Caucasian Business Week #12 by Caucasian Business Week

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BUSINESS WEEK July 08, 2013 #12

caucasian business week

July 08, 2013, Issue 12

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BE INFORMED, DO BUSINESS

GEORGIA

10 THINGS YOU MIGHT NOT KNOW ABOUT GEORGIA

or much of the last two decades since independence the former Soviet republic of Georgia has often hit the headlines for all the wrong reasons. Pg. 7

IRAQI AIRLINE ENTERS GEORGIAN MARKET

nother, this time Iraq air company Al Naser Airlines entered to Georgia air market. TAV Georgia informs that flights will be made from Tbilisi to 3 cities: Najaf, Basra and Baghdad. Pg. 6

TI GEORGIA: FINANCE MINISTRY’S ALLOCATIONS TO GEORGIAN PATRIARCHY AMOUNTED TO 160.7M LARI IN 2002-2013

I Georgia, Georgian branch of Transparency International, declared that allocations of the Finance Ministry, provided as direct funding to Georgian Patriarchy Pg. 7

WINE EXPORT TO RUSSIA REACHED 415,000 L

ational Wine Agency reported that Georgia’s wine export to Russia amounted to 415,000 l. export was implemented by 4 companies – GWS, Dugladze Wine Cellar, Cellar Door and Batono. Pg. 7

MAJOR PART OF RESPONDENTS FIND TBC BANK TO HAVE SIMPLIEST LENDING PROCEDURES

ajor part of respondents think that TBC Bank provides the simpliest procedures for issuing loans. Pg. 2

BANK RATINGS ACCORDING ACTIVES

hare of 5 leading banks in the total actives of the banking secotr was defined at 79,5% by June 1, 2013. Pg. 8

AZERBAIJAN VAZ, MERCEDES AND HYUNDAI MAKE BASIS OF AZERBAIJAN CAR FLEET

NBG EXPECTS ECONOMIC GROWTH TO MARK ABOUT 4%

ational Bank of Georgia (NBG) prognosticates that economic growth index of Georgia will be around 4% and it’s 25 less than official prognosis, indicated in

2013 budget. International Monetary Fund has the same prognosis as NBG does.

Fitch expects 3% economic growth in Georgia, Standard and Poors - 3,5%. George Kvirikashvili, Minister of Economy and Sustainable Development of Georgia stated that real expectation for Georgian economic growth is 4,5%-5%. Minister of Finance Nodar Khaduri stated on Friday that 6% growth will not happen, although budget sequestration is not expected.

AMENDED LABOR CODE COMES IN FORCE

fficial web site of Georgian Legislative Herald published today amendments to Labour Code, which were approved by the Parliament on June 12. Thus, amendments have entered in force. According to the document, the government should develop and approve within 3 months a rule for collective disputes’ conciliation, approve regulations of trilateral commission on social

partnership and list of branches of specific working regime. The amendments envisage that after 1 year, labor agreement, being set by employee with the same employer for 5 years or more, will be considered as permanent. The same agreement, being set for less than 5 years, will be considered as permanent in 2 years after the moment of enforcement of the amendments.

GEORGIA’S BANK SECTOR RANKS 9TH WORLDWIDE IN TERMS OF GROWTH IN ASSETS

he Compulsory Insurers Bureau has submitted a report on activities in 2012, revealed for the first time the structure of the active car fleet of Azerbaijan and debunked a number of myths. Pg. 10

ARMENIA ARMENIA RECORDS 5.3% YEARON-YEAR ECONOMIC ACTIVITY INDEX IN JAN-MAY 2013

conomic activity index in Armenia was 5.3% in Jan-May 2013, compared with the same period a year earlier, the press office of the Central Bank of Armenia reports. Pg. 11

CIS AZERBAIJAN, TURKEY AND KAZAKHSTAN SIGN PAPER ON TRANSPORT COOPERATION

e transport ministries of Azerbaijan, Turkey and Kazakhstan have signed a protocol on cooperation in transport development in the Turkic-speaking states. Pg. 12

WORLD NEWS OIL SURGES TO 14-MONTH HIGH OVER EGYPT UNREST

olitical unrest in Egypt and concern the turmoil will escalate have pushed US light crude oil prices to nearly $102 a barrel for the first time since May 2012. Pg. 13

Bidzina Ivanishvili held another meeting with journalists

Pg. 3

Finance Minister ister Changes his Position - Nodar dar its Khaduri Admits that a 6% Growth cannot be Reached this Year

Pg. 4

Economy Minister Recognizes that it’s Unrealistic to Achieve Economic Growth of 6% this Year

Pg. 5

Vakhtang Lezhava: Center for Policy Analysis Predicts Half a Billion Gap in the Budget by the End of the Year

Pg. 4

Giorgi Arveladze Becomes Liberty Bank Director Pg. 8

he Bank has published the report on the world’s bank system and the rating of 1000 major commercial banks. The rating also includes Georgia. The country ranks 9th in terms of growth in assets worldwide. According to the report, Georgia’s figure increased by 23.74% in 2012 and totaled 3.46 billion USD. The rating is topped by Gabon (6.09 billion USD),

where bank assets grew by 35.05% in 2012. Russia is second with 1.106 trillion USD, up 32.12% and Azerbaijan is third with 7.86 billion USD, up 27.71%. Bangladesh recorded 6.06 billion USD, up 27.47%; Peru - 54.22 billion USD, up 27.21%; Columbia - 184.25 billion USD, up 27.04%; Belarus - 20.11billion USD, up 25.64%; Chile 179.46 billion USD, up 24.61% and South Korea - 1.829 trillion USD, up 23.23%.

Environment Protection Minister to Toughen Control over Air Pollution Pg. 4

Former Economy Minister: Business Felt Comfortable during my Tenure as Minister

Pg. 4

TOP NEWS caucasian business week

ENERGY MINISTER: REGULATORY COMMISSION WILL BE STAFFED BY PROFESSIONALS

Presidential Election Date Changed Back to October 27

residential election date has been changed again and set for October 27 (Sunday) as it was initially announced before being changed to October 31 (Thursday), according to chief of president’s administration Andro Barnovi. The announcement came after Barnovi met a group of civil society representatives, who earlier on July 3 called on President Saakashvili to change election date from October 31 to other date which would fall on Sunday to help higher voter turnout including among Georgians living abroad. After he was called to change the date, President Saakashvili said that he was not “fixated” on any particular date and added that he instructed his

July 08, 2013 #12

E chief of administration to meet with representatives of the non-governmental organizations. “After a meeting [with civil society representatives], I spoke with the President… and the elections will be set for October 27, Sunday and it will be formally finalized today or tomorrow,” Barnovi said. According to the constitution presidential elections should be held in October, 2013. It’s up to the incumbent President to set an exact date. On July 1 President’s office initially announced October 27 (Sunday) as the presidential election date, but few hours later changed it into October 31, citing “a technical mistake” and now the date was changed back to October 27.

nergy Minister Kakha Kaladze declared that Georgian National Energy and Water Supply Regulatory Commission (GNERC) “is staffed with persons, who are not selected by their professional grounds, but due to their personal contributions toward Saakashvili”. The Minister declared this, while commenting today veto, set by the President Mikheil Saakashvili on draft amendments to law “On Electricity and Natural Gas”. As Kaladze said, the Commission was absolutely dependant body for years. He stressed that after the mentioned amendments, “the Commission will be staffed by professionals” and “all conditions will be created for this structure to gain real independence and become public and transparent structure”. According to the amendment, GNERC consists of 5 members, who should be appointed (and released) by the Prime Minister instead of the President (including the chairman).

EUROSTAT URGES GEOSTAT TO BE FULLY ACCOUNTABLE TO PARLIAMENT

urostat’s Adapted Global Assessment (AGA) recommends to make Sakstat fully accountable to the Parliament. The subordination issue of Sakstat and its board is not clearly defined, AGA considers. At that, AGA points that from administrative point of view, Sakstat should “appear under umbrella of the funding structure without threatening professional protection”.

ACCORDING TO WORLD BANK CLASSIFICATION, GEORGIA IS AVERAGE LOW-INCOME COUNTRY

ccording to World Bank classification, Georgia is average low-income country, with $3 496 gross national income per capita in 2012. Geostat informs that in Georgia Gross National Income was $3 496 per capita in 2012. Gross National Income was $15.724 billion last year. Although it’s preliminary data and Geostat will publish specific ones

on November 15 of the current year. World Bank divides countries into 4 categories according to this data: Low-income countries with Gross National Income bellow $1035 per capita; second - average low income category - for the countries with $1036-4085 GNI, third -upper average income category - countries with $4 086- 12 615 income and fourth - high income category – countries.

GEORGIA REVOKES VISA-FREE RULES WITH IRAN

eorgia unilaterally scrapped visa-free entry to Iranian citizens starting from July 1, according to the Georgian Foreign Ministry. Georgia and Iran signed an agreement on 45-day visafree travel rules in November, 2010 when then Foreign Minister of Iran visited Georgia. The agreement went into force in late January, 2011, which contributed to increase in number of visits from Iran to Georgia from about 21,300 in 2010 to over 89,600 in 2012. Starting from July 1, 2013 Iranian citizens will have to obtain Georgian visas, but Iran has not yet revoked visa-free rules for the Georgian citizens.

BY THE END OF THE YEAR PARLIAMENTARY ASSEMBLY CALLS “BORJOMI” PLANS TO SELL ON OSCE TO RESUME MONITORING 30 MILLION BOTTLES IN RUSSIA orjomi” plans to sell 30 million bottles of mineral water in Russia IN GEORGIA

he 22nd Annual Session of the OSCE Parliamentary Assembly is being held in Istanbul, Turkey from 29 June to 3 July 2013. Reports and draft resolutions have already been

published. According to the draft resolution of the Committee of Political Affairs and Security, the Parliamentary Assembly calls for intensified efforts towards generating a peaceful and viable solu-

tion to the un-resolved conflicts, and urges the OSCE Chairmanship to redouble efforts to find solutions to the tragic protracted conflicts in the Caucasus and Moldova. ‘In this connection, the Parliamentary Assembly repeats its recommendation to re-establish a meaningful OSCE presence in Georgia, and to maintain and strengthen the OSCE Offices in Baku and Yerevan, as well as the OSCE Mission in Moldova’, the resolution says. According to the document, the Parliamentary Assembly supports the Geneva Process to find solutions to the consequences of the 2008 war in Georgia, welcomes the decrease of security related incidents and the work of the Ergneti Incident Prevention and Response Mechanism, and urges the OSCE to continue its work on confidenceand security-building measures in Georgia. Members from 57 OSCE participating states are discussing economic, political security issues at the annual plenary session of the OSCE Parliamentary Assembly in Istanbul.

BUSINESS WEEK

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until the end of 2013. As the Russian edition BFM.ru writes, the main intrigue is whether Gennady Onishchenko’s service will find new technological violations in Georgian mineral water. If “Borjomi” is able to sell 30 million bottles, it will reach one-third of annual sales for 7 month period before the embargo. Recall that the most famous Georgian mineral water resumed sales in Russia in May this year. The products have already appeared in St. Petersburg and Moscow retail chains. In the near future

it will be supplied to other Russian cities. “Borjomi” appeared in Russia with the revised design, four options of packaging: 0.33-liter glass bottle, 0.5-liter bottle and 0.75 liter plastic bottle.

GEORGIA IS IN 73RD PLACE ON GLOBAL INNOVATION INDEX

eorgia is the 73rd on Global Innovation Index 2013. Georgia is second in the region after Armenia, which is the 59th. Azerbaijan is the 105th, according to the Global Innovation Index co-published by Cornell University , INSEAD and the World Intellectual Property Organization. The Global Innovation Index 2013 (GII) relies on two sub-indices, the Innovation Input Sub-Index and the Innovation Output Sub-Index, each built around pillars.

Five input pillars capture elements of the national economy that enable innovative activities: (1) Institutions, (2) Human capital and research, (3) Infrastructure, (4) Market sophistication, and (5) Business sophistication. Two output pillars capture actual evidence of innovation outputs: (6) Knowledge and technology outputs and (7) Creative outputs. Switzerland is in first place, like in the previous year, Sweden is the second, then comes Great Britain, Netherlands.

MAIN EVENTS July 08, 2013 #12

caucasian business week

BIDZINA IVANISHVILI HELD ANOTHER MEETING WITH JOURNALISTS ders were held wrongly” and a great number of project was imperfect. Ivanishvili brought Tbilisi bypass railway as example of such imperfect projects. Prime Minister also pointed that strategy of 7 regions’ development is prepared, which will publicly presented in next few days and it will not be a formal document. Responding question of Azerbaijanian journalist regarding reasons of delay of Baku-Tbilisi-Kars railway project, Ivanishvili declared that in contrary, the process was accelerated after appointment of new management by Georgian side and “pace of construction significantly increased”. We have “a great aspiration for project realization”, Georgia’s Prime Minister assured.

MORE THAN 100 ENTERPRISES TO BE FUNDED BY THE END OF THE YEAR Georgia’s Prime Minister Bidzina Ivanishvili assured that “not 60, but more than 100 enterprises will be financed” by the end of this year. He declared this at the today’s meeting with journalists. Premier pointed that 81 credits are issued at this stage in framework of the 3rd component of preferential agro-crediting program (funding of agricultural enterprises), while 24 loan applications are under consideration. Ivanishvili emphasized that “promises, we made in pre-election period, are fulfilling” in economic sphere. In this connection, besides the abovementioned enterprises, he mentioned program of spring agricultural works for land-poor farmers, cleaning and restoring of irrigation canals.

CAPITAL OF CO-INVESTMENT FUND MIGHT REACH 10B LARI Georgia’s Prime Minister Bidzina Ivanishvili declared that it is not excluded that authorized capital of co-investment fund will amount to 10 billion lari. This mentioned fund, initiated by the new government, is in process of establishment so far. Initially, the government declared that attraction of 3 billion lari is planned. As Ivanishvili announced at today’s meeting with journalists, “there will not be any problems with money”, “the main obstacle is the lack of projects”. Ivanishvili noted that he will not manage the fund himself, but he will be “one of the members” and his private money will be put in this structure.

INVESTMENTS OF $2B ARE PLANNED IN GEORGIA WITHIN CONSTRUCTION OF NEW GAS PIPELINE Georgia’s Prime Minister Bidzina Ivanishvili

declared that investments in Georgia, caused by construction of new pipeline for gas transportation from Azerbaijan’s Shah Deniz, should reach $2 billion. He said that total cost of new gas main project makes up $40 billion. Premier declared the mentioned during today’s meeting with journalists and noted that he had already had meeting with representatives of BP and SOCAR. Ivanishvili said that within this project, “volume of cheap gas that we receive from the previous pipeline will increase 3 times”. According to him, initial capacity of the pipeline will make up 14 billion cubic m, which should increase up to 24 billion cubic m in future.

MORE MONEY TO BE SPENT ON INFRASTRUCTURE THIS YEAR “More money will be spent on infrastructure this year”, Georgia’s Prime Minister Bidzina Ivanishvili declared at the meeting with journalists today. Premier admitted existence of definite interruptions, but explained that “a great number of ten-

THE RAILWAY WILL BE RESTORED WITHOUT FAIL We believe that the railway via Abkhazia will be restored - Georgian Prime Minister said at a press conference today.Ivanishvili said this would happen when, first of all, there would be no questions from the Georgian society . “The railway via Abkhazia is interesting and should be opened. Any new way improves economy. It will improverelations with Abkhazia. Unfortunately, too often, policiesare playing on that which is simple. In these cases, we arevery careful. There are questions, and we have to clarifythe issues with all interested parties, including Russia, ourbrothers. We try to exchange information with the Abkhazians through the public diplomacy. This process should begin when it does not cause great turmoil. In my opinion, this issue is overly politicized, and therefore, the process is slowed down. We do have the desire, but this should be in the case when there are no questions, first of all, in our society. We think that we will solve the problems and the railway will be restored “- Ivanishvili said.

FINANCE MINISTER: DRAFT BUDGET-2014 TO BE SUBMITTED TO THE PARLIAMENT WITHIN SET TERMS

inance Ministry reported that its advisory council held a meeting today, discussing course of reforms and preparation of budget-2014. In connection with preparation of the budget, the Minister Nodar Khaduri requested all the ministries to submit timely necessary information about priorities of the next year and their financing details. After the government meeting yesterday, Khaduri told journalists that work on draft budget has been started and the completed document will be submitted to the Parliament within set terms, i.e. until September 30. “We’ve agreed that we will continue work in July and August with spender entities on priorities, set in pre-election program of Georgian Dream coalition and in the government program, which has passed confidence voting in the Parliament, the Minister said. Khaduri declared that “economy will develop on the basis of free and competitive business”. “Rates of economic growth, achieved in previous years, were caused mostly by the government’s rouge interference in business”, he said, assuring that “the government does not going to continue such interference for economic development”, but “all infrastructure projects will be implemented in usual way”.

TBILISI INTERNATIONAL FESTIVAL OF THEATRE

AFTER THE BATTLE EMILIA ROMAGNA TEATRO – Compagnia Delbono, ITALY

International Program

n this grey space where I’m creating my new play I see a place of physical detention, prison, isolation, and at the same time a mental space, a shutting of the mind, the inability to find freedom or clarity. Evermore imprisoned in the schizophrenia of body and soul; torn between an idea of rulers, of kings, of a God imposing his presence, and an idea of man condemned to submit and lower himself everyday a little more. A schizophrenia tearing man apart, between displays of false joy and the real pain underneath; between the unavoidable responsibility that we feel towards the events that we suffer as victims, and a religious, fanatical, castrating feeling of guilt. A constant schizophrenia, with the fear of others on one side and the need to welcome and accept them on the other. A schizophrenia between our need for truth and our persistent lies. I see sick, ailing thoughts, in and outside my

head, or anyone’s head, closed thoughts, dark, suffocating thoughts. But sometimes, in this enclosed, grey, oppressing, claustrophobic space, I also see some incredible bursts of light. Dopo La Battaglia was probably conceived in a need to flee, to return, to howl, cry, laugh and play again like children, a need to lose ourselves again, to find again some kind of center, to retrieve a sense of revolt, of faith, of clarity of mind, to speak once again of love, speaking through our bodies, through sounds and dance... Extract from Dopo La Battaglia – poetical/political writings, by Pippo Delbono, ed. Barbes, 2011 OCTOBER 3 AND OCTOBER 4 , 2013 Duration: 110 minutes , without intermission Venue: Kote Marjanishvilis State Drama Theatre Ticket Prices: 55, 40, 25, 15 GEL www.tbilisiinternational.com www.facebook.com/TbilisiInternational

ECONOMY caucasian business week

July 08, 2013 #12

CENTER FOR POLICY ANALYSIS FINANCE MINISTER CHANGES PREDICTS HALF A BILLION GAP IN THE HIS POSITION - NODAR KHADURI BUDGET BY THE END OF THE YEAR ADMITS THAT A 6% GROWTH eorgia will face a budget gap in half a billion at CANNOT BE REACHED THIS YEAR the end of the year - this statement was made by a

researcher of Center for Policy Analysis Vakhtang Lezhava. As the expert said today as a guest of “Commersant” Business-Club, the government which announced a 6% economic growth would not be able to reach these results and at the end of the year a gap in the budget would reach half a billion. A growth of 0% in May has taken the form of political discussion, my aim is not to involve in the political discussions, but on the other hand, I think that the political discussion exacerbates these problems and prevents to find a way at the time when a solution is not in political, but in the economicplane, “- says Lezhava. He adds that the government has several ways to solve the problem of economic growth, including an increase in the deficit and then to cover the deficit with debts the government must find in a domestic market or take advantage of the foreign debt. On the other hand, the researcher sees way out in the costs reduction and a refusal from the programs planned by the government. “As far as I know, the International Monetary Fund has recommended the government to take a debt,” - says Lezhava.

fter the Minister of Economy, Finance Minister acknowledges that the economic growth of 6% can’t be achieved this year. Note: Nodar Khaduri announced yet last month that there was no need to review the government’s economic growth forecast. Today, the Finance Minister says that the economic growth rate does not depend only on investments - it depends on the current processes in the countries which are potential trade partners. According to him, he meets with potential investors every day, but investments will not bring a result in one day. The Minister claims that despite the slowdown in economic growth, all promised costs will be funded from the state budget and it will not be necessary to reduce costs. However, he does not specify due to what the state budget will be replenished. The Economy Minister was the first from the Cabinet members who recognized that the projected 6% economic growth is unrealistic and it’s possible the country will achieve a 4.5%- growth.

POST OF SUPERVISORY COUNCIL’S HEAD OF TELASI IS VACANT

EX-DEPUTY FINANCE MINISTER FORECASTS GAP IN BUDGET’S REVENUES

SC TELASI, Tbilisi energy distributor, told Sarke that post of head of supervisory council is currently vacant. New head will be elected in about a month, the company said. According to decision, made by recent meeting of shareholders (June 28), current composition

of the council is as follow: Pavel Okley, Dimitri Palunin, Alexander Pakhomov, Dmitry Volkov, Temur Chincharauli and Irina Milorava. Pakhomov and Volkov were not members of the council last year. As of January 15, 2012, their predecessors were Anton Badenkov (head of the council) and Vadim Mitushin (director general in March 2012). According to TELASI, Mitushin was elected at the extraordinary meeting in December 2011 and was released ahead of time at the meeting on June 28. The company does not disclose reasons of his early discharge. To note, members of the supervisory council of TELASI are elected for 4 years with option to be re-elected unlimitedly.

TELASI DOES NOT ISSUE DIVIDENDS IN 2013

ecent meeting of shareholders of JSC TELASI, Tbilisi energy distributor, decided not to issue dividends from profit-2012. To remind, according to audited report for 2012, net profit of the company amounted to 24.96 million lari (year-on-year decrease – 17%). The company noted that minority shareholder

Marine Kakachia expressed her dissatisfaction regarding not issuing of dividends by TELASI through years. Not payment of dividends is recommendation of supervisory council of TELASI. Shareholders meeting decided to appoint Ernst&Young again as auditor of TELASI for 2013. Agreement with this company should be signed in 3 months.

70% OF APARTMENTS IN M2 AT HIPPODROME ARE SOLD OUT

ccording to m2 Real Estate (former SB Real Estate), subsidiary of Sakartvelos Banki (Bank of Georgia), 70% of apartments in Tbilisi residential complex m2 at Hippodrome are already sold out. Today, the company has completed construction of carcass and roofing works of all 9 buildings of the complex. Construction of m2 at Hippodrome (total area 63,247 square m), which was started in April 2012, is planned to be brought to end in Septem-

ber 2014 (including finishing works). As m2 Real Estate told Sarke, installment with interest rate 0% is still available, while requirement for customer’s co-participation is decreased from 35% to 25% already for month or so. To remind, Netherlands’ Development Bank (FMO) opened last year a credit line of $20 million for the project, while $7 million was allotted by Sakartvelos Banki. Monitoring the construction process is implemented by American engineering company Aecom.

x-deputy of the finance minister and current chancellor of Agrarian University Lasha Gotsiridze considers that fulfillment of the state budget-2013 with existing parameters is impossible. He estimates that even in case of most optimistic scenario, gap in tax revenues will reach 300-400 million lari by the end of the year. As Gotsiridze noted in his Facebook, tax revenues in 6 months of this year amounted to 2.98 billion lari, while for the same period of 2012, the volume made up 2.96 billion lari. However, this year’s target for tax revenues exceeds by 9.6% the target of 2012, so tax revenues in 6 months of this year had to amount to 3.25 billion lari in order to secure fulfillment of the budget, Gotsiridze explained. Due to the mentioned, ex-deputy of finance minister recommends the government “to start immediately working on parameters’ correction in the budget-2013”. Cut of both, tax revenues’ target and expenditure part, and bringing them in compliance with the reality is required, he warns. At that, Gotsiridze stressed that the government should “stop acceptance, execution and public announcement of decisions, which hamper economic growth, i.e. creation of negative expectations” and “take administrative measures, required for improvement of tax revenues’ mobilization”.

ENVIRONMENT PROTECTION MINISTER TO TOUGHEN CONTROL OVER AIR POLLUTION

ccording to Environment and Natural Resources Protection Ministry’s program for 2013-2016, a modern effective system of routine testing should be launched for all kinds of transport means. From 2014, system of filling stations’ eco-marking should be introduced in order to inform Georgian public regarding quality of fuel, which is sold in the country. From 2015, system of on-road control of car emission should be introduced. From 2014, it is also planned to change taxation in order to stimulate import of ecologically clean and fuel-efficient cars and prohibit import of cars older than 20 years. According to atmosphere air protection service of the Ministry, transport means account for 71% of air pollution, energy – for 25%, industry – 4%. In terms of age, car fleet of the country is distributed as follow: cars older than 20 years – 44%, 16-20 years – 25%, 11-15 years – 22%, 6-10 years – 6%, up to 5 year old – 3%. 90% of imported cars are second-hand ones.

STATE AUDIT SERVICE: IN PRE-ELECTION PERIOD, NATIONAL MOVEMENT SPENT 5.24M LARI FROM THE BUDGET FOR OWN POLITICAL PURPOSES

tate Audit Service’s group for political parties’ financial monitoring concluded that National Movement has spent 5.24 million lari from the state budget for own political purposes in pre-election period. Based on materials of district prosecutor’s office, the Audit Service started in April administrative proceeding in connection of the former ruling party’s possible violations. The Service said that due to the government’s order of July 31, 2012, number of non-staff workers of Social Service Agency made up 26,791.

Besides, Social Service Agency’s director has ordered on September 3, 2012 to hire additional 21,837 workers for securing accelerated implementation of measures, envisaged by job seekers’ accounting program. Terms of labor contracts made up September 1-30, 2012. The employees’ fixed salary made up 300 lari (after taxation – 240 lari), being transferred in advance in branches of Liberty Bank. State Audit Service considers that the mentioned persons have “conducted agitation in favor of the party” and notes that the respective report will be sent to the Main Prosecutor’s Office.

INTERVIEW July 08, 2013 #12

caucasian business week

ECONOMY MINISTER RECOGNIZES THAT IT’S UNREALISTIC TO ACHIEVE ECONOMIC GROWTH OF 6% THIS YEAR

FORMER ECONOMY MINISTER: BUSINESS FELT COMFORTABLE DURING MY TENURE AS MINISTER

t’s unrealistic to reach a 6% economic growth. Ministry of Economy and Sustainable Development of GeorgiaGiorgi Kvirikashvili said after the Cabinet Meeting, adding that the country can achieve a 4.5% growth this year. Recall that as per “Sakstat” preliminary data, in May the real GDP growth was zero percent compared withthe corresponding period of the previous year, while in the first quarter economic growth was 2.4%. Experts have been talking about the fact that thecountry will not be able to achieve a 6% growth announced by the government for a long time. The expert Paata Sheshelidze explains that these indicators are the result of undue economic strategy. The expert believes that the new government deprives the private sector of activity and there is no work incentive in the country today. He also says that the 2013 year’s results will be even worse, and the country will not be able to

reach a 6% economic growth predicted by the government. According to Director of the analytical portal “BPI”, a 6% economic growth cannot be achieved in the backdrop of 0% growth observed in May. Irakli Lekvinadze assesses that in the current situation a 4% growth rate predicted by the international organizations is too optimistic, and it is possible that the country cannot achieve this rate. The expert explains poor indicators by the investors’ being in an expected mode due to the political situation and recommends the government to take up the role of an investor and fund infrastructure projects. In May, the Minister of Finance Nodar Khaduri claimed that he did not see the necessity of revising theforecast of a 6% economic growth. Note: The influential rating agencies Fitch and Standard & Poor’s predict a 3-3,5% economic growth in Georgian while EBRD has cut growth forecast from 5 to 3%.

BOC GLOBAL EVENTS GROUP LAUNCHES MARKETING BRILLIANCE AWARDS CEREMONY IN TBILISI, GEORGIA!

or the first time ever, Marketing Brilliance Awards Ceremony travels from London to Tbilisi, to celebrate some of the most innovative Marketing and PR achievements across various industry sectors, acknowledge the contributions made by individuals as well as by teams, in dramatically changing Region. The award is putting a spotlight on the homegrown talents bringing some of the most brilliant and innovative pioneers from the industries under one roof. Participants of the Award Ceremony can also join the Senior 1 day World Class Marketing & PR Leaders Best practice Exchange/Conference, FREE of charge; held within the framework of the Award Ceremony on 25th October: Hear Multi-Award winning experts and true in-

dustry leaders, joined by much smaller scale, yet equally successful organisations, discuss and share their expertise, on crafting and shaping the early stages of the world class marketing and PR functions; this event will provide answers to professionals representing international corporations as well as smaller organisations, wishing to succeed and outrun the competition on the local, or international markets; The Marketing Brilliance Awards and a conference will take place in Tbilisi on 25th October 2013. The ceremony is organised by British company - BOC Global Events Group, supported by most of Georgian Media: Marketer.ge, BPI, Caucasus Business Week, Ambebi.ge, Imarketing.ge and many more For more information and registration details visit: http://www.marketing-brilliance.boc-uk.com

ormer Economy Minister Vera Kobalia talks about the mistakes made by the previous government in a conversation with “Kvela Siakhle” [All news] newspaper, including in the field of economics and business. In addition, she says that business “felt comfortable” during her tenure as minister. “During my tenure as minister business felt comfortable. A fact that checks lasted for a long time was a mistake. Businessmen did not know what conclusion was made by tax inspection and so negative information accumulated, “ - Vera Kobalia notes. Kobalia talks about other mistakes made by the previous government and comments on the cachesdiscovered in Samegrelo:

“It turns out that our government made serious mistakes. I hope it will not be only at the level ofcharges. We’ll investigate until the end what was going on, and will do everything it will not happen again. The mental change and education is important for that, “- said the Former Minister.

ELDAR PIRMISASHVILI - TEN YEARS IN THE FIELD OF PUBLIC RELATIONS Twenty first century is the informational century. Public informing is granted the great significance for democratic governing. Formation of public opinion, transparency and care for the customer is the inevitable condition of today’s life. People communicate with each other, make contacts, and create groups. Governmental and business structures carry their policy, but do the issued information com back to the customer? Public Relations (PR) appears as a mediator between the informatory and receiver, PR cares for creating the communication strategy of company and also how the society will understand the politics of company and government. PR becomes successful in business, end also its strategy was transferred effectively in politics. In the conditions of today’s marketing economics, when there is motility of various products and candidates in case of politics, positioning is granted the great significance or holding the different and identified mark in man’s consciousness. If in case of business product was good witch was manufactured by this or that company, in case of politics the product become the person, candidate who needed the same characteristics as the product, package and selling. What PR does? PR cares for the reputation of company or person and also how his image perceives in society; appears as the mediator between the customer end companies. PR is often thought as an advertisement, basic difference is that PR creates the publicity, which spreads in media free, but many paid in advertisement. Public trust is less toward the advertisement then Toward the information broadcasting in media. Our interview guest is ELDAR PIRSMISASHVILI, the founder of Strategic Communication Agency “Peritus Group”. - Why is it so important for organization to collaborate with Consulting group and what benefits come from these relationship? - The most important principle for our consulting team “Peritus Group” is the satisfaction of our clients. Collaborating with us our clients get more benefits and developing perspectives. Minimal costs and maximal outcome – this is what we promise. Peritus is already working on the market for five years but all managers have 10 years working experience in this sphere. Good image and reputation has the great importance, success of the organization depends on it. Our clients get high competence, professionalism and more benefits with fewer costs from collaborating with consulting group. This is the core argument for partnering with Peritus Group. - What is the important aspect for effective working and what about the sequence of activities? - Our working steps include the whole cycle for company development. We start from research and all the following works are based on them, evaluate company resources and development stages. “Peritus Group” services include: Marketing, branding, PR, event management, media planning. These services make company working more effective and its messages reach the target audience - What is your approach to organizations and service fees?

- Our mission is “aspiration to perfection, enthusiasm, power based on knowledge, ethic and professionalism are our motive power”. We don’t work without strategy. Sequence and regulative work are basic components that create more effect and benefit for our clients. We have planned and implemented 45 projects during our career. Our news and innovation refers to the development of strategic communication market. Our web-site peritus.ge enables clients to choose the service and prices. Only Peritus has this service and customers who prefer new technologies can buy online our services via our site. We don’t stop and go ahead with new technologies. Trust Peritus and invested resources in company image and PR will be reflected on the development and success of company. Connecting with it, I remember one expression “In twenty-one century who governs information, has the power “. That’s why PR is granted the great role in today’s society, because it appears as the governor of information.

6 AJARA TEXTILE PLANS INVESTMENT INCREASE BY 33% BY 2014 LLC

jara Textile said that its investment volume amounted to $6 million by the end of 2012, while budgetary deductions – 1.5 million lari. The company plans to increase investments up to $8 million (by 33%) by the beginning of 2014. Ajara Textile was founded in 2008 in Kobuleti and initial investment made up about $4 million. In 2011, the company expanded and started building of clothing factory in Batumi. Currently, both factories have run about 800 sewing machines, producing 4.5 million units of clothes annually. Ajara Textile is member of Turkish Milteks group and produced clothes of such brands as Puma, Adidas, Lotto and Erima. The company is going to launch Nike production in near future as well.

NUMBER OF BUSINESS ENTITIES, REGISTERED IN Q2, DECREASED BY 0.75%

ational Agency of the Public Registry reported that 12,436 business entities were registered in the 2nd quarter, decreasing in number by 0.75%, if compared with the same period of the previous year. Out of total number of newly registered business entities, sole proprietors account for 56.8%, limited liability companies (LLC) – for 39.2% and non-profit legal entities – for 3.6%. Others are foreign legal entity, joint stock companies (JSC), foreign non-profit legal entities and legal entities of public law.

CAUCASUS ROAD PROJECT REGISTERED IN “WHITE LIST”

gency for Competition and State Procurements said that LLC Caucasus Road Project was registered in so-called “white list”. Accordingly, the company will enjoy some privileges during participation in the state tenders. Caucasus Road Project was established in 2005. While implementing construction project on Heroes’ Square in Tbilisi, the company has applied new technologies, building a galvanized bridge, as well as wooden and monolithic bridges, etc. Currently, “white list” of the Agency includes 38 companies, while its “black list” (companies, which are banned to participate in the state tenders during 1 year) includes 161 records.

BUSINESS July 08, 2013 #12

caucasian business week

ALDAGI BCI REJECTS BANK OF GEORGIA SYMBOLS

he insurance company “Aldagi BCI” confirms its plans of rebranding and declares that launches the brand reinforcement. Recall that commersant.ge exclusively learned that “Aldagi BCI” launches re-branding and plans to separate from “Bank of Georgia” at the brand level. A source close to the process informs commersant.ge that the main aspects following the re-brandingare considered in the company: the company will have a new name ALDAGI (instead of ALDAGI-BCI),while green will different variations be a corporate color. As for the logo, old logo may be entirely green with inscription “Aldagi.” According to the company’s restyle, “Aldagi” distancing from “Bank of Georgia” is planned at a

level ofbrand perception and a possible strategy would be the change of the image of a company affiliated with the bank. The source informs commersant.ge that the television and mass media campaign aimed at developmentof “Aldagi BCI” new brand is planned in the near future. “Aldagi BCI” confirms the abovementioned information in a conversation with commersant.ge. The company’s public relations department states, as a result of the rebranding , the company changes the color, name and logo. Answering commersant. ge question of why they decided to reduce the association with the bank, the company says: “We just want to establish and develop the brand separately, but it does not mean that we will not bea subsidiary of “Bank of Georgia”, - said the company.

GEORGIAN “CARREFOUR” DISTANCES ITSELF FROM THE COMPANY’S PROBLEMS IN THE WORLD

f the problems “Carrefour” faces in the world will affect “MAF Carrefour” business in Georgia? According to The Wall Street Journal, Europe’s largestretail network considers the

selling of the business in China and Taiwan. In Hong Kong, “Carrefour” may carry out the initial share placement and merge with another company. Can the “Carrefour “ problems in the world be reflected in Georgia as well? Commersant.ge addressed thisquestion to “Carrefour “ local representation whichclaims that the article in The Wall Street Journal is about “Carrefour Group” which is different from “MAF Carrefour” and has nothing to do with Georgia. “MAF Carrefour” is “MAF retail group’s” part. As for “Carrefour” new stores, “Carrefour” representation confirms that a new store is planned to be open. As it became known, “Carrefour” hypermarket will be opened in “Karvasla” shopping mall this autumn.

IRAN TO BRING TRACTORS TO GEORGIA FOR TEST USE

ogi Topadze, one of Industrialists’ leaders, declared at Iran-Georgia business-forum today that Iran plans to bring tractors for test use to Georgia. According to him, testing will held on territory of 200 ha. In the mentioned forum, being organized by Iranian industrial group in Tbilisi, 56 Iranian companies take part. They have expressed interest toward Georgian energy system, pharmacy, agri-

culture and metallurgy. According to Georgian National Tourism Administration, 89,170 Iranian tourists visited the country during 2012, exceeding by 48.14% the number of 2011. During 4 months of current year, 20,250 Iranian tourists have entered Georgia. In its turn, according to Sakstat, Georgian export to Iran amounted to $19.05 million in 2012 (increased by 17.55% year-on-year), while and import from Iran to Georgia made up $99.4 million (year-on-year growth – 53.37%). Regarding Iranian investments to Georgia, Sakstat reported that their volume in 2012 made up $404,700 (year-on-year growth – 2.8 times). In 4 months of current year, Iranian investments amounted to $29,000. It should be noted that according to Georgian press reports, Georgia has cancelled unilaterally visa-free regime with Iran, which acted since January 26, 2011. However, no official statement on the subject was made by Georgian Foreign Ministry so far.

LOYAL CAPITAL PROPERTY DEBTS HIT 11.6 MILLION GEL

oin Moseshvili, director of LLC Loyal Capital Property, declared that the company has 7 creditors, including 3 foreign companies. The company’s total debt toward these creditors amounts to 11.16 million lari. As Moseshvili noted, Loyal Capital Property has accounts only in TBC Bank, balance on which makes up 6,702 lari. The company does not have

any real estate or movable property. Due to these circumstances, the director requested to launch proceedings on the company’s insolvency, but the court has rejected his request recently. If none of the creditors applies to the court during one month after this decision, requesting bankruptcy of Loyal Capital Property, the company will be announced bankrupt through cancellation of registration.

PEGASUS AIRLINE LAUNCHED FLIGHTS TBILISIATHENS

eorgian Avia Service Agency (GASA, official representative of Turkish air carrier Pegasus in Georgia) reported that Pegasus Airline has launched flights from Tbilisi to Greek capital Athens on June 29. The flights on this route will be implemented daily. As GASA told Sarke, cost of one-way ticket ranges within 129-200 EUR.

WIZZ AIR UKRAINE MADE FIRST FLIGHT KHARKOVKUTAISI

ational Tourism Administration reported that Wizz Air Ukraine (Ukrainian subsidiary of Hungarian low-budget airline Wizz Air) implemented today its first flight from Kharkov to Kutaisi. According to the Administration, these regular flights will be implemented twice a week. Average cost of tickets makes up 40 EUR. As Administration told Sarke, Wizz Air Ukraine might add the third weekly flight as well.

IRAQI AIRLINE ENTERS GEORGIAN MARKET

nother, this time Iraq air company Al Naser Airlines entered to Georgia air market. TAV Georgia informs that flights will be made from Tbilisi to 3 cities: Najaf, Basra and Baghdad. The flights are assigned 5 times a week, during daytime and MD-82 plane will serve them. First flight of Najaf-Tbilisi will land on Wednesday, at 18:00 in Tbilisi International Airport. Al Naser Airlines is newly founded and it’s first private air company in the history f Iraq. On the summer season Ukrainian Aironix Airlines and Israeli Israir Airlines started flights.

BUSINESS & ECONOMY July 08, 2013 #12

caucasian business week

10 THINGS YOU MIGHT NOT KNOW ABOUT GEORGIA For much of the last two decades since independence the former Soviet republic of Georgia has often hit the headlines for all the wrong reasons. War, instability, corruption and Stalin. But, as Damien McGuinness reports, there is more to Georgia than that. Here are 10 other memorable things about the country.

7. Georgians are a friendly bunch

1. Tongue twister

4. High mountains

Spoken Georgian is like no other language you are likely to hear. It belongs to its own ancient linguistic group unlike any other language spoken outside the region. It includes rare sounds that many visitors may never have heard before. Some consonants, for example, are pronounced from the back of the throat with a sudden guttural puff of air. Georgian has its own 33-letter alphabet thought to be based on the sort of Aramaic spoken in the time of Jesus. To the untutored eye, the letters look very much alike. A squiggle too far and your “k” can easily turn into a “v” or a “p”. But even without understanding it, Georgian writing is beautiful, a myriad of theatrical swirls and flourishes. Very fitting to a country of dramatic personalities.

What’s the highest mountain range in Europe? The Alps? Wrong. It is the Caucasus Mountains marking the border between Georgia and Russia. While the highest peak is in Russia, Georgia lays claim to the second highest, Shkara, which at 5,193m (17,040 ft) beats Mont Blanc by nearly 400m (1,312 ft). These dramatic mountains, with their terrifying hairpin roads and hidden villages cut off at winter, are the stuff of legend. In Greek mythology they were one of the pillars holding up the world. And it was here that Zeus tied up Prometheus, to have his liver eaten by eagles. Today they are increasingly becoming a destination for climbers, walkers or skiers looking for adventure.

2. Georgia isn’t called Georgia At least, not by Georgians. They call their country Sakartvelo. The origins of the country’s name in English are obscure. One theory points to the Middle Ages when Christian crusaders swept through the region on their way to the Holy Land. At that time, it was part of the Persian Empire and the people here were known as “Gurj”. They were also devotees of St George. Theory has it that the crusaders made the connection and named the country Georgia. These days, there’s no mistaking the link to St George. A golden statue of the saint slaying a dragon dominates Tbilisi’s central square. He is also Georgia’s patron saint and the national flag featuring his red cross on a white background is everywhere.

3. Where’s Uncle Joe? Go to any flea market in Georgia and you’re likely to stumble across a moustachioed face looking out at you amid the bric-a-brac. Sixty years after his death there’s still a market for portraits of Joseph Stalin, the Georgian-born ruler of the former Soviet Union. As Georgia’s most famous son, attitudes here towards “Uncle Joe” are complicated. After independence, many Stalin statues were torn down but now some are returning to town squares. Some older Georgians revere him as a strong leader, who defeated Hitler, and are proud that tiny Georgia produced someone who had such an impact on world history. But more often he’s viewed as a tyrant responsible for brutal purges of his own people.

5. An architect’s dream There is a startling amount of space-age architecture in Georgia. The new parliament building is a huge glass and concrete bubble, looking like a giant frog’s eye. A slew of new police stations have been built that are all glass and see through, symbolic of Georgia’s aspirations for democratic transparency. Meanwhile, many of the country’s roads and infrastructure remains in bad shape. President Mikheil Saakashvili’s preference for flashy prestige projects to impress foreign investors and politicians, has not gone unnoticed. Also, while glass government buildings may work well in temperate Northern Europe, buildings constructed like greenhouses are less suited to Georgia’s scorching summers.

6. Tread carefully There is a lot of body contact between men in Georgia. Men stroll down the main avenue arm-in-arm, or lounge on street corners, limbs entwined. A casual observer might be forgiven for thinking that this was a sign of tolerance towards homosexuality. They’d probably be wrong. According to surveys Georgia is one of the world’s most homophobic countries - attitudes which came to the surface in May during a violent anti-gay demonstration in Tbilisi. Tens of thousands of people were angry because a group of gay rights activists had wanted to gather for 30 minutes against homophobic violence. The anti-gay protesters shouted slogans through megaphones, and called for “gays to go back to Europe”. Many other Georgians, though, were shocked by the display of intolerance, describing it as “a sad day for Georgia.”

A guest is a gift from God, goes the saying in Georgia. So foreign visitors are plied with food and drink - an enjoyable experience, if not always good for the waistline. But “a toast!” is the phrase dreaded by any visitor with a busy work day ahead. Out comes a bottle of Chacha, the lethal Georgian schnapps, or a large plastic bottle of homemade wine. Both must be downed in large shots. Excuses that you have to drive back six hours along twisting mountain roads won’t be accepted. Instead, you’ll be offered a bed for the night, and be propelled into a fullscale traditional feast.

8. Religion is big While many European nations have seen religious adherence fall in recent decades, the Orthodox Church in Georgia is booming. Attendance, adherence and respect for the Church are all growing. Over 80% of Georgians say they belong to the Church while its head, Patriarch Ilia II, is the most respected public figure by far, with popularity ratings over 90%. Dating back to the 4th Century, the Church helped the country keep its ancient musical traditions during the Soviet era and has been central to Georgians’ sense of themselves since independence.

9. Keep it in the family After centuries of domination by foreign powers, Georgians are sceptical of government. So family and friends are crucial for getting anything done. “I have a cousin who can sort it,” is what I was frequently told when I had a problem. One such cousin helped us buy a second-hand car, another got us accommodation at an army base when heavy snow trapped us in the mountains. With social welfare often patchy, it’s the family on which Georgians rely in times of crisis.

10. Georgia is in Europe, not the United States The leafy boulevards of the Georgian capital Tbilisi look like Paris, and the English-speaking young hipsters wouldn’t look out of place in Berlin. But take a look at a map and you’ll find the former Soviet republic 1,000km (600 miles) east of the Bosphorus, marooned in Asia. One definition of Europe marks the Caucasus Mountains as its border, putting Georgia firmly in Asia. Other definitions place the whole Caucasus region, including Georgia, in Europe which is where most Georgians feel it belongs. Head into the countryside however, where farmers scratch out a subsistence living, and it’s a different story. If this is Europe, it can sometimes feel more like 19th-Century Sicily than the modern-day EU. bbc

WINE EXPORT TO RUSSIA REACHED 415,000 L

ational Wine Agency reported that Georgia’s wine export to Russia amounted to 415,000 l. export was implemented by 4 companies – GWS, Dugladze Wine Cellar, Cellar Door and Batono. To remind, wine export to Russia began in early June. According to Georgian intellectual property center Sakpatent, requests on registration of 6 names of wine origin were submitted to Russian registration authority as of by June 2013: Akhasheni, Khvanchkara, Kindzmarauli, Mukuzani, Tsinandali and Tvishi.

UKRAINE REMAINS GEORGIAN WINE EXPORTS LEADER

ational Wine Agency reported that Georgian wine of $33.7 million was exported as of June, increasing by 11.7%, if compared with the same showing of the previous year. In the first half of the year, wine was exported to 18 countries. Top five countries of the export include Ukraine (43% of quantitative showing), Kazakhstan, Belarus, Russia and Poland. The 6th and 7th places are occupied by China and Latvia.

GEORGIA EXPORTED 5.16M L OF WINE IN Q2

ational Wine Agency reported that wine export (bottles of 0.75 l) in the 2nd quarter amounted to 5.16 million l. At that, 1.63 million l was exported to 18 coun-

tries in June. In total, wine export in the first half of the year amounted to 8.54 million l, exceeding showing of last year’s same period by 24%.

TI GEORGIA: FINANCE MINISTRY’S ALLOCATIONS TO GEORGIAN PATRIARCHY AMOUNTED TO 160.7M LARI IN 20022013

I Georgia, Georgian branch of Transparency International, declared that allocations of the Finance Ministry, provided as direct funding to Georgian Patriarchy, totalled for 20022013 (i.e. since the state signed a concordat with Georgian Orthodox Church) to 160.7 million lari. In 2013, state allocation for the Patriarchy amounted to 25 million lari, exceeding by 11.1% the volume of 2012. As TI Georgia said, funding of various events of the Patriarchy, provided in 2006-2012 according to orders of the President and the government, totaled to 8.4 million lari. Besides, 10.4 million lari was allotted to the Patriarchy from the President’s reserve fund during past 6 years. TI Georgia pointed that allocations of local administrations for needs of the Patriarchy totalled for 2002-2013 to 16 million lari. The organization noted also that the government has handed over multiple times land sites, urban gardens and buildings countrywide to the Patriarchy for free or for symbolic price (1 lari).

8 LIBERTY BANK TO ISSUE ADDITIONAL 20M SHARES

BANKING NEWS GIORGI ARVELADZE BECOMES LIBERTY BANK DIRECTOR

upervisory board of Liberty Bank made a decision to issue additional 20 million privileged shares. Total number of shares should not exceed 30 million, while term for their offering,a s well as of old shares, remaining for sale, should be extended by end of December 2015. Brokerage company Liberty Securities is appointed the agent of shares’ offering. Other details are not disclosed at this stage. As the bank told Sarke, additional information on the subject will be announced in near future. According to audited report of Liberty Bank for 2012, there were 892,553 privileged shares in circulation, while the rest were intended for sale by public offering (the deadline was June 30, 2013).

34% OF THE SECTOR PORTFOLIO COMES ON BANK OF GEORGIA’S LOANS

redit portfolio of Bank of Georgia was defined at 3,037 billion GEL by June 1, 2013 (First quarter 2013 - 2,990 billion GEL), market share at 34% (first quarter 2013 - 35%). Overall obligations are 4,237 billion GEL (first quarter 2013 - 4,113 billion GEL). Bank is a market leader by all data, the only exception is individuals’ deposits, which amounts more than 1 billion GEL. Bank actives are 5,186 billion GEL, market share 35,4%. January-May profit is 51,06 million GEL.

BANK OF GEORGIA RECEIVES EBRD AWARD FOR TBILISI FUNICULAR RECONSTRUCTION

ado Gurgenidze, director General of Liberty Bank was replaced by his deputy George Arveladze. “We’ll continue improvement of bank products and services and their adjustment to the consumer demand. We also plan infrastructural modernization and further enlargement”, - George Arveladze stated. Gurgenidze, as he states, will devote his time re-

sources to strategic development of the bank. Along with Arveladze, Lekso Liparteliani, Armen Matevosin, Sanrdo Rtveladze and David Verulashvili distributed curatorial directions of Arveladze. Before the staff, several other changes had been made. Authorized capital increased by 15 million GEL, which is kind of message of stock capital possible increase through stock emissions for the stockholders. To date, authorized capital, increased to 85 million GEL, is expressed by 7,5 billion common and 1 billion privileged stocks. Office term of Lado Gurgenidze, executive chairman of the supervisory board became unlimited. According to the decision, made on May session by Bank’s stockholders, authority of supervision board members - Melanie Chan, Vladimer Gurgenidze and Iaap Rotgans will have prolonged authorization with the second term from September 21. Dividends are issued with prerequisite that adequacy coefficient of the supervisory capital (norm ≥12%), is not less than 12,5% at the end of each calendar month. According to first quarter 2013 situation, the coefficient is 12,8% (4th quarter 2012 - 12,3%).

BANKS RATING DUE TO ASSETS BANKS RATING DUE TO JANUARY TO MAY LOSSES

banks out of 20 operating ones on the market completed January-May 2013 with loss, like in Kanuary-April, with total amount of 4,9 million GEL (01/05/13 - 4,6 million GEL). At the end 2012, 6 banks out of 19 was not profitable (Cartu, Provate Banks, BTA, Progress bank, Halyk bank, IsBank), with total amount of 97,6 million GEL. Net wprofit of the sector equaled to 134,2 million GEL. Net profit of 5 months 2013 is 132,571 million GEL. Rating of the unprofitable banks:

ank of Georgia received award of the EBRD’s trade financing programme for the best transaction, implemented in 2012. As Bank of Georgia said, it has issued 2 EBRD-supported guarantees for rehabilitation of Tbilisi Funicular. Due to these guarantees, necessary equipment was imported from Austria and Switzerland and installed. The bank disclosed neither transaction volume nor other details. Tbilisi funicular ropeway started operation in 1905. In 2000, the ropeway was closed, but operation resumed in 2012.

VTB INCREASES INTEREST RATE ON THE DEPOSITS

TB Bank started summer promotional campaign on the deposits. Bank informs that interest rates on the deposits made from July 1 to July 31 are increased by 0,5%. The offer refers to fixed-term, Growing and Growing Plus deposits. Respectively, interest rate for maximal term deposits in GEL increases to 9,25%, 8,25% and 8,75%, in USD - 5,75%, 4,75% and 5,25%. Minimal amount for all three deposits is 100 units (GEL/USD/EURO). Besides, adding money on the Growing and Growing Plus accounts is possible on the monthly basis.

ANNUAL GROWTH IN BANKS TOTAL ISSUE MARKED 11.8 MILION IN MAY

verall issue of Georgian banking sector equaled to 77,2 million GEL in May. According to Geostat preliminary data, overall issued of the sector in May considerably exceeds to May 2012 data by 10,7 million GEL. 92,6% of the total issue in May 2013 comes on commercial banks. In May total issue of the private banks equaled to 71,5 million GE, which is 11,8 million more in comparison with May 2012. In May of the current year, issue of National Bank of Georgia equaled to 5,7 million GEL, which is 1,1 million GEL less in comparison with May 2012. Index of the total issue of commercial banks was 62,6 million GEL in January, 59,2 million GEL 0 in February, 65,3 million GEL in March, 73,3 million GEL in April. As for the issue of National Bank, it equaled to 6,5 million GEL in January, 4,9 million GEL in February, 5,6 million GEL in March 6 million in April. Georgian banking sector is represented by 20 commercial banks. 19 banks operated in May 2012.

MAJOR PART OF RESPONDENTS FIND TBC BANK TO HAVE SIMPLIEST LENDING PROCEDURES

TBC INTRODUCES CONTACTLESS PLASTIC CARDS BC Bank introduced contactless VISA card. It enables payments from 4 cm distance. Bank informs that card’s advantage is safety and flexibility. Maximal amount of transaction is 45 GEL, which can be explained by ensuring additional security. Bank informs that card cost does not change. In the case of loss or expiration the customer will have to get contactless card, although cards without chip still remain valid.

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caucasian business week

Source: Commercial banks.

BANK RATINGS ACCORDING ACTIVES

hare of 5 leading banks in the total actives of the banking secotr was defined at 79,5% by June 1, 2013. Share of top-5 largies active owners is reduced by 2,1% from the begining of the year. Share of Bank of Georgia reduced by 1,3%, TBC - 1,1%, ProCredit - 0,6%, Liberty Bank’s market share increased by 0,i%, Republic - remained at 5,5%. List of top-5 banks, accroding actives:

ajor part of respondents think that TBC Bank provides the simpliest procedures for issuing loans. Club of Future Bankers has carried out a survey on crediting procedures. The survey was to outline the customer opinion on commercial banks with the simpliest lending procedures. About 500 respondents were inquired and their age categories are as follows: 18 to 25 years old (47%), 25 to 35 years old (14%), 35 to 50 years old (33%), over 50 years (6%). 73% of the respondents were women. 38% of the respondents named TBC Bank. They stressed the bank provides the simpliest procedures for issuing loans and both negative and positive repsonses are given on the same day. 26% think Bank of Georgia provides the simpliest procedures for issuing loans. 7% named ProCredit Bank Georgia, 19% named other commercial banks. At the same time, 10% assert commercial banks do not provide simpliest crediting procedures and they prefer services of microfinance organizations. What are criteria customers are based on to choose bank services? The survey has shown 54% of the respondents pay attention to the reputation and reliability of commercial banks, 29% show interest to the quality of bank services, 15% find the territorial vicinity the most important, while 2% follow the advise of other people to choose a commercial bank.

STATISTICS July 08, 2013 #12

INFLATION RATE IN GEORGIA, JUNE 2013 (OVER MAY 2013)

caucasian business week

RAPID ESTIMATES OF ECONOMIC GROWTH MAY 2013

ONE PERMANENT REFINANCING LOAN WAS ISSUED IN Q2

ational Bank of Georgia reported that one permanent refinancing loan was issued in the 2nd quarter, amounting to 10 million lari. To compare, 3 permanent refinancing loans were issued in the 2nd quarter of the previous year, totalling to 116.5 million lari. As for regular refinancing loans, 13 loans were issued in the reporting quarter, totalling to 3.495 billion lari, exceeding almost 3 times the volume of the same period of 2012.

AGRICULTURAL PRODUCTION MADE UP 2.74B LARI IN 2012

akstat reported that agricultural production of 2012 totalled to 2.74 billion lari. If compared with 2011, the volume has increased by 2.74%. At that, plant growing accounted for 1 billion lari, being reduced by 18.42% year-on-year. In its turn, production of cattle-breeding amounted to 1.62 billion lari (growth – 21.17%).Agricultural services accounted for 109 billion lari (growth – 11.1%).

DEPOSIT CERTIFICATES: DEMAND EXCEEDED EMISSION 1.78 TIMES IN Q2

ational Bank of Georgia reported that demand on deposit certificates exceeded emission 1.78 times in the 2nd quarter. In the reporting period, the emission totaled to 650 million lari, while the demand – to 1.16 billion lari. If compared with the same

period of 2012, emission is increased by 66.7%, while demand – by 19.9%. In the reporting quarter, average weighted coupon rate ranged within 5.04-5.91%. In the same period of 2012, this showing made up 6.15-6.87%. In the reporting period, 13 auctions were held - same number as in the 2nd quarter of 2012.

AZERBAIJAN July 08, 2013 #12

caucasian business week

TURKEY’S EXPORTS TO AZERBAIJAN UPS

xports of the Turkish goods to Azerbaijan amounted to $270.1 million in June 2013compared to $210.4 million in the same month of 2012, the Turkish Exporters’ Assembly

reported. Thus, Azerbaijan’s share in Turkey’s exports amounted to 1.3 per cent. The range of goods exported by Turkey to Azerbaijan (including the Nakhchevan Autonomous Republic) consists of wood products worth $29.3 million, cement ($13.4 million), gems and jewellery ($7 million), iron and steel products ($ 22 million), non-ferrous metals ($3 million), leather products ($868,000), other products ($230,000), electricity ($36.8 million), carpets ($2.6 million), chemical products ($44.6 million), machinery ($ 17.2 million) and textiles ($1.7 million). In June 2013, the lion’s share of Turkey’s exports fell to Germany at $1.1 billion. Iraq’s share hit $922 million and the UK - $682 million.

AZERBAIJANI INSURERS’ TOTAL CAPITAL SIZE EXCEEDS $338 MILLION

he total capital of the Azerbaijani insurance companies by 1 July 2013 amounted to AZN 265.776 million. The maximum share of the insurers’ total capital accounted for Xalq Sigorta (13.36%) and the minimum for Ateshgah Sigorta (1.39%). The aggregate capital of the insurance companies increased by AZN 16.559 million by eraly 2013 at the expense of capital of companies PASHA Heyat, AXA MBASK, Alfa Sigorta, Ata Sigorta, Era Trans, A-Qroup, Qarant Sigorta and Emrah Sigorta. Thus, Top 3 on the authorized capital consists of PASHA Sigorta (capital of AZN 35.5 million), Xalq Sigorta (AZN 26.38 million) and PASHA Heyat Capital (AZN 25.2 million). Azerbaijan is numbering 28 insurance and one reinsurance company. Currently, the minimum capital requirement of insurance companies is fixed at the level of AZN 5 million and reinsurance companies at AZN 10 million. The Ministry of Finance of Azerbaijan intends to increase gradually the minimum requirement up to AZN 10 million and AZN 20 million respectively.

UP TO AZN 3.2 MILLION OF SUBSIDIES GIVEN TO AZERBAIJANI FARMERS

he Azerbaijani government continues to take steps to encourage the development of agriculture in the country. The Ministry of Agriculture reports that today Agriculture Minister Ismet Abbasov chaired a meeting of the Special Commission for Farmer Subsidies. “According to Commission’s decision, a decision was taken to grant AZN 3.228 million to 9,474 manufacturers for the purchase of 14,487,656 tons of mineral fertilizers for farming of 83,233.3 hectares of land,” the MoA said. abc.az

FINCA AZERBAIJAN COMPLETED ITS INAUGURAL BOND ISSUE

INCA Azerbaijan Non-Banking Credit Organization completed its inaugural bond issue in Azerbaijan’s capital markets on July 1, as the State Committee for Securities registered 10,000 bonds, each with 1,000 AZN nominal value, for a total issuance of AZN 10 million and with a maturity of 3 years, according to a pressrelease by the organization. The bond proceeds will be used to fund the growing business loan portfolio of FINCA Azerbaijan, which as of June 30 exceeded AZN 140 million, mainly deployed in rural communities to micro and small entrepreneurs. “This landmark transaction diversifies our funding sources, while providing a significant amount of local currency to support our outreach, and enhancing FINCA brand in the capital markets”, commented Marco de Natale, Chief Financial Officer of FINCA Azerbaijan. The bonds traded on the Baku Stock Exchange were arranged and underwritten by “PASHA Bank” OJSC through “PASHA Capital” LLC. The latter has placed the bonds with institutional investors, and will also provide daily secondary market liquidity. Taleh Kazimov, CIO and Board Member of PASHA Bank has said: “This is the first public issue by an Azerbaijani microfinance institution. and PASHA Bank is pleased to pro-

vide the development finance community with an access to the local capital markets. Taking into consideration that FINCA Azerbaijan is the largest and oldest NBCO in the country this issue marks an important milestone in the contribution of PASHA Bank to the development of Azerbaijan microfinance sector”. FINCA Azerbaijan is a non-bank credit organization providing financial services to Azerbaijan’s lowest-income entrepreneurs, so they can create jobs, build assets and improve their standard of living. Its total assets exceed USD 200 million as of July 1, 2013. Over the last 15 years, FINCA Azerbaijan has grown to become the leading non-bank credit organization in Azerbaijan, with a network of over 60 branches and offices across the country, serving over 145,000 clients, and directly employing over 1,100 staff. PASHA Bank is a leading investment and corporate bank operating in Azerbaijan and Georgia. Established in 2007, PASHA Bank was awarded the title of “Azerbaijan’s Best Investment Bank” in 2011 and 2012 by EMEA Finance. In September 2012 PASHA Bank has been assigned with “BB -” long-term and “B” short-term counterparty credit ratings with stable outlook by Standard & Poor’s. This is the highest rating assigned to Azerbaijani commercial bank with 100% local capital. The Bank is committed to establishing and developing long term, supportive relationships with its growing customer base and aims at delivering banking services at the highest international levels of transparency and service built on three core values of Quality, Integrity and Profitability.

GEORGIA INTENDS TO GET $2 BN FROM AZERI GAS TRANSIT TO EUROPE VIA TANAP AND TAP

eorgia’s connection to pipeline system SCPX/TANAP/TAP designed to deliver Azerbaijan’s gas to Europe is going to be quite expensive for the project partici-

pants. Georgian Prime Minister Boris (Bidzina) Ivanishvili has stated that $2 bn will be spent on the construction of a new transit pipeline in Georgia. “We’ve reached an agreement on the construction of a new gas pipeline to supply gas from Shah Deniz field to Europe, which will cost $40 bn,” Ivanishvili said. It should be noted that $40 bon is the total es-

timated cost of Shah Deniz Project 2, including work on the organization of production, construction of SCPX (the second stage of the South Caucasus Pipeline) and gas pipeline TANAP, but excluding the cost of TAP pipeline. “In addition, we’ll increase the volume of cheap gas received from Azerbaijan by 3 times,” Ivanishvili added. Today, it is expected that 6 bn cu m out of 16 bn cu m to be extracted annually from Shah Deniz 2 will be delivered to Turkey and 10 bn cu m to Europe by TAP. Supplies to Azerbaijan and Georgia are not planned. abc.az

SOCAR LOWERS DRILLING WORK BY 6.5%

his June the State Oil Company of Azerbaijan (SOCAR) diminished drilling by 6.5% against May 2013. The SOCAR informs that if not to take into account drilling operations by joint ventures (JVs) and operating companies (OCs) it was drilled 12,224 m in June versus 13,075 m in May and 17,190 m in April (this year’s still best index). The best month indicator for the entire history was registered in

July 2012 (17.414 m). The best figure for 2011 was observed in September (14,866 m). The volume of drilling in February 2010 (12,890 m) was the best index of 2010, and 17,399 m in April of 2009 was earlier the best index over the last few years. At that, in June 2013 development drilling made up 11,022 m and exploration drilling 1,202 m without wildcat drilling. “In 2013 drilling works already total 83,334 m, including 78,098 m of development and 5,326 m of explora-

tion drilling,” it was reported. Last year’s drilling by SOCAR decreased by 7.4% against the 2011 index. Over the past year it was carried out 136,441 m of drilling works, including 128,968 m of development and 7,473 m of exploration drilling (2,150 m of wildcat drilling). The Company did not publish its plans for 2012, but in 2011 its drilling works totaled 147,287 m, including 133,343 m of development and 13,944 m of exploration drilling (including 2,550 m of wildcat drilling). Drilling for 2010 totaled 136,324 m against 168,182 m for 2009 and 202,954 m for 2008. In 2010, development drilling totaled 127,858 m, exploration drilling 8,466 m (including 1,785 m of wildcat drilling) versus 160,326 m of development and 7,856 m of exploration drilling in 2009. abc.az

VAZ, MERCEDES AND HYUNDAI MAKE BASIS OF AZERBAIJAN CAR FLEET

he Compulsory Insurers Bureau has submitted a report on activities in 2012, revealed for the first time the structure of the active car fleet of Azerbaijan and debunked a number

of myths. According to the report, the mandatory liability insurance was passed in 2012 by owners of 267,571 cars of Russian manufacturer VAZ. They ensured 38.65% actively exploited car fleet (692,217 vehicles) owners of which are forced to insure their liability. They are followed by cars of brand Mercedes Benz (112,765), which form only 16.29% of the active fleet. The third was Korean manufacturer Hyundai – 36,601 cars and a market share of 5.28%. Thus, it is necessary to take into account that the Bureau does not groups cars and trucks as well as buses in its statistics. As a result, VAZ, not producing anything but cars, in contrast to the same Mercedes and Hyundai, virtually single-handedly forms an active fleet of cars in Azerbaijan. On this basis, it can be assumed that the opinion that VAZ is allegedly the most emergency vehicle of the country is a myth: there are simply by order/ orders more such vehicles than other equipment, and the number of accidents with them just to be statistically 3-5 times more. The fourth car in the active motor fleet of Azerbaijan is GAZ (30,379 vehicles) and fifth - Toyota (25,007). “Modest” Opel opens a second five (24,505 cars). Japan’s Nissan is seventh in the Azerbaijani market (17,712), Mitsubishi - eighth (17,249), and Ford – ninth (15,462). Top 10 is closed by Volkswagen with 11,913 cars. So far, however, only 66.7% of the vehicle owners in Azerbaijan insured their liability. abc.az

PASHA BANK’S ASSETS TOTAL AZN 656.48 MILLION

ne of the largest private credit institutions of Azerbaijan, PASHA Bank OJSC, still cannot restore growth of assets moving away more and more from record level of AZN 760 million. The Bank reports that return on equity (RoE) of PASHA Bank for June grew from 15% (versus 18% in May as well as for Feb-Apr, 16% in January 2013 and 18% following 2012), while return on assets (RoA) up to 4% (against 3% in May, 5% in April, 4% for Feb-Mar, 3% in January and 4% in 2012). Bank’s assets in June decreased from AZN 675.27 million to AZN 656.48 million. Last year they reached AZN 742.1 million. For the reported month capital increased from AZN 153.936 million to AZN 181.419 million with preservation of share capital at AZN 157 million. In 2012 the figure reached AZN 178.08 million. PASHA Bank’s profit before taxation as of 1 July 2013 reached AZN 14.8 million against AZN 26.658 million in 2012 and AZN 19.329 million in 2011. This June the index was AZN 4.76 million versus AZN 520,000 in May, AZN 2.55 million in April, AZN 2.4 million in March, AZN 2.506 million in February and AZN 2.07 million in January. Net income by the reported date was AZN 3.9 million (loss) versus AZN 11.7 million in 2012 and AZN 11.7 million in 2011. In June 2013 the loss reached AZN 4.9 million versus AZN 4.9 million in May, AZN 3.907 million in April, AZN 2.37 million in March, AZN 2.267 million in February and AZN 1.6 million in January 2013. This year the Bank plans to bring its assets up to AZN 850-900 million. abc.az

ARMENIA July 08, 2013 #12

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ARMENIAN GOVERNMENT EXPECTS GDP TO GROW BY 6.9% IN 2014

rmenia’s economy in 2014 is expected to expand by 6.9%, according to finance minister David Sargsyan, who unveiled today the government’s medium-term public spending designed for 2014- 2016. He said also that the government expects the GDP to grow by 10 percent in 2015 and 11 percent in 2016.

The minister noted that the projected GDP growth for 2014 suggests that the government will have to collect 1.146 trillion drams in revenue, which will be 23.63% of the GDP, and spend 1.258 trillion drams or 25.93% of the GDP. Earlier a Central Bank of Armenia Board member Arthur Stepanyan said that the GDP growth in 2014 may decline to 4.3% due to higher prices

of natural gas and electricity. The EBRD and the IMF project that the GDP growth will slash to about 4% in 2014. Armenia’s GDP in 2012 was officially reported to grow by 7.2%. The government’s GDP projection for this year is 6.2%. President Serzh Sargsyan said earlier the government should ensure a 7% growth. ARKA

ARMENIA RECORDS 5.3% YEAR-ON-YEAR ECONOMIC ACTIVITY INDEX IN JAN-MAY 2013

conomic activity index in Armenia was 5.3% in Jan-May 2013, compared with the same period a year earlier, the press office of the Central Bank of Armenia reports. The index was ensured mainly thanks to growth in industry (8%) and services (4.8%).

Productivity in agriculture grew 1.3% in Jan-May 2013, and construction sector accounted for 8.8% productivity growth. “If such of growth pace continues, the third quarter’s economic growth will be recorded at 7%,” the regulator said. According to official reports, the country’s ex-

ports grew 9.2% in Jan-May 2013, compared with the same period a year before, while imports shrank 2.6%. Individual money transfers to Armenia grew 10.4%. In the 2013 government budget, GDP growth is projected at 6.2%. ARKA

AGRICULTURE MINISTER: 12,000 TONS OF APRICOTS EXPORTED FROM ARMENIA THIS YEAR BY EARLY JULY

rmenia has already exported more than 12,000 tons of apricots up to now and is expected to export other five or six tons until the end of the season, Agriculture Minister Sergo Karapetyan said Thursday at a regular Cabinet meeting. He said that only 12,500 tons of apricots have been exported over the last year’s whole season. The minister said that the apricot selling season began 20 days ago, and canneries alone have bought some 4,500 tons since then. He said that apricots are abundant this year in the country, and that is why it is hard to sell them even at 50 drams per one kilogram. Despite hailstorms in April and May, crop yield is higher this year than ever. Armenia exported 25,493 tons of fruits and veg-

NEW ECONOMIC PROJECTS WITH ARMENIA POSSIBLE UNDER RULE OF NEW IRANIAN PRESIDENT: MAJLIS DEPUTY

ran’s relations with Armenia can develop and new economic cooperation projects can be initiated under the rule of the Iranian president-elect Hassan Rouhani, deputy of Iranian parliament Karen Khanlaryan said. “Apart fr om that, I believe scientific ties between Armenia and Iran, and student and lecturer ex-

change programs in particular, will intensify during his rule”, the deputy told a press conference Wednesday. Ex-secretary of the national security supreme council Rouhani was elected to the presidential post in the 11th presidential election in Iran on June 14 wh ere he polled more than 50% of the votes. Vote attendance was 72.7% in the election.

Khanlaryan said Rouhani is focused on ArmeniaIran relations and positive changes should be expected in the bilateral relations during his term in office. Armenia and Iran are planning to implement a number of major projects in energy and transport fields. ARKA

LENDING TO ECONOMY IN MAY GREW BY 20.6 PERCENT

ending to Armenian economy by financial institutions increased by 20.6% in May 2013 from a year before while lending in foreign currency prevailed, the Central Bank of Armenia said today in a statement. According to the National Statistical Service, commercial bank loans to residents in May

amounted to 1. 622.8 trillion drams, an increase of 1.48% from April. The volume of outstanding loans granted by crediting institutions in May amounted to about 127 billion drams, having increased by 2.3%. The Central Bank noted that the volume of money and dram supply in May 2013 increased by 17.8% and 10.2% respectively compared to May of last year.

The growth in dram deposits in the reporting period amounted to 15.4%, and in foreign exchange to 27.5%. According to the National Statistical Service, the amount of individual deposits in drams in May amounted to 370.6 billion drams, the volume of deposits in foreign currency to 646.2 billion drams. ARKA

FRANCE IS THE LEADER OF DIRECT FOREIGN INVESTMENTS IN ARMENIA

ccording to last year’s statistics France is the leader of direct foreign investments in Armenia. “Armenpress” informs that according to the information provided by National Statistical service in 2012 the sum of direct foreign investment was 567.4 million USD and it is a 10.1 percent decrease compared with 2011’s results. The investments from France have been 230 million USD which is 2.3 times more than in 2011, and Russian investments were 88 million USD which is 3.83 less than in 2011. The volume of direct investments has become less also in case

of USA, United Kingdom, Belgium and Cyprus. The indicator of Argentinean direct investments has become 6 times more – 51 million USD. Germany’s investments were 48 million USD which is 2 times more compared with 2011, Swiss investments were 43 million USD which is 5.5 times more compared with 2011 results. Armenian investment and trade policy is considered by international organizations as the most open in CIS region. Foreign companies are encouraged to make investments and have some advantages. The law on foreign investment was accepted on July 1994. ARMENPRESS

IRAN-ARMENIA RAILWAY PROJECT MULLED

eneral Director of the South Caucasus Railway JSC Victor Rebets discussed the prospects of construction of the Southern Railway from Iran to Armenia during a visit to Tehran, Mediamax reported. In particular, the discussion covered projected traffic flows as well as the possibility of building a logistics centre at Yeraskh station, the South Caucasus Railway

reported. The launch of the Southern Railway Armenia and South Expressway Armenia projects estimated at $3 billion were announced in January 2013. A corresponding tripartite memorandum was signed back then between the South Caucasus Railway, the Ministry of Transport and Communication of Armenia and the Rasia company (United Arab Emirates).

etables this year before July 3, exceeding three times last year’s similar indicator (8,303 tons). Some 4,502 tons of fruits and 338 tons of vegetables were sold in Armenia by July 3, 2013 against 2,282 tons and 309 tons respectively over the same period a year earlier. New potatoes are expected to flood markets as well this year – 230 to 250 centners from one hectare. “The peak of harvesting vegetables will be 2030 days later this year than usually, but the crop yield will be high,” Karapetyan said adding that agriculture in Armenia showed 1.3% year-onyear growth in Jan-June 2013.

25,493 TONS OF FRUITS AND VEGETABLES EXPORTED FROM ARMENIA THIS YEAR UNTIL NOW

rmenia exported 25,493 tons of fruits and vegetables this year before July 3, exceeding three times last year’s similar indicator (8,303 tons), the country’s agriculture ministry has posted on its official website. Apricot export alone doubled to 12,243 tons. Some 4,502 tons of fruits and 338 tons of vegetables were sold in Armenia by July 3, 2013 against 2,282 tons and 309 tons respectively over the same period a year earlier. Some 3,956 tons of apricots were sold inside the country this year until now against 1,944 at the same period of the previous year. The ministry says that the country owes this success to the ministry’s two-year efforts, such as introduction of modernized facilities for processing fruits and vegetables. ARKA

12 CAPITAL OUTFLOW FROM RUSSIA AMOUNTS TO $38.1BN IN FIRST HALF OF 2013

he Russian Central Bank says net capital outflow from Russia was $38.1 billion in the first half of this year. Some $9.1 billion was withdrawn in the second quarter, compared to $29 billion in the first quarter. The Ministry of Economic Development had estimated the value of the capital flow in the first half of 2013 reached $30-35 billion.

IMF UPGRADES RUSSIA TO RICH

he Russian Federation has been reclassified as a high-income economy by the International Monetary Fund on the basis of a gross national income of $12,700 per capita, Kommersant reported Thursday. For the past ten years, Russia has been classified as a middle-income economy. The latest figures from the World Bank show that the country has nearly caught up with the majority of developed countries. The new status may facilitate Russia’s entry into the OECD. However, OECD president Jose Angel Gurria has repeatedly stated that membership in the organization is dependent on compliance with a number of criteria, of which income level is only one. Russia joins a list of 75 countries with the status of a high-income economy.

LATVIA BANS IMPORTS OF MEAT, DAIRY PRODUCTS FROM BELARUS

insk, 4 July. The Latvian State Veterinary Service has imposed a temporary ban on imports of meat, meat products, milk and dairy products from Belarus over cases of African swine fever in the country. The Latvian embassy in Minsk said on Wednesday that border guards and customs officers would examine travelers` baggage more carefully. Speaking to reporters earlier this week, Jonas Milius, director of Lithuania`s State Food and Veterinary Service, warned that the situation regarding the spread of African swine fever in Belarus was “threatening and virtually out of control.” He noted that the first case of the virus had been registered in the Hrodna region, some 30 kilometers off the Lithuanian border. Fresh cases were reported in the Vitsyebsk region close to the Latvian border, he said. “There`s a considerable distance between the two hotbeds, and this may mean that the epidemic has spread across the entire territory of Belarus,” Mr. Milius said. “If there`s at least one hotbed of the infection in Lithuania or Latvia, it will stop exports from the entire European Union,” he warned.

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July 08, 2013 #12

AZERBAIJAN, TURKEY AND KAZAKHSTAN SIGN PAPER ON TRANSPORT COOPERATION

e transport ministries of Azerbaijan, Turkey and Kazakhstan have signed a protocol on cooperation in transport development in the Turkic-speaking states. The signing ceremony was held on July 3 in the Azerbaijani capital Baku within a meeting of the transport ministers of the Cooperation Council of Turkic-Speaking States. The protocol was signed by Azerbaijan’s Transport Minister Ziya Mammadov, Turkey’s Transport, Maritime Affairs and Communications Minister Binali Yildirim and Kazakhstan’s Minister of Transport and Communications Askar Zhumagaliev. Moreover, the parties signed a memorandum of understanding on the development of relations between the ports of Baku, Aktau in Kazakhstan and Turkey’s Samsun. During the signing ceremony Minister Yildirim said the memorandum signed between the ports will contribute to the coordination of activities between them. According to the Azerbaijani Transport Minister, the ports have great importance for the development of maritime transport, therefore, their development and cooperation is very significant. In particular, it is planned to commission the first phase of a new international sea port in the Alat settlement in the Garadagh district of Baku in June 2014, Mammadov said. The creation of the new port will positively affect the development of the volume of cargo transportation and allow accelerating the process of their treatment, he said.

The new seaport is under construction in the Alat settlement. The construction work is being carried out by the Complex Construction Directorate under the Transport Ministry. Under the project, Dutch contractor Van Oord will carry out work in the maritime part of the new port and local company Azerkorpu is to conduct preparations for the main operations on its overland part. The construction operations, which started in November 2010, are carried out in three stages. The first phase of the project involves construction of two ferries, three cargo berths for receiving containers and conventional bulk carriers. The second phase of the project envisions the construction of three additional cargo berths and the third one -- the construction of two more cargo berths. The port will be capable of handling up to 10

million tons of cargo during the first stage. In the second stage, the capacity will reach 17 million tons; during the last stage, the port will ensure handling of 25 million tons of consignments. A free economic zone will be created in the territory of the port in the future in addition to a logistics center. The construction work will cost the Azerbaijani government over $1.1 billion. Currently, the shipment capacity of the old Baku Port is 5-10 million tons of loads per year. Transportation of cargo from the port takes a long time due to the location of the port in the center of Baku and busy traffic in the capital city. The construction of the new international sea trade port will allow to significantly increase the flow of goods and the volume of transit cargo. azernews.az

DAVID CAMERON, THE PRIME MINISTER OF THE UNITED KINGDOM, PAID A STATE VISIT TO KAZAKHSTAN

r. Cameron held talks with Kazakh President Nursultan Nazarbaev. Visiting plan of the delegation included Kashagan Oil Field and participation in the opening ceremony of Bolashak Oil Refinery plant in the Atyrau region. The President of Kazakhstan, Nursultan Nazarbaev, held a meeting in Atyrau with the UK Prime Minister, David Cameron, who made a state visit to Kazakhstan. Mr. Cameron and Mr. Nazarbaev discussed prospects of expansion of economic, trade, innovative and investment cooperation between the two countries. Business institutions of the two countries executed 14 agreements and memoranda totaling about one billion US dollars while the UK Prime Minister, David Cameron, visited Astana. constitutes 3.6 billion US dollars. According to customs statistics, last year the trade between Kazakhstan and UK constituted 2.2 billion US dollars, comprising 1.7 billion dollars of export and 0.6 billions of import.

ADB ALLOTS $220M TO UZBEKISTAN FOR HIGHWAY CONSTRUCTION

zbekistan and the Asian Development Bank (ADB) have signed a loan agreement worth $220 million to provide for the construction of the national highway in Uzbekistan, the ADB office in Tashkent told Trend news agency. As previously reported, the ADB board of directors approved a loan for the project in December last year. This is the second tranche allocated under the multi-tranche financing programme worth $500

million for the construction of national highways approved by the bank in August 2011 as part of the Central Asia Regional Economic Cooperation (CAREC) Programme entitled ‘Regional Roads Development II’. The ADB funds will be used for the reconstruction of individual sections of the Tashkent-Osh highway (A-373) with a total length of 75 kilometres with the replacement of the two-lane asphalt surface to a four-lane concrete one. The loan is granted out of the ordinary resources of the bank for 25 years, including a five-year

grace period at a standard preferential bank rate based on LIBOR. As reported, in the framework of this programme, the bank’s funds, allocated in three tranche during 2011-2013, will be used for the reconstruction of individual sections of Guzar-Bukhara-Nukus-Beynau (A-380) and Tashkent - Osh (A-373) roads to a total length about 230 kilometres. The first tranche of $130 million was granted in 2011 for 24 years including a four-year grace period. This was directed for the reconstruction of the A-373 road at the Kamchik pass at a length of 74 kilometres. As reported, in April 2010, ADB approved the provision to the Uzbek government of a debt package to the sum of $600 million for the construction of the national highway. ADB funds are being allocated for the reconstruction of individual sections of the GuzarBukhara-Nukus-Beynau (A-380) and TashkentAndijan (A-373) roads with a total length of 450 kilometres. Uzbekistan joined the ADB in 1995. The bank has approved loans for about 40 joint projects in education and healthcare, modernisation of generating the capacity and energy infrastructure, rail and road infrastructure, public utilities, agriculture and financial sector with a total project cost of about $9 billion with a share of ADB financing being about $4 billion.

13 BAD BONDS: IS PORTUGAL THE NEXT GREECE? WORLD NEWS

July 08, 2013 #12

oalition leaders will reconvene in Portugal in an emergency meeting to address Lisbon’s plan to complete its $102 billion (78 billion euro) bailout by next year, protect the euro, and restore bond yields. Shockwaves raced through European markets after two key ministers resigned on Tuesday over the appointment of a new pro-austerity Finance Minister, spurring fears of political and economic instability. The announcement sent tremors through European markets, as Portugal’s main index dropped nearly 7 percent and euro stocks plummeted. “The situation in most of Portugal’s economy is far from stable,” said Anna Bodrov, an analyst at Investkafe. To enable recovery on trading floors, Lisbon’s financial regulator banned short-selling of Banco Comercial Portuges, Banco Espirito Santo and Sonae Industria securities from 8:00am. to 11:59pm on July 4. These banks all experienced losses over 10 percent on Wednesday. The UK’s Financial Conduct Authority has also banned the short-selling. Portuguese 10-year bond yields spiked up to 8.11 percent on Wednesday, but have since settled back to near 7.5 percent, after dipping as low as 7.1 percent. Lower bond yields in the past were hailed as testimony of recovery, so the spike, relinquished a new wave of euro zone crisis contagion fears. Premier Pedro Passos Coelho will meet with his right-wing counterparts to try and defuse the looming coalition collapse under the tightening

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austerity measures, which have only deepened Portugal’s economic recession.

The Draghi factor

The Portugese bond scare will likely dominate European Central Bank (ECB) President Mario Draghi’s press conference scheduled for 2:30p.m in Frankfurt Thursday. “Today’s ECB policy announcement is a much larger threat to the euro,” BNP Paribas said in a note to CNBC. Draghi will also announce the bank’s financing rate, which is expected to remain unchanged at the record low level of 0.5 percent. He will also likely field questions about protecting the euro and the future of the ECB’s bond buying program.

‘Elusive’ recovery

As much as eurozone leaders like to boast about the end of the euro crisis, recession is still very real in the eurozone’s periphery economies- Portugal, Greece, Cyprus, Spain, and Slovenia have all suffered with high bond yields. Borrowing costs continue to rise, and export recovery remains week because all neighboring states are

experiencing the same problem: lack of demand. Output in Portugal contracted by 3.25 percent and its budget deficit has ballooned to 10.2 percent year-on-year in Q1 2013, up from 7.9 percent in the previous quarter. The IMF predicted in June that the public debt in Portugal would rise to 124 percent of GDP next year, an underestimation, according to many analysts. Unemployment across the 17 euro states hit an all-time high of 19 million in May. “Economic recovery is proving elusive,” the IMF said in a May report.

The International Monetary Fund (IMF) acknowledged that it made ‘notable failures’ in its handling of the Greek bailout, admitting they had underestimated how deeply austerity measures would stint growth, but are still taking the same route in Portugal. “It’s far from over. The immediacy may have ebbed away, but I think we’re all aware that under the surface, there’s still a lot of stuff than can come back to bite us,” a source at the finance officials’ meeting on Tuesday said, Reuters reported. rt.com

S&P UPGRADES CYPRUS TO CCC-PLUS

tandard & Poor’s on Wednesday upgraded the sovereign foreign credit rating on Cyprus to CCC-plus from selective default. The move comes in the wake of the nation’s 1 billion euro ($1.30 billion) debt exchange that is part of a financial adjustment program, Reuters said. S&P said late June that the exchange should help alleviate strains on the financial liquidity and that after completion it would put the rating back up to CCC-plus. The outlook on the credit is stable.

OIL SURGES TO 14-MONTH HIGH OVER EGYPT UNREST

olitical unrest in Egypt and concern the turmoil will escalate have pushed US light crude oil prices to nearly $102 a barrel for the first time since May 2012. Both WTI and Brent futures for August have hit record- highs. WTI hit a 14-month high at $102.16, and Brent soared to $105.59 on Wednesday’s trading floors. The narrow spreads on the futures also have analysts worried. Prices are inflated and should realistically be trading between $90 and $95 a barrel, but could also be high on the heels of America’s 4th of July holiday, one of the biggest travel days of the year. Traders are also eagerly awaiting a report from the Energy Department on US crude stockpiles, anticipating an increase in demand, as the report is expected to show between a 2.5 to 3 million barrel decrease. US crude inventories shrank by 9.4 million barrels last week.

Suez Crisis

The market is bullishly reacting to the uncertainty of Egypt’s future, as turmoil in Cairo could translate into higher oil futures, but of even greater concern is that the unrest could deadlock the country’s crucial trade route, the Suez Canal. The geopolitical risk in a regime change could threaten oil transport and the operation of the Suez Canal, which handles around 800,000 barrels of crude and 1.4 million barrels of refined fuels daily, according to a Barclays estimate for 2011. Though Egypt is not a producer, the Suez Canal grants it great authority over global oil supply and transport. Egypt’s military has made safeguarding the Suez Canal a priority as scores of protestors take to the streets of Cairo, situated about 125 kilometers west of the waterway. “There are no signs that the Egyptian armed forces,

which have given the Mursi government 48 hours to resolve the crisis, have any intention of taking such drastic action,” Barclays analysts wrote to Bloomberg in an emailed report Tuesday. Linking the Red Sea and the Mediterranean, oil shipments through the Suez Canal reached 140.8 million tons in 2012, up 22.5 percent from 2011, the canal’s statistics department said. The majority of the crude is northbound. LNG transport is also on the rise in the canal, and has increased six-fold since 2008. Protests in 2011 which ousted Hosni Mubarak didn’t directly disrupt traffic in the 190 kilometer passageway, but it did slightly slow traffic. In 2011, 17,799 ships transited the Suez Canal from both directions, petrol tankers accounting for 20 percent of traffic and LNG tankers for 6 percent, the canal’s statistic department reported. Closure of the canal would most likely require military support, and with 8 percent of the world’s water bound trade passing through, keeping it open will remain a priority for the Egyptian government, as well as regional partners. The canal, along with exports and tourism, is a key foreign-currency earner in Egypt, which generated $3.8 billion in the last nine months. Shipments increased by 13 percent in the first quarter of 2013 year-on-year, but prices could be thrown off kilter by Egypt’s second round of serious political protests in 2 years. The transit service tariff is based on a variety of factors- lost opportunity cost, currency baskets, energy prices, piracy risks, and alternative route pricing. Protestors descended on Port Said, a town the Suez Canal snakes through, in March 2013, demonstrating against the latest verdict on the deadly Port Said stadium riot in February 2012. Three were reported killed and 65 injured. The canal closed during the 1956 Suez Crisis, and ships were rerouted around the cape of South Africa. rt.com

CHINA TO GROW 7.6% IN SECOND HALF AS RISKS REMAIN - REPORT

hina’s economy is expected to grow 7.6 percent in the second half of 2013, the official China Securities Journal reported on Thursday. However, risks of bad local government loans, slowing growth of central government revenue, diminished export competitiveness and industrial capacity are growing. Chinese markets are struggling to recover from a crunch in the country’s financial markets, Reuters reported.

THE ECONOMIST POLL OF FORECASTERS

VERY month we ask a group of economic forecasters to predict GDP growth, consumer prices and current-account balances in 14 economies. The charts below show the range of our pollsters’ predictions for economic growth and inflation this year. Forecasts for Japanese GDP growth were the most wide-ranging, varying from 1.1% to 2.4%. Conversely our panel were most in agreement about the economies of Spain and the euro area as a

whole: the average consensus being contractions of 1.7% and 0.6%, respectively. Of the countries covered in our poll, Britain is expected to face the biggest rise in prices in 2013, with an average forecast of 2.7%. Prices in Japan are predicted to rise marginally, but the expectation for next year is of a 1.8% rise after the Bank of Japan’s recent promise to inject $1.4 trillion into the economy in its quest to achieve 2% inflation in around two years. economist.com

EXHABITION caucasian business week

July 08, 2013 #12

TBILISI GUIDE July 08, 2013 #12

Embassy United States of America Embassy 11 Balanchivadze St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 53-23-34 E-mail: tbilisivisa@state.gov; askconsultbilisi@state.gov United Kingdom of Great Britain and Northern Ireland Embassy 51 Krtsanisi Str., Tbilisi, Tel: 227-47-47 E-mail: british.embassy.tbilisi@fco.gov.uk Republic of France Embassy 49, Krtsanisi Str. Tbilisi, Tel: 272 14 90 E-mail: ambafrance@access.sanet.ge Web-site: www.ambafrance-ge.org Federal Republic of Germany Embassy 20 Telavi St. Tbilisi Tel: 44 73 00, Fax: 44 73 64 Italian RepublicEmbassy 3a Chitadze St, Tbilisi, Tel: 299-64-18, 292-14-62, 292-18-54 E-mail: embassy.tbilisi@esteri.it Republic of Estonia Embassy 4 Likhauri St., Tbilisi, Tel: 236-51-40 E-mail: tbilisisaatkond@mfa.ee Republic of Lithuania Embassy 25 Tengiz Abuladze St, Tbilisi Tel: 291-29-33 E-mail: amb.ge@urm.lt Republic of Latvia Embassy 4 Odessa St., Tbilisi Tel: 224-48-58 E-mail: embassy.georgia@mfa.gov.lv Greece Republic Embassy 37. Tabidze St. Tbilisi Tel: 91 49 70, 91 49 71, 91 49 72 Czech RepublicEmbassy 37 Chavchavadze St. Tbilisi Tel: 291-67-40/41/42 E-mail: czechembassy@gol.ge Web-sait: www.mzv.cz Japan Embassy 7 Krtsanisi St. Tbilisi Tel: 75 21 11, Fax: 75 21 20 Kingdom of Sweden Embassy 15 Kipshidze St. Tbilisi Tel: +995 32 2 55 03 20 , Fax: +995 32 2 22 48 90 Kingdom of the Netherlands Embassy 20 Telavi St. Tbilisi Tel: 27 62 00, Fax: 27 62 32 People’s Republic of China Embassy 52 Barnov St. Tbilisi Tel: 225-22-86, 225-21-75, 225-26-70 E-mail: zhangling@access.sanet.ge Republic of Bulgaria Embassy 61 Agmashenebeli Ave. Tbilisi Tel: 91 01 94, 91 01 95, Republic of Hungary Embassy 83 Lvovi Street, Tbilisi Tel: 39 90 08 E-mail: hunembtbs@gmail.com State of Israel Embassy 61 Agmashenebeli Ave. Tbilisi Tel: 95 17 09, 94 27 05 Embassy of Swiss Confederation’s Russian Federation Interests Section Embassy 51 Chavchavadze Av., Tbilisi Tel: 291-26-45, 291-24-06, 225-28-03 E-mail: RussianEmbassy@Caucasus.net Ukraine Embassy 75, Oniashvili St., Tbilisi Tel: 231-11-61, 231-12-02, 231-14-54 E-mail: ukraina_pu@wanex.net; emb_ge@mfa.gov.ua Consular Agency: 71, Melikishvili St., Batumi Tel: (8-88-222) 3-16-00/ 3-14-78 Republic of Turkey Embassy 35 Chavchavadze Av., Tbilisi Tel: 225-20-72/73/74/76 E-mail: turkemb.tbilisi@mfa.gov.tr Address: 8, M. Abashidze str. Batumi, Georgia tel: (8-88-222) 7 47 90 Republic of Azerbaijan Embassy Kipshidze II-bl . N1., Tbilisi Tel: 225-26-39, 225-35-26/27/28 E-mail: tbilisi@mission.mfa.gov.az Address: Dumbadze str. 14, Batumi Tel: 222-7-67-00 Fax: 222-7-34-43 Republic of Armenia Embassy 4 Tetelashvili St. Tbilisi Tel: 95-94-43, 95-17-23, 95-44-08 E-mail: armemb@caucasus.net Web: www.armenianembassy.ge Consulate General, Batumi Address: Batumi, Gogebashvili str. 32, Apt. 16

caucasian business week Kingdom of Spain Embassy Rustaveli Ave. 24, I floor, Tbilisi Tel: 230-54-64 E-mail: emb.tiflis@maec.es Romania Embassy 7 Kushitashvili St., Tbilisi Tel: 38-53-10; 25-00-98/97 E-mail: ambasada@caucasus.net Republic of Poland Embassy 19 Brothers Zubalashvili St., Tbilisi Tel: 292-03-98 Email:tbilisi.amb.sekretariat@msz.gov.pl Web-site: www.tbilisi.polemb.net Republic of Iraq Embassy Kobuleti str. 16, Tbilisi Tel: 291 35 96; 229 07 93 E-mail: iraqiageoemb@yahoo.com Federative Republic of Brazil Embassy Chanturia street 6/2, Tbilisi Tel.: +995-32-293-2419 Fax.: +995-32-293-2416 Islamic Republic of Iran Embassy 80, I.Chavchavadze St. Tbilisi, Tel: 291-36-56, 291-36-58, 291-36-59, 291-36-60; Fax: 291-36-28 E-mail: iranemb@geo.net.ge United Nations Office Address: 9 Eristavi St. Tbilisi Tel: 225-11-26/28, 225-11-29/31 Fax: 225-02-71/72 E-mail: registry.geo@undp.org Web-site: www.undp.org International Monetary Fund Office Address : 4 Freedom Sq., GMT Plaza, Tbilisi Tel: 292-04-32/33/34 E-mail: kdanelia@imf.org Web-site: www.imf.ge Resident Mission of the Asian Development Bank (ADB) Address: 1, G. Tabidze Street. Tbilisi Tel: +995 32 225 06 19, EXT:101 Cell: +995 577 900 128 e-mail: qtvalavadze.contractor@adb.org World Bank Office Address : 5a Chavchavadze Av., lane-I, Tbilisi, Georgia Tel: 291-30-96, 291-26-89/59 Web-site: www.worldbank.org.ge Regional Office of European Bank for Reconstruction and Development Address: 6 Marjanishvili St. Tbilisi Tel: 244 74 00, 292 05 13, 292 05 14 Web-site: www.ebrd.com Representation of the Council of Europe in Georgia Address : 26 Br. Kakabadze, Tbilisi Tel: 995 32 291 38 70/71/72/73 Fax: 995 32 291 38 74 Web-site: www.coe.ge

Hotels in Georgia TBILISI MARRIOTT Tbilisi , 13 Rustaveli Ave. Tel: 77 92 00, www.marriott.com COURTYARD MARRIOTT Tbilisi , 4 Freedom Sq. Tel: 77 91 00 www.marriott.com RADISSON BLU HOTEL, TBILISI Rose Revolution Square 1 0108, Tbilisi Tel: +995 32 402200 radissonblu.com/hotel-tbilisi RADISSON BLU HOTEL, BATUMI Ninoshvili Str. 1, 6000 Bat’umi, Georgia Tel: 8 422255555 http://radissonblu.com/hotel-batumi SHERATON METECHI PALACE Tbilisi , 20 Telavi St. Tel: 77 20 20, www.starwoodhotels.com SHERATON BATUMI 28 Rustaveli Street • Batumi Tel: (995)(422) 229000 www.sheratonbatumi.com HOLIDAY INN TBILISI Business hotel Addr: 1, 26 May Square Tel: +995 32 230 00 99 E-mail: info@hi-tbilisi.com Website: http://www.hi-tbilisi.com BETSY’S HOTEL With Marvellous Tbilisi Views Addr: 32/34 Makashvili St. Tbilisi Tel: +995 32 293 14 04; +995 32 292 39 96 Fax: +995 32 99 93 11 E-mail: info@betsyshotel.com Website: http://www.betsyshotel.com

Restaurants CHARDIN 12 Tbilisi , 12 Chardin St. , Tel: 92 32 38 CHINA TOWN Tbilisi , 44 Leselidze St. (ent. from Chardin St.) Tel: 43 93 08, 43 93 80, Fax: 43 93 08 BREAD HOUSE Tbilisi , 7 Gorgasali St. , Tel: 30 30 30 BUFETTI - ITALIAN RESTAURANT Tbilisi , 31 I. Abashidze St. , Tel: 22 49 61 DZVELI SAKHLI Tbilisi , 3 Right embankment , Tel: 92 34 97, 36 53 65, Fax: 98 27 81 IN THE SHADOW OF METEKHI Tbilisi , 29a Tsamebuli Ave. , Tel: 77 93 83, Fax: 77 93 83 PICASSO Tbilisi , 4 Miminoshvili St. , Tel: 98 90 86 SAKURA - JAPANESE RESTAURANT Tbilisi , 29 I. Abashidze St. , Tel: 29 31 08, Fax: 29 31 08 SIANGAN - CHINESE RESTAURANT Tbilisi , 41 Peking St , Tel: 37 96 88 VERA STEAK HOUSE Tbilisi , 37a Kostava St , Tel: 98 37 67 BELLE DE JOUR 29 I. Abashidze str, Tbilisi Tel: (+995 32) 230 30 30 VONG 31 I. Abashidze str, Tbilisi Tel: (+995 32) 230 30 30 BRASSERIE L’EXPRESS 14 Chardin str, Tbilisi Tel: (+995 32) 230 30 30 TWO SIDE PARTY CLUB 7 Bambis Rigi, Tbilisi Tel: (+995 32) 230 30 30 LOFT 11. I. Mosashvili str, Tbilisi Tel: (+995 32) 230 30 30 RESTAURANT NERO 21 Abano Street, Tbilisi Tel: (+995 32) 292 10 15

SH. RUSTAVELI STATE THEATRE Tbilisi. 17 Rustaveli Ave. Tel: 93 65 83, Fax: 99 63 73 TBILISI STATE MARIONETTE THEATRE Tbilisi. 26 Shavteli St. Tel: 98 65 89, Fax: 98 65 89 THEATRE OF PANTOMIME Tbilisi. 37 Rustaveli Ave. Tel: 99 63 14, (77) 41 41 50 Z. PALIASHVILI TBILISI STATE THEATRE OF OPERA AND BALLET Tbilisi. 25 Rustaveli Ave. Tel: 98 32 49, Fax: 98 32 50

Galleries ART GALLERY LINE Tbilisi. 44 Leselidze St. BAIA GALLERY Tbilisi. 10 Chardin St. Tel: 75 45 10 GALLERY Tbilisi. 12 Erekle II St. Tel: 93 12 89 GEORGIAN NATIONAL MUSEUM - PICTURE GALLERY Tbilisi. 11 Rustaveli Ave. Tel: 98 48 14 KARVASLA’S EXHIBITION HALL Tbilisi. 8 Sioni St. Tel: 92 32 27, KOPALA Tbilisi. 7 Zubalashvilebi St. Tel: 99 99 02, Fax: 99 99 02 MODERN ART GALLERY Tbilisi. 3 Rustaveli Ave. Tel: 98 21 33, Fax: 98 21 33 M GALLERY Tbilisi. 11 Taktakishvili St. Tel: 25 23 34 ORNAMENT - ENAMEL GALLERY Tbilisi. 7 Erekle II St. Tel: 93 64 12, Fax: 98 90 13

Akhvledianis Khevi N13, Tbilisi, GE. +995322958377; +995599265432

Cinemas AKHMETELI Tbilisi. “Akhmeteli” Subway Station Tel: 58 66 69 AMIRANI Tbilisi. 36 Kostava St. Tel: 99 99 55, RUSTAVELI Tbilisi. 5 Rustaveli Ave. Tel: 92 03 57, 92 02 85, SAKARTVELO Tbilisi. 2/9 Guramishvili Ave. Tel: 8 322308080,

Theatres A. GRIBOEDOV RUSSIAN STATE DRAMA THEATRE Tbilisi. 2 Rustaveli Ave. Tel: 93 58 11, Fax: 93 31 15 INDEPENDENT THEATRE Tbilisi. 2 Rustaveli Ave. Tel: 98 58 21, Fax: 93 31 15 K. MARJANISHVILI STATE ACADEMIC THEATRE Tbilisi. 8 Marjanishvili St. Tel: 95 35 82, Fax: 95 40 01 M. TUMANISHVILI CINEMA ACTORS THEATRE Tbilisi. 164 Agmashenebeli Ave. Tel: 35 31 52, 34 28 99, Fax: 35 01 94 METEKHI – THEATRE OF GEORGIAN NATIONAL BALLET Tbilisi. 69 Balanchivadze St. Tel: (99) 20 22 10 MUSIC AND DRAMATIC STATE THEATRE Tbilisi. 182 Agmashenebeli Ave. Tel: 34 80 90, Fax: 34 80 90 NABADI - GEORGIAN FOLKLORE THEATRE Tbilisi. 19 Rustaveli Ave. Tel: 98 99 91 S. AKHMETELI STATE DRAMATIC THEATRE Tbilisi. 8 I. Vekua St. Tel: 62 59 73

THE BEST GEORGIAN HONEY OF CHESTNUTS,ACACIA AND LIME FLOWERS FROM THE VERY HART OF ADJARA MATCHAKHELA GORGE IN THE NETWORK OF GOODWILL

PUBLICITY caucasian business week

July 08, 2013 #12