Issue #964 Business by Georgia Today

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Issue no: 964/87

• JULY 18 - 20, 2017

• PUBLISHED TWICE WEEKLY

PRICE: GEL 2.50

In this week’s issue... Georgian National Team Wins 3 Medals at International Chemistry Olympiad

NEWS PAGE 2

Galleria Tbilisi to Open Autumn 2017

FOCUS

PAGE 6

King David to Open Doors to Business and Residents

ON TOURISM

Airbnb accommodation and tourism competitiveness are on the rise in Georgia

PAGE 8 PAGE 4

Source: The Airbnb Blog

Poroshenko in Georgia, Opens Georgian-Ukrainian Business Forum BY NINO GUGUNISHVILI

etro Poroshenko, President of Ukraine, who arrived in Georgia Monday, opened the GeorgianUkrainian Business Forum at the Radisson Blu Iveria Tbilisi Hotel together with Giorgi Margvelashvili, President of Georgia. The Business Forum focuses on deepening the economic and trade relations of the two countries and developing partnerships between

Source: The Japan Times

the Georgian and Ukrainian business sectors. President Poroshenko arrived in Tbilisi on an official visit, joined by his family members and a delegation of Ukrainian government officials and Ukrainian business sector representatives. An official welcoming ceremony was held at the President’s Palace, followed by a presidential meeting. During Poroshenko’s official visit, the two presidents will view the occupation line at Khurvaleti village. Poroshenko is also expected to visit the Adjara and Svaneti regions. Meetings with the Prime Minister of Georgia and the Chairperson of Parliament are also planned.

BBC Says Magnificent Georgian Monasteries on Turkish Territory are Crumbling SOCIETY PAGE 9

Çabuk Still Facing Extradition as Erdogan Threatens to “Chop off the Heads of Traitors” POLITICS PAGE 11 Prepared for Georgia Today Business by

Markets As of 14ͲJulͲ2017

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

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

INDICES

w/w

m/m

BONDS

Price

w/w

m/m

GBP 35.13

Ͳ4,4%

Ͳ4,3%

GEOROG 04/21

105.30 (YTM 5.18%)

+0,7%

Ͳ0,3%

GBP 3.73

Price

+0,7%

Ͳ1,2%

GEORG 04/21

111.55 (YTM 3.54%)

+0,2%

Ͳ0,4%

GBP 16.21

Ͳ1,1%

Ͳ7,0%

GRAIL 07/22

109.70 (YTM 5.50%)

+0,2%

Ͳ1,1%

BGEOLN 07/23

101.78 (YTM 5.65%)

+0,2%

Ͳ0,1%

Price

w/w

m/m

48,91

+4,7%

+4,1%

CURRENCIES

Price

w/w

1 228,70

+1,3%

Ͳ2,6%

GEL / USD

2,3987

+0,1%

Ͳ0,5%

GEL / EUR

2,7454

+0,7%

+1,5%

m/m

Price

w/w

m/m

GEL / GBP

3,1416

+1,7%

+2,2%

FTSE 100

7 378,39

+0,4%

Ͳ1,3%

GEL / CHF

2,4940

+0,3%

+0,4%

FTSE 250

19 408,36

+0,1%

Ͳ2,8%

GEL / RUB

0,0406

+2,3%

Ͳ3,3%

DAX

12 631,72

+2,0%

Ͳ1,4%

GEL / TRY

0,6783

+2,4%

Ͳ1,9%

DOW JONES

21 637,74

+1,0%

+1,2%

GEL / AZN

1,4236

+0,2%

Ͳ0,5%

6 312,47

+2,6%

+1,9%

GEL / AMD

0,0050

NASDAQ

146,51

+4,3%

+2,8%

GEL / UAH

0,0923

+0,3%

Ͳ0,4%

1 047,05

+4,4%

+3,3%

EUR / USD

0,8719

Ͳ0,6%

Ͳ2,2%

SP 500

2 459,27

+1,4%

+0,9%

GBP / USD

0,7633

Ͳ1,6%

MICEX

1 960,69

+2,5%

+6,7%

CHF / USD

0,9635

Ͳ0,1%

Ͳ0,8%

MSCI FM

2 732,51

+1,2%

Ͳ0,3%

RUB / USD

59,0129

Ͳ2,3%

+2,8%

GT Index (GEL)

1 133,66

TRY / USD

3,5381

Ͳ2,2%

+1,4%

GT Index (USD)

922,38

Ͳ0,4%

+0,6%

AZN / USD

1,7000

+0,8%

MSCI EM EE MSCI EM

Ͳ2,7%

NEWS

GEORGIA TODAY

JULY 18 - 20, 2017

Tbilisi to Host Georgian - Greek Business Forum Georgian National Team Wins 3 Medals at International Chemistry Olympiad BY TAMZIN WHITEWOOD

rom July 6 to July 15, the 49th International Chemistry Olympiad ICHO 2017 was held in Thailand with the participation of 80 countries. The Georgian national team also participated in the tournament this year and was awarded three medals for its country, the first such prize won for Georgia. Bronze medals were awarded to Davit Rijinashvili, Lekso Pichkhadze and Saba Tavdgiridze. The Georgian National

Team is composed of four members, each a winner of the National Olympiad of Georgia. Rijinashvili, Pichkhadze and Levan Gojiashvili are students at the Demirel Private College, and Tavdgiridze is from Komarov school. The boys obtained some of the best results in the competition. "We are incredibly happy with such a result. Especially when two pupils from our school were among the winners. This is a great victory for our country and our school, especially considering that the national team has not had a win before, so we are happy our pupils were successful," said Nino Kavtiashvili, Director of Demirel.

Genadi Arveladze meets with George Katrougkalos

BY NINO GUGUNISHVILI

enadi Arveladze, Deputy Minister of Economy and Sustainable Development of Georgia, met with George Katrougkalos, Alternate Foreign Minister of Greece for European Affairs, during the ‘Georgia’s European Way - Ensuring Regional Stability Conference’ held in Batumi last week. The sides discussed the eco-

nomic partnership between the two countries and organization of the Georgian-Greek Business Forum to be held this year. Arveladze noted that all major issues for the fruitful cooperation of the two countries were discussed during the meeting, as was work on further strengthening and developing relations between the Georgian and Greek business sectors. “Organization of the Business Forum was agreed on. We expect it to be an excellent platform for business repre-

sentatives of the two countries, enabling them to connect and possibly realize joint projects,” Arveladze said. He and Katrougkalos are heads of an inter-governmental commission on Georgia and Greece’s economic and technical cooperation, the third session of which was held in May in Athens. The commission works on issues of deepening cooperation in the spheres of trade and industry, agriculture, tourism, energy, transport and innovation, communication, culture, defending intellectual property rights and more.

BUSINESS

GEORGIA TODAY

JULY 18 - 20, 2017

The Galt & Taggart Research team comprises Georgian and Azerbaijani finance and economic experts who have broad experience of covering the macro and corporate sectors of the two countries. Our current product offering includes Georgian and Azerbaijan macroeconomic research, Georgian sector research, and fixed income corporate research. For free access to Galt & Taggart Research, please visit gtresearch.ge or contact us at gt@gt.ge.

Tourism Market Watch FOR GEORGIA TODAY BY KAKHABER SAMKURASHVILI

ector research is one of the key directions of G a l t & Ta g g a r t Research. We currently provide coverage of Energy, Healthcare, Tourism, Agriculture, Wine, and Real Estate sectors in Georgia. As part of our tourism sector coverage, we produce a monthly Tourism Market Watch, adapted here for Georgia Today’s readers. Previous reports on the sector can be found on Galt & Taggart’s website - gtresearch.ge.

AIRBNB’S PRESENCE IN TBILISI GROWS AT AN ASTOUNDING PACE Over the last two years, the number of Airbnb listings in Tbilisi has more than tripled from 2,100 properties in 2015 to 7,000 this year. Almost 4,300 active hosts are now offering a wide array of accommodation options. The most prevalent are one and twobedroom apartments, which together account for over 60% of listings in Tbilisi. Notably, there are almost 1,000 active hosts who provide two or more listings, with as many as 100 hosts offering five or more. It is safe to say that buying apartments in Tbilisi with the aim of securing rental income via Airbnb has become a niche business model.

AIRBNB APARTMENT RENTALS FILLING THE GAP IN THE BUDGET/ECONOMY ACCOMMODATION SEGMENT IN TBILISI This is in line with how Airbnb currently fits in the global accommodation landscape. Only about 10% of its worldwide bookings are for business travel, so the largest impact is felt in the leisure segment, where budget/economy

accommodation is dominant. Based on our estimates, there are approximately 3,500-4,000 hotel rooms in the budget/economy segment in Tbilisi. We consider entire home listings ranging from studio size to 3-bedroom apartments on Airbnb, which currently add up to almost 4,700 listings, to be competing directly with this segment. Despite the strong growth in supply, occupancy rates for Airbnb rentals in Tbilisi have been on the rise. The 50th percentile of listings in June 2017 was at 50% occupancy (+32ppts y/y), while the top 10% of properties enjoyed occupancy rates of 93% and higher (+15ppts y/y). Average nightly rates in June 2017 for one and two bedrooms ranged between US$ 19 and US$ 25, while RevPAR for all available listings in Tbilisi was at US$ 23 for the month of June, up 30.6% y/y. Based on our estimates, the 50th percentile, in terms of occupancy and RevPAR, of Airbnb listings is largely in line with the performance of budget/ economy hotels in Tbilisi.

INTERNATIONAL UPSCALE HOTELS IN TBILISI NEARLY BOOKED TO CAPACITY FOR SUMMER, DESPITE HIGH PRICES COMPARED TO PEERS Based on booking.com data, the highest prices in the international upscale segment in Tbilisi are commanded by Radisson Blu Iveria and Biltmore, averaging GEL 637 to GEL 775 over July and August, while Hualing Hotels & Preference and Tbilisi Marriott average between GEL 479 and GEL 574. Notably, Ambassadori Hotel Tbilisi, a local 5-star hotel, commands one of the highest rates of any hotel in Tbilisi (GEL 624-773 over Jul-Aug). In the international midscale segment, prices average GEL 271 to GEL 501, with Holiday Inn Tbilisi and Courtyard Marriott having the highest rates. Rates at international hotels in Tbilisi are significantly higher

than at comparable hotels in peer countries. For example, average nightly rates for Radisson Blu in Tbilisi are 67.6% higher in July and 79.1% higher in August than at comparable Radisson Blu hotels in Eastern European and CIS countries. Such differences in prices point to a scarcity of branded hotels in Tbilisi, which we expect will be remedied once the extensive pipeline begins to materialize, pushing prices down closer to peer averages.

GEORGIA RANKED 70TH OF 136 COUNTRIES IN TRAVEL & TOURISM COMPETITIVENESS INDEX (TTCI) 2017, PUBLISHED BIENNIALLY BY THE WORLD ECONOMIC FORUM (WEF) In the previous edition, Georgia ranked 71st among 143 countries. The TTCI assesses four key areas: Enabling Environment, T&T Policy and Enabling Conditions, Infrastructure, and Natural and Cultural Resources. The most notable improvement compared to the 2015 edition was moving up 10 positions in Business Environment, which was mainly driven by improved property rights and efficiency of legal framework. While the country ranks extremely highly on Ease of Hiring Foreign Labor, skilled local labor remains a challenge, as indicated by the lowest rankings in Extent of Staff Training, Degree of Customer

Orientation, and Ease of Finding Skilled Employees. Lastly, the report highlights the urgent need for further development of tourist service and air transport infrastructure in Georgia.

NUMBER OF INTERNATIONAL ARRIVALS UP 28.5% Y/Y TO 0.67MN IN JUNE 2017 Of the top four source markets, there was strong growth from Armenia (+28.8% y/y), Azerbaijan (+16.6% y/y), and Russia (+45.0% y/y). The downward trend persists in the number of arrivals from Turkey (-6.4% y/y), but the decline was a modest one, compared to the previous three months. Arrivals from the EU were up 27.0% y/y to nearly 35,000 visitors.

almost 121,000 visitors and surpassed the number of Ukrainian visitors (+18.8% y/y) in the first six months of 2017.

y/y to over 128,000 visitors, with Germany (+32.3% y/y), Poland (+24.9% y/y), and UK (+27.9% y/y) driving the growth.

WHILE THE TOP FOUR SOURCE MARKETS ACCOUNTED FOR 80.7% OF INTERNATIONAL ARRIVALS IN JANUARY - JUNE, SECONDARY SOURCE MARKETS ALSO POSTED ROBUST PERFORMANCES

TOURIST CATEGORY CONTINUES TO DRIVE ARRIVAL GROWTH IN JUNE 2017

Arrival growth from secondary (non-EU) source markets contributed 3.7ppts to the overall growth of 13.4% y/y. The number of Israeli visitors increased 48.1% y/y to over 49,000 visitors, while the number of Indian visitors was up 132.7% y/y to over 27,000. Arrivals from the EU were up 23.2%

The number of overnight visitors (‘tourist’ category) was up 43.0% y/y – the largest y/y growth on record – and accounted for 49.3% of international arrivals. Sameday arrivals were roughly flat, while transit visitors posted an outsized 42.9% y/y growth rate. The number of tourist arrivals is up 29.1% y/y to 1.31mn in the first half of 2017, while the number of same-day visitors is down 2.7% y/y and the number of transit visitors is up 17.1% y/y.

NUMBER OF INTERNATIONAL ARRIVALS UP 13.4% Y/Y TO 3.00MN VISITORS IN FIRST HALF OF 2017 The number of visitors increased from all major source countries except for Turkey (-15.9% y/y). The largest individual contributors to overall growth were Armenia (+16.2% y/y, +3.4ppts) and Russia (+27.5% y/y, +4.1ppts). Azerbaijan contributed 1.9 percentage points, as the number of visitors from Azerbaijan posted a modest increase of 7.4% y/y from the high base of the first half of 2016 (+18.2% y/y). The number of Iranian visitors was up 3.2x to

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BUSINESS

GEORGIA TODAY

JULY 18 - 20, 2017

Galleria Tbilisi to Open Autumn 2017

Galleria Tbilisi

BY NINO GUGUNISHVILI

new shopping center, Galleria Tbilisi, is set to open this autumn on Rustaveli Avenue, Tbilisi, bringing brands like H&M, Calvin Klein, and Armani Exchange to the Georgian market for the very first time. “The brand new multi-functional shopping mall, the construction of which started two

years ago, will have a two-level children’s entertainment center, an integrated fitness center, and an Apple-designed store for the first time in Georgia,” Nika Tsintsadze, Galleria Tbilisi Director, said in a televised interview. Galleria Tbilisi will also have restaurants, cafés, a bowling alley, and cinema space. Galleria Tbilisi is situated exactly where the former Tbilisi Department Store (უნივერმაღი თბილისი) on Freedom Square was. The project is financed by the Georgian Co-Investment Fund.

BUSINESS

GEORGIA TODAY

JULY 18 - 20, 2017

EIB & ProCredit Bank Support Hundreds of Companies in Georgia

ince 2011, the European Investment Bank Group (EIB) and ProCredit have jointly improved access to long term finance for small and medium enterprises (SMEs) in Georgia. So far, 872 SME projects have received EIB financing through ProCredit Bank Georgia, totaling EUR 25 million. “Unlocking the potential of the private sector in Georgia through the availability of affordable, long-term financing for enterprises, in particular SMEs, is one of the EIB’s strategic priorities, which we welcome very much. Also, thanks to our partners ProCredit Bank Georgia, our activities are bearing results in the implementation of important projects,” said Heinz Olbers, EIB Neighboring Countries Department Director, during a presentation attended by Finance Minister of Georgia, Dimitry Kumsishvili, of selected projects financed by ProCredit Bank Georgia under EIB Loans for SMEs and/or EIB InnovFin SME Guarantee. The EIB signed three loans with SMEs with ProCredit Bank Georgia, in 2011, 2012, and 2015, with a total value of EUR 40 million. In March this year, following the signature of the InnovFin SME Guarantee agreement with the EIF, ProCredit Bank Georgia also started to use the InnovFin SME Portfolio Guarantee. The Bank’s activities in Georgia, as well as in other Eastern Partnership countries, help to reach the goals set up by the EU’s European Neighborhood Policy by financing projects that promote prosperity and increased regional integration. This activity increases the economic stability in the region and helps to forge stronger intra-regional partnerships and supports low carbon and climate resilient growth. The EIB, the European Union’s bank, finances projects in Georgia on the basis of the EU External Lending Mandate. The mandate provides the EIB with a guarantee covered by the EU budget for projects in the areas of social and economic infrastructure, local private sector development, in particular SMEs, and climate change mitigation and adaptation. The EIB is a AAA-rated, policy-driven EU financial institution raising funds in capital markets to on-lend to eligible investments supporting EU policies and priorities. The EIB passes on the financial advantage it obtains through benefits such as attractive interest rates and long maturities to projects that score highly in terms of EU objectives and are consistent with the Bank’s commitment to supporting sound, sustainable investments. The EIB’s extensive experience in financing projects, its in-house sector expertise and its deep knowledge of European policies facilitate the identification of projects that match both national and EU priorities. The EIB’s project appraisal covers technical, economic, financial, environmental and social aspects as well as credit

Photo source: EIB website

risks, provides for the appropriate mitigants and conditionality and helps structure projects in line with EU standards. The EIB thus acts as a flag carrier for EU policies outside the EU, contributes to the dissemination of best practices and facilitates the participation of other financiers in EU priority projects. The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. InnovFin ‘InnovFin – EU Finance for Innovators’ is a joint initiative launched by the European Investment Bank Group (EIB and EIF) in cooperation with the European Commission under the EU Research and Innovation Program Horizon 2020. InnovFin consists of a series of integrated and complementary financing tools and advisory services offered by the EIB Group, covering the entire value chain of research and innovation (R&I) in order to support investments by the smallest to the largest enterprises. In February, the European Investment Fund (EIF) and ProCredit Bank JSC (Georgia) signed the first agreement for SMEs and small mid-caps in Georgia under InnovFin. This agreement, supported by the InnovFin SME Guarantee facility with the financial backing of the EU under Horizon 2020, is expected to enable ProCredit to provide EUR 50m worth of loans to innovative companies over the next two years. Since the beginning of 2016, all EU activities that support SMEs in the Eastern Partnership countries have come under the umbrella of EU4Business.

King David to Open Doors to Business & Residents

he premium class multifunctional complex, which brings together the King David Residences and the King David Business Center’s towers, is now complete. The new residential complex is to open in September. The $70 million project received international recognition in 2016 when it was nominated as the best multifunctional complex in Georgia by the International Property Awards. The King David Residences are located in the 32-floor tower, which offers hotel services to its residents. High ceilings, stained-glass views, free planning and well-built infrastructure are “to open up the chance of a fresh lifestyle in the city center of Tbilisi,” the company states. At this stage, 45 % of the residences have been sold and the vast majority (85%) of the respective clients are said to be Georgian businessmen who actively operate in a wide range of business sectors. The 19-floor tower is occupied entirely by the King David Business Center which will be launched this month. From summer 2017, companies such as the Colliers International, Samsung Georgia and PwC Georgia will be represented in the King David Business Center. For interested parties, King David offers flexible payment terms. One can purchase office space, as well as take on a lease. Those interested in purchasing residences may utilize the 0% internal installment payment option, as well as receive a loan up to 20 years with 10 % co-sharing. The minimum size of residences is 48 sq. meters.

SOCIETY

GEORGIA TODAY JULY 18 - 20, 2017

Annual Folk Festival Art-Gene Kicks Off BY NINI GUGUNISHVILI

olk Festival Art-Gene is to open on the territory of Museum of Ethnography near Turtle Lake (Kus Tba), Tbilisi, on July 17 and run until July 24. The details were confirmed on Friday at TBC Bank’s head office, it being one of the supporters of the festival. Folk Festival Art-Gene, which opened with a regional tour in Surami on July 10, promises many novelties this year, arriving in Tbilisi in the framework of the ‘Check in Georgia’ project and opening with the concert of Sophie Villy, a young Georgian singer-songwriter, who successfully performs internationally. The band Asea Sool will be performing for the first time on the Art-Gene stage on July 18. Robi Kukhianidze and Outsider are to perform on July 19, followed by the band Region on July 20, and by Prani on July 21. Nino Katamadze and the Insight will be the guests of Art-Gene on July 22, and Niaz Diasamidze and 33a will perform the following day on July 23. A concert of the Sukhishvili National Ballet will close the festival on July 24. For the entire week of the festival, exhibitions of traditional Georgian crafts will be held throughout the Museum of Ethnography, an exhibition entitled “Europe in the eyes of the 19thCentury Georgians” to be a part of it, alongside musical performances from the regions of Georgia, and ‘Shavparosnebi’, a Georgian martial arts show. As per tradition, there will also be Georgian cuisine and hammock zones. “We are delighted to be the supporters of Art-Gene festival; it’s a very important

BBC Says Magnificent Georgian Monasteries on Turkish Territory are Crumbling BY THEA MORRISON

Tamar Melikishvili, founder amd organizer of Folk Festival Art-Gene

platform for promoting and popularizing our cultural heritage among the younger generations. Art-Gene has also been introducing new emerging artists and folklore representatives through the festival for thirteen years already,” said Nino Egadze, TBC Bank Marketing Director. As a supporter of the event, TBC Bank offers specially organized entertainment zones for festival visitors, with photo stands, rugby-themed activities, and a write in Georgian (#წერექართულად) corner, for children and youngsters, with numerous games planned. Founded in 2004, Folk Festival ArtGene has collected and archived unique ethnographic materials from all of the regions of Georgia, many of them in danger of being lost. Bringing together folklore and contemporary music, the festival plays a significant role in folklore popularization among the younger generations and in assisting the development of regional folklore ensembles. “It is one of the first festivals to give

folk ensembles a possibility to introduce their art to new audiences throughout the country,” said Tamar Melikishvili, Art- Gene festival organizer and founder. “It has always been the festival’s priority to introduce young artists to the audience, as well as bringing traditional and modern music together”. Art-Gene also widely supports young artists, introducing new musicians and bands by promoting live music. For many of them, Art-Gene has become an extremely successful jump-start in their careers. Apart from promoting folklore, traditional Georgian crafts and live music, the festival pays attention to regional development and tries to promote places which have historical, cultural or touristic significance to the country, carefully choosing locations for the regional tours of the festival each year. This year, it was Mtskheta, the ancient capital of Georgia, which is on the UNESCO World Heritage list.

BC has dedicated an article to Georgian medieval monasteries that are now on the territory of the neighboring country, Turkey. “Turkey’s Forgotten Georgian Kingdom” is the name of the article, which explains that the ongoing governmental disputes between the two states have left the fate of the medieval architectural wonders in limbo. “A rugged, remote area where unforgiving rocky crags give way to green oases, north-east Turkey is home to magnificent Georgian monasteries from the medieval principality of Tao-Klarjeti, a former feudal state ruled by the Bagrationi royal family,” the article reads. The authors of the article, Katie Nadworny and Emma Harper, explain that Tao-Klarjeti was once a part of the United Kingdom of Georgia that thrived during the 12th and 13th centuries. However, repeated incursions by the Turco-Mongol conqueror Timur in the late 14th Century led to the demise of the kingdom, and in the mid-16th Century, Tao-Klarjeti came under Ottoman rule, which led to it becoming a part of modern-day Turkey. “During the kingdom’s golden age, TaoKlarjeti was the center of monastic life governedbytheGeorgianOrthodoxChurch. Today, striking remnants of the principality’s spiritual influence remain tucked in tiny Turkish villages among the visually arresting Kaçkar Mountains near the Turkey-Georgia border,” the article reads.

Oshki Monastery. Source: BBC

The authors say that Oshki Monastery (963 - 973 AD) in Erzurum Province, one of region’s grandest Georgian Orthodox sites, is in danger, as the expansive, cruciform-shaped monastery is now mostly roofless, though the open sky emphasizes the splendor of the soaring central dome. “Disagreements between the Turkish and Georgian governments on how to proceed with restorations have left the monastery in a state of neglectful limbo, and the majesty of Oshki is left open to the elements, crumbling slowly,” the article reads. The article says that Ishan Church near the village of Arpacık, first mentioned in a Georgian manuscript in 951 AD, has suffered a fate worse than neglect: a haphazard restoration. “The sandblasted stone exterior belies the building’s age, while the large, smooth, square-cut stones – some a glowing white and others a perky pink – look more modern than medieval. Crowned with a brand new, yet uneven, red-tiled roof and bordering a carelessly excavated archaeological site, the church reveals the slipshod approach to preservation that is so prevalent in this region,” the article reads. As for the Dörtkilise church from the town of Yusufeli, the images of the Orthodox Christian saints have faded over time and the white walls beneath them are desecrated by graffiti. “Meanwhile, the slanted floor littered with debris lends credence to the claim that the church has most recently been used as a barn,” the article says. The authors stress that with no cohesive preservation plan in place, the fate of these architectural wonders remains uncertain.

SOCIETY

GEORGIA TODAY

JULY 18 - 20, 2017

Illegal Kosmonavtika: an Exhibition

REVIEW BY DAVID MONGAZON

ead over to the Institute of Space Structures in Saguramo, outside Tbilisi, before July 22 to see an exhibition that gathers various installations and workshops around a fascinating theme. The building now housing the Institute of Space Structures was created in 1979 as the former Soviet Georgian Space Program but very little is known about its purpose. The only well-known program was the construction of a Georgian satellite called “Reflector,” put into orbit in 1999. One of the buildings in the complex, an anti-gravity pool, was demolished and the metal within sold. The Institute’s hidden location and the fact that it was abandoned in 2006, and, further, that it has remained unexploited until very recently, constitutes the perfect framework for the abovementioned exhibition. In fact, these off-road abandoned buildings are nowadays the symbol of a society that is forgetting its past and that is perhaps trying to avoid questions by allowing such remnants to be destroyed, so preventing future generations from the chance of understanding what happened. This is precisely what the Soviet Union looks like to the young generation: a blurry era of issues which this exhibition aims to dig up by questioning propaganda and state secrets through different generations of artists, from those who knew socialist realism and the monopoly of the state, to their younger contemporaries. The display includes installations by artists Mariam Natroshvili and Detu Jincharadze, making a “ghost” museum of Unidentified Files, gathering different material related to the most important constituent of Soviet utopia, the conquest of space.

Ana and Tamara Chaduneli explore the influence of advertising on society, both in the Soviet system propaganda, which promoted utopian ideals, and within the current system; emphasizing the fact that while the techniques may have changed, the desire to control remains the same. Besides the display of works, the exhibition also included the workshop “protest aerobics” which involved “conceiving, developing and examining” efficient physical forms of protest, run by the Group Bouillon collective. The exhibition also brings into question the monopoly of states and corporations nowadays, those which failed to disappear with the collapse of the Soviet Union, attempting to imagine a similar scenario for today’s structures. The term ‘Illegal Kosmonavtika’ itself was coined by Georgian artist Zura Jishkariani and refers to an individual with rudimentary skills for survival in such case the current system also fails. And this precisely involves transgressing from the norm imposed by greater interests, be they legal, economic or social. The exhibition uses its location to emphasize space conquest and introduce the possibility of a space program based on people, with space already being colonized by both state pride and propaganda, and corporate interests, taking as examples the project of mines on Mars. Those ‘Illegal Kosmonavtika’ among us should first overcome financial problems, surveillance and even mockery in order to achieve their goals. But the exhibition advocates, through its different installations and workshops, drawing on do-it-yourself solutions in order to achieve great things, such as discovering new territories. The display is on at the Institute of Space Structures in Saguramo, 30km north of Tbilisi. Further details about participants, venue and the theme of ‘Illegal Kosmonavtika’ can be found on the official website of apexart, a non-profit art organization.

Georgian Dance Group Injured in Accident BY THEA MORRISON

bus carrying members of the Georgian dance group Lamprebi has been involved in an accident in Giresun, Turkey. Vice Consul of Georgia, Manana Beriashvili, stated that 38 people were on the bus and were subsequently taken to four different hospitals. The news was confirmed by the Ministry of Foreign Affairs (MFA) of Georgia. The MFA released a statement which claims that no human casualties have been reported. “On July 16, a road accident took place near Giresun (120 km from Trabzon and 320 km from Sarpi). The children's dance group Lamprebi were on the bus. There are no casualties, 38 people were injured and were sent to four clinics around the region. General Consulate staff are present at the hospitals to check the health of the children and are in constant contact with family members of the injured," the MFA stated. Georgia’s Public Broadcaster says that only four

Photo source: 1tv.ge

injured remain in hospital now, one of them the driver, whose condition is grave; the others have minor injuries. The Ministry of Health of Turkey has said it will provide full support to the Georgian citizens injured in the road accident. A phone conversation took place between the Minister of Health of Georgia, Davit Sergeenko, and his Turkish counterpart. The Turkish Health Minister said his office is monitoring the process of treatment of the injured Georgian citizens.

POLITICS

GEORGIA TODAY JULY 18 - 20, 2017

Ambassador: Turkey Ensures Transparent & Fair Trials BY THEA MORRISON

Çabuk Still Facing Extradition as Erdogan Threatens to “Chop off the Heads of Traitors” BY DAVID MONGAZON

n July 16, European Parliament Member (MEP) Rebecca Harms visited Georgia to support Mustafa Emre Çabuk, a Turkish teacher who has been in custody since May 24 when the Turkish government accused him of participating in a terrorist organization, and which now demands his extradition. Tbilisi City Court ruled on May 25 that Çabuk would stay in a three-month pre-extradition detention. Çabuk settled in Georgia 15 years ago and began working at the Demirel Private College in Tbilisi, which is associated with the Gülen Movement, an organization created by the US-based imam Fethullah Gülen. This movement is considered a terrorist group by the Turkish government, which calls it the FETÖ (translated as the “Gülenist Terror Organization”). The Turkish government claim the FETÖ is behind the attempted coup that shook Turkey one year ago. The MEP stated at a special pressconference that “teaching in a school linked to Gülen is not a crime” and called on the Georgian government to grant political asylum to Çabuk. Harms’ visit was no coincidence, since it is occurred on the anniversary of the attempted coup. Throughout the past year, Turkish authorities have held what some consider a “witch-hunt” against alleged supporters of the coup, resulting in hundreds of arrests, including of journalists and scholars. The same day of the MEP’s visit, Turkey celebrated the anniversary of the coup failure, on the occasion of which President Recep Tayyip Erdogan threatened to “chop off the heads of traitors,” referring to the people he accuses of having tried to destabilize his power. At the top of his list is the Gülen movement. Harms spoke critically of the current situation, saying that “it goes beyond [Çabuk’s] personal case,” highlighting basic human rights: “nobody should be prosecuted like that, [especially not] a teacher.” But the Georgian government sees things otherwise- Georgia is placed between two major international powers: Russia and Turkey. Since 2008 and the breaking of relations with Russia, Georgia has had no other choice but to

cooperate with and conform to the whims of its ever more controversial neighbor. And what stands out in this latest case is that Çabuk seems to be beyond reproach. Georgian authorities investigated the school where he taught but found nothing they could relate to a terrorist organization. “The Government of Georgia, the countries of the European Union, should categorically refuse to extradite Mustafa Emre Çabuk to Turkey. He and his family members must be granted political asylum in Georgia or elsewhere,” Harms said. The European Parliamentarian visited Çabuk in prison on Sunday and thanked the prison administration for treating him well. The teacher and his family assure the Georgian authorities that there is high risk that he will face torture if extradited to a Turkish prison, and the recent statements made by Erdogan do nothing to dissuade on this point. For this reason, the family applied for asylum in Georgia, though their request was rejected by authorities earlier this month. Rebecca Harms expressed regret at this decision and promised “to try to convince the EU to offer asylum to Çabuk and his family”. She noted that the EU could do a lot more considering the gravity of the case, which “involves clear violations of human rights”. Meanwhile, she says she will try to remind both the Georgian government and the EU to be on the side of the rule of law, observing that “we cannot expect justice from Turkey”. Çabuk’s case is also linked with the presumed kidnapping of Azerbaijani journalist and political activist, Afghan Mukhtarli, on May 29, who reappeared after less than 24 hours with the Azerbaijani border police. He is now in custody in Azerbaijan, facing accusations of illegal border-crossing and smuggling and is unable to receive visits from family or friends. Harms also spoke about this case on her visit, having met Mukhtarli’s family herself. “I strongly support their request to the Georgian government to organize an independent investigation into his disappearance,” she said. “I think Mukhtarli and his wife should be granted the status of victims. We should not stop fighting for [his] release... His situation in the Azerbaijani prison is much harder than the situation of Mustafa Emre Çabuk in Georgia. In this respect, I will appeal to the Azerbaijani government," she added.

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eki Levent Gumrukcu, Turkish Ambassador to Georgia, has said that Turkey ensures transparent and fair trials for every person. Ambassador Gumrukcu made the comment in response to the question of the extradition of Turkish college manager, Mustafa Emre Çabuk, who was arrested in Georgia on May 24, charged with having links to the organization FETO, registered in the United States and associated with Fethullah Gulen, who is accused of orchestrating a military coup attempt in Turkey on 15 July, 2016. The Ambassador noted that neither

Mustafa Emre Çabuk, nor other persons should be afraid and there should be no doubts about trials in Turkey. "It is unreasonable and unacceptable to think that the lives of persons that are brought to justice in Turkey might be in danger. No-one can bring a specific example of torture or inhuman treatment of defendants. No competent international organizations have said anything of the kind,” he added. As for Çabuk’s extradition, Gumrukcu said the Georgian court was to answer that question, though he said he could not see any obstacle in the extradition of Çabuk to Turkey. The Ambassador believes that if Çabuk is innocent, he should prove it at court in Turkey. “The presumption of innocence is a

fundamental principle for the Turkish court,” he added. Tbilisi City Court ruled on May 25 that Çabuk would stay in three-month preextradition detention. His lawyer Soso Baratashvili demanded refugee status and political asylum for Mustafa and his family members, but the Ministry of Refugees of Georgia turned down the request, saying their decision is in line with the law and it is not politically motivated. Last week, Georgian non-governmental organizations criticized the decision of the ministry, claiming “it is obviously an unreasonable, arbitrary and unreasonable expression of political loyalty towards the non-democratic regime of Turkey". Baratashvili has said he will appeal the decision of the Ministry.

Russia Works on Extending its Corridors to the South Caucasus BY EMIL AVDALIANI

ussian-Georgian relations have witnessed a number of interesting developments in the recent period. Progress has been made on the issue of opening/controlling trade routes through Georgia’s Abkhazia and South Ossetia breakaway territories, while Russia on July 15 announced that works are starting on the Avaro-Kakhetian road – a 85 km highway which will connect Dagestan with Georgia’s Kakheti region. The numbers of Russian tourists are up and the same trend is observable in bilateral trade contacts between the countries. Yet on July 15, Russia restricted scheduled Tbilisi outbound flights to Moscow citing earlier restrictions imposed by the Georgian government on Russian Ural airways, which itself follows early July developments when Russian troops moved South Ossetia’s makeshift “border” signs some 700 meters deeper south towards Georgia’s east-west highway. It is hard to contextualize all these moves and developments. Certainly not all of them are of strategic importance. For instance, the issue of shutting down Georgian Airways flights could be seen as temporary, as a “quid pro quo” step by Moscow which can easily be fixed. The opening/controlling of the trade routes is linked to the 2011 agreement and can be hailed as a minor victory for Tbilisi. However, the question of the AvaroKahetian road is of more lasting importance, and Moscow’s behavior here is formed by the geography of the Caucasus

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region and dilemmas emanating from it. As Russia is located on a vast and flat landmass, the European plain, it has virtually no geographic barriers. In fact, the Ural mountain range could be regarded as such, but even there the average height is little more than 1000 meters and thus does not represent an insurmountable obstruction. This may explain why the Russians have always been fearful of, and in fact subject to, foreign invasions - from the Mongols in the east to the French and Germans in the west. The natural reaction to this was the creation of a strong military force to protect the country’s borders. The Caucasus Range, though, represents by far the only large geographic barrier the Russians have ever crossed. Russia could well have shut itself behind the mountain range and not have tried to cross into the South Caucasus. But since the decision was made in late XVIII-early XIX centuries by Russia, its rulers have always cared about improving the existing and creating additional routes through said mountains. Russia could not allow those natural and artificial passes to be under foreign control as it would essentially mean barring Moscow’s projection of power into the region. Currently, Russia has three major routes in: the first from Sochi and the surrounding territories to Abkhazia along the Black Sea coast; the second through the Roki Pass in South Ossetia (Samachablo); and the third along the Caspian Sea coast from Dagestan to Azerbaijan. Russia has consistently dominated the three routes and when threatened, has used military action, much as it did in 2008 when there was a real possibility of the Roki Pass being overtaken by Geor-

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gian troops. The control of the routes allows Russia to quickly deploy its forces in Abkhazia and South Ossetia and, in case of urgency, even threaten Tbilisi. From the Russian perspective, this projection of hard military power, through the three routes, serves the basis of Moscow’s foreign policy whereby the chances of Georgia’s NATO membership are drastically reduced. The construction of the Avaro-Kakhetian road could be based on the premise of having deeper economic cooperation with Georgia. Trade between the countries has considerably increased in recent years. But there is a military aspect, too, as the road, like the Roki Pass and the Abkhazia route, could be used for military purposes in case of armed escalation. Also arising is the need for an alternative route connecting Russia with Armenia. The Larsi Pass, which is currently used for the transit of Armenian goods and passengers, is difficult to keep open in winter and is often closed, causing problems for Armenia. Thus, for the Russians, there may be multiple reasons behind building an additional road to the South Caucasus. Further projection of military power and extension of connectivity with the region certainly serves Moscow’s purpose. In addition, the road can be used for better links with Russia’s ally Armenia. In any case, for Tbilisi it is harder to find positive scenarios for the Avaro-Kakhetian road as there have been too many cases in Georgian history when Russian infrastructure projects served more military purposes than the development of the South Caucasus region.

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