Issue #966 Business

facebook.com/ georgiatoday

Issue no: 966/88

• JULY 25 - 27, 2017

• PUBLISHED TWICE WEEKLY

PRICE: GEL 2.50

In this week’s issue...

Construction of New Terminal at Kutaisi International Airport to Start in August NEWS PAGE 2

Iceland Adds Georgia to List of Safe Countries PAGE 4

FOCUS ON THE NDI POLL

Find out more about the 'Two Georgias' ahead of the PAGE October elections

6&11

Exclusive: NDI Director on the Recent Poll & “Two Georgias” INTERVIEW BY VAZHA TAVBERIDZE

L

ast week, the National Democratic Institute’s (NDI) International observation mission assessed the status of the electoral environment at a pressconference (see page 11). GEORGIA TODAY and Panorama TV Show seized the opportunity to have an exclusive interview with NDI Georgia Resident Director, Laura Thornton, on the delegation’s findings. Which, most curiously, included a tale of “two Georgias”.

Continued on page 6

New Hotel Opens in Sno, Profits to Develop the Village PAGE 5

Juncker Plan: £820 mln for SMEs as EIF & ProCredit Double Support for Companies PAGE 8

EU Project Helps Prevent Suicide Cases in Georgian Prisons SOCIETY PAGE 10

The Russian Grand Strategy POLITICS PAGE 11 Prepared for Georgia Today Business by

Markets As of 21ͲJulͲ2017

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

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

INDICES

Price

w/w

m/m

BONDS

Price

w/w

m/m

GBP 34.63

Ͳ1,4%

Ͳ3,3%

GEOROG 04/21

105.48 (YTM 5.12%)

+0,2%

+0,2%

GBP 3.60

Ͳ3,4%

Ͳ10,0%

GEORG 04/21

111.81 (YTM 3.46%)

+0,2%

Ͳ0,2%

GBP 16.24

+0,2%

Ͳ3,6%

GRAIL 07/22

109.82 (YTM 5.46%)

+0,1%

Ͳ0,7%

BGEOLN 07/23

102.10 (YTM 5.58%)

+0,3%

+0,2%

Price

w/w

m/m

48,06

Ͳ1,7%

+7,2%

CURRENCIES

1 254,98

+2,1%

+0,7%

GEL / USD

2,3945

Ͳ0,2%

Ͳ0,6%

GEL / EUR

2,7893

+1,6%

+3,9% +2,0%

Price

w/w

m/m

Price

w/w

m/m

GEL / GBP

3,1121

Ͳ0,9%

FTSE 100

7 452,91

+1,0%

+0,1%

GEL / CHF

2,5381

+1,8%

+2,4%

FTSE 250

19 751,24

+1,8%

+0,3%

GEL / RUB

0,0404

Ͳ0,5%

+1,3%

DAX

12 240,06

Ͳ3,1%

Ͳ4,2%

GEL / TRY

0,6770

Ͳ0,2%

Ͳ0,7%

DOW JONES

21 580,07

Ͳ0,3%

+0,8%

GEL / AZN

1,4201

Ͳ0,2%

+0,3%

6 387,75

+1,2%

+2,5%

GEL / AMD

0,0050

Ͳ

NASDAQ

Ͳ

145,52

Ͳ0,7%

+5,2%

GEL / UAH

0,0925

+0,2%

Ͳ

MSCI EM

1 060,18

+1,3%

+5,3%

EUR / USD

0,8572

Ͳ1,7%

Ͳ4,3%

SP 500

2 472,54

+0,5%

+1,5%

GBP / USD

0,7694

+0,8%

Ͳ2,5%

MSCI EM EE

1 925,13

Ͳ1,8%

+4,0%

CHF / USD

0,9457

Ͳ1,8%

MSCI FM

2 737,39

+0,2%

+1,7%

RUB / USD

59,3575

+0,6%

Ͳ1,5%

GT Index (GEL)

1 133,66

Ͳ

Ͳ

TRY / USD

3,5361

Ͳ0,1%

+0,1%

GT Index (USD)

922,38

Ͳ0,4%

+0,6%

AZN / USD

1,6871

Ͳ0,8%

Ͳ0,8%

MICEX

Ͳ2,8%

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NEWS

GEORGIA TODAY

JULY 25 - 27, 2017

Construction of New Forbes Praises Georgian Terminal at Kutaisi ”Cheese Pizza” – Khachapuri International Airport to Start in August

BY THEA MORRISON

A

BY NINO GUGUNISHVILI

T

he Kutaisi International Airport terminal expansion project is planned to start in August this year, Giorgi Kvirikashvili, Prime Minister of Georgia, announced at the weekly government meeting last week. The new terminal is expected to be able to receive six flights simultaneously.

Combined with the construction of a railway platform in front of the airport

gate, the new terminal project will serve an increasing number of passengers, enabling them to travel with greater comfort.

The three-kilometer railway construction to Kutaisi airport started in April 2017 to allow travelers to get to the airport terminal by train.

The Prime Minister noted that the 92% increase in passenger flow is a result of the visa liberalization process, and reflects the efforts undertaken in the direction of tourism growth.

Kutaisi International Airport, which operates a number of low-cost flights, was opened in 2012.

n American business magazine has dedicated an article to the Georgian national dish ‘Khachapuri’.

The author of the article, Chris Dwyer, compares Khachapuri to “the best cheese pizza you've ever tasted.”

“The country lying between Turkey and Russia doesn't fail to win over visitors thanks to its incredible dish, Khachapuri,” Dwyer claims in his article, going on to explain that Khachapuri is “mix of local cheeses which fill - both outside and inside - soft dough that is baked to perfection.”

The author adds that the enormous pies are not even the main dish at a meal, but actually an accompaniment, the “mother” of all side dishes.

“A Georgian feast, called a supra, will feature at least 20 plates of food on the table when you sit down, even before the Khachapuri arrives - always hot, always straight from the clay oven. Then it's on to the entrees, usually skewered lamb, pork or chicken, grilled slowly over charcoal and marinated in heady local herbs and spices,” the article reads.

Dwyer also says that there are countless cheeses made across the fertile Georgian countryside, all of which can be used in Khachapuri either solo or, more often, in combination.

“Like apple pie in the US, every home has their own recipe and special take on it,” the author says.

He explains that one of the most common types features Imeruli, a curd-like

Photo source: Forbes

cheese mixed with beaten egg, all in a flatbread, while Adjarian Khachapuri is an odd, canoe-shaped bread filled with cheese and topped with butter and a raw egg before being bought to you.

“But the most decadent, outrageous and sinful is Mingrelian, a veritable dairy tsunami flooding the bread, inside and out…

And while everyone loves pizza – 88 percentofGeorgianssaytheypreferKhachapuri.

I'm with them,” the author says.

The article reads that Georgia is one of the most exciting new food frontiers as it melds the very best of its own recipes and ingredients along with Persian, Arab, Turkish, Russian and Asian influences.

“It's also, remarkably, the original home of wine, where it was first made more than 8,000 years ago and stored in underground earthenware jars called Qvevri,” Dwyer explains.

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BUSINESS

GEORGIA TODAY

JULY 25 - 27, 2017

TBC Capital Successfully Places $10 million Nikora Bonds

BY NINO GUGUNISHVILI

T

BC Capital has successfully finalized a placement of 10 million USD worth of bonds issued by the Georgian company Nikora , after several months of working on the project.

This is regarded as one of the largest placements by a non-financial organization in the local market.

Bonds have a two-year maturity and carry annual 9% interest paid out quarterly. TBC Capital arranged the deal, carried out marketing and placed the bonds with both local and foreign investors.

Considerable work has been done in order to gauge the market risk appetite and price the bonds correctly.

“This is a very important step for the Georgian market and we are delighted that with the help of our subsidiary company, this offering was carried out successfully and effectively,” said Vakhtang Butskhrikidze, General Director of TBC Bank.

TBC Capital is an advisory arm of TBC Bank offering corporate advisory, research and brokerage solutions in Georgia. It is committed to playing an active role in the development of capital markets in Georgia. TBC Capital supports both institutional and strategic investors in exploring investment opportunities in Georgia while at the same time allowing domestic companies access to additional forms of funding outside the traditional bank loan financing.

TBC Capital was established in 1999, and until 2015 it largely concentrated on brokerage and custody solutions. In 2015, Research and Corporate Advisory

units were launched, transforming the company’s platform from a purely brokerage unit into an investment banking boutique, providing services tailored for the Georgian market.

“We’re very glad to be helping the company to place such a large issue. We think investors’ interest was strengthened by Nikora’s long history, as well as its leading position on the local food production and retail sales market, and of course by the appropriate pricing of the bonds,” George Tkhelidze, TBC Bank Deputy Director, said at the press conference held at TBC Bank’s head office

on Thursday.

“We think transactions of this caliber will promote further development of capital markets in the country and will encourage other Georgian companies to consider similar fundraising avenues,” he added.

“I would like to congratulate TBC Capital, TBC Bank and Nikora on the placement of the bonds, which is a significant step towards capital market development,” Nino Javakhadze, Deputy Minister of Economy and Sustainable Development of Georgia noted.

As Irakli Bokolishvili, General Director

of Nikora noted, the supermarket chain of Nikora Group had issued 5 million USD worth of bonds last year, and this new placement will give them the opportunity to gain more financial flexibility and diversify their funding resources.

Nikora is considered to be one of the most successful companies in the Georgian food processing and retail sales market. Founded in 1998, Nikora currently produces meat, fish, milk, ice cream, baked goods, salads and other products. It brings together the largest number of food retail outlets under the company holding. Nikora is one of the first among Georgian com-

panies to have ISO 9001, ISO 2200 and HACCP accreditation.

“This is the largest placement of a nonfinancial company on the Georgian market thus far, and the sole fact that it was easier to do it this year, rather than the last year means that the capital market is truly developing. Approximately twothirds of (mostly retail) investors were local, the rest foreign. It shows that Georgian investors are ready to take Georgian company risks. By all means, this is a very interesting and beneficial step forward,” Avto Gigineishvili, TBC Capital Co-head pointed out.

eration or rejecting the application without prior examination. When appropriate, cases of nationals of states on the list undergo general material procedure;

therefore the list is only intended for guideline purposes," the official website of the Immigration Directorate of Iceland reads.

Iceland Adds Georgia to List of Safe Countries

BY THEA MORRISON

T

he Immigration Directorate of Iceland has included Georgia on its list of safe countries.

"Georgia is a constitutional democracy and is, among other things, a member of the International Covenant on Civil and Political Rights and the United Nations Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment. Human rights are generally respected in Georgia and the Georgian constitution ensures the equality of citizens,” the statement of the agency reads.

Iceland's Immigration Service also notes that foreign human rights organizations work without obstacle in Georgia.

"Foreign human rights organizations have also worked in the country without any barriers. The Icelandic Directorate of Immigration has investigated Georgia's situation in relation to asylum seekers from the country and it is clear that all the prerequisites exist for defining Georgia as a safe state," the statement says.

Aside from the EU member states, other countries that have been assessed as safe by the Immigration Directorate of Iceland are: Albania, Australia, Canada, Georgia, Japan, Liechtenstein, Kosovo, Macedonia, Monaco, New Zealand, Nor-

way, Serbia, Switzerland and the United States.

The Agency says that basic human rights are generally respected in the states on this list and cases of asylum seekers, who are nationals of these countries, are usually given priority by the Icelandic Directorate of Immigration.

Citizens of these states who apply for asylum in Iceland and are not granted asylum are usually instead returned to their state of origin.

"Each case is especially examined on its own accord, however, taking into account the appropriate information at any time. The fact that an asylum seeker comes from a state on the list can never lead to the Directorate of Immigration not taking his/her case up for consid-

10 Galaktion Street

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

BUSINESS

GEORGIA TODAY JULY 25 - 27, 2017

5

New Hotel Opens in Sno, Profits to Develop the Village

BY THEA MORRISON

A

new hotel named Sno was officially opened in the village of the same name in Kazbegi Region, eastern Georgia, where Georgia’s Catholicos-Patriarch Ilia II was born.

The 34-room hotel was built with the funding of the Patriarchate of Georgia and its parish and its profits will be spent on development of the village. Around 40 locals will be employed at the hotel.

The opening ceremony was attended by the Catholicos-Patriarch, Prime Minister of Georgia, Giorgi Kvirikashvili, President Giorgi Margvelashvili and representatives of the government, diplomatic corps and Georgian Orthodox Church.

The PM said that opening of the new hotel in the Patriatch’s hometown was symbolic, as the profit from it will be

spent on the needs of the village population.

In his speech, the Prime Minister talked about ongoing and future infrastructural projects in the region.

“Construction of the Kobi-Gudauri cable way will be completed next year to transform Stepantsminda, Sno and the region into a winter resort. Hotel resources, such as this in Sno, directly relate to Gudauri potential,” Kvirikashvili stated.

President Margvelashvili addressed Ilia II in his speech, commending his special role in the development of the country.

“We learned from you strength without aggression, love without hypocrisy, faith without fanaticism.

You really managed

to strengthen our nation,” he told the Patriarch.

His Holiness Ilia II blessed the community gathered at the opening ceremony of the hotel which, he said, should be an example to other regions.

“We are in a very important region, the Sno valley which protects Georgia from the north. This hotel was built not because someone would benefit from it, but to contribute to the region’s development and set an example for the other regions,” the Patriarch stated.

Moreover, at the opening ceremony, the presentation of a book containing four parts and uniting the personal letters of Ilia II was held.

Sno is a tiny settlement located about 5 km from Stepantsminda. The home of the Patriarch of the Georgian Orthodox Church is here, and there is a small church in the courtyard of the residence.

Sno also boasts a large statue of King Vakhtang Gorgasali, and a tower fortification from the XVI century.

Best Western Plus Batumi Opening

Best Western Plus Opens in Batumi

BY NINO GUGUNISHVILI

A

four-star Best Western Plus hotel has opened in Batumi, with 50 hotel rooms, a conference hall, café-terrace ‘7 Bar’ and an open swimming pool. Construction of the six-floor hotel was launched by Mgzavrebi Company in 2016. The project has generated GEL 5 million investments in the region.

Best Western is one of the largest international hotel chains in the world, uniting 4200 hotels in more than 100 coun-

tries worldwide.

Ramaz Bolkvadze, Minister of Finance and Economy of Adjara, noted that the opening of the hotel in Batumi is an example of dynamic and intense economic development of the Adjara region, bringing more employment opportunities and tourism growth. He further announced that yet another international brand hotel, Courtyard Marriott, is expected to open in the region in future.

“We’re celebrating another successful project opening in Batumi. I’m happy that a new high-class hotel with stylish infrastructure has opened,” said Zurab Pataridze, head of the Adjara government.

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BUSINESS

GEORGIA TODAY

JULY 25 - 27, 2017

Exclusive: NDI Director on the Recent Poll & “Two Georgias” Continued from page 1

HOW WOULD YOU ASSESS THE ENVIRONMENT AHEAD OF THE ELECTIONS? This delegation came in at an early stage.

We were aiming at this point to get in before the campaign began so we could put forward constructive recommendations that might have time to be addressed before election day. However, there are things taking place in the general political context that would certainly shape the campaign even before the candidates have been selected, such as the various constitutional and legal reforms, ongoing concerns documented by CSOs and oppositional parties and in relation to media and judication of various disputes or lack of resolution to these disputes.

There are a lot of issues flagged for us that we have to keep an eye on throughout the campaign. Not all candidates have been selected. We did meet with four major mayoral candidates who talked with us about their ideas, platforms and challenges. I think the mayoral race will be of great national significance, going beyond Tbilisi. Tbilisi represents 30 percent of the country. I think it’s also a test for the opposition forces to see what their viability is.

YOU MENTIONED TWO GEORGIA’S DURING YOUR SPEECH – A ROSY ONE SEEN

BY GOVERNMENT AND A CONTRASTING PICTURE SEEN BY EVERYONE ELSE I think that’s the million-dollar question.

Polarization is not a unique factor to Georgia. If you talk to political elites in a lot of countries, you would see a huge divergence there also. But I think that in the long term it is unsustainable, be it in Georgia or the US. The onus tends to be on the governing party as they are in the position to make decisions and to build that consensus. One of our biggest recommendations has been to be more deliberative, be broader, bring in more voices, have more discussions. This pattern of hasty decision-making without enough feedback is not a constructive way to move beyond these “two Georgias”. And I don’t know which one is correct. I’m not evaluating- I’m simply saying that it was striking when the delegates went to those meetings and had the impression that at one meeting there was one country and then at other meetings it was a different country. It was a very noticeable outcome.

WHAT WOULD YOU SAY TO THE CRITICISMS ABOUT THE NDI. YOUR POLLS AND RESULTS ARE NOT ALWAYS TAKEN KINDLY, AND SOME PEOPLE DO OPENLY ACCUSE YOUR ORGANIZATION OF RUNNING THE FORMER GOVERNMENT’S AGENDA I don’t hear that as much as I used to - the perception that we were aligned to a certain political force. That comes up less and less with each poll. But, certainly, the criticism about the polling has continued and I think it’s just a little bit of a ‘shoot the messenger’ scenario: ‘we don’t like what we hear so we need to discredit the

person delivering the messages because it looks bad for us’. A lot comes from not understanding the polling and lack of familiarity with the concept.

ONE OF THE MOST PROMINENT AND LONG-STANDING SUBJECTS IN YOUR POLLS IS THE ENDURING POPULARITY OF THE CHURCH. WERE THE RECENT SCANDAL THE REASON FOR THE DECLINE IN THE CHURCH’S RATINGS? I can’t analyze why that happened. Trust in the Church always been really high and consistent. And in our last poll in April, we saw it go down a little but still remain pretty high. I do think that the timing of this [Cyanide] scandal probably had some effect. We asked about funding. It was interesting not so much that people disapproved of the Georgian church receiving state funding – the majority did approve– but that they thought the funding should be subject to audit.

ON TO EURO-ATLANTIC ASPIRATIONS. THE LATEST POLLS YIELDED SOME SPECTACULAR REVELATIONS – 23 % OF PEOPLE APPARENTLY THINK THAT WE ARE ALREADY IN NATO. LACK OF EDUCATION COMES ACROSS AS A NATURAL EXPLANATION, BUT WHAT DO YOU THINK SHOULD BE DONE ABOUT THIS? We do a lot of in-depth polling on foreign policy. And we’ve been going even deeper into some of those issues like what shapes

peoples’ foreign policy, how they feel about it. We’ve also held focus groups.

We’ve learned that there is not enough information, particularly in certain communities. There is a vulnerable population that lacks information, that is susceptible to Russian propaganda, and that is less likely to hold favorable views towards Europe and Euro-Atlantic integration. We know they are older, they live in rural, and particularly in minority, settlements; we know their levels of education and employment status. These things are all related. And the more we can sort out who and where the need is, the better we can target our information.

YOU ALSO RESEARCH EUROSCEPTICISM. WOULD YOU SAY WE’RE DEALING WITH ANTI-WESTERN PROPAGANDA HERE, UNDER THE GUISE OF FREEDOM OF EXPRESSION? I don’t know if it’s increasing. It feels like it is but we don’t have good evidence of it. What we do know is that those anti-western messages are sticking; they are finding their audience. We are seeing them reflected back at us in our polls.

For example, in our last poll, some people said NATO would harm the Church.

You know that comes directly from misinformation campaigns that the West would degrade Georgian morality. In our focus groups, we’ve heard unbelievable stories, like NATO is injecting people with diseases... And the recent protest march is certainly building on these xenophobic and homophobic fears. I believe this is an extremely dangerous

trend, and I also believe this is not unique to Georgia. My biggest hope is that at least everyone acknowledges that this is a problem so we can try to come up with ways to mitigate it.

IT’S YOUR THIRD YEAR IN GEORGIA. ASIDE FROM POLITICS AND WORK, WHAT ARE YOUR IMPRESSIONS OF GEORGIA? I love Georgia and I don’t want to leave.

I’ve worked for the NDI for almost 20 years but before in south-east Asia: seven years in Cambodia, then Indonesia, Thailand, Malaysia, Singapore, and I loved it there. But it never felt like ‘my people’, and when I came to Georgia, within hours I was whisked off to a supra and people were shouting about politics and drinking too much wine. And I was like ‘yes, these are my people!’ I’m a New Yorker, so maybe that’s part of it. Of course there are daily struggles living in Georgia and being away from family. But I’m very happy living here. I think it’s a wonderful place. And Georgians are fun and warm and interesting people.

ANY MINUSES? Just talking from a living-here standpoint, one thing I would love to see as a citizen of Tbilisi is a greener Tbilisi. One of the things I dislike most about living here is air pollution and a lack of green space and constant construction works. I worry about children- about their lungs. I know that a lot of Georgians share this view and I would hope that there can be more pressure put on those that can make a difference with such issues.

8

BUSINESS

GEORGIA TODAY

JULY 25 - 27, 2017

FIRST BRAND HOTEL IN KUTAISI UNDER BEST WESTERN INTERNATIONAL Within the framework of the Georgian Hotels’ Regional Network Development Project “12 hotels in 12 regionsâ€? by GHYHORSPHQW FRPSDQ\ Âł6LPHWULD´ WKH ÂżUVW EUDQG KRWHO KDV been opened in Kutaisi under the Best Western International brand.

The hotel accommodates 45 guest rooms, including 40 standard rooms and 5 suites. The hotel was designed taking into consideration special conditions and safety for guests with disabilities.

Address: 11 Grishashvili Str., 4600, Kutaisi, Georgia TEL 219 71 00 info@bwkutaisi.com

Three mobile conference halls are available with a total capacity of about 100 persons.

(XURSHDQ FXLVLQH FDQ EH HQMR\HG LQ WKH JURXQG ÀRRU FDIp and a grill-bar menu in the roof top restaurant with panoramic views over the city.

The International Hotels Management Company “T3 Hospitality Management,� providing the hotel management, has 20 years’ experience in hotel management in different countries globally.

Juncker Plan: ÂŁ820 mln for SMEs as EIF & ProCredit Double Support for Companies

T

he European Investment Fund (EIF) and ProCredit Group are providing an additional EUR 450 million to innovative small and medium-sized companies (SMEs), bringing a total of EUR 820 million to companies in eleven countries.

The EIF-backed financing is now available through ProCredit banks from Germany to Georgia, with target companies using new technologies and producing new products in one of the eleven countries where the facility is available (Germany, Albania, Serbia, FYROM, Bosnia and Herzegovina, Bulgaria, Greece, Romania, Moldova, Ukraine and Georgia).

To date, agreements with ProCredit have already supported more than 1,000 innovative SMEs and many more will be financed in the coming years.

These agreements were signed under the European Commission’s InnovFin initiative, backed by the EU’s research and innovation program Horizon 2020. The InnovFin initiative enables participating banks to provide loans to innovative companies with the support of a guarantee provided by the EIF. The agreements signed in EU member state countries were made possible by the support of the European Fund for Strategic Investments (EFSI). The EFSI is the central pillar of the European Commission's Investment Plan for Europe, also known as the “Juncker Plan�. The “Juncker Plan" focuses on boosting investments to create jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment and providing visibility and technical assistance to investment projects.

Facilitating access to the finance they need to innovate, expand and create jobs is one of the most effective ways by which the EU supports SMEs across Europe

“We are delighted that InnovFin SME guarantee agreements with the ProCredit banks are yielding such positive results,� said EIF Chief Executive, Pier Luigi Gilibert. “ProCredit’s well-established distribution network, combined with its SME lending expertise, ensures that EC-backed loans can be rapidly deployed across the eleven territories. These transactions will help companies to access this EU backed finance in order to drive forward an innovation agenda across Europe.�

"The Commission recognizes that small businesses help drive jobs and growth in Europe,� said European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competition. “Facilitating access to the finance they need to innovate, expand and create jobs is one of the most effective ways by which the EU supports small and medium-sized enterprises across Europe. I wish those set to benefit from this financing every success as they take their next steps." “The InnovFin initiative has definitely helped to modernize the SME sector in our countries of operation,� said Borislav Kostadinov, Member of the Management Board of ProCredit General Partner AG (sole liable managing entity of ProCredit Holding AG & Co. KGaA). “Thanks to our Hausbank relationship with a large number of innovative SMEs, ProCredit banks have been in a position to finance initiatives across a wide range of industries, especially in the manufacturing sector. Hence we are pleased that EIF and the ProCredit group have agreed to expand this successful program.�

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 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. More information on EIF's work under EFSI is available here.

ProCredit Holding AG & Co. KGaA, based in Frankfurt am Main, Germany, is the parent company of the international ProCredit group, which consists of banks for small and medium enterprises (SMEs) and whose operational focus is on South Eastern and Eastern Europe. In addition to this regional focus, the ProCredit group is also present in South America and Germany. The company’s shares are traded on the Prime Standard segment of the Frankfurt Stock Exchange.

BUSINESS

GEORGIA TODAY JULY 25 - 27, 2017

PASHA Bank Spreading the Word on Borjomi Forest Rehabilitation

P

ASHA Bank has initiated another environmental project, this time to attract more companies to the on-going campaign “Agadgine” by BIA and Treepex that aims to rehabilitate the Borjomi Forest. Tissuepaper, acting as a partner of this campaign, will collect waste paper from volunteer companies and recycle it. 0,15 GEL will be donated to “Agadgine” for each kilogram of paper collected. The accumulated funds will be used to plant trees and maintain them for the next five years.

“This campaign is a continuation of PASHA Bank’s green CSR activities,” said Anano Korkia, Head of PR and Marketing Department of PASHA Bank.

“Companies with a desire to participate in the rehabilitation process of the forest will be able to do so without any monetary cost. All they have to do is, instead of throwing their waste paper away, donate it for recycling to “Tissuepaper”. We hope that this campaign will also help develop the culture and habit of collecting and recycling used paper.

I want to use this opportunity to thank the Association of Communication Agencies of Georgia (ACAG) for their support. They organize print contests in which their member agencies compete with each other to create print advertising images on social issues. They have helped us with creative communication material for this social campaign, for which we are very grateful. We hope that, together with many other companies, they too will join the forest rehabilitation campaign by donating their waste paper”.

“We’re glad that this campaign has been launched together with Agadgine,” said deputy director of BIA, Salome Kukava. “Companies should take an

interest in this initiative. We’ve already planted about 35,000 trees within the territory of the burnt Borjomi forest; however, this is not enough to rehabilitate the forest fully, and 750,000 more trees need to be planted. Therefore, more involvement and activity is needed from companies. Considering that BIA has access to up to 32,000 active local companies via our platform, I’m sure that the information about the campaign will be effectively communicated. The rest depends on the goodwill of the companies, whether they want to donate their waste paper for a good cause instead of just throwing it away. By this simple choice, we’re enabling them to participate in the rehabilitation of the Borjomi forest that was burnt down during the war of 2008,” “Tissuepaper is a Georgian company focused on the production of a variety of paper-based products,” said Alex Stroganov Commercial Director of Tissuepaper. “Our factory is equipped with modern machinery that enables us to recycle large volumes of paper. We will gladly assist the companies that contact us regarding about campaign and will supply them with special boxes and transport the collected paper for recycling. We’re ready to transfer 0.15 GEL for each collected kilogram of paper to Agadgine, thus contributing to the rehabilitation of the forest. We can collect paper both shredded and in its original form. It is also important that we have tools and processes that enable us to guarantee the confidentiality of information that could be contained in papers earmarked for recycling”.

Those who wish to donate paper can contact Tissuepaper via this contact information: 032 255 08 77; 577 05 42 83; 557 45 45 54; info@tissuepaper.ge

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SOCIETY

GEORGIA TODAY

JULY 25 - 27, 2017

EU Project Helps Prevent Suicide Cases in Georgian Prisons

T

he Council of Europe (CoE) and the European Union continue to support the further enhancement of skills of Georgian prison psychologists, psychiatrists and social workers in administering the Suicide Prevention Program (SPP) in prisons. As a part of the support, on-site supervision of multidisciplinary teams of SPP was launched in November 2016. The project closed in May this year.

Three local CoE experts supervised the work of the multidisciplinary suicide prevention teams in the prior selected prisons. The supervision assessed the current situation in prisons, analyzed how the trained prison staff implemented the SPP, supported them and developed recommendations for further improvement.

On July 15, at 1-day working group meeting, the local experts and members of the multidisciplinary teams discussed and shared opinions on the results and problematic areas identified during the administering of the SPP. The introduction and implementation of the SPP has been supported by the CoE since its launch in 2013. International experts were involved in the

development of the program, different corresponding documents were reviewed in light of the relevant CoE recommendations as were international standards and best practices. In addition, several meetings were held with all stakeholders to allow the sharing of best practices and experience.

Around 900 medical and non-medical staff members of prisons, as well as prison directors, deputy directors and chief doctors, were trained using a program and methodology specially designed for teaching suicide prevention protocol. The prison staff who underwent the training learned more about suicide prevention activities and suicide management techniques and, accordingly, are now equipped with the necessary skills to prevent suicide attempts in prisons to a possible extent and thus to contribute to decreasing in the number of suicide cases.

The supervision is a part of CoE and EU Delegation support to improve the provision of mental health in Georgian prisons and other closed institutions. It was organized within the framework of the CoE/EU Partnership for Good Governance Project “Human Rights and Healthcare in Prisons and Other Closed Institutions in Georgia II”.

55 Thousand Georgians Travel to EU in 4 Months

BY THEA MORRISON

S

ince the activation of the visa-free regime with the European Union (EU) on March 28, in total around 55 thousand Georgian citizens have left the country for the EU. Georgia’s Ministry of Internal Affairs (MIA) reports that around 3,000 Georgians have violated visa-liberalization terms since then and failed to return to Georgia within the maximum 90-day period.

Deputy Interior Minister, Shalva Khutsishvili says that these people have been included in the 'Potential Risk Group' list.

"Some of them may have moved to Ukraine, Belarus or Turkey. Those persons who have not yet returned to the country have been identified by the Ministry,” Khutsishvili said.

The Deputy Minister noted that the highest rate of Georgian visitors is reported in the countries to which Georgia has direct flights.

He also said that despite the warning from Georgian border guards, 160 people crossed the Georgian border but were sent back by the European border guards.

"We had around 160 cases when citizens did not

follow the recommendations of the border guards and persistently continued on their way to Europe, but they were sent back by the European border guards," Khutsishvili said.

He added that the mutual cooperation agreement is currently being reviewed by the EU Border Guard Service, and if necessary, the process of exchange of information between the two sides will become more active.

The Visa-Free regime with the EU took effect on March 28, meaning all Georgians holding biometric passports can enter the Schengen Area for 90 days within any 180-day period for vacation, business, or any other purpose except work.

Georgians are able to travel without visas to the following 22 EU member states: Belgium, Austria, Germany, Denmark, Spain, Estonia, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Greece, France, Slovenia, Slovakia, Hungary, Finland, Sweden, and the Czech Republic.

Georgians can also travel without visas to four non-EU-member states (Iceland, Lichtenstein, Norway and Switzerland) as well as four Schengen candidate countries (Bulgaria, Cyprus, Romania and Croatia).

Exceptions for visa-free travel include Ireland and the United Kingdom.

POLITICS

GEORGIA TODAY JULY 25 - 27, 2017

11

The Russian Grand Strategy

BY EMIL AVDALIANI

NDI Releases Findings & Recommendations Ahead of Local Elections in Georgia

BY THEA MORRISON

A

n international delegation organized by the National Democratic Institute (NDI) has released a statement regarding their findings ahead of the October local elections in Georgia.

The NDI delegation held meetings in Georgia on July 17-21 to assess electoral preparations in advance of the October local elections, review the broader political environment; examine factors that could affect the integrity of the electoral process, and to offer any recommendations that could advance dialogue and consensus-building toward peaceful, credible elections and public confidence in the process.

“Georgia approaches the October local government elections equipped with a deep reserve of democratic assets. Georgians have many achievements to their credit, including a vibrant political landscape, and [they] overwhelmingly support a democratic future for their country,” the statement reads.

The NDI says that the delegation encountered two parallel and divergent Georgias: one seen through the lens of the ruling Georgian Dream (GD) party leaders and officials, and one described by all other groups with whom the delegation met - domestic and international NGOs and observers, all other parliamentary and non-parliamentary parties and candidates, the President’s Office, and media organizations.

“In the view of the former group, there are very few democratic challenges.

There are limited threats to media freedom and access, adjudication of electoral and political cases is swift and unbiased, there are few obstacles to equitable political competition; and reforms whether constitutional or legal - have taken into account input and are pursued with the aim of improving democratic practices,” the organization says.

However, the statement stresses there are also a number of significant democratic challenges: uneven and political application of the law and resolution of disputes, an unlevel playing field for parties and candidates, pressure on potential funding sources, legal and constitutional reforms designed to politically benefit the ruling party, shrinking media space for alternative viewpoints, and abuses of state resources, including interference by the state security services.

The organization also says that before the October 2017 local elections, Georgia’s constitution, election code, and local government legislation are in the midst of significant reform processes.

“NGOs and opposition parties have

criticized all three reform processes as lacking sufficient transparency and inclusiveness. Concerns have also been raised about the timing of these reforms so close to election day. Together, these issues could impact trust in the electoral process,” the document reads.

The organization added that these constitutional and legal reforms did not include measures to increase gender equity, saying only 15 percent of parliamentary seats are held by women and 12 percent of local councilors are women.

Furthermore, The NDI included unequal funding of parties and abuse of state resources in the list of key findings.

The statement says that Georgia’s media environment remains one of the most free and diverse in the former Soviet Union and repression against individual journalists is rare.

Nonetheless, the organization noted that politicization of the media shapes coverage and allegations of undue government influence over station management and editorial choices have been a source of concern, both of which could hamper citizens’ ability to make informed political choices.

Moreover, the statement reads that concerns were repeatedly raised by political parties and NGOs regarding what they believe to be a lack of adherence to rule of law, particularly regarding acts of violence and legal charges from both the 2016 electoral period as well as in recent months.

“They pointed to a pattern of delayed investigations, selective pursuit of cases, pressure on judges, and uneven and disproportionate application of sanctions,” the statement reads.

The NDI delegation provided a number of recommendations for the political parties, parliament, media, NGOs and international community. These included more inclusive, consensus-based constitutional and legal reform processes; a political party code of conduct emphasizing a commitment to nonviolence; changes in parties’ internal behaviors and practices to attract and prioritize women candidates, as well as ensuring a minimum of 30 percent women candidates on City Council party lists; improved training for poll workers on counting and reconciliation procedures; concrete strategies to mitigate disinformation; impartial and timely application of justice; and increased support for local media outlets and citizen election observer groups.

The organization added that the mission is the first activity in NDI’s international election observation of the local elections.

In August, NDI will deploy a team of long-term observers. This will be supplemented by an international Election Day observation delegation.

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GEORGIA TODAY

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Editor-In-Chief: Katie Ruth Davies

I

n recent weeks, interesting political and military developments have been taking place in the breakaway territories across the former Soviet Union. Military escalation in east Ukraine, continuing “border” movements in South Ossetia, and the coordinated actions of Kiev and Chisinau in Transnistria to strangle the Russian presence there, are good tools for Moscow to control the behavior of those countries trying to join the EU/ NATO. However, it remains doubtful how successful Russia can be at pulling the strings in so many “theaters,” particularly as acting simultaneously on several fronts is so complicated militarily as well as financially.

EXERCISING THE GRAND STRATEGY If Russia has a grand strategy in its foreign policy realm, it certainly involves the purposeful creation of conflict zones and their management across the postSoviet space. The fall of the Soviet Union was indeed the biggest geopolitical setback for Moscow as the country instantly lost such large portions of land on a scale rarely, if ever, seen in recorded history.

But keeping 11 buffer states around Russia has remained a cornerstone of the Kremlin’s foreign policy against Western influence. Politicians in Russia clearly saw that because of Russia’s low economic potential, the South Caucasus states would inevitably turn to Europe.

The same would happen on Russia’s western frontier in Moldova and Ukraine, which have been more susceptible to Western economic and military potential because of geographic proximity and historical interconnections.

And it can be rightly said that Russia has been quite successful in fomenting and managing Abkhazia, South Ossetia, Transnistria and east Ukraine conflicts in the last 25 years. From Moscow’s perspective, through these conflicts Moldova’s, Georgia’s and Ukraine’s prowestern aspirations would be stopped if not permanently, then at least significantly hampered. Even in “Nagorno Karabakh,” where Russia was not an active player at the beginning, now sees Russia having the highest biggest stakes through which it exercises influence on Azerbaijan’s foreign policy and thus limits Baku’s potential to be more influ-

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

Source: The Washington Post

ential in such.

However, it is becoming more and more difficult to manage five breakaway conflicts together. First, financial support for the regimes (except for “Nagorno Karabakh”) comes from Moscow. To this should be added military expenses related to the stationing of military bases there.

Third, Russian support for breakaway regimes has created a veritable arc of anti-Russian states along almost the entirety of Russia’s southern and western borders.

FIRST SIGNS OF COMING PROBLEMS Just before his first visit to Georgia on July 17, Ukraine’s president Petro Poroshenko opened a joint UkraineMoldova transit point on the Transnistrian section of the Moldova-Ukraine border. This comes amid heated rhetoric from the Moldovan government on tightening border control measures and calls for 1,500 Russian troops to be withdrawn from Transnistria. It was also reported that Ukraine and Moldova would open up to ten additional border control points.

The head of Transnistria claimed that it would choke the region’s trade causing a loss of approximately $40 mln.

This could potentially create problems in the further deterioration of economic conditions in Transnistria and put Russian influence at risk. Indeed, Russia has a lot to worry about with these developments since its does not have a direct land route from the Russian mainland to Transnistria. Unlike with South Ossetia, Abkhazia or east Ukraine, where mainland Russia is directly connected to the breakaway territories, Transnistria

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from the military perspective is perhaps the most disadvantageous place for Russian forces.

Before the Ukraine crisis, Ukrainian territory was used by Moscow as a transit route for the resupply of Russian forces in Moldova. But once relations between Kiev and Moscow deteriorated in the wake of the conflict in Donbass, the land and air routes to Transnistria were closed to Russian troops. Now the Russian Defense Ministry will have to circumvent Ukraine and enter Moldova itself. If denied air transit in Moldova too, Moscow will essentially be cut off from its 1,500-strong peacekeeping force in Transnistria.

Surely any such scenario is fraught with consequences for both Moldova and Ukraine. For example, Moscow, in response, could escalate the military situation in east Ukraine if Kiev decides to further strangle Transnistria. In Chisinau, too, Russians could rely on the pro-Russian president who is able to gather wide support among the population and cause problems for the ruling pro-European government.

Nevertheless, it shows how it is becoming ever more complicated for Moscow to manage four different breakaway territories across Moldova, Ukraine and Georgia. Transnistria is perhaps a testing ground for Russian efforts to keep the breakaway territories under its influence.

Any failure to do so will result in an unfortunate example for Russia’s projection of power outside its borders and will be a major defeat for Moscow’s strategy of denying its neighbors the opportunity to join western-led integration projects.

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