Issue #1042 Business

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Issue no: 1042/126

• APRIL 24 - 26, 2018

• PUBLISHED TWICE WEEKLY

PRICE: GEL 2.50

In this week’s issue...

What is the ‘Night Tbilisi Development Concept’?

NEWS PAGE 2

No News is Good News for Georgia, as Forecasts Point to Stable Growth ISET PAGE 4

FOCUS

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Georgian Finance Minister meets with Executive Director of International Monetary Fund Anthony De Lannoy

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eorgia’s Finance Minister, Mamuka Bakhtadze, has confirmed that the World Bank (WB) and the International Monetary Fund (IMF) support the already implemented economic reforms in the country and will continue financing ongoing projects.

“We have full support from the World Bank, the International Monetary Fund, the European Union, the European Investment Bank, as well as full support of the initiative to promote small and medium businesses and human capital," Bakhtadze said after a number of high-rank meetings in Washington DC within the framework of the Spring Meetings of the International Monetary Fund and the World Bank Group.

Continued on page 3

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Georgia's Finance Minister Holds High-Rank Meetings in Washington

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NEWS

GEORGIA TODAY

APRIL 24 - 26, 2018

What is the ‘Night Tbilisi Development Concept’?

BY THEA MORRISON

A

ny economic activity that starts from 8pm and lasts until morning is considered a ‘Night Economy.’ It involves various directions, including transport and communications, restaurant and hotel business, culture industry, trade and tourism.

An explanation was made by Tbilisi Mayor, Kakha Kaladze on Friday, at the presentation of the Night Tbilisi Development Concept.

The Mayor stated that the decision to revive night capital was made after studying the experience of such big cities as Amsterdam, London, Madrid, Barcelona, Tokyo, Vilnius, Zurich and many others, which generate great income from nightlife activities.

According to the concept, the project aims to: • Create new workplaces • Promote tourism • Create diverse activities • Develop remote districts • Transform Tbilisi into a 24/7 city The project is expected to benefit ordinary citizens, tourists, small and medium businesses, large investment units and culture representatives.

Kaladze stated that in order to implement the project, the following steps need to be taken: • Conduct a study • Set up a strategy

Photo: Tbilisi Mayor and Night Development Concept Head

• Seek donors • Implement municipal initiatives • Hold an international forum

• Make communication “In order to implement the project, we need to develop night transport, and we

are already working on this. Noise regulation is also crucial,” he said, adding that maximum safety will be provided

for in Tbilisi during night hours.

Kaladze underlined that the concept envisages development and promotion not only of the central part of the city, but also the districts, recognizing that all parts of the capital need to be equally attractive to tourists.

The Head of the concept, Sergi Gvarjaladze, who also delivered a speech at the presentation, stated that one of the main aspects of the concept is communication and coordination between the main components of the project.

“Without communication, a night economy is unimaginable. I am sure that this will be one of the most interesting and creative projects in which I have participated,” he said, adding that one of the most important aspects of the nightlife economy is development of music and the creative industry.

Gvarjaladze said that by 2025, Georgia expects to be hosting around 11 million visitors per year. According to the current statistics, 50% of them will come to Tbilisi.

“Therefore, our goal is to increase the number of days of their visit, which is approximately 2.5-3 days,” he said, adding that outdoor cinemas and night museums will also be arranged in the capital.

The project head says the first step will be a study to reveal which aspects are important in Tbilisi nowadays and what kind of cultural activities will be most attractive for tourists.

“International researchers will also be involved in this project,” Gvarjaladze stated.

Int’l Community Reacts to Escalating Situation in Armenia

BY KAREN TOVMASYAN IN ARMENIA

T

April 26-29: Ukrainian Film Festival to Be Hosted in Tbilisi

BY BENJAMIN MUSIC

T

his Thursday, April 26, the Ukrainian Film Festival themed “Ukraine in Focus” starts in Tbilisi. Every day until Sunday April 29, a handful of contemporary Ukrainian films will be shown at the Amirani Cinema.

Entrance is free for all guests wishing to see the latest Ukrainian movie creations.

The festival is to open with a screening of Peter Bebjak’s The Line (2017) at 20:00, while the following days’ highlights are Akhtem Seitablaev’s Cyborgs (2017), Akhtem Seitablaev’s Someone else’s prayer (2017), Maryna Stepanska’s Falling (2017), and Oleg Borshchevskyi’s DZIDZIO Kontrabas (2017).

Lovers of short films will also get a good deal, as the festival has arranged screenings of award-winning short movies too. On April 28, the evening is dedicated to numerous Ukrainian shorts, including Antonina Noiabriova’s Independence Day (2017), Katya Gornostay’s Lilac (2017), Pavlo Ostrikov’s Graduation ’97 (2017), and Mariia Kondakova’s Falling leaves (2017).

In addition to the wide range of movies for adults, the festival offers different

features for younger audiences. The fantasy film The Stronghold by Yurii Kovaliov (2017) will be shown for children within the scope of the festival. The film will be screened in Ukrainian.

“The Ukrainian Film Festival is organized for the fourth time in Tbilisi and each year this extraordinary event is visited by more and more film-lovers of different ages and nationalities. This year, we have modern films of various genres on the program and we hope that every viewer will be able to attend film screenings of his/her interest. In addition, we hope our guests will learn more about Ukrainian cinematography and take something special from the festival,” said Maria Moskalenko, the organizer of the festival.

FX Film Georgia and JS Films are behind the organization of the festival, which is supported by the Ukrainian State Film Agency, the Embassy of Ukraine in Georgia, the Ministry of Culture and Monument Protection of Georgia, the Georgian National Film Center, the Odessa International Film Festival, and the Company Solar Media Entertainment.

Find the Festival Program on Facebook: https://www.facebook.com/UFFUkraineinfocus/ WHERE: Amirani Cinema - 36/1 Kostava Street, Tbilisi

he European Union on Sunday called on Prime Minister Serzh Sargsyan and opposition forces challenging him in the streets, to urgently resume negotiations on settling the deepening political crisis in Armenia.

Arrests and detentions of opposition leaders and demonstrators have already come into the spotlight of EU and US attention.

The Press-Secretary of EU Foreign Policy Chief Federica Mogherini released a statement late on Sunday, which says that the Armenian authorities “must fully respect” citizens’ constitutional right to demonstrate peacefully and “apply the law in a fair and proportionate manner.”

Mogherini’s spokesperson Maja Kocijancic also demanded that,“All those who have been detained while exercising their fundamental right of assembly in accordance with the law must be released immediately.”

The EU official also called on Armenian opposition and other authorities to resume their failed dialogue, as the “immediate and peaceful resolution of the current situation is essential.”

Earlier the same day, the EU delegation to Armenia and EU member state embassies released a statement, stating, “The EU is concerned that today’s short meeting between Prime Minister Serzh Sargsyan and MP Nikol Pashinyan failed to prevent the further escalation of tensions. The European Union reiterates that it is crucial that all parties show restraint and responsibility and urgently seek a negotiated solution.”

The Embassy of the United States in Armenia is also concerned with the developments in Yerevan. In a statement, they said, “We urge the government to show restraint to allow for peaceful protest and we urge those

Image source: cnn.com

exercising their freedom of assembly to do so responsibly, to avoid violence, and to prevent an escalation of tensions.

We are concerned over reports of violence against journalists and demonstrators; we emphasize the need for those responsible for violence against police or demonstrators to be held accountable under the law.”

The Embassy statement also says that “The US Embassy in Armenia strongly encourages police and protesters to adhere to peaceful, legal means for freedom of assembly as provided for by the Armenian constitution.”

Russian officials and representatives have not yet reacted to the recent developments, but five days ago, both Putin's spokesperson Pushkov and Russian Foreign Ministy's spokesperson Maria Zakharova expressed their hope that everything would "happen according to the law and constitution of Armenia and in a peaceful manner."

Unlike the “Electric Yerevan” movement of 2016, the Russian media is not condemning the latest developments in Yerevan, nor does it seek pro-western roots in the demonstrations as it is more than clear that the main agenda of the protests is internal and against the possible life-long rule of PM Serzh Sargsyan whose 10-year presidency and corrupted

government disappointed a considerable part of Armenian society.

The situation in Armenia was extremely tense, as thousands of people protested in the center of Yerevan and troughout the country, for the 11th consecutive day demanding the resignation of the former president of the country Serzh Sargsyan, whom the National Assembly of Armenia elected as Prime Minister.

According to the new constitution of Armenia, the PM's role made him the most influential person in the country, while the President became "ceremonial," with nominal power.

After the failed negotiations between PM Serzh Sargsyan and opposition leader MP Nikol Pashinyan early in the morning on April 22, riot police used a special police operation in the afternoon to isolate Nikol Pashinyan and MP Mikayelyan, and to detain more than 200 demonstrators from the march led

by Pashinyan.

Despite the detention of opposition leaders and hundreds of their supporters, the Armenian opposition increased its pressure on the government, suceeding on Monday to gain Sargysan's resignation.

The April 22 rally in Yerevan’s Republic Square was one of the biggest in Armenia since independence in 1991.

NEWS

GEORGIA TODAY APRIL 24 - 26, 2018

Velvet Revolution a Success: Sargsyan Resigns

BY KAREN TOVMASYAN, ARMENIA

P

rime Minister of Armenia Serzh Sargsyan, who was appointed as Armenia’s PM on April 17, was forced to resign a week later under the increasing pressure of mass, countrywide protest movements against his rule.

Although he was sure that after changing the constitution of the country, he would be able to keep the power in his hands following his last presidential term, it seems this was not what the people of Armenia wanted.

Neither the repressions of the opposition activists nor the arrests of the opposition leaders was enough to stop the huge popular movement against his premiership.

On Monday afternoon, the peacekeeping battalion based in Yerevan joined demonstrators in a march through the city.

On Sunday, following the detention of

two opposition leaders and numerous citizens, the international community began to call on Armenia to find a peaceful resolution, while today the Russian president’s spokesperson Dmitri Peskov announced that "whatever is happening in Armenia is Armenia’s internal affair only and Russia cannot and will not intervene."

As such, Sargsyan’s government were forced to release the detained opposition leaders. Hours later, the PM's Office released the statement of Sargyan’s reluctant resignation.

Sargsyan came to the presidency in 2008 as a result of widely criticized and challenged presidential elections, with his main opponent his former boss, the first President of Armenia, Levon TerPetrosian (1991-1998) who had huge popular support.

A 10-day sit-in and demonstrations at the time were seriously harming Sargsyan’s victory and led the government to open fire against the peaceful demonstration on March 1, 2008, killing at least 10 demonstrators and finally allowing Sarg-

3

"Nikol Pashinyan was right. I was wrong. I am leaving the office of the country's leader, of Prime Minister."

syan's team to take the president’s office.

Over 10 years, Armenia's foreign debt arose almost six times, becoming nearly 7 billion; poverty rose to 40%, and 350,000 people migrated from Armenia.

Demonstrations which started a week ago were among the most powerful the country has witnessed since the inde-

pendence in 1991.

According to the plan suggested by opposition leader Nikol Pashinyan, soon parliament will elect an opposition representative as the new Prime Minister of the country, later, he says, they must work to dissolve the parliament elected on April 2017 and set new parliamentary elections.

At time of going to press, the population of Armenia is celebrating its long awaited victory and hoping finally to establish democracy in the country.

The demonstrators began national celebrations after the PM's office released Sargsyan's resignation text.

Georgia's Finance Minister Holds High-Rank Meetings in Washington Continued from page 1 The Meetings annually bring together central bankers, ministers of finance and development, private sector executives and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness. This year's Spring Meetings events took place in Washington on April 16-22.

During his visit, the Georgian Minister met with the Executive Director of International Monetary Fund, Anthony De Lannoy, and discussed the ongoing Extended Fund Facility under which Geor-

gia is receiving $285.3 million over a threeyear period.

De Lannoy noted that Georgia made a lot of progress between the first and second reviews, and, after the IMF executive board approves the second review, Georgia is to receive $43.6 million over the course of this year.

Furthermore, at the meeting with World Bank Group Executive Director, Frank Heemskerk, which saw the introduction of Georgia’s current macroeconomic indicators, it was decided that Tbilisi will host the World Bank’s (WB) executive board meeting in May, 2018.

“Hosting such a high-rank meeting is a

big responsibility for Georgia. I would like to thank everyone who made such an important decision,” Bakhtadze told Heemskerk. Successful completion of the second review of the International Monetary Fund Enhanced Financing Mechanism (EFF) Program was also positively assessed at the meeting.

The sides emphasized the importance of the reforms implemented by the Georgian government for achieving inclusive economic growth and poverty reduction.

It was also noted at the meeting that the World Bank will continue funding the priority fields of the country, including energy, agriculture, regional and municipal

development and infrastructure projects.

Within the frames of the visit, Bakhtadze and Georgian delegation members met with the Vice President of the International Finance Corporation (IFC), Georgina Baker, and discussed current and future projects of the IFC in Georgia.

The Finance Minister thanked the IFC Vice President for financing priority sectors of the country, like agriculture, industry, healthcare, infrastructure, energy, small and medium enterprises and the capital market.

"We discussed the issues of successful bilateral cooperation between the IFC and Georgia. I'm glad that the partnership con-

tinues. We are going to support Georgia in the future,” Baker stated at the meeting. FC is a member of the World Bank Group and isthelargestinternationalinstitutionfocused on development. World Bank's private sector operations are funded by IFC. During the past two decades, it has been promoting private sector development through investments and consulting services in Georgia.

Bakhtadze also met Robert Blau, the Vice President of the Millennium Challenge Corporation (MCC).

The sides discussed the implemented and ongoing projects in Georgia with the support of the MCC.

4

BUSINESS

GEORGIA TODAY

APRIL 24 - 26, 2018

No News is Good News for Georgia, as Forecasts Point to Stable Growth

BY DAVIT KESHELAVA AND YASYA BABYCH

I

SET-PI has updated its forecast of Georgia’s real GDP growth rate for the first and second quarters of 2018. Here are the highlights of this month’s release: • ISET-PI’s forecast for the first two quarters of 2018 stands at 4.1% and 5.1%, respectively (no change from last month’s estimations).

• Geostat has released its rapid estimate of real GDP growth for January and February of 2018. Estimated growth stands at 4.4% and 5.5%, correspondingly. As a result, the average real GDP growth for January-February 2018 reached 4.9%.

• Based on February’s data, we expect annual growth in 2018 to be 4.6% in the worst-case or “no growth” scenario, and 5.6% in the best-case or “average longterm growth” scenario. Our “middleof-the road” scenario (based on average growth over the last four quarters) predicts 4.8% real GDP growth.

Based on the February 2018 data, our forecast for the first two quarters of 2018 has not changed significantly. Most of the explanatory variables in our model remained quite stable in February. The most meaningful yearly changes were observed for variables related to the deposits of various maturities in commercial banks and to external sector statistics.

LARI DEPOSITS CONTINUE TO GROW AS INTEREST RATES BECOME MORE ATTRACTIVE FOR LENDERS. DEPOSIT DOLLARIZATION DECLINES National and foreign currency deposits in commercial banks grew by 15.9% annually in February 2018. The main drivers were national currency deposits which increased by 44.7% annually and 2.1% monthly, while foreign currency deposits increased by only 4.3% annually and even declined by 1.3% monthly.

The dynamics of deposit interest rates

indicate that commercial banks are trying to attract more deposits in the national currency and that this policy is working for almost every type of deposit. For example, interest rates on National Currency Demand Deposits increased by 47% year-on-year and by 3% month-on-month. At the same time, interest rates on Foreign Currency Demand Deposits went down by 27% y-o-y and 2% m-o-m. As a result, National Currency Demand Deposits increased by 87% y-o-y and 7% y-o-y, while Foreign Currency Demand Deposits increased only slightly, by 1% y-o-y and even showed a decline at 4% m-om.

De-dollarization measures introduced by the Georgian government, along with improved macroeconomic environment and stable exchange rate, led to a notable reduction in deposit dollarization (by 0.6 percentage point to 63.8%). The combination of these factors has had an overall positive (albeit slight) effect on our model’s prediction of GDP growth.

OUT WITH THE DOLLAR, IN WITH THE LARI: LONG-TERM LOANS ARE INCREASINGLY DE-DOLLARIZED There were also a few variables which had a slight negative effect on our predictions. These variables were mostly related to Consumer Credit. In yearon-year terms, the Short-Term Volume of Commercial Banks' Consumer Credit in Foreign Currency increased by 37%, but the Long-Term Credit Volume of Commercial Banks' Consumer Credits in Foreign Currency declined substantially, by 10%. As these variables are quoted in lari terms, the growth rates are even higher (or lower in case of negative growth) after excluding exchange rate effect .

The Credit Volume of Commercial Banks' Consumer Credits in the National Currency was increasing for both shortand long-term loans – by 33% and 46%, respectively. The latter suggests that after introduction of de-dollarization measures, long-term Consumer Credit in Foreign Currency is being widely replaced by long-tern Consumer Credit

in National Currency. As a result, dollarization of loan portfolios declined by 0.5 percentage points and stood at 55.6%.

The set of key variables that had a slight positive effect on our forecast for the first two quarters’ growth were Import-Export as well as Money Inflows and Tourism.

Exports continue the positive dynamics from last year, although the trade balance has deteriorated due to high imports. In February, total exports rose by 25% y-o-y, driven by higher re-exports of copper and copper ores (to EU countries), which contributed 8.8 percentage points to total export growth. The main destination markets for Georgian export products were Russia, Bulgaria, Turkey, Azerbaijan, Armenia, Lithuania and Ukraine, accounting for 64% of total exports.

These promising trends in Georgian export statistics are closely related to the improved economic performance of Georgia’s trading partner countries.

According to estimates for February 2018, the annual growth rates for the countries in the wider region were 7.3% for Armenia, 1.5% for Russia, 1.3% for Azerbaijan, 5.6% for Kazakhstan, and 5.6% for Belarus. The improved economic conditions in partner countries further stimulates the Georgian economy though trade, remittances and tourism channels.

Imports increased by 8.7%, driven by petroleum and petroleum gases, wheat and tobacco products. Turkey, Russia, Azerbaijan, China and Ukraine were the main sources of Georgian imports in February. As a result, the trade deficit deepened by 1.5% year-on-year, and amounted to 416.4 million USD. Interestingly, in terms of destination countries, Georgian imports are becoming more diversified, while exports were less diversified compared to the same

10 Galaktion Street

Source: Geostat

month of the previous year.

Both remittances and tourism showed significant annual increases in February. Money inflows increased around 21%, while money outflows increased by 23%, compared to the same month of the previous year. The European Union, Russia and Israel accounted for 74% of total remittances. In addition, the number of international visitors and tourists increased by 20% and 27%, respectively. Both tourism and remittances made a significant positive contribution to our growth forecast.

Inflation pressures subside in 2018 Inflation pressures moderated as the national currency exchange rate

strengthened. The lari continued to appreciate in February 2018; it strengthened against the US dollar by 3.3%, while the nominal effective exchange rate gained 2.4% month-on-month. The pressure on domestic prices from a one-time increase in excise taxes last year has already subsided. Annual inflation in February 2018 constituted 2.7%, which was in line with the 3% NBG target. In addition, annual inflation on imported goods came down to 1.8% while the core inflation rate stood at a low 1.7%. This is good news for the Georgian economy, as low core inflation typically translates into lower overall inflation in the future.

Our forecasting model is based on the Leading Economic Indicator (LEI) methodology developed by the New Economic School, Moscow, Russia. We constructed a dynamic model of the Georgian economy, which assumes that all economic variables, including the GDP itself, are driven by a small number of factors that can be extracted from the data well before the GDP growth estimates are published. For each quarter, ISET-PI produces five consecutive monthly for forecasts (or “vintages”), which increase in precision as time goes on. Our first forecast (1st vintage) is available about five months before the end of the quarter in question. The last forecast (5th vintage) is published in the first month of the next quarter.

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

BUSINESS

GEORGIA TODAY APRIL 24 - 26, 2018

5

Russia, Uzbekistan Conclude Discussion on Oil Supply Agreement

BY DIMITRI DOLABERIDZE

Opposition Protests Disrupt GeorgianArmenian Checkpoints

R

ussia and Uzbekistan are working on an intergovernmental agreement on the supply of Russian oil to the Republic, Russian Energy Minister Alexander Novak said.

"At the final stage, there will be a discussion of international agreements about oil supplies to Uzbekistan," he said, speaking at the launch ceremony of the Kandym gas complex.

Earlier, the Deputy Minister of Energy of the Russian Federation, Kirill Molodtsov, reported that Gazprom Neft is exploring the possibility of supplying up to 1 million tons of oil to Uzbekistan in 2019, with the exact amount dependant on the capacity of the transport system.

Uzbekistan has ambitions to receive up to 3 million tons of oil from Russia from 2020. Increasing the supply will require the construction of a pipeline and two pumping stations worth 5 billion Rubles ($80 million) each.

Deputy Minister of Energy of the Russian Federation, Anatoly Yanovsky, said that negotiations are at the initial stage. “At present, we can talk about additional supplies of 5 million tons of oil,� he said, noting that they can be carried out both from the territory of Russia and from Kazakhstan.

BY BENJAMIN MUSIC

Image source: akipress.com

The official representative of Transneft, Igor Demin said that the plan of oil deliveries to Uzbekistan for December is 50 thousand tons, and in November it is planned to pump up to 30 thousand tons.

Oil supplies to Uzbekistan were begun in November last year, in accordance with the framework agreement of September 16, 2017 between the governments of Kazakhstan and Uzbekistan on energy.

The Russian oil is delivered through the

Tbilisi Carpets Gallery Pekini st.36 +995555763366

main oil pipeline "Kaztransoil " on the route Omsk-Pavlodar-Shymkent overpass via the Shagyr oil loading point.

General Director of Kaztransoil, Dimash Dosanov, agreed with Demin's statement and confirmed that, according to schedules of oil deliveries, in November the volume of transit will be 30 thousand tons. By the end of 2018, he said, it is planned to bring up to 80 thousand tons of raw material into Uzbekistan.

L

ast week, the Armenian capital Yerevan experienced widereaching protests by opposition supporters when Former President Serzh Sargsyan was appointed Prime Minister in a move generally seen as undermining the democratic process of the country.

Even outside the capital, the Armenian opposition arranged street blockades and called upon people to go to the streets to voice their anger. The Armenian-Georgian border town of Bagratashenshi was also affected by these protests, hindering the flow of traffic between the two countries.

According to Armenian sources, cars,

buses and trucks are havong difficulties accessing the customs area at the border, vital to the declaration of goods. Without this procedure, the cargo is not allowed to enter the other country, delaying business transactions.

Problems can only be seen on the Armenian side, as the Georgian government confirmed the flawless access to Georgian customs checkpoints.

Former President Sargsyan's ascension to the PM office is highly contested.

Sargsyan governed the country with an authoritarian hand the previous decade before he changed vital laws to transfer presidential powers to the office of PM. As he was obstructed to run a third time for president due to constitutional restraints, the prime ministership allows him to legally continue to govern the country.

6

BUSINESS

GEORGIA TODAY

APRIL 24 - 26, 2018

Why the “European System” is Better OP-ED BY BENJAMIN MUSIC

I

remember my childhood very vividly: Those long rides back into war-torn Bosnia sitting next to my father, who explained his country in a mystical way to me. My age prevented me from seeing Bosnia before the Yugoslavian War catapulted my fatherland into disdain and destruction.

Victim to the failure of international powers and the UN, Bosnia, in the middle of the Balkans, is one of the forgotten places in Europe. The state apparatus is split into two as a renegade region called Republika Srpska vehemently attempts year after year to spread disorder throughout the bureaucracy of the remaining parts of the nation. Their goal to split away from Bosnia, as a region with a Serbian-orthodox majority, is founded in their refusal to engage in a statebuilding process with other areas inhabited by Catholic and Muslim majorities.

The problem is that this religious hatred fuels the inefficiency of the bureaucracy.

As ordinary citizens gave up on their hope to advance the Bosnian state, egoism and nepotism spread into every sector of society. The lost faith in a fair and unbiased government forces people to look after their families and their lives with self-administrated justice. People’s behavior is not directed towards the common good, but towards Darwin’s evolutionary theory of the survival of the fittest. From funding for education to pension funds, the government’s preoccupation with fighting internal battles fuels their increasing failure to take care of their citizens. When motoring down from functioning Austria to enter an almost failed state, I ubiquitously experienced this selfish behavior, especially when encountering police checkpoints.

Arbitrary traffic violations allows police-

men to pocket additional salary to provide better for their families. For me, it was always obvious: corruption is a product of a failed state!

However, talking extensively with Georgian policemen, I was shocked to hear their defense of a bribe’s mechanism, what they call the “Russian System”. As if there are two schools of thought, they say their desire to receive bribes is merely founded on a different idea of redistributive government measures. Almost academia-like, corruption is neglected by arguing for private citizens to cover for the policemen’s family.

“It is better to give the money directly to me, rather to the state,” noted one policeman. “Now I have an average-fixed salary, but before I was able to offer my family much more,” reiterated a second.

I am unsure if their arguments arose from an earnest conviction that policemen are top-earners of society, or if they simply longed for an outdated communist system in which they violated all ethical principles of communism. However, it outraged me for multiple reasons.

Firstly, the audacity to cover up corruption as a different school of thought: the “Russian System;” secondly, the refusal to advocate a strong distributive state; and third, their self-perception as policemen running their own company, funded by traffic violations.

Looking at European soft power in the Caucasus, I am often critical of the tiptoe approach by the EU to promulgate a possible EU membership, without uttering their adamant belief that Georgia won’t become a member in the near future. Bosnia and Georgia both benefit from EU funds, but the difference is that the leaders of Georgia channel them into something meaningful. I spent every summer in a little mountain village in Bosnia, where electricity and water are a privilege for a few hours a day, watching the policemen rely on corruption to

maintain a decent standard of living.

Their earnings, however, often succeeded average citizen salaries, making them the top-earners of Bosnian society.

Depending on the creativity of a policeman for traffic violations, he could pocket a substantial amount of Bosnian Mark per month.

Georgia is too beautiful, the people are too engaged, and the society experiences too much development to be subjected to the same fate. Advocating for a corruption-free police apparatus doesn’t mean choosing between two systems, but it means putting the policemen under state control and maintaining a monopoly of force by the state, so heavily advocated by thousands of political state theories. Furthermore, it puts men with guns at the same level as ordinary citizens, whom they need to protect.

Humans are flawed beings and the law is above them to guarantee that their flaws don’t affect society in a destructive manner. No state is perfect, but covering up imperfection and problems as a different system is a suicidal endeavor hin-

dering development at all levels.

When it comes to corruption, there is only one solution: cut down on it. Georgia progressed during the previous 10 years partially due to their crackdown on petty corruption, painting the government in a much better light than most other postSoviet countries can claim. Advances in e-governance and building the House of Justice are additional steps to a transparent and efficient bureaucracy which puts all citizens on the same footing.

It shouldn’t be missed that one of the most redistributive side effects of a functioning police apparatus in an effective bureaucracy are higher tax revenues, allowing government officials to invest in better infrastructure and social services. In the end, the families of these policemen will benefit more than would have ever been possible during the patronage of self-appointed tax collectors.

The Georgian government, praised by the IMF and other international organizations, implemented many reforms in the field of tax regulations. Just last week, a conference of Eastern European nations

engaging in e-governance measures was held in Tbilisi, as the country is a role model to other states in many aspects.

The advancement in online civil services helps the state to generate the necessary momentum for greater transparency among all levels of government. From the clerk in the patent office to the president, checks and balances increase their efficiency and stop further abuse of office.

The view of ordinary police officers is important as their perspective can be extended to more experienced civil officers. It translates the state into a pyramid, in which the bottom represents policemen and other state employees, and the top is the government. Problems occurring at the bottom are inevitable carried to the top and both symbolize a heavy abuse of state authority.

This abuse makes the plastering of the pyramid crumble, resulting in its eventual decay. Precise intervention to stop this abuse will support the pyramid for decades to come, and citizens will respect this construct knowing that it can actually advance their everyday lives.

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BUSINESS

GEORGIA TODAY

APRIL 24 - 26, 2018

Beating the Fluctuations: Terabank Introduces the ‘Convertible Deposit’

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erabank’s customers will now be able to use a new, innovative product, the Convertible Deposit, the key features of which are a high-interest rate and flexibility during currency rate fluctuations.

The Convertible Deposit allows customers to exchange the deposited amount into the desired currency at any time throughout the deposit term without cancelation of the initial deposit. The number of exchanges is unlimited, making this a unique product on the Georgian market. Terabank’s representatives say that creation of the product was inspired by the current financial situation and market requirements.

“Currency rate fluctuation is rather a focal issue,” says Keti Mghebrishvili, Head of Terabank’s Retail Sales Department. “Considering the existing situation, we decided to offer the relevant profi table product. Customers can always make exchange operations, which will allow them to feel safe during currency fluctuations. The deposit responds to customer needs so well, I’ve no doubt it will be interesting for many.”

Opening a Convertible Deposit is free of charge and customers doing so will receive additional gifts.

Terabank also recently intoduced another innovative product called 'Tourist Mortgage' to customers. This product is intended for those who want to purchase, renovate or improve the design of their real estate in Tbilisi or Georgia’s tourist regions for rental purposes, as well as for persons who are in need of additional finances.

Terabank seeks to consistently respond to the market requirements and trends with its new products.

TANAP Set for 2018 Commission

TANAP Allocates 70 million LIRA to Turkey

BY DIMITRI DOLABERIDZE

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ANAP (the Trans-Anatolia Natural Gas Pipeline) is to provide material support to 431 projects in Turkey to the amount of 70 million

Azerbaijan President Ilham Aliyev (left) and Georgian President Giorgi Margvelashvili during a launch ceremony for TANAP in Kars, Turkey, March 2015. Source: neweurope.eu

BY DIMITRI DOLABERIDZE

T

he oil and gas sector is the main part of the economy of Azerbaijan, - the President of Azerbaijan, Ilham Aliyev, said last week. "At present, we are engaged in the implementation of the Southern Gas Corridor Project. Investments in the Southern Gas Corridor amount to $40 billion. Most of these funds are invested by foreign partners and banks.

It was not easy to attract these funds to the country, since this period coincided with the economic crisis in the world.

“We managed to achieve this, of course, through diplomatic, political and economic ways. Within the framework of the Southern Gas Corridor project, Shah Deniz-2, the South Caucasus Pipeline and TANAP will be commissioned this year,” the President said.

The Head of State went on to note that Azerbaijan has already changed the energy map of Europe and Eurasia "In the years to come, Azerbaijan will function as a country that supplies important energy resources to the world markets. This, of course, will give us additional revenues, which we will direct to the future development of our country" said the president.

Lira ($17.08462 million).

The agreement-signing ceremony in Ankara was attended the General Director of TANAP, Saltuk Dyuzyol, adviser to the Minister of Energy and Natural Resources of Turkey, Fatih Donmez, and other officials.

Within the framework of the first grant project, TANAP will finance 431 projects

in 11 cities of Turkey.

In the framework of the TANAP project, a total of 93.5 works have been carried out in two phases. At the first stage of commissioning the pipeline, two billion cubic meters of gas will be supplied to Turkey per annum. Over the next three years, this volume will be brought to six billion.

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BUSINESS

GEORGIA TODAY

APRIL 24 - 26, 2018

US Department of State Report Includes Mukhtarli, Cabuk Cases

BY THEA MORRISON

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he high-profile cases of Azerbaijani journalist Afgan Mukhtarli, allegedly kidnapped in Tbilisi and transferred to Baku, and the trials of the Turkish national and Demirel College Manager, Mustafa Emre Cabuk, who spent nine months in Georgian prison on charges of having links to the organization FETO, have been mentioned in the latest 2017 Country Report on Human Rights Practices of the US Department of State.

“Azerbaijani journalist Afgan Mukhtarli accused government officials in May of kidnapping him in Tbilisi and facilitating his rendition to Azerbaijan,” the report reads, adding that in July, 2017, the Government of Georgia denied asylum to a Turkish citizen, Mustafa Emre Cabuk, and his family.

“In May the government detained him due to the Turkish government’s extradition request which accused him of being a member of a terrorist organization,” the US Department of State stated.

The document also notes that the Georgian Public Defender’s Office, local and international NGOs, and international organizations raised concerns about the potential extradition of Cabuk and his family to Turkey, where they warned he

and his family would likely face persecution and torture.

“Cabuk appealed the government’s denial of asylum and his extended preextradition detention. The government provided his family with witness protection due to threats of violence. In November, Tbilisi City Court ruled in favor of the government and denied Cabuk’s asylum request, and separately extended Cabuk’s pre-extradition detention until February 2018," the report reads.

Moreover, the report says the Georgian government and court violated former Prime Minister Vano Merabishvili’s rights during his pretrial detention in 2013.

"In September 2016, the former head of the Constitutional Security Department, Davit Akhalaia, and three former officials of the Ministry of Internal Affairs were charged in connection with the violent dispersal of a protest in 2011 that was allegedly ordered by the then-Interior Minister Vano Merabishvili, who remains in prison," the report reads.

The US Department of State says that on November 28, the European Court of Human Rights’ (ECHR) Grand Chamber ruled that the government and court had violated former Prime Minister Vano Merabishvili’s rights during his pretrial detention in 2013 but that the initial decision to detain him had not violated the ECHR standards.

"This ruling was consistent with the ECHR judgment of June 2016. The court

ordered the government to pay 4,000 EUR in damages," the report reads.

However, the Vice-Premier and Foreign Minister of Georgia, Mikheil Janelidze, says the report, on the whole, is positive.

"The report of the State Department

reflects the progress in many directions in terms of democracy and human rights in Georgia. It is important for us to cooperate with our strategic partner in this direction. Since the restoration of independence, the United States has been

supporting Georgia in terms of strengthening the democratic institutions. Of course, we pay great attention to their views. As for certain objections, we'll take them into consideration,” Janelidze said.

Georgian Opposition Addresses Strasbourg Court over Rustavi 2 TV Case

BY THEA MORRISON

T

welve Georgian opposition parties have addressed the European Court of Human Rights (ECHR) in Strasbourg, asking them to prolong suspended enforcement of the verdict over Rustavi 2 TV reached on March 2, 2017, by the Grand Chamber of the Supreme Court of Georgia.

The opposition parties claim that the government wants to remove the most critical TV channel before the October presidential elections.

The parties believe that the continuation of the ECHR temporary measure is of utmost importance for Georgian democracy.

“The fact that there can still be found

democracy and freedom of speech signs in Georgia, including pluralistic media outlet for voicing opposition ideas, it is

the merit of the ECHR, which suspended the government-orchestrated court verdict on the Rustavi 2 dispute. This helped

the broadcaster to remain impartial and critical. We do hope that this temporary measure will be in force until the dispute is over,” the statement of 12 opposition parties reads.

The Grand Chamber of the Supreme Court of Georgia, which is tasked with solving the most complex cases, made the final decision on the high-profile Rustavi 2 TV dispute and granted the assets of the broadcaster to its former owner, Kibar Khalvashi, in early March, 2017.

Khalvashi was a co-owner of Rustavi 2 from 2004 to 2006. He filed a lawsuit in August 2015 to reclaim his shares, saying he was illegally deprived of his company under the previous United National Movement (UNM) government.

The case was handed to the Grand Chamber on November 21, 2016. On March 2, 2017, the Chamber, which con-

sists of nine judges, including the Chair of the Supreme Court, ruled that 60% of Rustavi 2 TV shares were to be given to Khalvashi and the remaining 40% to Panorama LTD, which is a company owned by him.

The Chamber made the decision on the background of protest rallies organized by Rustavi 2 and its supporter opposition parties, who demanded “a fair decision” from the court. However, the ECHR suspended the decision the following day.

The ECHR is a supra-national or international court established by the European Convention on Human Rights.

It serves to hear applications alleging that a contracting state has breached one or more of the human rights provisions concerning civil and political rights set out in the Convention and its protocols.

BUSINESS

GEORGIA TODAY APRIL 24 - 26, 2018

11

GRASS On Georgia’s Vulnerabilities to Russian Influence

BY MÁTÉ FÖLDI

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n April 17, the Georgia Reform Associates (GRASS) presented their report on Georgia within the framework of Romanian think-tank Global Focus’ year-long study, “Propaganda Madeto-Measure: How Our Vulnerabilities Facilitate Russian Influence.” The study assesses the permeability of countries in the Black Sea region to malign influence, and propaganda and the associated Propaganda Permeability Index provides the indepth, extensive analysis of what makes us vulnerable to hostile influences, with a focus on the Kremlin agenda.

The report on Georgia focused on four key areas: society; economy; politics; foreign policy and security. The authors of each area were: Mariam Tsitsikashvili and Davit Kutidze; Beso Namchavadze; Paata Gaprindashvili; Gogi Zoidze and Giorgi Goguadze.

In his opening remarks, GRASS Director Paata Gaprindashvili stressed the need for Georgia, its government and civil society, to regularly analyze the risks and dangers posed by Russia.“We must understand that anti-Western propaganda in the hands of Russia is the weapon through which it capitalizes on the weaknesses existing in different fields. First of all, we need to analyze these weaknesses so that Russia cannot achieve its long-term goals, which means Georgia’s going back under Russian influence so as to hamper its integration into NATO and the EU.” Mariam Tsitsikashvili, host of the presentation, explained the framework of the study. “We have taken an early warning approach and hence have focused our research to see what is it that we, in our societies, do wrong/not do enough of and which of our weaknesses can help our enemies. We were looking at what Russia can use of what we do, more than at what Russia does. The goal is simple: to discuss our weaknesses that might well fall in the hands of Moscow or any other illiberal state wishing to meddle in our societies.”

She added that, “Russian propaganda and malign influence use internal (structural) vulnerabilities and seek to amplify existing fractures to reach a tipping point. The ultimate goals are, firstly, to prevent governments and societies from making policy choices that help them become increasingly autonomous, efficient, successful and integrated with the West while the Kremlin’s aim is to reverse the course of such developments, drawing them as close as possible into Moscow’s sphere of influence and control, and to shape their identities to converge with the Russian worldview and posture, thus turning them into long-time partners/ proxies/ satellites or even ‘army of zombies’.

The focus was made on vulnerabilities/potentialities that have already been exploited by the Kremlin and more importantly those which “might get exploited at any later stage.”

In the societal sphere, the Kremlin has been making use of various channels and actors, like media, politicians, public figures and the clergy, in an attempt “to erode public faith in democratic institutions, spread illiberal propaganda, undermine pro-Western sentiments in Georgian society by portraying the West as an enemy to Georgia’s identity and Russia as an indispensable “brother” with a common history and a common faith, preserve adherence to Russia's imperial aura, prevent Georgia from modernizing in order to become a member of the EU and NATO and hinder Georgia’s democratic development overall,” Tsitsikashvili explained.

She added that Georgian society’s nostalgia towards the Soviet Union, with some 42% of respondents of the opinion that the dissolution of the USSR was bad for Georgia and 57% believing that Stalin played a very/mostly positive role in history, are the “sorts of sentiments which anti-Western disseminators make ample use of to further ignite sympathy for the Soviet past. Nostalgia for the Soviet period is exacerbated by an understanding of history infused by propaganda.”

The rising of radicalism and nationalistic sentiments is another societal aspect exploited by proKremlin forces “From social attitudes to legislative proposals, much is formulated in terms of identity and identity conflict… The diversity of Georgian society is instrumentalized as a “dangerous fragmentation” by radical nationalist groups, some of whom are openly pro-Russians… Intolerance is part of Georgian society towards ethnic, religious, and /or LGBTQ minorities… All these sentiments are sophisticatedly exploited by radical groups, or

the Kremlin itself, who portray liberal values, tolerance and peaceful coexistence with minorities as leading to the loss of Georgian identity.”

The incumbent regime’s willingness to ride the populist wave is another concern that was expressed at the presentation. “What we have underlined as more alarming is not the number of those radical groups, but the fact the administration has been tacitly supportive of these undercurrents by their passive if not encouraging attitudes, climbing on the populist wave, which also explains their proliferation, as they are not marginalized or penalized in any way either by society or by the state, and in some way, they are endorsed by the Church, which enjoys more trust than state institutions.”

Indeed, another societal risk that has been identified is the fact that democracy isn’t acknowledged as ‘the only game in town’ in Georgia. “Georgian society still finds religious institutions to be more trustworthy than democratic institutions. Public opinion polls reveal that trust in the Church has been consistently high, whilst trust in parliament, the government and the judiciary has been much lower and fluctuating. The high level of trust in the Georgian Church may become a vulnerability, since the institution itself or some of its clergy often spread anti-Western and/or xenophobic narratives and often intervene in public policy-making on issues of non-discrimination and minority rights in ways which coincide with Russian interests,” Tsitsikashvili explained.

However, the Church isn’t the only actor to use anti-Western rhetoric. Media, especially of the online format, along with pro-Russian NGOs, also aid the dissemination of Russian propaganda in society. “In this context, lack of western language knowledge, ICT skills and media literacy are the vulnerabilities that ample societal susceptibility towards the Kremlin-spread disinformation campaigns,” Tsitsikashvili said.

In the economic sphere, the risks are also significant. In sum, “There is a high risk that Russia will make a political decision to ban the import of Georgian products, limit travel for Russian tourists and make it difficult for labor migrants to transfer money to Georgia, or even force them to leave Russia altogether. In this case, significant material losses (USD 1.2 billion or 9% of Georgia’s GDP) will be inflicted,” the presentation explained.

The domestic political environment plays a central role in determining whether or not Moscow will be effective in its subversive efforts or not. As Tsitsikashvili explained, to that end “the Georgian state of governance, politics and rule of law still offers plenty of cracks for Russia to penetrate the system.

“Our analysis identifies particular shortfalls in Georgian politics, including: weak institutions, starting from informal and deinstitutionalized governance, lack of parliamentary oversight over the government, lack of civic control over security services and law enforcement structures, deficiencies in the system of democratic checks and balances, shortfalls in the justice sector expressed in the political control over the judiciary, overall weakness of political parties that has its consequences in voter apathy, low party funding that creates a loophole for the Russian interference, a fragmented pro-Western opposition and the rise of pro-Russian, or in other words ethno-nationalistic parties, plausible infiltration of security and political institutions, weak checks and balance, party politics dominated by personalities rather than ideologies, and lack of bipartisanship among the political parties.”

With regards to foreign policy and security, Russia’s primary goal is to keep Georgia within its sphere of influence, hinder its political, economic and security autonomy and prevent Tbilisi’s integration with the West. The most obvious path to achieve this has been the occupied territories of Abkhazia and South Ossetia and the Russian military presence there, followed by borderization and potential annexation. “Russia is intentionally protracting the ‘borderization’ process to keep the pressure on the Georgian government and the international community and create a sense of indefensibility and vulnerability. … This, among others, serves one of Russia’s key objectives of ‘keeping Georgia from joining NATO and the EU, by portraying Georgia to the members of those organizations as unstable and militarily indefensible and, therefore, a potential liability as a member,’” the presentation explained.

The incumbent government’s responses to the threats were also discussed. “In a limited way, the government has acknowledged Russian propaganda as a threat in its strategic documents, As the study was concluded last year, the recent updates are not

available within it. However, we welcome positive developments in this regard. The Foreign Affairs Committee of Parliament is working on its strategy and it will be finalized within the following weeks.

And the good news is that the Committee quite explicitly acknowledges the emerging threats stemming from the Kremlin-waged hybrid war and, most importantly, the Committee takes upon itself a responsibility to develop the relevant legislative basis for preventing and countering hybrid threats, including disinformation. We’ve also seen one of the political parties announce that they are developing a package of legislative initiatives for countering Russian propaganda in Georgia. Better late than never, as they say, and we should welcome these initiatives and hope that it will become a matter of bipartisan cooperation,” Tsitsikashvili said.

However, while the government is indeed working on combatting the threat, there are still significant warnings to be heeded, “Developing a legislation for countering Russian Propaganda and information warfare is not enough. And what we

have identified as one of the biggest vulnerabilities of Georgia’s security and foreign policy is the lack of a holistic and comprehensive National Security Strategy, which should be the framework to form, plan and better implement the country’s security policy. The most recent document which attempted an overview of the foreign and security policy environment is the National Security Concept of 2011. The concept has not been updated since then and was not accompanied by any action plan or mechanisms for implementing the goals set out in the document. Unfortunately, the National Security Review that would streamline the roles and responsibilities of relevant state agencies and lead to the development of a package of conceptual and strategic documents has yet to be conducted. The absence of the key strategic document and of human capacity simultaneously increases the level of vulnerability and fragility in front of the threats facing Georgia. The lack of an overall strategic vision means that the state apparatus is destined to be bogged down in its routine activities and limited in any long-term development perspectives.”

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BUSINESS

GEORGIA TODAY

APRIL 24 - 26, 2018

Bulgaria Loses Out: Gazprom to Demolish Remains of South Stream Pipeline Image source: engineersjournal.ie

EU, Germany to Allocate € 53 million to Ukraine for Energy Efficiency Projects

BY DIMITRI DOLABERIDZE

T

he government of Ukraine has concluded an agreement with the International Finance Corporation, the European Union and the Federal Republic of Germany, which envisages the creation of a fund to improve energy efficiency on Ukrainian territory.

It is expected to help Kyiv reduce energy losses in the housing sector, reduce greenhouse gas emissions and switch to a modern consumption model and energy accounting.

At the first stage, Germany and the European Union are allocating $53 million for these purposes, according to the official website of the Ministry of Finance of Ukraine. The agreement was signed by the Minister of Finance of Ukraine,

Alexander Danilyuk, on April 21.

"This multi-donor fund, together with the Ukrainian Energy Efficiency Fund, will co-finance energy efficiency projects in apartment buildings in Ukraine and provide expert support for the development of the market," the statement of the main Ukrainian financial department says.

"We have launched an important project that will become one of the main tools for achieving energy efficiency in our country,” Danilyuk said at the signing ceremony. “Many families in Ukraine are being forced to use a large amount of energy for heating, since old apartment buildings lose up to 50% of the heat. The Fund will help solve this pressing problem for Ukraine by helping us to modernize such houses. The project will also contribute to the creation of about 75,000 new jobs for engineers, builders and workers in the energy sector.”

Image source: acrossthepond.ideasoneurope.eu

BY DIMITRI DOLABERIDZE

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azprom announced its intention to liquidate the gas transmission facilities built for the South Stream gas pipeline, meaning the gas measuring station "Morshanskaya" and 506 kilometers of the linear part of the "Eastern Route" (Pochinki-Anapa), belonging to the Southern Corridor, will be removed.

“The unfinished construction (NCS) on sections of the linear part of the East-

ern Corridor wil be liquidated with a view to further implementation of usable material and technical resources (MTRs).

Preservation of NCS facilities will take place before making a decision on the implementation of these facilities in full,” says Gazprom.

The company intended to build gas pipeline South Stream along the Black Sea basin from Russia to Bulgaria. Its capacity was to be 63 billion cubic meters of gas per year. However, after the intervention of the European Parliament, Bulgaria decided to abandon its agreements with Russia. Thus, at the end of 2015, the project was frozen, and in 2017,

the Russian Foreign Ministry said that it was not going to reanimate the unfinished gas pipeline.

In May 2017, Russia began work on another project - the sea part of Turkish Stream. The gas pipeline will also run along the bottom of the Black Sea, but towards Turkey. In future, it will be possible to extend one of the threads of the Turkish Stream to the countries of the European Union.

Both strings of the gas pipeline will have a total capacity of 31.5 billion cubic meters of gas per year. Construction work is expected to be completed in 2019.

SOCIETY

GEORGIA TODAY APRIL 24 - 26, 2018

World Vision: Changing the Lives of Georgian Children EXCLUSIVE INTERVIEW BY MÁTÉ FÖLDI

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orld Vision is an international organization whose presence in Georgia has been key in improving the living conditions of children through their three strategic directions: Child Protection and Welfare; Youth Development and Empowerment; and Early Childhood Development Sectors.

GEORGIA TODAY sat down with Country Program Director Eka Zhvania to find out more about their work in Georgia.

PLEASE SUMMARIZE THE OPERATIONS OF WORLD VISION IN GEORGIA World Vision has three strategic directions (Child Protection and Welfare, Youth Development and Empowerment and Early Childhood Development Sectors) within which we implement our programs in Georgia. The primary focus of the organization worldwide is the protection of the most vulnerable children. World Vision International branch in Georgia has been operating since the mid-90s. Five years ago, the organization undertook the national strategy evaluation. Based on evaluation findings, the strategic directions were respectively tuned and new approaches elaborated.

Children being our key focus, we are doing our best to incorporate holistic interventions which are targeted towards children whose welfare can’t really be guaranteed. If in past, WVG was known for its strong regional presence and grassroots work through three regional offices in Samtske-Javakheti, Imereti and Kakheti, within the new strategy, the organization embraced operations at different levels: to achieve a systemic, sustainable impact the cooperation between the Government of Georgia and all key stakeholders in child protection and welfare sector; as part of regional operations, and to closely collaborate with local governance bodies through advocacy and support provision for the development of quality services and systems in the area of child protection welfare. Welfare implies not only the provision of services but educating duty barriers and communities that the rights and protection concepts stand for. Through our regional programs, we work with the most vulnerable households and children of different age groups. Most recently, we launched an urban development program with the main focus on the Gldzani-Nadzaladevi destrict due to the high concentration of vulnerable children in that area.

services are ensured for most vulnerable children.

Through household-strengthening and economic empowerment, we strongly believe the violence against children will substantially decrease. Violence towards and neglect of vulnerable children may not be so obvious to a regular citizen but is frequently encountered in the daily lives of children living in poverty. Many of these children end-up living and working in the streets. Such children can be found encountered in most big cities in Georgia.

Those are the children WVG focuses on within the response program framework.

HOW FAST ARE THINGS CHANGING IN GEORGIA ?

Considering the social sector funding limitations, the likelihood of fast changes is obviously low in Georgia. Thus, WVG took the strategic decision to co-fund the development of a number of key services and quality provision strategies in the area of child protection and welfare. Three daycare/24 hour shelters, two in Tbilisi and one in Kutaisi are administered and have been co-funded by WVG since 2014. It needs to be noted though, that the scale of services to address the problem of children working and living in the streets is not sufficient and is under funded unless constant donor support is ensured.

HAVE YOU FACED SOCIAL STIGMA? Definitely. Even though people see vulnerable children at traffic lights, in shops and central crowded areas, they often avoid them or just give small change in the belief it will be of help. In reality, each of us handing over a few coins contributes to an endless cycle of violence against children. To break the cycle of violence, and to contribute to a decent life for every child that is free of violence and focused on development, World Vision Georgia joined the global partnership campaign ‘It Takes a World to End Violence Against Children’ with a specific focus on combatting child exploitation on the streets. The local campaign with the name ‘Not My Choice’ envisages raising general public awareness that a child already on the street is the result of multiple vulnerabilities, and that giving change when passingby is not the act of charity the majority of us perceive it as. There are other ways, through citizen engagement, that can make the lives of children working and living in the streets better. Through an active social media campaign, WVG strives to better educate the general population on how we can support the positive change if our efforts are united.

WHAT DO YOU MEAN BY “PROTECTION”?

WHAT HAS BEEN THE BIGGEST CHALLENGE YOU HAVE HAD TO OVERCOME WITH THE IMPLEMENTATION OF THE CHILD PROTECTION PROGRAM?

In our work, we use the term ‘child protection’ to refer to preventing and responding to violence, exploitation and abuse against children. Children subjected to violence, exploitation, abuse and neglect are at risk of death, poor physical and mental health, different infections, and homelessness.

These are children being deprived of any choice for a better life. Children’s rights awareness, the readiness of the Government of Georgia to strengthen the child protection system and services, and collaboration with civil society and all major actors to join the efforts is key in that regards.

As a child-focused organization, we work both on prevention and response programs. Respectively, our focus is two-fold, the key emphasis of the WVG prevention program is to support the most vulnerable households, in most cases in close collaboration with Social Service Agency so that those households start experiencing a better quality of life. This is carried out through diversified approaches such as material/technical support, education or professional skills development opportunities, job coaching, supporting in small business start-ups, and psychological support. The support needs very from household to household. Furthermore, through the work at local or central levels, WVG provides support to professional development and social services establishment so that needs-based social

If we look at it through the prism of street children, with whom we work extensively in Tbilisi and Kutaisi, the biggest challenge we face is the full rehabilitation and integration of children. Especially those children at daycare services who can be seen on the streets at night time. Also the question: what happens next? Once a child (who has been under state care) turns 18, they are removed from the system and left with no support mechanism.

Economic empowerment and strengthening of households also remains an outstanding issue.

Unless the empowerment and strengthening of those families is a key priority of the Government of Georgia, the flow of vulnerable children will constantly increase.

The funding scheme for shelter services established in 2014 under EU/UNICEF funding is now insufficiemt. Since the donor funding phase-out, the shelters are being financed though the state per capita/voucher scheme. While the substantial budget gaps were topped-up by WVG international donors, it needs to be noted that the state funding is insufficient for the quality functioning of shelter services. The quality and sustainability of shelter services is at stake in view of the gradually decreasing international financial support unless the funding scheme is revised by the Ministry of Health and Social Welfare.

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POLITICS

GEORGIA TODAY

APRIL 24 - 26, 2018

What Next in Syria?

BY BENYAMIN POGHOSYAN

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he April 14 US, UK and France joint strikes in Syria and the heated debates in the UN Security Council just before and after the military action once more emphasized the growing disagreements between Russia and the Western powers on Syria.

However, the targeted and limited military strikes have no ability to alter the course of the conflict.

Since the launch of the Russian military operation in September 2015, Syrian government forces, with the active support of Russian and Iranian units, have made tangible successes, including the establishment of full control over Aleppo and pushing back rebel groups from the suburbs of Damascus. The US-led coalition and the Syrian Democratic forces, comprised mainly of Kurdish fighters, have gained ground against the Islamic State and currently control almost a third of Syrian territory. Turkey, for its part, through the Euphrates Shield and Olive Branch operations, controls large swathes of territory in North Western Syria, effectively pushing backs Kurdish forces. At present, the Syrian battlefield comprises four main areas: Syrian government-controlled territories where both Russia and Iran exert significant influence; the Idlib province where several rebel groups, supported mainly by Turkey, Qatar and Saudi Arabia, are competing with each other; Northeastern Syria, which is controlled by Syrian Democratic forces and where some 2000 US special forces are deployed along with small UK and France units; and the territories in northwestern Syria de facto under Turkish dominance.

Since the late 2016/beginning of 2017, the Syrian conflict has gone through a serious transformation, becoming less about the fight against the Islamic State or the struggle between Syrian government forces and various rebel groups.

The two main battlefields have emerged in the last year: the Turkish fight against Kurdish forces in Northern Syria and growing tensions between Iran and Israel.

By making an alliance with Iran and Russia, Turkey managed to receive Russia’s tacit support as well as to neutralize a possible backlash against its de facto occupation of northwestern Syria, in return turning a blind eye to the Syrian

Image source: monsterchildren.com

government and pro-Iranian force advancements in Aleppo and territories around Damascus. It is unlikely Turkey will agree to Pro-Assad forces entering the Idlib province. Turkey controls some Islamist groups deployed there and their defeat will significantly impact Turkey’s ability to shape the post-civil war political construction of Syria.

Now, Turkey is seeking ways to come to terms with the US and expand its military operation towards northeastern Syria. The top target for Turkey is the Manbij, which is under the control of US and Kurdish forces. Turkey demands the US push back Kurdish military units from the town and is offering to establish a joint US-Turkish force to patrol the city.

If successful, Turkey will make attempts to move further to the East and reach the main Kurdish stronghold Haseke.

Russia sees two advantages in a Turkish incursion into Kurdish controlled northern Syria. By encouraging Turkey’s advancements against the Kurds, Russia hopes to

drive a wedge between Turkey and the US. Given the Turkish-Iranian rivalry in the region, Russia perceives the growing Turkish influence in Syria as a potential leverage against Tehran which Russia may use as a trump card during negotiations with Iran, reflecting the future contours of political settlement as well as the role of Russian and Iranian companies during the potential reconstruction process.

The strategic goal of Iran is to further expand its influence in Syria through the establishment and development of permanent military bases as well as small and medium factories producing light armaments, including mid-range missiles which can target Israeli territory from the Hezbollah strongholds in Lebanon. Iran will continue to heavily rely on non-state military groups comprised of Shia fighters brought from Afghanistan, Pakistan and Iraq under the operational control of the elite Iranian Quds force. Iran uses its entrenched military presence in Syria to establish a direct arms supply line to Hez-

bollah units deployed in Lebanon, as well as to put additional pressure on Israel from the Syrian territory. Iran also supports President Assad’s bid to regain control over the Idlib province, which put Iran at odds with Turkey. The Iranian vision of restoring Assad’s influence over the whole country also goes against Russian plans to seek an “exit strategy” and freeze the conflict while keeping its military bases in Tartus and Khmeimim.

The growing Iranian military presence in Syria is one of the key concerns for Israel. Through its military bases and small factories, Iran now enjoys efficient means to provide Hezbollah with sophisticated arms, including more precise and mid-range missiles which can be used against Israel in case of another Israel Hezbollah war. Iran also has an opportunity to directly threaten Israel from Syrian territory, thus opening a second front against Tel Aviv. Simultaneously, Iranianbacked armed groups are starting to target US forces deployed in northeastern

Syria. The Baqir Brigade, one of a number of Iranian-backed militias operating in Syria, announced on April 6 that it would launch military and jihadi operations against “the US occupier and all those affiliated with it in Syria.”

Given the President Trump administration policy of containing Iran and countering its influence in the Middle East, Iranian presence in Syria is a source of grave concern for Washington. Syria may become one of the starting points for the Iran containment policy and in this context the complete withdrawal of US forces from northeastern Syria is less likely.

Given the existential threat posed by Turkey, if the US withdraws, the Kurdish forces will most likely cut a deal with the Syrian government and Iran to protect themselves from further Turkish advancements, which will only foster the Iranian influence, something which is unacceptable for Washington.

The possible deployment of Saudi forces in northeastern Syria to replace American units and prevent both Turkish advancement and the potential Kurd-Assad-Iran deal may bring Iran and Saudi Arabia to the brink of direct conflict. The Saudis also will face tremendous pressure from Turkey to let them in. The Turkish military presence in Kurdish populated areas may create a new conflict between Turkish forces and Kurdish Peshmerga, with the active involvement of Iran-backed military groups, which may use the turmoil to target Saudi units.

The US will keep some military units in northeastern Syria and will seek coordinated actions with Israel against Iranian influence. As for Turkey-US disagreements over the fate of Kurdish controlled territories, Washington will not let Turley move deeper into the Syrian northeast, simultaneously turning a blind eye to the de facto occupation by Turkey of northwestern Syria.

Thus, the initial movement for reforms in Syria later has been transformed into a military uprising and civil war with the influx of foreign jihadi fighters and establishment of the Islamic State. Now, Syria faces another shift in its conflict pattern: Syria has become a battlefield for a proxy war by global and regional actors, which makes any hope for conflict settlement less and less relevant.

Dr. Benyamin Poghosyan is the Executive Director of the Political Science Association of Armenia. @benyamin_poghos

Protests in Armenia Unlikely to Change the Country’s Foreign Policy OP-ED BY EMIL AVDALIANI

A

rmenia experienced more than a week of protests against the former president Serzh Sargsyan’s transfer to the position of Prime Minister (PM). Since Armenia recently became a parliamentary republic, the new PM now holds greater powers and effectively controls the government.

Protesters demanded the new PM’s resignation and achieved this goal late Monday afternoon.

Unlike in many other neighboring countries, the situation inside Armenia is heavily influenced by external circumstances.

Yerevan is strongly aligned with Russia, and Moscow deeply controls many of Armenia’s strategic infrastructures. Protests inside the country, if they get out of the government’s control, so endangering Moscow’s positions, could be easily manipulated by an escalation in Nagorno-Karabakh and the seven surrounding territories.

Armenia is dependent on Russia in the economic and energy sectors, but perhaps the most crucial point is the military aspect of this cooperation. Russia sells weaponry to Armenia, as it does to Azerbaijan. This results in discontent among the Armenian public and often brings the effectiveness of the alliance with

Moscow into questioned. This was particularly true after the 2016 NagornoKarabakh military escalation, the worst since the end of the conflict in the early 1990s, when it became clear that Azerbaijan had achieved significant progress in its military capabilities.

Damping Russia as an ally would be very difficult for Armenia to do because the country is sandwiched between two of its enemies, Turkey and Azerbaijan.

Without Russian military aid, together with diplomatic support, it will be difficult for Armenia to keep the existing status quo around the occupied territories. Baku will be less hesitant not to act, while Turkey will support its ally Azerbaijan, if not militarily then without doubt in every other way.

Thus, from a higher geopolitical standpoint, the Russian presence in Armenia, despite being criticized, is important for the security of the country, and each new Armenian government will take this into account. Hypothetically speaking, there will be only one scenario where Armenia will no longer need Russian assistance: if there is a change in the NagornoKarabakh status quo in favor of Azerbaijan and the withdrawal of Armenian forces from the occupied territories.

The geopolitics of Armenia goes handin-hand with the internal situation of the country. Previously, internal political crises inside and confrontations along

A protest rally in Yerevan on April 19. Source: eurasianet.org/Joshua Kucera

the contact line in Nagorno-Karabakh were caused by each other.

RUSSIA VS REVOLUTIONS Although, for the moment, Russia has strong positions in Armenia, for the Kremlin the current Armenian protests are indirectly indicative that Russian

influence can be subject to question.

Demonstrations-turned-revolutions foundationally shook Russian influence in Georgia, Moldova and Ukraine. Those were revolutions which questioned the Russian right to dominate those countries; questioned Russian soft power and redirected those states towards Europe.

Still, the Russians would be right to fear the situation in Armenia, even if they do not express it in official comments. In fact, the protesters in Armenia have already named their activities an ongoing “Velvet Revolution”.

Historically, one of the foundations of Russian influence across the Eurasian landmass was the ability to position itself as a source of economic and political progress. Even the communism, with all its fundamental failures, was still a source of political attraction for many nations across the Eurasian landmass. The Russia-West geopolitical confrontation is multi-faceted, and which side will be more attractive politically is significant.

In previous editions of GT, I have written extensively about how different the current Russia-West competition is from what happened in the past.

No matter how the standoff ended in Armenia, the country will constantly face internal problems as the Armenians increasingly regarding their Russian allies as a problem. At the same time, although the discontent will be growing, all will come down to the country’s geopolitical preferences: whether to keep the status quo around Nagorno-Karabakh and remain allied with Moscow, or to make concessions, as, without the Russian help, Yerevan will be unable to withstand the pressure from both Turkey and Azerbaijan simultaneously.

POLITICS

GEORGIA TODAY APRIL 24 - 26, 2018

15

Bibilov Invites Bashar Al-Assad to Occupied S. Ossetia

Photo source: Interfax

BY THEA MORRISON

S

elf-proclaimed president of Georgia’s Russian-backed breakaway region of South Ossetia, Anatoly Bibilov, has invited President of Syria, Bashar al-Assad, to occupied Tskhinvali.

Bibilov made the statement after an ‘official meeting’ with the Syrian delegation at the IV Yalta International Economic Forum, expressing solidarity to the Syrian people, noting they are both “facing the terrorism and aggression of Western states.”

The information about the meeting was released by de facto S. Ossetian media outlet, PEC.

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“We closely follow the events that are taking place in the Syrian Arab Republic…

I am sure that justice will be restored, the Syrian people will once again live in peace and prosperity, and the help provided by the Russian Federation will contribute to this,” the so called president told Syrian delegates.

Bibilov underlined that de facto Ossetia is eager to develop relations with Syria and sent an invitation to the President of the Syrian Arab Republic Bashar al-Assad to visit the breakaway region.

In parallel with breakaway S. Ossetia, Georgia’s another occupied region Abkhazia also expressed solidarity with Syria and its leader. After the missile strikes by the US, France and the UK on targets associated with the chemical weapons capabilities of Syria earlier in April, de facto Abkhazian authorities released a statement condemning the airstrikes and offering the Syrian regime their assistance.

"The Armed Forces of the Republic of Abkhazia are ready to defend the Syrian people and assist them with professionally trained specialists, including pilots,” the statement of the so called Defense Ministry of Abkhazia reads.

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

Margvelashvili: Georgia's Top Challenge Is Russian Policy

BY THEA MORRISON

G

eorgian President Giorgi Margvelashvili says that the main challenge of the country is dealing with the Russian policy, highlighting that Georgia's northern neighbor carries out hybrid, propagandist and informational war against Georgia.

Margvelashvili made the statement at the NATO PA 97th Rose-Roth Seminar in Batumi, held on April 23.

He said that Russian policy is not a challenge for Georgia and Ukraine alone, but is also so for other states.

“Georgia is facing a propaganda war

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and through this process [Russia] seeks to split the public through social media and other formats…Russia chooses the problem in the country in the process of the propaganda war, radicalizing society and the environment. We cannot give up our democracy in the face of this challenge and we must create joint messages related to these issues," Margvelashvili said, calling on other states to unite in the fight against hybrid wars.

The Georgian President underlined that people living on the territories of Russian-occupied Abkhazia and South Ossetia are Georgian citizens, regardles of who controls the areas at present.

“We will overcome the barbed wire fence reality, just like the Germans managed to destroy the Berlin Wall,” he added.

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