEORG 04/21

106.81 (YTM 4.21%)

+0,0%

+0,4%

GBP 2.62

Ͳ4,0%

+3,8%

GRAIL 07/22

105.98 (YTM 6.04%)

+0,3%

+0,7%

GBP 17.30

Ͳ0,1%

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GEBGG 07/23

99.81 (YTM 6.05%)

+0,1%

Ͳ0,2%

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

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

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CURRENCIES

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75,33

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GEL / USD

2,4521

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1 244,32

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GEL / EUR

2,8638

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GEL / GBP

3,2446

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INDICES

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2,4406

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FTSE 100

7 661,87

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0,0392

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20 813,12

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0,5047

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DAX

12 540,73

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GEL / AZN

1,4411

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DOW JONES

25 019,41

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GEL / AMD

0,0051

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NASDAQ MSCI EM EE

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7 825,98

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GEL / UAH

0,0935

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161,47

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0,8558

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1 075,64

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SP 500

2 801,31

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1,0017

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MSCI FM

2 685,47

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62,4462

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GT Index (GEL)

1 582,68

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4,8387

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GT Index (USD)

1 208,13

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1,6977

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MSCI EM

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NEWS

GEORGIA TODAY

JULY 17 - 19, 2018

Explosion in Tkibuli Mine Kills 4, Leaves 6 Injured: Shaft to Be Closed Photo: Georgia’s Minister of Economy Giorgi Kobulia. Source: IPN

New Minister Names Georgia's Main Economic Challenges

BY THEA MORRISON

G

BY THEA MORRISON

A

Monday morning explosion in Mindeli Mine, Tkibuli, left 4 miners dead and 6 severely injured.

The Georgian Ministry of Internal Affairs (MIA) stated that a methane explosion supposedly caused the collapse of the ceiling in the tunnel.

Prime Minister Bakhtadze has said the government will no longer put its citizens lives at risk and has declared the mine will be closed.

An investigation was launched under the second part of Article 240 of the Criminal Code of Georgia, which implies a violation of safety rules in

mining, construction or other works.

“The investigation has already started and all responsible people will be punished to the full extent of the law,” Bakhtadze noted. “The shaft will not resume work until the criminal investigation and technical expertise is complete.”

The injured miners were hospitalized and one was transferred to Tbilisi in a critical condition.

A previous explosion in the same Mindeli mine occurred in April 2018, when 6 died and 3 were injured.

Deputy Ministers of Economy, Genadi Arveladze and Giorgi Cherkezishvili, went to Tkibuli to inspect the site, offering their condolences to the families and injured miners.

The PM declared July 16 a Day of Mourning. The state flag was lowered on all administrative buildings on the territory of Georgia.

eorgia’s new Minister of Economy, Giorgi Kobulia, has named the main challenges that hinder the development of the Georgian economy.

Kobulia, who was working for global consulting company McKinzie for two decades, says one of the top challenges is that small and medium businesses (SMEs) in Georgia are not developed enough.

“In order to accelerate the pace of economic development, more people should be involved in economic activities. It is necessary to develop small and medium business, and in this area there are significant challenges in Georgia,” he stated in Parliament.

The new minister believes that better access to credit for small and medium-sized businesses will promote their development.

In addition to this, Kobulia says it is necessary to accelerate the level of industrialization.

“We have foreign investments, including in infrastructural projects, but we need more. Industrialization is one of our priority directions. Without development in this field, we cannot move our economy forward,” he stated.

Development of the regions is another challenge listed by the Minister. He said the Ministry of Economy will work together with Ministry of Agriculture to help develop the agricultural industry further.

Kobulia underlined that Georgia is often referred to as a logistics hub but noted that little has been done to develop and use the full potential the country has in this sphere.

He believes that human resources, people's education, and skills should also be developed, adding the State should help people increase their knowledge and advance their skills in order to increase their income.

According to the Minister, Georgia cannot exist only by developing the local market.

“We need to focus on export and enter new markets. Therefore, integration with export markets is very important. Steps have been made in this direction, but there is still much to be done,” he added.

Kobulia highlighted that Georgia's economic indicators are impressive, but despite that, the economic income that Georgia creates per capita is very small.

“In 2017, economic growth was 5%, and in 2018 it is 7.5%, which is a very good figure. In addition, employment has significantly increased, as have investments, but according to the World Bank, Georgia remains in the list of poor countries, something which needs to be changed,” he said.

“This can be explained by the fact that despite good growth, the economic income that Georgia creates per capita is very small. Our situation in this regard is 10 times worse than in the leading developed states,” the Minister added, noting that in order to improve the living conditions of citizens, it is necessary to employ as many people as possible.

Kobulia and two other new ministers were nominated by the Prime Minister Mamuka Bakhtadze last week.

The PM noted that Kobulia has experience in the development of the global economy and in the field of energy. He stated his confidence that the new minister will be able to cope with the existing economic challenges in the country.

Georgian Parliament Approves Reshuffled Cabinet

BY THEA MORRISON

T

he Parliament of Georgia has supported the reshuffled cabinet of ministers with 101 votes in favor to 12 against.

This is the second time the government confirmed the governmental composition in one month, as the former Prime Minister resigned on July 13 and after the new government was approved, the current PM, Mamuka Bakhtadze, launched structural changes which required a second vote for the ministers.

The final composition of the government is as follows: •Defense Minister – Levan Izoria; •Minister of Education, Science, Culture, and Sport – Mikheil Batiashvili;

•Minister of Economy – Giorgi Kobulia; •Minister of Finance – Ivane Machavariani; •Minister of Environment Protection and Agriculture – Levan Davitashvili; •Foreign Affairs Minister– Davit Zalkaliani; •Minister of Internal Affairs – Giorgi Gakharia; •Minister of Internally Displaced Persons from the Occupied Territories, Labor, Health and Social Protection – Davit Sergeenko; •Minister of Justice and Corrections – Thea Tsulukiani; •Regional Development and Infrastructure Minister – Maia Tskitishvili; •State Minister for Reconciliation and Civic Equality – Ketevan Tsikhelashvili.

The parliamentary opposition parties did not vote for the new cabinet.

Ruling Georgian Dream (GD) has 116 MPs out of total 150 seats in the legislative body.

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BUSINESS

GEORGIA TODAY

JULY 17 - 19, 2018

Average Hotel Prices in Georgia and Hotel Price Index (June 2018)

I

n Georgia, the average cost of a room1 in a 3-star hotel was GEL 143 per night in June 2018. The most expensive 3-star hotels in June in Georgia were in SamegreloZemo Svaneti -164 GEL, Tbilisi -153 GEL and Adjara -150 GEL. The cheapest 3-star hotels in June in Georgia were found in Kvemo Kartli- 89 GEL, Imereti – 103 GEL and Guria – 120 GEL. The average cost of a room in a 4-star hotel in Georgia in June 2018 was GEL 247 per night. The most expensive 4-star hotels for this month were found in Tbilisi – 268 GEL, Samtskhe-Javakheti – 257 GEL and Kakheti – 231 GEL. The cheapest 4-star hotels in June in Georgia were in Samegrelo-Zemo Svaneti – 173 GEL, Imereti – 197 GEL and Mstkheta-Mtianeti – 219 GEL. The average cost of a room in a 5-star hotel in Georgia in June 2018 was GEL 403 per night. In Tbilisi, the average price was GEL 522, followed by Kakheti462 GEL, Adjara – 359 GEL and Samtskhe-

Javakheti-GEL 330. In June 2018, the average cost of a room in a guesthouse2 in Georgia was GEL 73 per night. The highest daily rates for guesthouses were found in Kvemo Kartli -148 GEL, Guria – 141 GEL and Adjara – 82 GEL. The cheapest guesthouses in June in Georgia were found in Shida Kartli – 56 GEL, Imereti – 59 GEL and Kakheti – 61 GEL. In terms of apartments, on Airbnb in Georgia the average cost of an apartment in June was US$37. On Airbnb in Georgia among self-governing cities the highest average cost of an apartment in June was recorded in Batumi-US$51 (125 GEL), followed by Tbilisi-$42 (103 GEL), Poti-$41 (101 GEL), Kutaisi-$24 (59 GEL) and Rustavi-$23 (57 GEL).

According to Airbnb, in June, in Batumi, Tbilisi and Kutaisi the average cost of an apartment (Batumi- 125 GEL, Kutaisi59 GEL, Tbilisi – 103 GEL) were less than average cost of a room in a 3* hotel (Batumi -152 GEL, Kutaisi – 104 GEL, Tbilisi – 153 GEL).

HOTEL PRICE INDEX In June 2018, the hotel price index3 increased by 8.6% compared to May 2018.

The daily rates for standard double hotel rooms increased mostly in Adjara – 29.1% and Guria – 16.6%. Such price increases in Adjara and Guria were due to the hotel price increases in Batumi, Kobuleti and Ureki.

In June 2018, compared to May, the daily rates decreased only in Shida Kartli and Racha, correspondingly by 8.5% and 2.3%.

In Tbilisi the hotel prices only increased by 0.3%.

The increase of hotel prices in Georgia may be linked with the increased number of international travelers. The number of international travelers in June compared to May increased by 14.9%, and of these international travelers, the proportion who stayed in Georgia for 24 hours or more (classified as tourists) increased by 11.4%4.

Table 1: Percentage change of prices in April 2018 over March 2018 The 3-star, 4-star and 5-star hotel price index increased by 10.6% in June 2018 compared to May 2018. In these types of hotels, the highest price increases were recorded in Adjara – 36% and Guria – 32.8%. The hotel price decrease was not recorded in any of the regions. In Tbilisi the prices for standard double hotel rooms only increased by 0.4% compared to the previous month.

For guesthouses, the price index increased by 5.8% in June 2018 compared to May 2018. In this type of accommodation, like 3, 4 and 5 star hotels, the biggest percentage price increase for standard double rooms were recorded in Adjara and Guria, correspondingly 20.2% and 13.3%. In these type of accommodation the prices decreased in four regions. The hotel prices decreased mostly in Shida Kartli region, by 8.5%. In Tbilisi the prices for guesthouses decreased only by 0.4%.

The results are based on the surveying of standard double hotel room prices of 3, 4, 5-star hotels and guesthouses in 10 regions of Georgia. Hotels were chosen arbitrarily according to random sampling principle. The study contains 71% (312) of all 3, 4 and 5-star hotels and 25% (456 guesthouses) of all guesthouses registered on www. booking.com The 3, 4 and 5-star hotel price data was collected by contacting hotels individually, while the prices of guesthouses were taken from booking.com. The average prices are arithmetic mean of standard double hotel room prices.

2 Guesthouse: a type of accommodation that is characterized by having a small number of rooms and services are usually offered by the resident family.

3 The calculation of the hotel price index is based on the recommendations given by the International Monetary Fund (IMF). The elementary aggregate price index is calculated by Jevons index (Consumer Price Index Manual-Theory and Practice (2004), Practical Guide to Producing Consumer Price Indices (2009)).

4 According to the Georgian National Tourism Administration, in June 2018, 727,385 international travelers visited Georgia. Of these, 399,989travelers stayed in Georgia for 24 hours or more. In May 2018, the number of international travelers was 633,086, of whom 359,744 travelers stayed in Georgia for 24 hours or more.

1

Graph 1: In the graph, average prices for standard double rooms in 3 and 4-star hotels and guesthouses are given by region. 5-star hotel prices are provided below.

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BUSINESS

GEORGIA TODAY JULY 17 - 19 2018

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Batiashvili’s New Plans for Georgian Education

BY SAMANTHA GUTHRIE

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ikheil Batiashvili was recently appointed as Georgia’s new Minister of Education, Science, Culture, and Sport. According to Prime Minister Mamuka Bakhtadze, Batiashvili is a “very prominent figure in our processional community” – the two worked together when Bakhtadze was head of Georgian Railways and Batiashvili was rector of the Business and Technology University, which he helped to found.

He has spent several years as a member of the Strategic and Competitiveness Institute at the Harvard Business School network, said Bakhtadze, and has significant experience in the field of education and technology.

Batiashvili has faced criticism in the Georgian media and particularly on social media for statements that were seen as overly vague and using doublespeak. His first public remarks came quickly after his appointment, however, and the ministry he now heads is a recent creation, combining the former Ministry of Education and Science with elements of the former Ministry of Sport and Youth Affairs and the former Ministry of Culture and Monument Protection. With several areas of responsibility in his purview, it is not yet clear what Batiashvili’s positions will be on most topics.

Bakhtadze has offered strong support for Batiashvili and his ability to execute government plans for the future of education in Georgia. “We plan to implement a 5-level reform that involves the integration of preschool education, school education, vocational education, higher education and science, the introduction of innovative education systems, and more importantly, the deepening of close ties between education and economics. I am sure Mikheil Batiashvili will be able to implement these very important reforms,” said Bakhtadze.

Batiashvili has made statements on several specific programs, mainly in the field of education.

The new minister insists that the government should not only supervise the quality of national education from a distance but be an active supporter and standards-setter. He wants Georgian universities to attract more foreign students by offering programs that are consistent with European standards. “Georgia should transform itself into a regional center of education,” said Batiashvili, “We should offer almost all types of education programs to foreign students, who are important for the country’s foreign image as well as for the state economy.”

Speaking of his reform plans to Parliament, Batiashvili said, “In terms of the authorizationaccreditation of universities, we should orient towards European standards. Despite difficulties, a protracted process, and a huge expenditure of

Georgia Advances Position in Global Innovation Index 2018

Photo source: tbilisilocalguide.com

BY THEA MORRISON

G

eorgia has advanced its position in the Global Innovation Index 2018 and was ranked the 59th position out of a total 126 countries, which is a 9-point improvement compared to the same

index in 2017.

The Global Innovation Index is an annual ranking of countries by their capacity for, and success in, innovation. It is published by Cornell University, INSEAD, and the World Intellectual Property Organization, in partnership with other organizations and institutions, and is based on both subjective and objective data derived from several sources, including the International Telecommunication Union, the World Bank and the World Economic Forum.

The index was started in 2007 by INSEAD and

World Business, a British magazine. The GII is commonly used by corporate and government officials to compare countries by their level of innovation.

The GII is computed by taking a simple average of the scores in two sub-indices, the Innovation Input Index and Innovation Output Index, which are composed of five and two pillars respectively.

Each of these pillars describes an attribute of innovation, and comprises up to five indicators, their score calculated by the weighted average method.

Georgia’s scores in each indicator are: Output rank – 62, Input rank – 53, Institutions – 39, Human capital and research – 67, Infrastructure – 71, Market sophistication – 39, Business sophistication – 91, Knowledge and technology outputs – 57, Creative outputs – 73.

The top 10 list is headed by Switzerland, the Netherlands, Sweden, the United Kingdom, Singapore, the United States, Finland, Denmark, Germany and Ireland.

energy, our position is that we should satisfy the highest standards. We should not have controlling bodies that frighten universities. We should be oriented on assistance, development and promotion to reach European standards.”

Also speaking to Parliament last week, Batiashvili emphasized the importance of involving Georgian scientists in more international research.

On July 13, Batiashvili spoke out about technology in the classroom, saying “we should not fight smart phones and tablets in schools: we should use them for education.” He plans to focus on “the concept of digital school,” which would encourage classrooms to integrate electronic devices and technology into the curriculum and utilize diverse resources, including videos and computer programs.

Batiashvili has long promoted STEM (science, technology, engineering, and math) development in Georgia. One of his landmark projects as rector

of Tbilisi’s Business and Technology University was ‘Silicon Valley,’ a public research, business and development center near Turtle Lake. “The mission of Silicon Valley Tbilisi is to become a regional educational hub that will meet the educational needs to be competitive in the global market. Our objective is to train highly qualified professionals and to give them a chance to be hired by leading international companies, without leaving Georgia,” said Batiashvili in September 2016, ahead of the center’s opening.

The new Ministry of Education also plans to change the funding mechanisms for students. The new structure “will not be attached to the current system. It will be based on a different system consisting of various criteria. World Bank experts are involved in this reform. We’ll introduce it in September,” Batiashvili said yesterday at an extraordinary session of Parliament.

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BUSINESS

GEORGIA TODAY

JULY 17 - 19, 2018

The Highest Interest Rate on the Market & Deposit Porting at Terabank

A

s the first offer on the Georgian banking market with the highest interest rate and deposit porting – Terabank is starting a new deposit promotion.

Our new promotion offers customers the opportunity to open up deposits at the highest interest rate available locally. These terms are valid for two Terabank products: Term Deposit and Deposit Certificate.

Moreover, the promotion includes a further novel offer: deposit porting that allows customers to port deposits to Terabank without any financial loss.

For those term deposits opened in 2018, any interest that consumers will lose due to a violation of their deposit terms will be covered entirely by Terabank.

Deposit porting is something completely new on the Georgian banking market. “The offer will give customers a chance to be more flexible, port to Terabank without any obstacles or losses and receive the highest interest rate on their deposit opened as a part of this new promotion,” explains Keti Mghebrishvili, Head of Terabank’s Retail Banking Division.

Deposits are one of the most important and successful directions for Terabank. According to 2017 financial data, the increase in the bank’s retail deposit amounted to GEL 61 million (42%).

BUSINESS

GEORGIA TODAY JULY 17 - 19 2018

Despite RussiaGeorgia Economic Contacts, Relations Will Remain Strained

Image source: wcastl.org

BY EMIL AVDALIANI

I

n December 2017, Tbilisi signed a contract with a Swiss company, known by its acronym, SGS, to monitor the Abkhazia and Samachablo (the so-called South Ossetia) trade corridor, one provision of the 2011 deal.

In late May 2018, Moscow followed suit. The initiative involves linking Russia and Georgia via a trade corridor through South Ossetia, a faster, wider and, in winter, safer route than the Kazbegi-Upper Lars mountain pass over which most cargo between the two countries travels today.

The agreement comes on the 10th anniversary of the 2008 Russia-Georgia war and after almost three decades of separatist conflicts in the regions of Abkhazia and Samachablo. Despite geopolitical differences between Russia and Georgia, trade between the breakaway territories and the rest of Georgia has in fact increased. Even the European Union has begun testing options for opening the free trade agreement it has with Georgia to Abkhaz businesses.

In some respects, the agreement on trade corridors would be beneficial for Samachablo, the Russians and, most notably, Armenia, which has only one access route to Russia through the Georgian territory would likely enjoy some economic dividends.

Trade has been rising since 2015 at the only crossing for motor vehicles between Samachablo and Georgia proper, connecting Akhalgori to the Mtskheta-Mtianeti region of Georgia. In 2017, trade increased: and a large number of trucks passing through became common. An average of 20 trucks per day passed through the checkpoint to deliver goods from Tbilisi to the breakaway territory markets. Georgian commodities, despite costing 2-3 times the price in Samachablo, are nevertheless much cheaper in comparison with products imported from Russia. Just to give approximate numbers for ongoing trade: 1,500 tons of cargo reach Akhalgori per month.

As to the Abkhaz side, according to the Abkhaz authorities, 150 tons of commercial cargo cross the

150 tons of commercial cargo cross the conflict divide daily

The freight’s annual value ranges from $7 to $15 million conflict divide daily, in both directions. The freight’s annual value ranges from $7 to $15 million, according to International Alert studies conducted in 2010-2015.

The new trade route initiatives are clear, but there are many problems, among them the unwillingness on the part of any interested parties to compromise the territories’ political status. Moreover, as will be shown below, differences between Tbilisi and Moscow are in fact so wide that any fundamental progress in bilateral relations will be unlikely to follow.

GEORGIA-RUSSIA: A BIRD’S EYE VIEW This economic activity might be taken as a sign of gradual improvement in the bilateral relations of Georgia and Russia. However, when compared with the geopolitical constrains hindering any improvement, it is clear that Moscow and Tbilisi share some fundamental differences in foreign policy.

Georgia’s intention to integrate into the EU and NATO goes against Russian interests. I have written before that for Russia, Georgia’s NATO aspirations are problematic, but integration into the EU is far more crucial and long-term for Russian decision-makers.

Russians fear that there is a definite shift among the Georgians towards the benefits of the European economy, education and military capabilities.

Tbilisi and Moscow might sincerely wish to improve bilateral relations, and there are reasons for this. The resolution of security issues in the light of terrorist activities in the region would benefit both countries. Economic prospects, as noted in the beginning, too might drive the countries to work more closely. However, beyond that, it gets difficult to ascertain any additional factors for cooperation.

Russia’s military strategy does not have any room for Georgia’s NATO/EU integration. Moscow wants Tbilisi to reverse the course of its foreign policy – a nearly impossible task for any Georgian government as it would result in a public backlash, strong European and US reactions and overall geopolitical ramification in the region.

Thus, economic cooperation is important, but not so crucial as to cause Georgian-Russian relations to improve significantly.

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BUSINESS

GEORGIA TODAY

JULY 17 - 19, 2018

Georgian Brand ‘Gepherrini’ Opens Store in Hong-Kong

Source: Enterprise Georgia

BY ANNA ZHVANIA

G

eorgian handbag and accessories brand ‘Gepherrini’ has unveiled a new store in Hong-Kong.

With the support of the Ministry of Economic and Sustainable Development’s Agency ‘Enterprise Georgia’, Georgian leather bag manufacturer ‘Gepherrini’ has opened a store in the most prestigious retail center ‘Harbor City’ in Hong-Kong.

Harbor City is a large shopping mall in HongKong and is owned by a chain of office blocks and hotels. The mall features various branded boutiques

and, from now on, customers will be able to purchase Georgian leather handbags from Gepherrini there.

Within the framework of Enterprise Georgia, Gepherrini participated in an international exhibition APLF in Hong-Kong. During the exhibition, company representatives established contacts and raised interest among international buyers. As a result, Gepherrini signed a contract with InterBlock Hong Kong Limited, which offered to export Gepherrini products to Hong-Kong.

Gepherrini’ founded in 2014, is one of the fastestgrowing leather handbag brands. It is renowned as a high-end and top quality leather handbag manufacturer adding a refined lady-like appeal to any outfit.

Winery By & For Women Gets EU Support

Photo: Madamwine, Facebook

BY SAMANTHA GUTHRIE

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adamwine is a Georgian wine venture created by female entrepreneurs. It is the first winery in Georgia that is entirely created and run by women. The company boasts that its founder, managers, wine technical specialists, and all its employees are women.

Madamwine was founded in 2010 by Manana Akhvlediani with the mission to create products for women. Their website puts a decidedly feminist foot forward, reading, “research shows [that] the role of women today has increased much in all spheres. It is well-known around the world that women are considered the best winemakers (enologists). However Georgian people, in many centuries and years, thought that this job is only for men and there is only men’s prerogative to create alcoholic beverages. [Madamwine] dared to break this stereotype.” The winery’s core is a group of women united by their love of winemaking and “whose nature is similar to this divine drink.” Madamwine draws similarities between wine and women, seeing in both “a coquetry, playfulness, fun, severity and mysteriousness.” Madamwine has two product lines, Traditional and For Women, both of which produce wines using traditional Georgian grape

varieties. The For Women line gives its blends fun names such as “Lovely woman,” a semi-sweet red, “Coquette,” a semi-dry red, and “Housewife,” a dry red.

The enterprise is supported in part by EU4Business, an EU initiative which boosts the growth of small and medium-sized businesses by improving their access to financing and new markets. The initiative targets female entrepreneurs and projects in green energy. The winery plans to broaden its online marketing strategies with the support of EU4Business.

Madamwine describes itself as a “company which tries to provide the Georgian wine to the whole world, seen by eyes of the Georgian women. Plans are big, beautiful and endless, like the female phenomenon.”

EU4Business explains that as Madamwine is a small company, it does not have its own production line, but has taken part in many domestic and international exhibitions. The company has exported its wines to South Korea, Japan and Hong-Kong.

The company is focusing on online marketing to attract new customers and international investors.

EU4Business gave the winery financial support and connected them with a leading IT advisory firm to develop its concept and website design, and to integrate social media channels.

Akhvlediani has further plans to build a winery and actively participate in wine tourism.

10

BUSINESS

Georgian fusion restaurant "Meama" with an authentic taste tradition!

Adress: 8 Dzmebi Zdanevichebi str. Tbilisi Mob: 558 31 11 33

GEORGIA TODAY

JULY 17 - 19, 2018

French Institute in Georgia on Developing Partnerships EXCLUSIVE INTERVIEW BY ANTOINE DEWAEST

what is being done for peace in Georgia. Furthermore, we try to inform people in Georgia about this event. Last, the Institut Français must find EUR 4.5 billion from sponsors all around the world.

T

DESCRIBE A TYPICAL IFG STUDENT

he Institut Français in Georgia (IFG) first opened its doors to students in 2002. If we take a closer look at it, this is a win-win relationship: a way to enhance the French influence in the Caucasus but also an opportunity for Georgians to increase their cultural and linguistic background.

GEORGIA TODAY met with Cécile Fagegaltier, the Secretary-General of the IFG, who agreed to answer to our questions.

IS THE IFG A RELAY OF THE FRENCH EMBASSY? Of course. The IFG is a French Institution with Financial Autonomy under the control of the French Embassy, formerly known as Alliance Française (until 2002). We are funded by the Ministry of Foreign Affairs. Each year, 900 students go through our Institute and some pass the DELF, a diploma of French language studies. With this diploma, students can apply to French Universities.

TELL US ABOUT THE FRANCOPHILIA HERE The relationship is old and strong. France hosted refugees from Georgia during the second world war. The exiled government was located in Neuville-sur-Orge, and near it there are plans to build a Georgian cultural center. In addition, the Georgian national treasure was hidden in France in order to avoid soviet looting. Alexandre Dumas wrote a book about Georgia and the Caucasus in the mid19th century. And in 2008, France supported Georgia against Russia.

WHAT ARE THE MISSIONS OF THE IFG? According to the agreement of objectives 2018-2019, the IFG aims to enhance the attractive and above all innovative image of France. That is the first objective, working on excellence, innovation and the digital. This will is embodied by the Night of Ideas ('La Nuit des idées') which aims to celebrate the stream of ideas between countries, cultures, topics and generations. Another example will be the Paris Peace Forum (Paris, November, 11-12-13, 2018) of which the Institut Français is a founding member. So, the first goal, putting Paris at the heart of international diplomacy.

WHAT ROLE WILL THE INSITUT FRANÇAIS EN GÉORGIE PLAY AT THE PARIS PEACE FORUM? We are looking for Georgian speakers to discuss

A large majority of our students want to study abroad, in French Universities, in particular Sciences Po (Political Sciences), but there are also students who aim to get involved in business management. Others learn French for Tourism or just because of a real love of the French language. They can start the courses here when they are three years old, but the majority are between 10 and 35. Learning French at the Institut Français can be really useful. They can then study in France, and if they apply to a Master’s there, they will be able to do an internship provided by the French Ministry of Foreign Affairs.

TELL US ABOUT THE COURSES The IFG is based on the European framework. Having a Diploma for life, which allows you to study in France, requires a B2 level knowledge of French.

On average, you need 4 years of courses here to get that. For three classes each week over two months, it’s not so expensive, only 390 Lari. Moreover, each year we deliver around 20 scholarships in order to enhance student mobility. On May 26, Jean-Yves Le Drian ratified a partnership between six French universities and some Georgian universities. This partnership focuses on the food industry, agriculture, digital, tourism and wine studies.

In September, we’ll start the first: Tourism. We are confident, because for four years the number of Georgian students in France has grown by 35% (around 650 currently). We are also proud of the French Media Library we have in Tbilisi, among the best ways to connect the Georgian and French people.

IS THE IFG WELL-ESTABLISHED IN GEORGIA? Yes, it is. We go to local events, even if the cultural budget is down. Most events are audio-visual because Georgia is full of good cinema directors, and each year some Georgian directors come to the Festival de Cannes, the Prométhée Festival and the Festival of Annecy. France is also working with Georgia to help it get back its old movies from Russia, but for that, Georgia needs infrastructure and knowledge to keep them in good condition.

But, I think we should be more involved as many people do not know who we are.

Find the IFG at 75 Davit Aghmashenebeli Ave, Tbilisi and https://institutfrancais.ge/fr/

SOCIETY

GEORGIA TODAY JULY 17 - 19 2018

11

Russia, US Try to Revive Relations

BY SHAWN WAYNE

U

S lawmakers visited Russia this week in what is considered a mission to help revive the muchworsened Russian-US relations. The senators also aimed to observe how Russia's economy has been doing after four years of Western sanctions. The main meeting took place with Russia’s Foreign Affairs Minister, Sergey Lavrov, on July 3.

The senators’ visit in itself is important as rarely have such events taken place in the last several years. However, what makes this nascent Moscow-Washington cooperation more crucial is the sequence of events leading up to the July 3 meeting as the visit comes at the time both countries are preparing for the TrumpPutin summit on July 16 in Helsinki, Finland.

The presidents are expected to discuss a whole range of problematic issues concerning the two states across the Eurasian landmass. Russia and the United States have also agreed that their top diplomats will meet after the presidential summit, the Russian FM said.

This follows Trump’s recent consistent rhetoric that Russia must be readmitted to the G8 and the relations be improved.

Quite naturally, Ukraine and Georgia have become worried, as top politicians

in Kyiv and Tbilisi fear their countries’ core geopolitical interests could potentially be compromised in an apparent Russo-American rapprochement.

Yet, there is substance behind the need for Russia-US cooperation. Both countries want improvement in relations primarily in the realms of Syria and Ukraine. It is in Russian interests to gain some (even minor) geopolitical concessions from Washington at a time when the Western front has remained pretty much united against the Russian actions in Ukraine since 2014.

However, the intention behind the Russian diplomatic moves (although the idea of senators’ visit seems to have originated from the US) is based on the Russian strategy of trying to divide the Western opposition. Indeed, the time seems to be ripe for those efforts to succeed. The transatlantic alliance between the US and the European Union has been strained recently with the US pulling out of the Iran nuclear agreement and heaping additional taxes on European steel and aluminum.

Moscow clearly sees that dangers to Western unity are apparent, but it is still unclear what will come of these US-EU economic and diplomatic confrontations.

True, for Moscow it will be a big opportunity to grab, but the maximum the Russian leadership can hope for is the (partial) lifting of EU sanctions as well as minor concessions in the field of the NATO military build-up in eastern

Europe. Yet, even if this happens, from a broader perspective, the EU will still hold important leverage in Ukraine as Kyiv remains firmly under the European economic influence.

The EU-US disagreements are important, but for the moment not so much as to cause real fractures in the trans-Atlantic partnership. Europe and the US see that they need each other to keep Russia

at bay. Europe understands that without the US’ military resolve in eastern Europe, Ukraine’s military capabilities are unlikely to improve, making Moscow less hesitant in its actions on its borderlands.

The same goes for Georgia. In Tbilisi’s understanding, any meandering on the Western part would near geopolitical concessions and the increase of Russian influence.

It is for the moment unclear what Moscow and the US are hoping for in trying to revive the bilateral relations. There are simply so many fronts where both countries’ geopolitical agendas clash that any prospective cooperation would need a clear concession from either the Russians or the Americans. The TrumpPutin summit is expected to bring more clarity to the discussion.

200,000 Children Born to Georgian Emigrant Families Since 1990

BY SAMANTHA GUTHRIE

T

he Georgian organization Demographic Revival Foundation has released a report that estimates that since 1 9 9 0, a p p rox i m a t e ly 200,000 children have been born into Georgian emigrant families, as reported

by Commersant.ge.

The figure is based on demographers’ calculations: official figures are not particularly reliable, as they do not account for the significant numbers of undocumented Georgian emigrants living in Europe and North America.

Tamar Chubinidze, head of the Demographic Revival Foundation, explains that most children born abroad to Georgian citizens will not return to their family’s historic homeland, instead building a life in the country of their birth.

"This is a serious loss for Georgia,” says Chubinidze, “The children of Georgians who were born abroad, show interest in their historical homeland, but as guests only. We can only hope that as the borders are opened, the attractiveness of Georgia will grow, and at least some of them will come to live here.”

Similar patterns are seen in many countries, including in other former Soviet states. The case of the Armenian dias-

pora is particularly notable. The global Armenian community numbers approximately 10 million, while the domestic population is under 3 million. The website of the President of Armenia writes that “there are Armenian communities in more than 100 countries all over the world” and that “Armenians of the Diaspora are mainly involved with issues concerning preservation of the national identity; they establish schools, churches,

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cultural homes and pan-Armenian organizations.” The Armenian Diaspora Ministry was established in 2008.

An Office of the State Minister of Georgia for Diaspora Issues was also established in 2008, but it was dissolved and its duties absorbed by the Ministry of Foreign Affairs in late 2016, although the website is still active, if outdated.

Chubinidze warns that Georgia’s visafree regime with the European Union,

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

established in March 2017, has a significant downside. She claims that the number of emigrants from Georgia to Europe is four times higher than before the regime came into effect.

In the final quarter of 2017, more Georgians citizens applied for asylum in Europe than from any other former Soviet state. The European Asylum Support Office reported that the number of Georgian asylum seekers increased 39% year-

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on-year to reach 10,465. Eurostat reported that 4,970 Georgians requested asylum in the European Union in the first quarter of 2018.

In the midst of Europe’s migration crisis, the increase was seen quite unfavorably. In February, German Foreign Minister Thomas de Maizière warned the Georgian government that if the flow of asylum seekers continued at that pace, they would be forced to consider reinstating visa requirements. At that time, Dorota Dlouchy-Suliga of the EU Delegation in Tbilisi was not worried, telling EurasiaNet, “In the past, we have had a similar experience with the Balkan countries. There was a bump at first...we hope that the number of applications from Georgia will go down.”

The predication was realized, as 2018 has seen decreasing numbers of asylum seekers each month. Germany’s Federal Office for Migration and Refugees reports that in January 2018, there were 745 asylum applications filed by Georgians in Germany, while in February there were only 595, March 490, April 350 and in May just 221.

Nine countries in the European Union have granted Georgia the status of ‘safe country’ from which no asylum applications are accepted. These countries are Ireland, Luxemburg, Belgium, Netherlands, France, Bulgaria, Lichtenstein, Austria and Iceland.

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