Issue #994 Business

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Issue no: 994/102

• OCT. 31 - NOV. 2, 2017

• PUBLISHED TWICE WEEKLY

In this week’s issue...

FOCUS

One Miner Dies Due to “Breach of Safety Norms” in Tkibuli

ON CATALONIA

Catalonia declares independence, Georgia supports Spanish sovereignty

PRICE: GEL 2.50

NEWS PAGE 2

PAGE 3

Georgia’s Democracy: The Puzzle of a Red Country Turning Blue ISET PAGE 4

Electricity Market Watch GALT & TAGGART PAGE 6

Bloomberg: Bidzina Ivanishvili’s Wealth Increased by $275m in One Year BUSINESS PAGE 8

KFW Development Bank to Provide Grant for Infrastructure Improvement in Georgia

BY NINO GUGUNISHVILI

T

he Ministry of Regional Development and Infrastructure of Georgia has announced that the German KFW Development Bank is to provide a grant to the amount of EUR 1,650.000 for the implementation of a project on touristic and communal infrastructure improvement in the Mtskheta-Mtianeti and Imereti regions of

Georgia.

The agreement was signed by the Ministry of Regional Development and Infrastructure of Georgia, United Water Supply Company of Georgia and KFW Development Bank representatives.

As the Ministry of Regional Development and Infrastructure reports, a plan of communal infrastructure rehabilitation and an overview of the existing urban situation will be conducted within the provided grant from KFW, alongside a social and environmental assessment of the investment activities planned.

The International Business Forum BUSINESS PAGE 12

The Taxi of Terror SOCIETY PAGE 13

Assessing the Russian Power across the Post-Soviet Space

POLITICS PAGE 15 Prepared for Georgia Today Business by

Markets As of 27ͲOctͲ2017

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

Price

w/w

m/m

GBP 35.39

+2,7%

+9,7%

GEOROG 04/21

107.13 (YTM 4.52%)

+0,6%

+1,0%

GBP 3.66

+4,6%

+17,5%

m/m

GEORG 04/21

BONDS

112.34 (YTM 3.08%)

Ͳ0,1%

Ͳ0,0%

GBP 17.22

+1,2%

+5,8%

GRAIL 07/22

111.68 (YTM 4.93%)

Ͳ0,1%

+0,1%

BGEOLN 07/23

103.12 (YTM 5.36%)

+0,2%

Ͳ0,3%

Price

w/w

m/m

60,44

+4,7%

+4,4%

1 273,35

Ͳ0,6%

Ͳ0,7%

CURRENCIES

Price

w/w

m/m

GEL / USD

2,5619

+3,1%

+3,4%

GEL / EUR

2,9740

+1,7%

+2,2% +1,4%

Price

w/w

m/m

GEL / GBP

3,3635

+2,6%

FTSE 100

7 505,03

Ͳ0,2%

+2,6%

GEL / CHF

2,5765

+1,9%

+1,1%

FTSE 250

20 146,06

Ͳ0,0%

+2,9%

GEL / RUB

0,0441

+2,1%

+3,5%

DAX

13 217,54

+1,7%

+4,4%

GEL / TRY

0,6765

Ͳ0,0%

Ͳ2,3%

DOW JONES

23 434,19

+0,5%

+4,9%

GEL / AZN

1,5085

+3,1%

+3,5%

6 701,26

+1,1%

+3,8%

GEL / AMD

0,0053

+1,9%

+1,9%

NASDAQ

Ͳ1,3%

+0,3%

GEL / UAH

0,0955

+2,0%

+2,1%

MSCI EM

1 110,22

Ͳ0,8%

+2,9%

EUR / USD

0,8614

+1,5%

+1,2%

SP 500

2 581,07

+0,2%

+3,0%

GBP / USD

0,7617

+0,5%

+2,0%

+1,4%

+2,7%

MSCI EM EE

157,87

2 068,76

Ͳ0,1%

Ͳ0,6%

CHF / USD

0,9981

MSCI FM

2 869,54

Ͳ0,6%

+0,8%

RUB / USD

58,0975

+1,0%

Ͳ0,2%

GT Index (GEL)

1 133,66

Ͳ

Ͳ

TRY / USD

3,7883

+3,2%

+5,9%

GT Index (USD)

922,38

Ͳ

Ͳ

AZN / USD

1,7010

+0,1%

+0,2%

MICEX

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NEWS

GEORGIA TODAY

OCTOBER 31 - NOVEMBER 2, 2017

One Miner Dies Due to “Breach Man Dies During Arrest on Nutsubidze of Safety Norms” in Tkibuli

BY THEA MORRISON

BY THEA MORRISON

P

A

aata Pavliashvili (32) died on October 25 on Nutsubidze Plateau, Tbilisi, while being arrested by two police officers after he allegedly refused to cooperate and verbally abused them.

Eyewitnesses to the incident claim that Pavliashvili repeated several times that he was unwell, yet the police officers ignored him and pushed him to the ground.

Georgia’s Ministry of Internal Affairs released a statement soon after the incident, which reads that the Patrol Police Officers were approached by a supposedly drunk person who behaved aggressively and verbally insulted the person who had called the police, citizens who were present at the scene, and the patrol officers.

“The patrol-inspectors repeatedly called on the citizen to maintain law and order, but he did not obey the legitimate demand of the police and behaved even more aggressively. During the detention procedures of the mentioned person, which were carried out within full compliance of the law, he suddenly became indisposed and died at the scene,” the Ministry stated.

The Prosecutor’s Office of Georgia (POG) launched an investigation under Article 116 of the Criminal Code of Georgia into the possible fact of negligence on the side of the police officers. The authorities of the police officers have been suspended pending the results of the investigation.

“At this stage of investigation, the patrol police officers, eyewitnesses and mem-

n incident which occurred on October 27 in the Mindeli Mine, Tkibuli, western Georgia, claimed the life of miner Davit Phorchkh-

bers of the family of the deceased have been questioned. Every necessary investigative action and procedure will be carried out effectively and as soon as possible. The public will be informed about the further results of the investigation,” the POG stated.

It also added on October 30 that the main evidence, footage seized from the patrol inspector’s shoulder camera, did not show the incident and detention process of Paata Pavliashvili.

A number of Non-Governmental Organizations (NGOs) believe there are too many questions surrounding the case, adding it is very suspicious that the shoulder camera recording does not feature the detention process.

The NGO Georgian Young Lawyers Association (GYLA) says they are protecting the rights of the deceased man’s family.

NGO Human Rights Education and Monitoring Center (EMC) suspects the evidence was deliberately destroyed.

“Everything together raises too many questions and exacerbates suspicions about the work of the police. Experts should assess if the recordings were destroyed deliberately,” said Sopo Verdzeuli from the EMC.

idze.

The Saknakhshiri GIG Group, which owns the coal mines in Tkibuli, stated that the death occurred when a tunnel collapsed.

“The company expresses sorrow over the incident. We offer our condolences to the family, friends and each member of our company," the statement of Saknakhshiri reads.

This is not the first case of a miner’s death in Tkibuli. On May 10, four employees died in the same mine when a freight elevator they were on failed and plummeted down the 400-meter mine shaft.

The Ministry of Economy said of this latest death that safety norms on the ground had been violated and the Interior Ministry of Georgia has launched an investigation under Article 240 of the Criminal Code of Georgia, which implies violation of safety norms during miningconstruction works.

A joint team of the ministries of economy and healthcare demanded the suspension of mining activities until investigation is over. The representatives of both ministries went to the scene to study the case.

The Ministry of Economy and Ministry of Labor, Health and Social Affairs created a joint monitoring group based on a joint order of May 11, 2017, after the death of the abovementioned four miners. They were tasked with checking all

mines and other high-risk work places in order to eliminate future accidents.

Beka Peradze, an Inspector of the Labor Supervision Department of the Ministry of Health stated that part of the mine collapsed during the investigation works at the scene. He said that the collapse hinders investigative activities and at present it is impossible to assess what caused the death of the miner.

“This is a high-risk place. There is pressure that resulted in the collapse of the tunnel. The mining works have been suspended and cleaning works will be carried out. Afterwards, the mine will be reinforced and only after this will we study the case in detail,” the inspector stated.

The wife of the deceased, Maia Porchkhidze, says that her husband has been

working in the mine for nine years and was a very experienced employee. She believes that a breach of safety norms was the reason for the accident.

The United Trade Union asks for immediate and transparent investigation. Raisa Liparteliani, Deputy Chair of the Union, says that it is necessary to restore labor inspection and also to tighten labor law.

“This year, 24 people died due to a breach in labor conditions in Georgia and 30 were injured. Such cases are never timely investigated, and we demand a quick and transparent investigation in order to find out the real reason for the incident,” she stated.

Last year, 58 died and 84 people were injured due to improper working conditions in Georgia.

NEWS

GEORGIA TODAY

OCTOBER 31 - NOVEMBER 2, 2017

3

Georgia Condemns Declaration of Independence by Catalonia

BY THEA MORRISON, TAMZIN WHITEWOOD

T

he Georgian government has condemned the declaration of independence

by Catalonia and supports the Spanish government's efforts to restore legitimacy.

Official Tbilisi reports that the Georgian government is firmly committed to the sovereignty and territorial integrity of the Kingdom of Spain within its internationally recognized borders and considers Catalonia as an integral part of Spain.

“The Georgian government greatly appreciates steady partnership with the important partner of our country, the Kingdom of Spain, which is based on shared values and traditional friendly relations,” the governments official statement reads.

The Prime Minister of Georgia, Giorgi Kvirikashvili, also made a statement to confirm that Georgia supports Spain's territorial integrity.

"Georgia strongly supports the sovereignty and territorial integrity of our friend and partner: Spain,” the PM stated.

Georgian President Giorgi Margvelashvili sent letters to King Philip VI of the Kingdom of Spain and Prime

Minister Mariano Rajoy.

“I would like to assure you that Georgia and the Georgian people firmly support the sovereignty and territorial integrity of the Kingdom of Spain. The threat of separatism is well-known for our country,” the letter of Georgian president reads.

“I am confident that the fundamental principles of international law and the unity of the international community will make it possible to regulate the existing problems. Let me reiterate my deep respect, and I wish you and the Spanish people peace and prosperity," the letter reads.

The Parliament of Catalonia declared independence from Spain on October 27.

Spain dismissed Catalonia's president and Cabinet and dissolved its Parliament on Friday, hours after lawmakers in the autonomous region defied Madrid and voted overwhelmingly to declare independence.

Catalan MPs backed the motion 70-10 in a ballot boycotted by the opposition.

Spanish Prime Minister, Mariano Rajoy, earlier told senators direct rule was needed to return "law, democracy and stability" to Catalonia.

The Catalan government said that of the 43% of potential voters who took part in the referendum, 90% were in favor of independence. But Spain's Constitutional Court had ruled the vote illegal.

Photos: Enterprise Market

Tbilisi Hosts Enterprise Market at Meidan

BY NINO GUGUNISHVILI

A

two day Enterprise Market was organized in Tbilisi’s Old Town this weekend, introducing souvenirs, clothes, dry food, sweets, tea and alcohol beverages produced in Georgia. Visitors attending the event had a chance to taste a wide range of products and establish new contacts with local producers presented there. The Market was organized by the Produce in Georgia Agency for the second time.

The weekend Enterprise Market was attended by the Deputy Ministers of the Ministry of Economy and Sustainable Development of Georgia Giorgi Cherkezishvili and Nino Javakhadze, and Mariana Morgoshia, Director of

the Produce in Georgia Agency.

Javakhadze noted that various countries around the world have traditions of organizing such fairs and events. They will now be held in Georgia regularly and are expected to promote Georgian products and producers, raising awareness among the Georgian public.

“The Enterprise Market has a rotation principle: we’re not displaying one and the same producer on the same stand each year; we’re trying to cover all emerging producers in Georgia, helping them to promote their products; we’re trying to maximally bring in new benficiaries every time, thus assisting them to popularize what they produce,” said Mariana Morgoshia, Produce in Georgia Agency Director.

“We want the Market to have a large scale, introducing and involving more and more of the micro-producers from the regions and capital”.

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BUSINESS

GEORGIA TODAY

OCTOBER 31 - NOVEMBER 2, 2017

THE ISET ECONOMIST A BLOG ABOUT ECONOMICS AND THE SOUTH CAUCAUS

www.iset-pi.ge/blog

The ISET Policy Institute (ISET-PI, www.iset-pi.ge) is an independent think-tank associated with the International School of Economics at TSU (ISET). Our blog carries economic analysis of current events and policies in Georgia and the South Caucasus region ranging from agriculture, to economic growth, energy, labor markets and the nexus of economics, culture and religion. Thought-provoking and fun to read, our blog posts are written by international faculty teaching at ISET and recent graduates representing the new generation of Georgian, Azerbaijani and Armenian economists.

Georgia’s Democracy: The Puzzle of a Red Country Turning Blue Figure 1. Elections results for party list representation in parliamentary elections (2008, 2012, and 2016) and local elections of 2017. Red country turning blue in less than 10 years.

Note: I – Parliamentary election, 2008 II – Parliamentary election, 2012 III – Parliamentary election, 2016 IV – Local election, 2017 In blue: districts won by Georgian Dream (GD)

BY ERIC LIVNY, GIORGI MZHAVANADZE AND YAROSLAVA BABYCH

O

n October 21, 2017, Georgia’s entire political map was painted in different shades of blue – the color of the ruling Georgian Dream (GD) party. GD won all but one race in the country’s municipal elections – achieving solid majorities in all sakrebulo (city councils) and placing party-backed candidates as mayors in all cities and self-governing communities.

Such results are quite unusual, and nearly impossible to achieve nowadays in the politically polar-

ized atmosphere of Western Europe, UK or the U.S. Do these results suggest that GD has been exceptionally successful in pleasing the Georgian electorate: implementing a myriad of badly needed reforms (ranging from judiciary, to tax administration, to penitentiary systems), securing relative calm in Georgian-Russian relations (while staying the course of Euro-Atlantic integration!), and achieving visa liberalization with the EU? The proponents of the government would certainly agree with this assessment.

The opponents (which in the Georgian political landscape are still numerous and vocal) would, however, bring up low economic growth, record lari devaluation,

Figure 2: Support for UNM and GD (votes for party list representation), by type of settlement: (a) October 1, 2012 parliamentary election.

and argue that the Euro-centric foreign policy achievements of GD (like EU visa liberalization or the DCFTA agreement) have sprouted on the ground set by their political predecessors.

Whatever the verdict on GD’s political achievements, it is worth remembering that just a few years ago Georgia’s entire political landscape was painted in different shades of red, the color of GD’s predecessors, the United National Movement (UNM).

UNM’s victory in 2008 parliamentary election process was not a smooth sailing. It was achieved against the backdrop of popular protests on the streets of Tbilisi, yet it was as overwhelming as GD’s triumphs in 2016 and 2017.

Indeed, it is difficult to reconcile Georgia’s fiercely polarized political life, as observed in Tbilisi, with the results suggested by the electoral maps above, both in 2008 and today. Since massive voting irregularities can be largely ruled out, we need to find a better explanation for the stunning electoral successes of Georgia’s ruling parties.

GEORGIA: A SINGLE COUNTRY, TWO POLITICAL CULTURES

(b) October 8, 2016 parliamentary election

A key explanation (and a major challenge for Georgia’s fledgling democracy) is the predominant tendency of rural Georgians (and ethnic minority voters in particular) to vote for whoever is currently in power.

Figures 2(a) and (b) demonstrate the relative ease with which Georgian rural and ethnic minority voters can be swayed to vote for the incumbent administration.

• The rural segment of the electorate stayed with the UNM through the (bitter) end in 2012, while all the five biggest cities (Tbilisi, Kutaisi, Batumi, Rustavi and Poti) voted for change.

• Four years later, in 2016, the rural population and ethnic minorities were already solidly pro-Georgian Dream, which had by then lost much of its support in Georgia’s largest cities.

Another very important aspect feature of political behavior of Georgia’s traditional electorate can be gleaned from the results of political attitude surveys conducted by the National Democratic Institute (NDI). While grossly missing out on the actual voting results in 2016, the survey clearly shows a relative tendency among rural voters to refuse to state their political preferences (“no party,” “don’t know,” “refuse to answer”).

The share of those not stating their political preferences was lowest in the capital (46%), followed by large cities (56%), and predominantly rural municipalities (61%). It was highest in ethnic minority municipalities (63%).

We already know that in reality rural voters tend to bet on the incumbents (UNM in 2012 and GD in 2016). What we learn from the NDI survey is that, being most dependent on handouts by the central government, rural and ethnic minority voters are not willing to take the risk of exposing their pro-government preferences to survey takers who, they think, might represent, or share information with, the opposition forces.

One could try to explain the radical change in attitudes of Georgia’s rural electorate towards the GD in 2016 parliamentary elections by its success in opening the Russian market for Georgia’s traditional agricultural products in summer 2013, and the drastic increase in the financing of agricultural programs targeting subsistence and semi-subsistence farmers. Yet, while certainly contributing to GD’s electoral victories in 2016 and 2017, the same factors (with a minus sign) did not prevent Saakashvili from securing another term in 2008 and winning a very large share of rural voters in 2012. Georgia’s rural voters tend to be pro-government voters even when the government in power does not deliver on their dreams of inclusive growth and prosperity.

2012, Tbilisi overwhelmingly supported Bidzina Ivanishvili’s GD coalition while rural Georgians were still willing to vote for Misha’s UNM. Conservative pro-establishment forces get stronger in traditional, rural areas where people’s political agendas are dominated by purely local concerns – access to utilities, jobs, health and education services (provided by the central government). The proestablishment vote is most pronounced in ethnic minority-dominated municipalities along Georgia’s southern borders, where people’s attitude towards national policy matters (as opposed to local ones) is best characterized by indifference and apathy.

Georgia’s most recent local elections suggest that Tbilisi (and, by extension, Georgia as a whole) is not yet ripe for another political transition. Kakha Kaladze, a former football star and GD’s energy minister may not be an exceptional popular candidate, yet his first round victor in Tbilisi’s mayoral race suggests that Georgia’s capital still solidly blue. Furthermore, NDI surveys and the actual election results indicate that the opposition forces – while quite vocal – are hopelessly divided. In the absence of a strong unifying opposition leader, it is much easier for GD to win in those areas, where the majority of people would have preferred an alternative to the status quo.

Strong leaders have always been a crucial factor in Georgian politics. Ruling coalitions and parties have been held together by powerful (formal or informal) leaders: Shevardnadze from 1992/3 until 2003, Saakashvili from 2003/4 until 2013, and Bidzina Ivanishvili since 2012. The latter remains at the helm of GD even after resign-

ing from his official positions in 2013. As the éminence grise of Georgia, he appears to be perfectly capable of maintaining GD’s unity and political domination in the foreseeable future. * * * In the short term, the tendency of rural Georgians to stand by the incumbents is a stabilizing factor. It certainly allows new governments to consolidate their power and implement an ambitious reform agenda, should they wish to do so. In the medium term, however, this very tendency detracts from the vibrancy of Georgia’s democracy. First, it puts the emerging forces of change in Tbilisi and the country’s major urban centers at a disadvantage when it comes to formal channels of influencing policy outcomes, raising the political temperature and creating a fertile ground for destabilizing, violent forms of political expression. Second, it weakens the government’s democratic accountability and reduces its appetite for participatory democratic processes and sound, welfare-enhancing reforms.

The planned reform of Georgia’s electoral law, which currently facilitates the emergence of parliamentary super-majorities, is quite likely to create a healthier situation in which major political choices are more rigorously contested. However, it would be foolish to assume that any such reform alone would turn Georgia into a full-blown democracy. It will be probably take a protracted civil education effort for the Georgian countryside to fully embrace democratic freedoms and independently and fearlessly exercise their democratic rights.

Figure 3: National Democratic Institute’s data on public attitudes in Georgia, June 2016

POLITICAL TRANSITIONS START IN TBILISI, OR DON’T START AT ALL What are the implications of these voting patterns for Georgia’s ability to genera democratic transitions? The intellectual and business elites in Tbilisi and (to a less extent) in other major cities, such as Batumi and Kutaisi, clearly play a key role in generating political change. Georgia’s 2003 Rose Revolution was won in Tbilisi, not the Georgian countryside. In

Source: http://www.electionsportal.ge/. The following classification was used in constructing this chart: ‘capital’ – Tbilisi; ‘urban’ – Kutaisi, Batumi, Rustavi (population>100,000); ‘rural’ - other towns and municipalities (population<100,000); ‘ethnic minorities’ - municipalities in Kvemo Kartli and Samtskhe-Javakheti regions (Gardabani, Marneuli, Bolnisi, Dmanisi, Tsalka, Tetritskaro, Borjomi, Akhaltsikhe, Adigeni, Aspindza, Akhalkalaki, Ninotsminda), which have the highest shares of ethnic minority population.

BUSINESS

GEORGIA TODAY

OCTOBER 31 - NOVEMBER 2, 2017

5

New Rating of Anaklia Consortium World's Most Meet with American Powerful Passports Chamber of Commerce Kazakhstan Comes

BY NINO GUGUNISHVILI

in at 112th

A

naklia Development Consortium representatives met with AmCham members in the Radisson Blu Iveria hotel last week, to introduce the Anaklia Deep Sea Port and Special Economic Zone projects. ADC Founders Mamuka Khazaradze and Kurt Conti talked about the upcoming future plans, while Levan Akhvlediani, ADC CEO, and Ketevan Bochorishvili, Anaklia City CEO, made detailed presentations about the Anaklia Deep Sea Port and Anaklia City projects.

“Anaklia Deep Sea Port is a very important project. I’m sure the American Chamber of Commerce will be actively involved in the different stages of port construction,” R. Michael Cowgill, AmCham President said.

The Anaklia Deep Sea Port project was launched last year. In June 2017, SSA Marine, a leading US operator, was announced as the future container terminal operator, as well as an investor in the Anaklia Deep Sea Port project. The Anaklia Deep Sea Port Master Plan was put together by Anaklia Development Consortium in 2016 and approved by the Government of Georgia in October 2017, a document in which the ADC worked together with an international company MTBS for a year.

After Anaklia City JSC was established, the Anaklia City & Special Economic Zone project was launched in June. A memorandum with South Korea’s Incheon Free Economic Zone was signed, and

BY DIMITRI DOLABERIDZE

O

n a new list of the "world's strongest passports," the Individual Passport Power Rank, Kazakhstan took

dialogue with over 100 international companies began. At the same time, Anaklia City announced an expression of interest in the development plan, visionary master planning and economic analysis.

The company is reviewing proposals from more than 30 international consulting consortiums. The study is to commence in late November.

Other major stages of the Anaklia Deep Sea Port project included marine, engineering, geo-technical, topograpical and other studies carried out by leading Dutch company Van Oord. The Anaklia Development Consortium has already completed the majority of feasibility studies, the project Phase 1- preliminary design has been developed and submitted, drawn up together with leading international companies including Mof-

fatt and Nichol, Royal Haskoning DHV and Van Oord.

The Georgian government has already transferred parts of the Anaklia Port investment area to the Anaklia Development Consortium. An environmental impact assessment of the project was carried out by ADC, through which over 50 studies were made to examine the flora, fauna and marine areas of the Anaklia Deep Sea port and its adjacent territory. Furthermore, public meetings were held in the process of working on this assessment, with up to 20 local and international companies involved, Royal Haskoning DHV and Ecoline International among them.

As previously announced, the Anaklia Deep Sea Port Land Construction works will officially start on December 20, 2017.

112th place.

According to the company Arton Capital, with a Kazakhstani passport it is possible to enter 71 countries of the world without any issues (35 without a visa and 36 visas-uponarrival).

Belarus, Oman and the dwarf state of Nauru are listed within the same category as the Republic of Kazakhstan. In the "individual classification," the Belarussian passport is listed at 109th place, and Oman 111th place.

Top of the list was Singapore, with the passport of which one can enter 124 countries without a visa, and get a visa-on-arrival at 35 more. A year earlier, Germany came in at 1st place, but this year it came 2nd. With a German passport, you can visit 125 countries without a visa, and another 33 a visa-on-arrival.

Also in the top ten are: Sweden (124 and 33), South Korea (117 and 40), Denmark, Finland and Italy (124 and 32), France (123 and 33), Spain (122 and 34) and Norway (120 and 36). The United States came in at 21st place (114 countries without a visa and 40 with visas on arrival), and Russia at 83 (76 without a visa and 32 more to receive a visa upon arrival). Georgian citizens can enter 67 countries visa-free and 38 upon arrival (total: 105 countries).

The Individual Passport Power Rank is updated annually by Arton Capital.

EIB Group Signs 1st Guarantee Agreements in Georgia, Moldova & Ukraine under EU4Business Initiative

BY KATIE RUTH DAVIES

T

he European Investment Bank (EIB) and the European Investment Fund (EIF), jointly the EIB Group, last week signed the first guarantee agreements with ProCredit Holding and its subsidiaries in order to support EUR 100 million of lending to small and medium-sized enterprises (SMEs) in Georgia, Moldova and Ukraine under the EU4Business initiative.

These agreements will enable the ProCredit banks in these countries to facilitate access to finance for local SMEs by providing a 70% guarantee on each loan and subsequently extend financing on favorable terms, including with reduced collateral requirements.

The three guarantee transactions are expected to unlock additional financing to small and medium-sized businesses and ultimately to sustain jobs and new business opportunities in the three countries. The guarantees are funded by the European Union (EU) through the Neighborhood Investment Facility under the EU4Business initiative.

The EIB Group joins forces with the EU to strengthen economic development in the countries that have signed Association Agreements with the EU, namely Georgia, Moldova and Ukraine, by providing financial and technical support targeted at SMEs in these countries. The EU supports private sector development in the Eastern Partnership

countries through its EU4Business initiative by enhancing access to finance for SMEs, improving the business environment and providing advisory services to local businesses.

Commenting on the transactions, EIB Vice-President Vazil Hudák with oversight for Ukraine and Georgia, said, “Support for SMEs is one of the EIB Group’s priorities because by funding them we are boosting economic growth, innovation and employment. These guarantee agreements with our longstanding partner ProCredit Holding and its subsidiaries will help us to reach SMEs in the countries that have signed an Association Agreement with the EU, increasing access to crucial long-term financing in order to help them continue to develop new projects and generate growth.”

“The support of the EIB Group to strengthen the SME sector contributes to economic diversification and helps increase small businesses’ share of GDP generation,” said EIB Vice-President Alexander Stubb, with oversight for Moldova “The SME sector is not only significant from an economic point of view but is relevant politically in terms of further development of the middle class, which contributes to political stability and helps raise citizens’ living standards”.

“This represents an important milestone for the EIB Group as these are the first guarantee agreements which EIB and EIF are jointly supporting in Georgia, Moldova and Ukraine,” said Hubert Cottogni, Head of the Mandate Management Department at the EIF.

“Thanks to the EU’s financial backing, these transactions will provide significant support to businesses in these countries at a time when access to finance remains a key concern for many companies”.

Borislav Kostadinov, Member of the

Management Board of ProCredit Holding, the Frankfurt am Main (Germany)based parent company of the ProCredit Group said, “We are proud that ProCredit is the first group of banks to sign guarantee agreements under the EU4Business initiative for its operations

in Georgia, Moldova and Ukraine. Thanks to our ‘principal bank’ relationship with a large number of innovative SMEs in these countries, we are confident that these guarantees will support further investments in the modernisation of this sector”.

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BUSINESS

GEORGIA TODAY

OCTOBER 31 - NOVEMBER 2, 2017

The Galt & Taggart Research team comprises Georgian and Azerbaijani finance and economic experts who have broad experience of covering the macro and corporate sectors of the two countries. Our current product offering includes Georgian and Azerbaijan macroeconomic research, Georgian sector research, and fixed income corporate research.

For free access to Galt & Taggart Research, please visit gtresearch.ge or contact us at gt@gt.ge.

Electricity Market Watch

FOR GEORGIA TODAY BY MARIAM CHAKHVASHVILI

S

ector research is one of the key directions of Galt & Taggart Research. We currently provide coverage of Energy, Healthcare, Tourism, Agriculture, Wine, and Real Estate sectors in Georgia. As part of our energy sector coverage, we produce a monthly Electricity Market Watch, adapted here for Georgia Today’s readers. Previous reports on the sector can be found on Galt & Taggart’s website - gtresearch.ge.

INSTALLED CAPACITY ADDITIONS AND FORECAST Power plants commissioned over the last two years have increased total installed capacity of Georgia by 10.0% to 4,104.9 MW. 2016-2017 additions have included 12 hydro (352.7 MW) and one wind (20.7MW) power plants. Three large HPPs – Dariali (108MW), Khelvachauri (47.5MW), and Shuakhevi (178.7MW) – account for 89.5% of the aforementioned capacity increase. After several months in test regime, Khelvachauri HPP reached its normal generation capacity in April 2017, while Shuakhevi HPP, the largest HPP constructed in Georgia in the last 50 years, is expected to reach the planned level of generation only after October 2017.

According to the 2017 forecast, these three HPPs will produce 0.5 TWh of electricity in 2017 and satisfy 4.2% of annual consumption (11.9TWh).

Total installed capacity of Georgia will increase by 13.8% by 2020, if projects at construction stages are completed on schedule. 35 HPPs with 337.2MW of installed capacity are at the construction stage to be commissioned by end-2020.

Their timely completion will result in 1,586.0 GWh of additional hydro generation annually. In addition to the HPPs

at the construction stage, the pipeline includes over a hundred projects at the feasibility stage, as well as a second GOGC-owned CCGT project (230MW) in Gardabani, to be completed by 2020, and designed to satisfy electricity demand during winter deficits.

ENERGO-PRO GEORGIA WAS RATED BY FITCH RATINGS Energo-Pro Georgia, the largest electricity distribution company in the country, was rated "BB.” Fitch Ratings has assigned JSC Energo-Pro Georgia (EPG) an Expected Long-Term Foreign Currency Issuer Default Rating (IDR) of 'BB(EXP)' with Stable Outlook. The rating is based on expected cash flows and market situation for the next three years. GNERC’s regulatory methodology, whereby tariffs are revised every three years, and the upward revision of the WACC from 13.54% to 16.4% as of January 2018, positively affect the ratings. Capital expenditures are expected to average GEL 66.0mn over 2017-2021.

ELECTRICITY CONSUMPTION AND GENERATION: SEPTEMBER 2017 Domestic consumption increased 16.3% y/y in September 2017 and 9.0% y/y in 9M17. Consumption by eligible consumers, up 91.1% y/y, was one of the key drivers, as usage by Georgian Manganese increased 149.7% y/y and contributed 7.6 percentage points to overall growth in September 2017.

Consumption of distribution companies, up 13.0% y/y, was an even larger contributor (10.1 ppts). Consumption by Energo-Pro Georgia subscribers, including former Kakheti Energy Distribution subscribers, increased 13.2% y/y, while Telasi consumption was up 12.5% y/y.

The Abkhazian region’s electricity usage was down 8.2% y/y and accounted for 11.0% of domestic consumption.

Domestic generation increased 2.8% y/y, with HPP generation up 10.4% y/y

(74.1% of total). Deregulated HPPs posted an 11.7% y/y increase in generation, due to the addition of Dariali, Khelvachauri, and Shuakhevi HPPs. Generation by Enguri/Vardnili was up significantly (35.4% y/y) and accounted for 44.5% of total supply, while generation of other regulated HPPs declined 22.8% y/y in September 2017.

Thermal generation decreased 32.4% y/y (11.2% of total) from the low base in 2016, while the new wind power plant accounted for 0.7% of total electricity supply. The guaranteed capacity fee was down 24.0% y/y to USc 0.6/kWh, as Mtkvari Energy and G-Power were under maintenance for most of the month.

ELECTRICITY IMPORTS AND TRANSIT Electricity import increased 5.5 times y/y to 132.9 GWh and accounted for 13.9% of total electricity supplied to the grid in September 2017. Notably, the level of import was only 0.7% above the plan. The main source of import (60.6%) was Azerbaijan, with the rest coming from Russia.

Electricity transit through Georgia declined 68.6% y/y to 31.9GWh in September 2017 and 63.9% y/y in 9M17. Transit from Azerbaijan to Turkey remains the main direction, accounting for 59.1% of electricity transited in September 2017 and 74.2% in 9M17; the rest was directed from Russia to Armenia. Electricity exports in September 2017 were negligible.

ELECTRICITY PRICES IN GEORGIA AND TURKEY Wholesale market prices in Georgia increased 9.6% y/y to USc 4.8/kWh. Electricity traded through the market operator accounted for 23.7% of total electricity supplied to the grid in September 2017, with the rest traded through bilateral contracts. Average import price decreased slightly to USc 4.8/kWh. Turkish electricity prices increased 7.5% y/y to USc 5.3/kWh, 10.9% above the Georgian wholesale market price.

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BUSINESS

GEORGIA TODAY

OCTOBER 31 - NOVEMBER 2, 2017

Promoting Pro Bono in Georgia access to global trends and expertise, considerably helping us with the promotion of pro bono initiatives in Georgia.

EXCLUSIVE INTERVIEW

BY MATE FOLDI

WHAT ARE THE MAIN ACHIEVEMENTS OF THE CSRDG’S CSR PROGRAM?

T

aking place during the penultimate week of October, Pro Bono Week is a global celebration that is held simultaneously in more than 20 countries and sees a multitude of pro bono events. In 2016, Georgia joined this group of countries, and on October 27, the Center for Strategic Research and Development of Georgia (CSRDG), in cooperation with the Bank of Georgia, held this year’s Pro Bono Marathon at the Bank of Georgia Headquarters.

The Pro Bono Marathon is organized within the framework of the Georgian Civil Society Sustainability Initiative (GCSI). GCSI aims at improving the operational environment for civil society in Georgia, empowering civil society organizations (CSOs), increasing their accountability towards constituencies and amplifying their linkages to other actors. The project is co-funded by European Union and the Federal Ministry for Economic Cooperation and Development. By the end of 2020, with a total budget of EUR 5.07 Million (the EU contribution amounts to EUR 3.8 Million) GCSI aims to: execute over 110 activities, award 79 sub-grants, and target more than 5000 representatives of civil society across all Georgia. The project is implemented by Konrad-Adenauer-Stiftung in cooperation with the Civil Society Institute (CSI), Center for Training and Consultancy (CTC), Center for Strategic Research and Development of Georgia (CSRDG) and Kutaisi Education Development and Employment Center (KEDEC).

The beneficiaries of this year’s Pro Bono Marathon were CSOs whose work deals with combatting various social issues in Tbilisi and other regions of the country: Association Anika, the Guria Agribusiness Center, Association Atinati, Association of Young Psychologists and Doctors XENON, Union Step to the Future, Civil Development Association of Georgia, Charity Humanitarian Center Abkhazeti (CHCA).

DuringtheMarathon,GEORGIATODAY sat down with Lela Khoperia, the Corporate Social Responsibility (CSR) Program Coordinator at CSRDG, to find out more about the event and her work.

INTRODUCE YOURSELF, YOUR COMPANY, AND WHAT YOU DO WITHIN THE “GEORGIAN CIVIL SOCIETY SUSTAINABILITY INITIATIVE”?

I’m the Corporate Social Responsibility (CSR) Program Coordinator at the Center for Strategic Research and Development of Georgia (CSRDG), and our organization is one of the oldest civil society organizations in Georgia, having been

It has been a dozen years since we started the program, working together with companies to promote their responsible business behavior. Today, I can say that we’re proud of the results we’ve achieved.

Of course, we’re not the only ones responsible for the level of success that has been had, but we’re very proud of how much our input has contributed to the cause so far. Compared with the state of affairs 10-12 years ago, in present day Georgia, more and more companies are paying significant attention to corporate social responsibility, trying to embed responsible attitudes in their business behavior, as well as making the effort to become involved in CSR initiatives, joining different networks that unite responsible businesses, like the Georgian Pro Bono Network, Global Compact, the CSR club, CSR Commission of the ICC Georgia, etc. We believe that CSR is developing very quickly in Georgia, and we are very proud of having been able to contribute to this. active for 22 years. One of our core programs is developing corporate social responsibility in the country : actually, all our programs are linked with sustainable development in one way or another.

I’ve been leading the CSR program for 12 years and, within this program, for the last two years, we’ve been implementing initiatives that promote pro bono work in Georgia.

As to the Georgian Civil Society Sustainability Initiative, this is a very largescale program that will have a huge impact on the development of Civil Society in Georgia. This program is implemented by four Georgian CSOs with the lead of Konrad-Adenauer-Stiftung and financial support from the EU and German Government. Within this Program, CSRDG is responsible for the implementation of a number of components and one of them is Promoting CSR and Pro Bono in Georgia.

WHAT CHALLENGES DO YOU FACE IN ENSURING THE SUSTAINABILITY AND FUTURE DEVELOPMENT OF YOUR WORK?

TELL US ABOUT THE PRO BONO MOVEMENT IN GEORGIA Pro bono entails the provision of professional services, free of charge, for public benefit organizations; in Georgia itself, the movement is in its infancy, though in Europe and the United States pro bono has quite a long history.

In 2015, we initiated the creation of the Georgian pro bono network which unites 11 leading Georgian companies and two business associations, with more and more companies joining our network every year. For example, we’ll have an annual network meeting that will see three new companies join our ranks.

Members of our network commit themselves to providing pro bono services,

like consultation, mentoring, and expert support, to non-profit organizations.

Indeed, there exists a global Pro Bono network uniting mediator organizations from over 20 countries. A mediator

organization is an organization like ourselves which connects businesses with beneficiary organizations, facilitating pro bono services. CSRDG is a member of this global network which gives us

There are a lot of challenges that perhaps hinder the development of CSR in Georgia that are more general in character, like political instability, economic difficulties, and the relative infancy of the corporate sector of the country. You know, we ask Georgian companies to introduce activity standards equal to those of European companies: companies that may have already existed for more than a century. Conversely, while the Georgian private sector is developing quite rapidly, it has only been around for 25 to 30 years, so a lot of the companies are facing the difficulties that come with this reality.

Another, maybe not challenge but stimulus, for companies will be whether or not the Georgian government introduces more well-articulated and clearer policies on supporting CSR development in the country. To that end, we are working closely with the government, and fortunately there are indeed many indications of their willingness to closely support the development. For example, on November 30th we’re organizing a very large-scale, multi-stakeholder forum on CSR and labor rights, that three different ministries will be supporting. So the government is definitely starting to declare its position on supporting CSR. Political stability and steady economic development definitely remain a key precondition for the continued development of CSR in Georgia.

Bloomberg: Bidzina Ivanishvili’s Wealth Increased by $275m in One Year

BY THEA MORRISON

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he Bloomberg Billionaires Index, which lists the 500 richest persons on the planet, reads that the capital of Georgia’s former Prime Minister, tycoon Bidzina Ivanishvili, has increased by $275 million in the last year and amounts to $5.72 billion.

On the list of the world’s 500 richest people, Ivanishvili takes 305th position.

Bloomberg reports that Ivanishvili, 61, made his fortune in post-Soviet Russia during the 1990s, building a collection

of iron ore producers, steel plants, banks and real estate.

“He sold the majority of his assets between 2003 and 2006, and the rest in the run-up to his election as Georgian prime minister in October 2012. He stepped down after a year in office,” Bloomberg states.

The Top 10 list of billionaires is led by Bill Gates ($88.0B, USA), followed by Jeff Bezos ($83.5B, USA), Warren Buffett (81.1 B, USA), Amancio Ortega (78.3 B, Spain), Mark Zuckerberg (72.4B, USA), Carlos Slim ($61.4B, Mexico), Bernard Arnault ($57.5B,France), Larry Ellison ($55.2B, USA), Larry Page ($49.3B, USA) and Sergey Brin ($48.2B, USA).

BUSINESS

GEORGIA TODAY

OCTOBER 31 - NOVEMBER 2, 2017

9

Medvedev Instructs Ministry of Energy to Conclude LNG Agreement with Pakistan

Historical Building of Tbilisi Circus For Sale

BY THEA MORRISON

BY DIMITRI DOLABERIDZE

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ussian liquefied natural gas (LNG) is increasingly entering the world market, with Russian Prime Minister Dmitry Medvedev now having instructed the Ministry of Energy to prepare and sign an agreement with the Pakistani authorities on the supply of LNG. The intergovernmental agreement will be concluded for three years with automatic prolongation for the same period, the number of prolongations thereafter unlimited- a necessary detail for the Pakistani authorized company to conclude a longterm contract with Gazprom without conducting a tender.

The company-buyer of Russian LNG will become state holder ‘Pakistan LNG Ltd.’ and coordinators of the implementation of the agreement will be the Ministry of Energy of the Russian Federation and the Ministry of Energy of Pakistan. Volumes of

purchases of liquefied gas are not specified in the instruction, but most likely, they will be significant.

As Pakistan is currently experiencing an acute shortage of energy resources, the potential demand for natural gas is twice the supply. That is why the implementation of projects for the construction of terminals for regasification of LNG and the network of trunk gas pipelines has become a strategic priority for the economy of Pakistan over the next few years.

At the same time, the implementation of the North-South gas pipeline project, which the state corporation Rostek is supposed to build, cannot begin in the country as, although the design is almost complete, the parties still cannot agree on tariffs for pumping. The Russian side does not like them because they do not allow a return of investments put into the project.

The 12.4 billion cubic meter gas pipeline is intended to connect regasification terminals in the ports of Karachi and Gwadar in southern Pakistan with power plants and industrial consumers in Lahore in the north of the country.

ICC Georgia Continues Training Series in Tbilisi

BY KATIE RUTH DAVIES

T

heInternationalChamber of Commerce in Georgia (ICC Georgia) held the third of a series of training sessions in Tbilisi: ‘Incoterms 2010 and PPD,’ which is supported by the EU funded project ‘SME Development and DCFTA in Georgia’ and implemented by GIZ. The first part of the training series was held in Batumi on 23-24 September and 7-8 October.

The next part was held on 28-29 October, at Rooms Hotel, Tbilisi.

Training is aimed at representatives of small and medium-size businesses operating in the field of international trade transactions, who are involved in drawing up/reviewing purchasesale contracts, risk assessments, logistics planning and management, deal with financial security, insurance etc. Training sessions are also attended by NGO and public-sector representatives.

The latest training session was opened by Mariam Gabunia, Head of the Foreign Trade Policy Department at Ministry of Economy and Sustainable Development of Georgia.

‘Incoterms’ are international rules developed by the International Chamber of Commerce for trade transactions, which clearly define the parties' respective obligations, and reduce the risk of legal complications; therefore, it is an essential condition to purchase and sale contracts.

The latest training itself was conducted by certified trainer of International Chamber of Commerce, Irina Kitiashvili, and co-trainer, Pavle Tvaliashvili.

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eal estate service company Colliers International Georgia reports that the historical building of the Tbilisi Circus is now for sale at a starting price of $18 million.

The information posted on the website of Colliers International Georgia reads that the total area of the real estate is 21,014 square meters.

“Built in 1939, the Tbilisi Circus was designed

by Nikolay Neprintsev, a prominent soviet architect at the time. The structure was one of the most significant and well-appointed circus buildings in the Soviet Union. The structure includes a neo-classical rotunda and 4,750 m2 of total space spread over four floors and a basement.

The adjoining administrative building counts

approximately 800 m2, and contains support facilities for circus operation,” Colliers International Georgia reports.

The company added that the property is suitable for the development of a mixed-use scheme including office, hotel, event hall and other leisure facilities.

“The site is located on a hill overlooking Heroe’s Square, the main transport junction of the city.

Tbilisi`s three most active and popular districts, Vake, Vera (Mtatsminda) and Saburtalo meet there. The land provides an eye-catching 360-degree view of Tbilisi and the main city sights including historical Tbilisi, as well as sweeping views of Mtatsminda Mountain and the Valley of Mtkvari (Kura) River. Because of this unique perspective, it is an exceptional property in the city center,” the web page says.

The circus building and the adjoining structure represent a monument of cultural heritage.

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BUSINESS

GEORGIA TODAY

OCTOBER 31 - NOVEMBER 2, 2017

90,000 Georgians Enjoy Visafree Regime with EU in 6 Months number of applications for asylum.

“Negative numbers are not growing and that is important. The number of asylum seekers is also very important.

This number has not increased, but it was high before the visa liberalization,” he added.

Herman stated that the EU is satisfied with the results and joint work with Georgia, however, underlined that much more needs to be done in future.

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.

BY THEA MORRISON

S

ince the activation of the visafree regime with the European Union (EU) on March 28, in total around 90 thousand Georgian citizens have left the country for the EU. The information was released by the Head of the EU Delegation to Georgia, Janos Herman, while summarizing the results of the first six months of visa free travel with the European Union.

He noted that the number of citizens who were refused access to the Schengen Area is low.

"The EU is preparing a monitoring report, where the results of the visa regime will be more detailed. I hope that the current progress will continue," the EU Ambassador said, adding that in the given period only 230 Georgians were refused entry to the Schengen Area.

“The number of Georgian citizens traveling to the Schengen is increasing.

This was our goal," he said.

He added that it is very important for the EU to observe how many citizens remain in the Schengen Area more than the time permitted or how many are sent back from the border, as well as the

NABA Summit 2017 Shows How Nordic Businesses Can Participate & Invest in Africa's Resilient Growth SOURCE: NABA

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n 26 October, 400 African and Nordic leaders, including more than 20 ambassadors from African countries, Vice President of Ghana H.E. Dr. Mahamudu Bawumia and the Minister of Investment of the Republic of Sudan H.E. Mubarak Al-Fadil, assembled to discuss how Nordic companies can invest in Africa’s resilient growth.

For the seventh consecutive year, the Norwegian-African Business Association (NABA) hosted the largest NordicAfrican business summit in Oslo, Norway.

Africa’s real GDP growth slowed to 2.2% in 2016, mainly due to the continued fall in commodity prices and weak global economic growth. With dynamic private sectors, entrepreneurial spirit and vast resources, Africa has the potential to grow at an expected growth rate of 3.2% in 2019. This year's summit focused on

how to invest in Africa's transition and not why. In addition to the plenary sessions, various seminars focused on ‘The possibilities of investments’, ‘Finance’, ‘Energy’ and ‘Technology’.

“The Norwegian government is working to create a broad partnership with African countries,” said Ine Eriksen Søreide, Norwegian Minister of Foreign Affairs. “It is important to increase international investments to ensure jobs and development. The Nordic-African Business Summit has become a central meet-

ing place for Nordic and African business. Africa has become increasingly more important for Norwegian business, and the Minister of Foreign Affairs is proud to co-host this year’s conference”.

“Building on the successes of the previous six summits, this year the summit mixed inspiring keynotes with smaller workshops that showed how you can invest in and take part in Africa’s resilient growth,” said Eivind Fjeldstad, Managing Director of NABA. “The Summit facilitates face to face conversations with

10 Galaktion Street

business leaders, politicians and civil society that build trust, a key ingredient to building businesses across continents”.

Nigeria’s Minister of Industry, Trade and Investment H.E. Okechukwu Enelamah and ministers from Sudan and Uganda were also among the honored guests attending the all-day conference organized by NABA. "In Yara, we strongly believe that modern agriculture is the key to a positive future for Africa,” said Svein Tore Holsæther, President and Chief Executive Officer of YARA. “We invest and dedicate resources in this market because we believe that the required changes will not only make the continent selfsufficient - it will enable it to export food to the rest of the world. One day, Africa will be the world's breadbasket”.

The Nordic-African Business Summit in 2017 is the seventh conference hosted

by NABA and the largest Nordic business conference on Africa. 46 speakers and more than 400 African and Norwegian leaders, including 20 ambassadors from African countries, attended this

year’s summit themed “Investing in Africa’s Transition: 'How?’, not ‘why?’”.

The parallel sessions focused on case studies within chosen sectors: Finance, Energy and Technology.

The Norwegian-African Business Association (NABA) is the only NorwegianAfrican chamber of commerce. It seeks to promote business opportunities on the African continent, and serves as a bridge between Norwegian and African business communities. NABA analysis the current landscape, advocates for more efficient and less risky trade between Nordic and African business communities and hosts events for its 126 member companies. These events include investor trips, ambassador breakfasts, member luncheons, seminars and workshops as well as today’s annual summit. NABA was founded by the Confederation of Norwegian Enterprise (NHO), Virke The Enterprise Federation of Norway, Norfund, Statoil, Yara International, Nortura, Jotun, The Norwegian Shipowners' Association and Innovation Norway.

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

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BUSINESS

GEORGIA TODAY

OCTOBER 31 - NOVEMBER 2, 2017

The International Business Forum INTERVIEW BY NINO GUGUNISHVILI

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ales create success is the slogan of the upcoming International Business Forum (IBF), to be held at Hotels and Preference Hauling Tbilisi on November 3 - 4, bringing together representatives of some of the world's most famous brands as speakers, including Ania Jakubowski, former General Director of Coca Cola; Pierandrea Quarta, Procter & Gamble Global Brand Manager; Haseeb T Hasan, coach for companies like Apple, BMW, Siemens, Barclays; and Gil Petersil, a networking guru, among others. It is to be one of the largest sales forums organized in Tbilisi, and with the starting date fast approaching, GEORGIA TODAY talked to Guga Kobakhidze, International Business Forum Founder, to find out more about the company, their success story so far and what they are planning for the future.

THE IBF WAS FOUNDED BACK IN 2015. TELL US HOW THE IDEA OF ESTABLISHING IT ORIGINATED, AND WHAT MADE YOU THINK CREATING IBF WAS SOMETHING THAT WAS NEEDED? The idea of creating IBF came after we invited Brian Tracy to Georgia, who conducted a one-day masterclass “Sales and Leadership.” The event got extremely positive feedback, which gave us the motivation to continue our work in this direction, bringing even larger scale to it. With Brian Tracy’s masterclass successfully organized, we saw what an impact it had on the event participants, and on the success of their businesses. The IBF is a unique platform where you can simultaneously acquire knowledge, establish new connections, expand and grow your business and be in the epicenter of new things happening, as our forum unites various industries, speakers, brands and top managers sharing their experience with the forum participants, which is crucial for the development of business in Georgia.

WHAT ARE YOUR GOALS WITH THE IBF? Our goal is to make Georgia a key player on an international level in business activities, and become a center for such forums. For businesses, entrepreneurs, investors and different industry representatives, we want to create an event that will be highly anticipated each year and furthermore, when companies or individuals think about which forum to attend, we want IBF to be the first that comes to mind, and for that to happen we’ve been focusing and will continue to do so, on the individuals or brands that have vast international experience, on those who are thinking globally across various sectors. Accordingly, we have created a space where people can get information on the latest trends, establish new contacts, develop their business, and, ultimately, create more benefits. In 2018, we’re planning to organize a massive business event like this, which will bring together different industries and enable us to attract both Georgian and foreign participants, helping to boost tourism and economic development of the country.

WHAT HAVE YOUR ACTIVITIES BEEN TO DATE? The IBF team has already organized events such as hosting Brian Tracey for a masterclass in Tbilisi, Time Lord (David Allen) also in Tbilisi, and of course the IBF Batumi, where we had six famous and successful speakers, namely Pierluigi Collina, N1 Referee by FIFA; rugby legend Sean Fitzpatrick; Marshall Goldsmith, leadership trainer and coach; John King, author of Tribal Leadership; Dananjaya Hettiarachchi, considered to be world champion of public speaking; and Kevin Gaskel, Former CEO of Porsche, Lamorghini.

HOW WOULD YOU ASSESS THE PAST BUSINESS FORUM AND ITS OUTCOMES? IBF Batumi was a standout event, both in terms of its format and its outcomes. We’ve added details to the IBF Batumi format that were not traditionally part of business events. In addition, IBF was first to establish a B2B platform entitled 'Brella', enabling participants to find the right contacts

easily within the forum. Brella is a Finnish company, a startup with which we’re cooperating with closely. It managed to attract 2,000,000 million investments, meaning they’ll be developing the product further, and we of course will continue our long-term collaboration with them. At the same time, the participants of IBF Batumi and sponsors achieved tangible results, be it expanding their businesses in different countries, or exporting their products, establishing new contacts and starting negotiations, receiving offers locally from large corporate clients and more, which means IBF Batumi achieved its goal, the audience saw what a modern business event with concrete results looks like.

THE UPCOMING IBF SALES FORUM IS TO START ON NOVEMBER 3, TELL US ABOUT THE FORUM AND WHAT IT OFFERS. Right now, we’re working on our fourth event, with sales as its main theme. We’ve invited five international and three Georgian speakers, as well as five Georgian companies to participate in panel discussions. The sales forum will be organized for the first time not only in Georgia, but in the whole region. We decided to choose sales as a main focus, since sales are critical for companies, and we also want to assist business growth also.

The upcoming IBF will have the following speakers and panel discussion participants: Ania Jakubowski, Former CEO- Coca-Cola; Pierandrea Quarta, Digital Brand Manager (global), Procter & Gamble; Haseeb T Hasan, International Speaker; Evgeny Kotov, Founder and CEO, Practicum Group; Gil Petersil, Networking Guru; Vakhtang Kordzaia, GPI Holding; David Chikvaidze, Founder, CEO, International Sales institute; Tornike Guruli, Management Academy; Vato Kavtaradze, Windfor’s, Founder and Creative Chairman; Gaga Darsalia, Co-founder, Redberry; Teiko Lominadze, East Point, Tbilisi Gardens – Marketing Director; Giorgi Tushurashvili, Founder, CEO, Influence.ge; and Giorgi Burchuladze, Managing Partner, Livingstone.

TELL US ABOUT THE ACTUAL PROCESS OF PREPARING THE EVENT AND HOW YOU MANAGE TO CONVINCE SUCH HIGHPROFILE SPEAKERS TO PARTICIPATE? One of the most interesting things about organiz-

ing such a massive event is, of course, the preparation and planning. It has to be mentioned that we’re doing it on our own, thus it requires a great deal of hard work and lots of energy. Our team works through all the details of the event, starting from communication with the speakers, to the creative part of the forum, from discussing how it should start and how it has to end, so that it leaves the participants with the desire to be a part of the forum again in the future. As for our contacts with speakers, that part also requires a lot of work. We assess their speeches in order to make a selection, and then we shortlist the candidates after speaking with them, followed by the final decisions being made and negotiations starting. The negotiations as a process are difficult enough, since coming to Georgia can be quite time consuming, and we need more efforts to persuade our international speakers to come.

WHAT IS THE KEY TO YOUR SUCCESS? One of the key components of IBF success is teamwork and a shared goal that all of us pursue, and every member of our team puts immense energy and time in achieving that goal. We believe in what we do and we see the results of our work, whether it’s a developed business or new connections established. Often people thank us, saying the speakers at our events played a life-changing role for them.

All of that gives us more motivation and power, and assures us that we’re moving in the right direction.

WHAT ARE YOUR EXPECTATIONS FOR THE EVENT? From the start, we planned the IBF Sales Forum as the most practical forum, and that’s what our expectations are. That’s how we selected the speakers and we believe that, from the very interesting twoday event, the participants will take away knowledge that will be adapted in their businesses later and help them to achieve better results and more sales.

ANY FUTURE PLANS TO SHARE WITH US? As I already mentioned, we’re working on IBF 2018, planned to be much larger than the previous ones, with more speakers, more themes and more participants. We’ll announce more details later on.

SOCIETY

GEORGIA TODAY

OCTOBER 31 - NOVEMBER 2, 2017

13

The Taxi of Terror INTERVIEW BY VAZHA TAVBERIDZE

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f you ask a random tourist in Georgia what he or she doesn’t particularly like here, taxi drivers coming clear favorites might be a safe bet. Indeed, these devious individuals have mastered the craft of swindling unsuspecting visitors, often charging them exorbitant amounts of cash for a short ride. Of all these, the ones nesting near the airport might just be the craftiest bunch. Oftentimes, the ire of the tourists doesn’t go further than occasional complaining among fellow expats or more well-mannered Georgians, but one particular visitor decided to take this one step further and actually speak out. Meet Billy Martinsky, a travel blogger and caricaturist extraordinaire, who depicted his experience with Georgian cab drivers in a blog aptly titled as “The Taxi of Terror”. GEORGIA TODAY and Panorama TV Show decided to meet him.

YOUR BLOG POST ENDED WITH “I’LL NEVER USE A CAB IN GEORGIA AGAIN”. SHARE WITH US YOUR EXPERIENCE WITH GEORGIAN DRIVERSJUST HOW BAD ARE THEY? That was my first ever experience in Georgia, landing in the country. As for why I said that I would never use cab drivers again - because I had never experienced anything like that before, taxi drivers in the USA and other places I have been, well, they can be crazy too, but this was unlike anything I’ve

pictures of the sheep, but the driver was really angry, honking and screaming at the sheep. It must have been about 20 minutes standing still in a traffic jam caused by 300 sheep. Oh and constant honking seems another Georgian thing - I’ve noticed that whenever drivers are about to pass another driver, they always honk and immediately speed around. There are different types of Georgians: one really nice, really friendly and one angry and superaggressive. It’s two completely different worlds.

ever been through before. I landed at 4 in the morning. I was exhausted, and I had no idea how to use the public transportation system here. I just had an address of the hostel I was staying at. So I kind of stumbled out of the airport and showed the taxi driver the address and got in the cab. I thought it would be a casual drive from the airport to the hostel, and then I’d get out and go to sleep. Nothing extraordinary. You see, I couldn’t have been more wrong! Immediately after getting in, he lights up a cigarette and takes a beer out of somewhere. So holding the beer in one hand and cigarette in the other. He starts driving with his wrists on the wheel, and he is driving like the world is about to end, like all the fiends of an apocalypse were after us and we had to escape. He was speeding down the road, passing everybody in the way.

AND THEN THERE IS A BIT ABOUT POLICE CARS PICKING UP HITCHHIKERS AND DRIVING THEM TO THEIR DESTINATIONS…

WITH HIS WRISTS, EH? THAT REQUIRES SOME MASTERING. Yeah. It probably was not the first time he’d ever done that. But I never experienced anything like that before. And he was going about 140 or 150. And then, lo and behold, a police car right in front of us. I thought, wow, thank God, this guy’s going to slow down because there is, well, a police car and all that.

NO CHANCE, I’D SUPPOSE? None at all. He just went past him all chilled and casual-like, like it was the way things were supposed to be. I was still delirious because I hadn’t really slept, I was jetlagged, but I was thinking any second there could be a crash.

That’s how it’ll all end. I was fearing for my life the whole ride. We finally came to the hostel, I was thinking lto myself wait, wait, I’m here, I am alive. Thank God I am alive. And I’m really not that religious, you know? But for me as a Westerner, I’d never experienced anything like that. I’d never seen someone driving with his wrists, all the while smoking cigarette, and passing a police officer. Now that I have been here for 6 weeks and I have been in lot of marshrutkas, I’ve got more used to it.

But it was the very first time I’d ever seen anything like that. And to be frank,

it was absolutely terrifying.

THERE’S A VERY FUNNY STORY ON YOUR BLOG ABOUT SHEEP BLOCKING THE ROAD RESULTING IN A CRASH. IT EVEN CONTAINS A SORT OF 10 COMMANDMENTS OF GEORGIAN DRIVING… Sure enough, sheep and cows can cause traffic jams. That happened when I was going to Kazbegi. On the way back there must have been 300-400 sheep, just standing in the road. They wouldn’t move. We were quite amused, taking

Yes, I’ve met two or three different people here who told me their experience with hitchhiking and that the police drove them…I’d feel safer hitchhiking with police officers than with drivers [in Georgia]. Definitely safer than taking a taxi. And they probably wouldn’t try to overcharge me.

SO, WHAT IS IT IN GEORGIA THAT ATTRACTS YOU SO MUCH? I always wanted to see things that are different from where I grew up. I grew up in a very small town in US, about 10,000 people, it was pleasant but nothing ever happened, nothing really exciting. I wanted to seek things that are different in a positive way. Except for driving, I really enjoyed everything here.

Continued on page 15

14

POLITICS

GEORGIA TODAY

OCTOBER 31 - NOVEMBER 2, 2017

The Cyprus Case: a Helpful Path towards Georgian Reunification?

BY VICTOR KIPIANI

R

ecent progress towards the reunification of Cyprus has put the island in the spotlight, and may provide a reliable recipe to defeat the cancer of separatism and secession.

This recipe is becoming even more attractive in light of the deepening of existing territorial disputes and the rapid emergence of new ones. The Georgian government has paid (or at any rate should be paying) closer attention to the ups and downs of the Cypriot case, since, notwithstanding continuous efforts at various levels, the question of Georgia's territorial integrity remains at an impasse, offering little prospect for hope.

What lessons can we draw from efforts to reunite the divided and occupied island of Cyprus? Does Georgia's most acute problem resemble what Cyprus has undergone to date and is currently trying to overcome? Both cases bear striking resemblances and fundamental differences, but let us begin with an overview of the events which took place on the ‘Island of Aphrodite’ in order to better understand the drama which unfolded in Georgia in the early 1990s and its ever-present consequences.

CYPRUS IN THE 1960S AND ’70S Tensions between the Turkish and Greek communities erupted almost immediately after Cyprus gained its independence from the United Kingdom in 1960.

In reaction to ethnic clashes, Greece sent troops to the island and Turkey responded with airstrikes. In turn, the United Nations created the so-called ‘Green Line’ and deployed peacekeepers to maintain a buffer zone between the two sides in sectors of Nicosia. A relative stability lasted until 1967, when the ‘Colonels’ seized power in Greece and attempted to escalate the conflict.

It is worth noting that the military junta’s policy of enosis (uniting Cyprus with Greece) was at odds with the course adopted by the Cypriot President, Archbishop Makarios III, who was eventually overthrown and fled to Britain.

Turkey once again responded with great military force, and deployed troops to protect the Turkish Cypriot community.

The unity of Cyprus was now effectively broken: the island was partitioned in 1974 between Turkish Cypriots to the north (effectively expanding their control to 36% of the island) and Greek Cypriots to the south. Although the coup in Athens collapsed quickly and a series of diplomatic efforts sought to restore the status quo, the island’s partition and the occupation of its northern part were maintained and indeed continue to this day. As a result of this conflict, nearly 160,000 Greek Cypriots fled to the south and around 50,000 Turkish Cypriots moved north to the so-called ‘Turkish Republic of Northern Cyprus’, whose independence only Turkey recognizes.

PARALLELS AND DIFFERENCES As this brief summary of the Cypriot question shows, the crisis has unfolded through a series of interconnected stages.

This has also been the case in Georgia, and both conflicts were greatly escalated by the military intervention of external state actors. And yet the Cypriot and Georgian cases are clearly different, since on Cyprus the "patron states" of both communities, Greece and Turkey, openly intervened to protect their fellow countrymen, whom they saw as an ‘extension’ of their nation, culture and heritage. This is very dif-

ferent from the Georgian scenario, as there was no Russian community in the disputed territories at the time of Moscow’s open aggression. Instead, the Kremlin discreetly created a casus belli via the ‘passportization’ of the Abkhaz and Ossetian populations (by which the Russian authorities have induced people, usually the holders of former Soviet passports, to apply for Russian citizenship), thus enabling it to claim that its intervention was purely ‘humanitarian’.

This original ‘humanitarian’ excuse— which in fact resulted in deeper ethnic cleansing and in the near-total exodus of Georgians from the disputed areas— was soon forgotten, and a new type of ‘Russian enosis’ through the ‘creeping annexation’ and progressive absorption of both territories is currently in full swing. But these slight historical parallels between the Cypriot and Georgian cases essentially end here, and in reality evolve into a series of differences.

‘ADVANTAGE CYPRUS’ By virtue of its insularity, Cyprus has always been spared the problem of sharing land borders with any of the conflict’s ‘patron states’, notably Turkey. This absence of physical frontiers greatly alleviated the pressure the island came under from its neighbours, whereas their existence in Georgia’s case contributed decisively to the escalation of the conflict—but neighbourhood is obviously not the sole factor which renders the unification of Cyprus more feasible.

More importantly, Cyprus is a member of the EU; this makes a huge difference, and increases the chances of ultimately being able to resolve the Cypriot conflict.

The possibility of becoming an EU citizen is a great incentive to those among the island’s Turkish community who wish for reconciliation and reunification.

The legal and economic benefits of EU membership are crucial to the likely prospect of Cypriot unification, whereas the promise of visa-free access to the Schengen area for holders of Georgian passports is not as attractive.

Besides, Cyprus’s relatively peaceful process of reunification has led to the wider international engagement of

impartial actors over the past few decades, introducing a preventive mechanism capable of negating the interference of patron states. In addition, the physical presence of a dedicated UN peacekeeping force in the buffer zone effectively prevents sporadic skirmishes between the two communities. These are without doubt precisely what the Georgian case so badly needs, and their absence forces us to go around in endless circles with no breakthrough in sight.

Overall, security issues include not only those commonly attributable to peacekeeping, but also others linked to post-conflict resolution. Negotiating a supranational security arrangement leading to the withdrawal of Turkish troops from Northern Cyprus would certainly accelerate the process of reconciliation and reunification. The fact that both Greece and Turkey are members of NATO gives added weight to the Cypriot case, as their membership provides a number of incentives (admittedly somewhat bleak in practice) to talk and come to an agreement under an umbrella of collective security. It is interesting to note that the NATO implications also entail inviting Cyprus to join the Alliance whilst preserving Turkish military forces on the island but under the NATO flag. The presence of Russian troops in Georgia’s breakaway regions, however, poses a much larger problem, since Russia refuses to progressively adapt its own reading of the conflict to that of the international community and international law. But Georgia is not alone in having to play a ‘game without rules’ against Moscow: there are unfortunately other examples to which the world’s democracies have yet to react effectively. It should be noted, en passant, that Russia is surreptitiously trying to position itself as a patron state and to bring pressure to bear upon the island’s Christian Orthodox community.

A key element inherent to conflict resolution in countries populated by several ethnic groups is agreeing on a form of fair governance and a wellbalanced separation of powers. Coming

to such an agreement is important for both legal and political reasons, as it enables actors to avoid becoming pawns in another’s game. Existing plans for a unified Cyprus with a federal (quasicantonal) system of government may well resonate not only with the national unity agenda, but also with cultural heritage preservation and the property rights of Greek and Turkish populations in various parts of the island. The latter question is a highly contentious point considering the ca. 160,000 Turkish nationals to have settled on the island since 1974 and the ca. 200,000 Greek Cypriots who lost their homes in violation of their property rights.

A side-effect of bringing about reconciliation in Cyprus is the plan to explore for oil and gas in the Mediterranean Sea, and in this respect the Georgian case yet again largely falls behind: plans for Anaklia may not be considered sufficient grounds for ‘infrastructure diplomacy’, and clearly something more would be needed to appeal to nonGeorgian communities in the conflict zones.

detailed and concrete explanation of how we, the Georgians, see the future of our common state with the Abkhaz and Ossetians. Moreover, the plan would also have to take into account the special economic advantages which certain states on the periphery of the conflict zones have already gained within them, as ignoring these interests would render the plan unrealistic and impossible to implement. Let us be honest: ‘geo-economics’ exist in parallel with geopolitics.

In fact, such a plan may well be flexible, changing to the rhythm of regional and global geopolitics, but we need it to be worked out already.

As an ancillary to the process of drafting this plan—our own ‘white paper’, if you will—the law on occupied territories could be revisited. By opening the gates to businesses from friendly states, we could permit the free and unrestricted movement of goods and capital, and so reduce the ‘encapsulation’ of both regions by the aggressor state, raise the living standards of the Georgian community, and eventually help to create a progressive platform for future direct talks.

REINVIGORATING THE GEORGIAN CASE

THE ROAD AHEAD

Enough time has passed since the ‘hot’ phase of the conflict in Abkhazia and the war in South Ossetia was several years ago, but the Georgian government still has no clear and detailed strategy for its relationship with the Abkhaz and Ossetians. The declarations of ‘brotherhood and sisterhood’ various Georgian officials have made at different levels are not enough, and in the long run fall far short of what is needed to steer the country through the standoff phase of both conflicts. More importantly, a plan—a Georgian Unification Plan—for post-conflict arrangements needs to be formulated which consider matters such as security mechanisms in both regions, forms of government, property rights, citizenship, education, cultural heritage, etc. A Georgian Unification Plan such as this would certainly not be formulated in order to immediately be placed on the negotiating table; instead, its main purpose would be to serve as a

Georgia’s current policy of ‘non-recognition’ is good but not enough, as it does nothing to resolve the conflicts and merely maintains the matter frozen.

Continuing to see ourselves as the victim is also no help since we, the Georgians, are expected to provide real solutions. The blame game must stop: it serves no real purpose, whereas taking the process away from the ‘hijacker’ and into our own hands would add real leverage to the country’s reunification.

Finally, the ability to resolve conflicts also relies heavily upon moral authority. This appeals to us, Georgians, as a nation striving to run a multinational state successfully and fairly; applying the same high standards when dealing with matters responsibly; not only pointing out the faults and failures of others, but also fully recognizing our own. This is, admittedly, a long-term process during which we will all end up as either winners or losers. Let us hope for the former.

POLITICS

GEORGIA TODAY

OCTOBER 31 - NOVEMBER 2, 2017

Assessing the Russian Power across the Post-Soviet Space

The Taxi of Terror Continued from page 13

HOW CAN YOU COMPARE AMERICANS WITH GEORGIANS?

President Putin with With President of Belarus Alexander Lukashenko. Photo source: http://static.kremlin.ru

OP-ED BY EMIL AVDALIANI

S

ince the breakup of the Soviet Union in 1991, Belarus has remained closely aligned with Russia through various Russia-led economic and political integration projects. Minsk joined the Customs Union, later transformed into the Eurasian Union, and remains an active member of CSTO. Belarusian leader Alexander Lukashenka, who has ruled the country since 1994, due to suppression of opposition parties and free media outlets, was sanctioned by the West. This, along with heavy strategic importance Moscow has been putting on Belarus, made Minsk largely attached to Moscow both economically and security-wise.

However, disagreements between the countries have grown as Russia has experienced a resurgence in power over the past 10 or so years, reflected in the invasion of Georgia in 2008 and facilitation of the separatist conflict in east Ukraine since 2014.

Belarus started to feel worried about the prospects of bilateral relations as the Ukraine crisis unfolded and there are concerns that Russia would not withhold from undermining Belarusâ&#x20AC;&#x2122; sovereignty (if â&#x20AC;&#x153;necessaryâ&#x20AC;?) in future.

Thus in order to balance Russia, Belarus started its rapprochement with Europe, and Brussels even lifted some of the sanctions against the Belarusian economy and different high-level officials. Minsk has even been adamantly against calls from Moscow to open a new Russian military airfield in Belarus. There are even disagreements over how the Eurasian Union operates as Belarus is worried that Moscow is using the economic union to advance its political aims. Even CSTOâ&#x20AC;&#x2122;s work was questioned. Since the military alliance has not been used preciously, it is often considered merely a symbolic organization.

Moreover, Belarus and Russia also often have disputes over energy prices, transit issues, and Minsk has at times been quite critical of Russiaâ&#x20AC;&#x2122;s foreign policy towards the neighbors. For example, Minsk, despite pressure from Moscow, did not recognize Georgiaâ&#x20AC;&#x2122;s breakaway territories of Abkhazia and South Ossetia. Lukashenka also voiced criticism of Armenia, Russiaâ&#x20AC;&#x2122;s long-time ally in the South Caucasus, over its policies in Nagorno-Karabakh, Azerbaijanâ&#x20AC;&#x2122;s breakaway territory.

But, despite all these disagreements over a range of issues, Belarus also needs Russia. Russian investments as well as trade are predominant in Belarus.

In the security realm, Belarus shares Russiaâ&#x20AC;&#x2122;s concerns that NATO forces are moving too close to the Russian and Belarusian borders.

Moreover, Lukashenkaâ&#x20AC;&#x2122;s rule has many similarities with that of Putin. Both are holding on to power for too long and are widely criticized for it. Both have been facing countrywide protests over the past year

and are positioning themselves as strongmen.

So, when we talk about Lukashenkaâ&#x20AC;&#x2122;s overtures to the West and the chances of changing the sources of Belarusâ&#x20AC;&#x2122; foreign policy vector, his wish to hang on to power should also be taken into consideration. Although these are quite strong arguments, there are even larger geopolitical reasons which underpin Belarusâ&#x20AC;&#x2122; attachment to Russia and the latterâ&#x20AC;&#x2122;s interests in projecting its power over its western neighbor.

From Russiaâ&#x20AC;&#x2122;s perspective, Belarusâ&#x20AC;&#x2122; geographic position makes it an important piece of land to project economic and political power in. Belarusâ&#x20AC;&#x2122; location on the North European plain has made it through the centuries an avenue for foreign invasions of the Russian mainland. Charles XII of Sweden, Napoleon, and Hitler in XX century all directed their Russian campaigns through Belarus. Nowadays when the EU and NATO have made considerable headway into the former Soviet space by signing EU association agreements and holding military exercises with Moldova, Ukraine and Georgia, Russia perceives it no less a danger than the abovementioned historical figures.

Moreover, Belarus not only borders on the core Russian territories, Russian mainland, but also industrially and economically important regions such as Pskov, Bryansk, Smolensk and others. More importantly, Belarus is geographically very close to major Russian population centers, most notably the Russian capital Moscow.

Keeping Belarus under its influence also gives Russia the possibility to project its power far beyond the current Russian borders deep into the Central Europe and the Baltic states. Belarus borders on Poland and Lithuania, both members of NATO and unequivocally anti-Russian in their foreign policy stance. Moreover, as Russia grapples with the ongoing Ukraine crisis, Belarusâ&#x20AC;&#x2122;s position has become doubly important as it borders on North Ukraine and is very close to Kiev.

Thus, Belarusâ&#x20AC;&#x2122; geographic position would largely explain Russiaâ&#x20AC;&#x2122;s interests and its foreign policy moves.

However, like in Ukraine, alongside pure geopolitical calculus, there is also a cultural aspect to the significance Belarus bears for Russia. Belarusians are the Russiansâ&#x20AC;&#x2122; Slavic brethren and the country, like Ukraine, represents an integral part of Russian history. For the steadily decreasing Russian population, keeping almost 10 million Slavic Belarusians is an important asset.

Belarus and Russia will continue facing challenges in bilateral relations. The issues will range from security realm to wider political issues. Still, both countries will remain deeply aligned with each other. Russia will continue to be a major economic power for Belarus, while Minskâ&#x20AC;&#x2122;s rapprochement with the West will not cross the red line whereby Russia feels it has to step in to safeguard its strategic interests in the western borderlands.

PUBLISHER & GM

George Sharashidze COMMERCIAL DEPARTMENT

Commercial Director: Iva Merabishvili Marketing Manager: Salome Vashalomidze

GEORGIA TODAY

EDITORIAL DEPARTMENT:

Editor-In-Chief: Katie Ruth Davies

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

15

Americans follow rules more; itâ&#x20AC;&#x2122;s much more regulated. You know what to expect; in Georgia things are much more unexpected, chaotic, but also in a good way. Itâ&#x20AC;&#x2122;s exciting sometimes. But it feels very genuine here; when someone needs help, a lot of people will help you. If I needed someone to help me in the US, I am not sure that they would; well, occasionally they might, but you canâ&#x20AC;&#x2122;t always count on that. You would at least need something to offer them in return.

Here, someone will always come to help you.

Someone will care about you. Someone will make sure that you have food, a safe place, even police officers picking up hitchhikers. I really felt very welcomed here. Americans will be very friendly, smiling in the streets, but itâ&#x20AC;&#x2122;s more formal, polite, itâ&#x20AC;&#x2122;s not that deep. Here even if someone drives crazy, he will invite you over and offer food and wine. Thatâ&#x20AC;&#x2122;s what I really liked. The fact that you can be welcomed, treated as honorable guest, that someone will look to help you out.

WHAT WOULD BE YOUR ADVICE TO FELLOW TOURISTS THINKING ABOUT VISITING GEORGIA?

Well, If you come to Georgia expecting to find a place like Berlin or London, youâ&#x20AC;&#x2122;ll be disappointed because itâ&#x20AC;&#x2122;s very different. But if you go expecting to find something that is unique, something that has really good food and wine, and amazing nature, then youâ&#x20AC;&#x2122;ll have a positive experience.

Georgia can be a little bit chaotic, and if you want to control everything exactly as you like it to be, youâ&#x20AC;&#x2122;ll probably be upset.

Tbilisi is an interesting city, but if you can get out of the city, go to a village: itâ&#x20AC;&#x2122;s a different experience. When I went to Mestia, I was thinking about doing the track to Ushguli, but everyone I met there, every single foreigner I met there was doing that track, so I looked at the map and picked up different random villages. It was amazing. That said, Svaneti towers are pretty amazing.

Shatili and Tusheti are two place I didnâ&#x20AC;&#x2122;t go to yet, but I plan to, as people say amazing things about them. I just ran out of both money and time this trip. But I hope to return next year in February or March, and then go and see more of Georgia.

But if youâ&#x20AC;&#x2122;re keen to have an interesting experience, even if that experience has been in taxis and marshrutkas, youâ&#x20AC;&#x2122;re in for an exciting ride in Georgia.

For the full interview, go to georgiatoday.ge

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