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BUSINESS WEEK May 20, 2013 #05

caucasian business week

May 20, 2013, Issue 05

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BE INFORMED, DO BUSINESS

GEORGIA

GEORGIA SEEKS RESET WITH RUSSIA

eorgia’s Prime Minister Bidzina Ivanishvili says he wants Georgia to normalise its relations with Russia. He also expects Georgia to become a member of NATOin the near future. Pg. 9

Prime Minister Considers EBRD’s 3% Economic Growth Forecast as Pg. 2 Normal

ILIAUNI BUSINESS REVIEW: GEORGIAN RAILWAY EMERGES AS MAJOR EMPLOYER

s employment research of IliaUni Business Review says, largest employer in Georgia in 2012 was Georgian Railway. The company employs about 13,000 persons. Pg. 2

THE STATE SIGNED HIGHEST NUMBER OF CONTRACTS WITH TEGETA MOTORS LAST YEAR

ompany Tegeta Motors was the activiest supplier in the state tenders in 2012 According to annual report of Competition and State Procurements Agency, in 2012 Tegeta Motors signed the most, 365 contracts through etenders, with total value of 12 344 950 GEL. Pg. 7

MONEY TRANSFERS IN APRIL

n April 2013, the volume of money transfers from abroad constituted 122.4 million USD (202.3 million GEL), which is 9.7 million USD (16.1 million GEL), or 8.6 percent more than the same amount for April 2012. Pg. 6

AZERBAIJAN SOCAR SETS OPENING DATE OF FIRST FUEL STATION AFTER REBRANDING IN SWITZERLAND

ARMENIA ARMENIA SET TO ISSUE FOREIGN CURRENCY-DENOMINATED BONDS

CIS & TURKEY THE EBRD OFFICE OF THE CHIEF ECONOMIST LOOKS AT THE REGIONAL ECONOMIC PROSPECTS FOR EBRD COUNTRIES OF OPERATIONS AS OF MAY 2013

egional vulnerabilities in this region remain significant due to the reliance on external demand to support growth, terms of trade pressures (as all countries except for Azerbaijan are net energy importers, and the Caucasus countries depend on import of foodstuffs), and volatility of remittances (Armenia, Georgia and Moldova). Pg. 12

WORLD NEWS EUROZONE AND US INFLATION FALLS BACK ON WEAKER OIL PRICE

S&P FORECAST: GEORGIA’S GDP WILL INCREASE BY 3.5%

nternational Rating Agency Standard & Poor’s presented report for Eastern Europe and post-Soviet countries of the Central Asia (Russia, Ukraine, Belorussia, Kazakhstan, Azerbaijan, Georgia). Weak investment climate, absence of reform directed to private sector and high level of corruption hinders economic growth in the region. S&P considers that only Georgia has a dynamic non-oil sector, “which will continue growing in the mid-term perspective”, - Standard & Poor’s

statement sounds. According to S&P prognosis, growth of Georgas’s GDP will be 3,5% for 2013. The rating agency considers that strengths of Georgian economy are: moderate state debt, strong growing potential for medium-term, increasing improvement of institutions’ quality and accountability of political power. Weaknesses are: high level of protectiveness from the external risks, limited flexibility of monetary policy, low level of GDP per capita.

TATA POWER, CLEAN ENERGY INVEST AND IFC TEAM UP FOR GEORGIA HYDRO PROJECTS

ata Power, India’s largest integrated private power utility, Norway-based Clean Energy Invest AS and IFC InfraVentures signed an agreement last week to develop hydro power projects in Georgia’s Black Sea region of Adjara with an aggregate capacity of 400MW and an estimated cost of USD 700 million. “The power generated by the projects is planned to be vended primarily to Turkey,” Tata Power said in a press release on May 10. According to the company, the projects will be developed in three phases with the first phase of 185MW expected to be completed before mid2016. Tata Power and Clean Energy will hold 40% each with the rest going to IFC InfraVentures, which is a fund created by the International Finance Corporation (IFC), member of the World Bank

Group, in 2008 to support and develop private and public-private partnership infrastructure projects in the world’s poorest countries. “Georgia is a great country to work in and Turkey is a fast evolving energy market in Europe. This relationship with Clean Energy and IFC puts us on a strong footing to take advantage of the considerable potential of this market,” said Tata Power’s managing director Anil Sardana. It was announced that Tata Power and Clean Energy Invest were in the process of formalizing partnership over development of Adjaristskali hydro power projectin late February, when chief executives of the two companies visited Georgia and met PM Ivanishvili. The Georgian Energy Ministry and the Clean Energy Invest AS agreed on development of hydro power plant project on Adjaristskali river in Adjara Autonomous Republic in June, 2011

Mikheil Saakashvili – Georgia is a Brand Linked with Reforms in the U.S. Pg. 2

Business Ombudsman Explains Decline in Economic Indicators by the Problem in State Management Pg. 4

Levan Pkhakadze Wissol Group: “Business is not in a waiting mode” Pg. 5

Levan Kalandadze, Expert: our case is complicated! Pg. 5

Kakha Okriashvili: Business is not in a waiting mode, it was freed from a serious anxiety Natakhtari khtari Drawing What surprise can be expected by lucky consumers from innovative drawing Pg. 3

Pg. 5

TOP NEWS

May 20, 2013 #05

IVANISHVILI ON NATO AND TIES WITH RUSSIA

egaining breakaway regions, joining NATO and being “friends” with Russia are all “manageable” tasks for Georgia, PM Bidzina Ivanishvili said on May 14. Asked during his monthly press conference how he was going to on the one hand improve relations with Russia and on the other hand pursue Georgia’s NATO integration path, Ivanishvili responded: “I will repeat persistently, that we will do both; we will achieve both.” He said that there were “many such precedents” in Europe and “there is no need to look aggressively” at Russia’s opposition to Georgia’s NATO integration. “Russia had a similar [negative] stance towards many European states [and their NATO integration] – Poland, the Baltic states, Slovakia,” Ivanishvili said and also added that Georgia’s case “is more tense” and different from those cases but achieving both goals “is not unimaginable.” “Of course it is desirable if there is a rapprochement between NATO and Russia – that would have resolved our problem; but Russia has such a position and it had the similar position in respect of other states; but others managed to do it and why can’t we? We failed to do it because I think the previous government did grave mistakes; it [the previous government] was irritating Russia with NATO,” Ivanishvili said. He also said that Georgia “would have been NATO member and would have had good relations with Russia if not those mistakes” of the previous government. Asked if he had some “compromise” solution to offer to Russia, Ivanishvili responded: “I do not see anything where we can make concessions; we have nothing left.” “We should return territories, which belonged to us,

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we should also join NATO and also be friends with Russia – these are all manageable,” Ivanishvili said. “The Russian authorities are probably realizing and will realize that these separatist territories are not useful for them either and neither our NATO accession will collapse Russia; we will gradually realize all these and manage to do that; but it will require time,” he said. Ivanishvili also reiterated that his government “has an ambition” to get NATO Membership Action Plan at the Alliance’s next summit in 2014. Ivanishvili, however, also said that he did not want to speak much about it and cause exaggerated expectations in order not to harm the process. “I prefer to do deeds rather than to make promises in advance; but we have such an ambition [about MAP] and I think this is a very objective ambition and I think we will manage to do that,” he said. Giga Bokeria, President Saakashvili’s national security adviser and Secretary of National Security Council, said late last month that the notion that Georgia would ease its NATO integration after improving ties with Russia was wrong and the government should first focus on NATO integration. he said that focusing on this latter and joining NATO at first would then also help Georgia “to, as the government puts it, mend ties with Russia.”

Sochi Olympics

Asked during the May 14 press conference whether he would attend 2014 Sochi Olympic Games if invited by President Putin, Ivanishvili responded: “I do not know; I don’t have an answer.” “I have not yet received an invitation and I do not even know whether I will get one at all or not. Let’s see how our relations will develop and whether I will have an opportunity and time [for this visit],” Ivanishvili said.

“I do not rule out anything; I may go, but today I have no reason to give you a concrete answer,” he said and added that there still was enough time before the Sochi Olympics in February, 2014. “Lot of things may happen in this period. If our relations develop very positively... I may go,” he added. Georgian National Olympic Committee endorsed unanimously on May 2 to take part in the Sochi Winter Olympic Games.

Foreign Visits

During the same press conference he was asked when he was going to visit the United States. Ivanishvili responded that making foreign trips was not his focus, as there “is lots of work to be done here” within the country. “Foreign visits are not decisive [factor],” he said. He said that he had invitations from Poland, Romania, the Baltic states, but he was not in a hurry to make these visits. He said that he was going to visit France, “but changed my mind.” “There is no problem with my foreign visits,” he said. “I think that focus was wrongly made by the previous authorities on foreign [audience]; they were mainly accountable abroad before Europeans and Americans, ignoring the Georgian society; I do not think that’s how it should be. I think that we should sort out things mainly internally,” Ivanishvili said and also added that he would probably visit Berlin after Germany’s September elections. On U.S. trip, he said that he had no problems with visiting Washington either. “I think it would be better if this visit takes place later in order to demonstrate ourselves to our strategic partner in maximally best way,” Ivanishvili said without elaborating. Civil.ge

UTA IVANISHVILI, PRIME MINISTER’S SON BECAME THE SOLE OWNER OF CARTU GROUP

ta Ivanishvili, Prime Minister’s son became the sole owner of Cartu Group. Since March 29 5 subjects represent stockholders’ structure, among them 2 - Inter Incest and Argo Service are Georgians, and 3 are registered on Virgin Islands and Belize (Tarpar Management Limited, Krista Investment Limited, Sargans Limited). These companies were among Cartu’s stockholders till April 30, 2012, until Tarpan limited sold stocks to 6 companies (Frankland Holdings Limited, Ropwind Invertments Limited, Alerdal Investment Limited, Laveni Holdings Limited, Padburi Holdings Limited and Drofield Investment Limited), Finsek Limited - to 3 (Benfield Investments Limited, Sanvors Holdings Limited and Charwood Finance Limited). Krista Investment Limited alienated part of shares to Felvey Holdings Limited and Sargans Limited alienated part of shares to Marsten Holding Limited. Chis Vasilliadis, Foreign lawyer of Cartu Group introduced stockholder structure last year to prove that Bidzina Ivanishvili was not owner of Cartu property; accordingly, National Enforcement Bureau did not have to sequestrate Group’s property due to Bidzina Ivanishvili’s fine for violation of Electoral Law. Vasiliadis made this statement 1 day before Cartu auction. 150-million property also included Bank Cartu and Bidzina Ivanishvili’s 21,7% share of Progress Bank, founded by Kakhi Kaladze.

Natakhtari Drawing

WHAT SURPRISE CAN BE EXPECTED BY LUCKY CONSUMERS FROM INNOVATIVE DRAWING sealed winning caps: super prize –GEL 50,000 and 300,000 free 0.5L glass bottles of Natakhtari. You can call the hot line – 2 550 700 to obtain information on winning or drawing. TORNIKE NIKOLAISHVILI, Marketing Director of Natakhtari Company: Natakhtari’s grand drawing is being held for the fifth time. The prize fund and the chance to win is increasing from year to year, which makes the drawing more and more innovative . Packages taking part in the drawing are distinguished by special marking placed on the collar of plastic or glass bottles. This is to indicate to the consumer that he or she is buying the bottle participating in the drawing and giving the opportunity to win any prize.

atakhtari continues its tradition and offers innovative drawing to its consumers. This year promotional drawing will be held from May 15 till July 15. Rules are very simple and convenient. In particular, upon

purchasing you can open PET (plastic) bottle of Natakhtari Beer of any volume and find GEL 10, 20, 50, 100 or 200 banknote in a capsule attached to the cap. In addition, in packages (0.5L glass bottles, 1-L, 2-L and 2.5 – L plastic bottles) of all sizes except for cans you can find laser-

The novelty of the drawing is that it represents an instant way of winning which may exist. If the buyer is lucky, he/she will find the capsule in the cap with GEL 10, 20, 50, 100 or 200 banknote. Such consumers can get the money without visiting the company’s office. Also, buyers can win 300,000 bottles of Natakhtari beer. As regards the grand prix of our dreams this is GEL 50,000. Since this amount cannot be placed in the cap, the laser inscription will tell the luckiest consumer about winning this amount. Nobody knows beforehand the region where the winning bottle with the grand prix will be sold. Last year the winner was revealed in Rustavi. Marika Khidureli

INTERVIEW caucasian business week

May 20, 2013 #05

KAKHA OKRIASHVILI: BUSINESS IS NOT IN A WAITING MODE, IT WAS FREED FROM A SERIOUS ANXIETY An interview with “PSP” founder Kakha Okriashvili

- A phrase that business is in a waiting mode has been often heard recently. High-ranking officials announce this, including the President of

the National Bank. In your opinion, is business in a waiting mode or it started an active work? If it came out, what has caused such not encouraging data in the first quarter of 2013 in terms of economic growth? - Remind you what mode there was in the country. The business had anxiety. This was because there was not a very good Code, except for a few articles, which stated that Georgia has very low taxes. Therefore, the business had a negative attitude. We are a group of very patriotic businessmen. I do not have anything overseas. If any profit has been generated, we have invested it in Georgia. Last year we decided to invest abroad. This is because there is no trust in the environment inside the country. We have received such a decision for the first time in 20 years. We changed our mind and decided not to bring money and our knowledge abroad. Thus, we are not in a waiting mode. We have decided to continue to invest in Georgia. Now there is not a waiting mode. In fact, business was freed

from serious anxiety but another kind of excitement has remained. This is Labor Code. If in past it was deviated to the right, now it is deviated to the left, some to the communist ideas. I am glad that Mr. Bidzina expressed his position, and I think we’ll have a balanced Code. In addition, the antitrust laws will be adopted. I hope that all facts of creation of monopolies will end very soon. Business has its tasks and we are socially responsible to work for our country. We should create at least 300 000 jobs in 7-8 years. Business’s objective is to create jobs and form a decent society with a decent salary and a loyal staff. Jobs should be created by businesses, including us. In total 6 000 people are employed in our company and we will try to increase this number in the future. This number can be increased to 8 000. By the way, an average salary in our company is 900 GEL. The minimum salary makes 500 GEL. Business exists for this purpose and not an individual founder to make

a fortune. The role of the state is to maximally promote business. - The so-called left-wing ideas are heard towards business from the parliamentary branch of government. Do they represent a problem today? - Yes, this is a big problem. “Take from the rich, give to the poor” – the poor will not get rich on this principle and everyone will live equally bad as it was during the Soviet Union. Everyone should have hope for tomorrow. We need to achieve this together. - As for the economic parameters, in your opinion, what is the reason for such figures in the first quarter of 2013? - First, that the government has changed, is its own visions for the implementation of infrastructure projects. As we can see, the design periods increased. Before the project could be built without a project. Today there are different visions. Let’s see how they will be implemented. I am optimistic. Commersant.ge

BUSINESS OMBUDSMAN EXPLAINS GEORGIA WANTS TO SHARE DECLINE IN ECONOMIC INDICATORS POLAND’S EXPERIENCE IN AGRO BY THE PROBLEM IN STATE INSURANCE SPHERE inistry of Agriculture discussed positively evaluated current programs of the minMANAGEMENT enhancement of Georgian-Pol- istry.

ish relations David Shervashidze, first deputy Minister of Agriculture and Ilia Kvitaishvili, deputy minister met to Anna Varminska, acting ambassador of Poland in Georgia and Machay Khrjanovsky, second secretary of the embassy in economic issues. Ministry informs that deepening Georgian-Polish relation and future projects were discussed on the meeting. David Sharvashidze informed Polish guests about programs implemented by Georgian government and Ministry of Agriculture. Polish Ambassador

Georgian side expressed wish to share experience of the Polish side, especially on the direction of formation of the subsidized agro insurance sphere and development of extension centers. Representatives of Polish embassy expressed wish to organize business forum for the Polish investors in the future. Anna Varmiska mentioned that bilateral cooperation will be beneficial for both sides. Issues of bio-industry development and increase of Georgian wine export in Poland were discussed on the meeting.

REVAZ ARVELADZE : “ELECTRICITY TARIFF REDUCTION IS IMPOSSIBLE”

usiness ombudsman Giorgi Gakharia makes a loud statement. As a guest of “Commersant - club”, Gakharia says that the decline in economic indicators is a result of the problem in management and administration of state agencies. He says that there is no political pressure on businesses, but there is a problem of management and administration. Gakharia notes, management quality and a low level of competence is observed in the state structures and in the business. “Business is used to developing in greenhouse

conditions and the freedom is strange for it. It relates to medium and small businesses. Big business - groups have sufficient resources. In addition, the effect of long-term investments is impossible in a short period “- Gakharia notes. Central bank President talks about a low business activity in the country. In his words, the inflow of investments has reduced and local businesses are still in a waiting mode. National Statistics Office estimates that in recent months economic growth rates have been declining and made 0.2 per cent in March. Commersant.ge

RAILWAY EXPORT SHIPMENTS INCREASED

argo shipping data of Georgian Railway increased. According to company report, Georgian Railway shipped 4 552 168 tons of cargo in the first 3 months of 2013, 4 547 563 tons – in the first 3 months of 2012. Out of overall amount of the cargos 12,7% comes on the local shipments and equals to 577 338 tons

(January-March 2013 – 683 938 tons). In the reporting period export shipments are increased and equal to 384 399 tons (311 394 tons in the first 3 months of 2012); meanwhile import shipments are reduced from 704 084 tons to 467 517 tons. In the overall shipments of the company transit shipments equal to 68,6%. In January-march Georgian Railway served to 3 123 913 tons of transit freight (2 848 146 tons in January-March 2013). Georgian Partnership Fund owns 100% of JSC Georgian Railway stocks since August 6. The company has issued Euro bonds, traded on the London stock market.

evaz Arveladze, president of Energy Academy, regards that further reduction of electricity tariff is impossible. “I was always saying that there was merely a reserve for electricity tariff reduction by 3 tetri, while for gas tariff – by 5-10 tetri”, he notes.

At the same time, the expert says that the population should be ready for unavoidable growth of tariff in future. Tariff will be increased after construction of any new electricity station, he declares and explains that in case of new station, the rate might not be less than 7-8 cent per 1 KWh, while current average weighted tariff is 4.5-5 tetri.

“NEW PHARMACEUTICAL COMPANY APPEARED ON GEORGIAN MARKET”

inister of Healthcare, Labor and Social Affairs David Sergeenko declares that insurance companies’ wage debt towards the doctors reaches to several

millions. The Ministry is not able to actively interfere in private companies’ wage policy, but it assumes responsibility on all activities, related to the patient’s treatment, the Minister notes. “The Ministry is working on this direction and 1/3 of the wage debt is already paid, while pay-

ment schedule is prepared”, Sergeenko has declared at the briefing, held on May 10. The Minister also touched upon an issue of insurance company Alpha, which cancelled service of the patients, and noted: “patients will not have a problem if any particular company refuses to perform the duties, as the state will assume these responsibilities”. Sergeenko has announced about forthcoming entrance of new European pharmaceutical company on the Georgian market, but does not named it, as negotiations are still underway.

May 20, 2013 #05

BUSINESS & ECONOMY

LEVAN PKHAKADZE – WISSOL GROUP: “BUSINESS IS NOT IN A WAITING MODE”

usiness has not transferred to a waiting mode. Deputy Chairman of the Supervisory Board of “Wissol Group” Levan Pkhakadze says in response to the National Bank

President.

According to Giorgi Kadagidze, the business has not yet come out of a waiting mode. He says, the combination of economic indicators published by “Sakstat” don’t allow to suggest that at the end of the year economic growth figure will reach 6%. In addition, the European Bank for Reconstruction and Development [EBRD] has cut this year’s economic growth forecast from 5 to 3%. What is going in the Georgian business on this backdrop? Levan Pkhakadze explains to сommersant.ge that “Wissol Group “ at the moment is implementing several projects simultaneously, including, construction of “Smart” supermarkets and a project of American restaurant chain “Wendy’s”. Pkhakadze notes that the American fast-food restaurant is expected to open in Georgia in August and 25 such facilities will operate across the country. “Business has not transferred to a waiting mode, on the contrary, we are implementing much more projects than in previous years,” - says Pkhakadze.

GERMAN SPECIALISTS WORKING ON QUALITY IMPROVEMENT OF “CASTEL” PRODUCTS

astel - Georgia’’ company is holding negotiations with the French company in order to improve marketing system. The company’s owner Temur Chkonia states radio “Commersant’’ that co-operation agreement with the French company will be signed in a few days. Chkonia notes, the company invited two German specialists in the country who are working on quality improvement of “Castel’’ products. Chkonia does not name a specific time when “Castel’’ new products will appear on the market, however, says that more details will be announced a week later.

“IMEDI L” FORMER OWNER ACCUSES “BANK OF GEORGIA” OF CAPTURING COMPANY THROUGH PRESSURE

ne of the former shareholders of the insurance company “Imedi L” exclusively talks about the transition of the company to “Aldagi BCI” ownership. Aleksandre Tughushi accuses “Aldagi” owner- “Bank of Georgia” of capturing “Imedi L” through pressure. According to Tugushi, “Bank of Georgia” terminated a loan agreement with “Imedi L” when the company was to build hospitals.

of them. Research, conducted by ACT, revealed that most recognizable such shop is Hotsale.ge (41%). Next come Swoop.ge (33%), Vovovo.ge (27%), Ideals. ge (13%), while all others – 7%.

GRAIN TRANSLOADING TERMINAL OPENED IN POTI

GEORGIAN PRIME MINISTER: OUR GOAL IS TO CREATE MODERN TRADE-TRANSPORTATION CENTER

eorgia’s Premier Minister Bidzina Ivanishvili declared that “Our goal is creation of modern trade and transportation center, which will facilitate trade between East and West”. He noted that “East-West transit corridor is strategic issue and largely defines role of Georgia and region in global policy”. Ivanishvili declared the mentioned today, at the

Central Asia and Caucasus Institute’s conference, dedicated to regional economic integration in South Caucasus and Central Asia. Ivanishvili said that in order to play successfully a role of transit corridor, the country should achieve success in 3 directions: improvement of transport infrastructure, securing attractive investment environment and fruitful cooperation in common projects with neighboring countries.

LEVAN KALANDADZE, EXPERT: OUR CASE IS COMPLICATED!

evan Kalandadze, expert in economic issues in the social network responded to Prime Minister Bidzina Ivanishvili’s Tuesday’s statement that president of National Bank should leave making political statements though review of economic growth prognosis. Kalandadze wrote on his Facebook wall that our case is complicated when prime minister thinks that statements made by National bank about prevention of expected financial threats is politics. “If one asks and obeys to prime minister, National Bank should leave making economic prognosis and statements about prevention of expected financial threats on one hand and on the other hand, neither monetary policy has been competence of National Bank… Prime minister’s “logic” is simple – making economic prognosis, talking about economic and financial threats, according to his evaluation, is making political statements and National Bank should not make so called “political statement”… hmmm, our case is complicate!” – expert wrote. We remind that National bank plans to review 6% economic growth prognosis of the current year.

Bidzina Ivanishvili criticized George Kadagidze because of this statement and called him not to interfere in the politics as a head of independent and elective body. European Bank of Reconstruction and Development (EBRD) already reduced Georgia’s economic growth prognosis of the current year from 5% to 3%.

ASKANELI BROTHERS WILL RETURN COGNAC ON THE RUSSIAN MARKET SOON

Aleksandre Tugushi also talks about the pressure from the previous government officials and notes that Prime Minister was in the know that “Imedi L’’ was forced to sell “Imedi L” to “Aldagi’’ for one- fifth of the company’s value. Recall that MP Koba Davitashvili accuses “Bank of Georgia” of artificial bankrupting Insurance “Imedi L” company. “Aldagi” bought a 85% share in “Imedi L” for 8 million GEL in 2012 and then purchased the remaining share.

ACT: ONLY 40% OF TBILISI’S INTERNET USERS IS AWARE OF ONLINE DISCOUNT SHOPS nalysis and Consulting Team (ACT) reported only 40% of Internet users in Tbilisi is aware of online discount shops. At that, 68% of them could name neither

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In terns of online discount shopping, only 27% of Tbilisi Internet users have ever used such sites. Most popular in this term are Hotsale.ge (33%) and Swoop.ge (29%). ACT considers that these results show quite good prospects of online discount shops and service in Georgia. The research was conducted as telephone poll of representative sample (426 adult residents of Tbilisi).

rain transloading terminal was opened today on territory of Poti port. Capacity of terminal, owned by Pace Group, APM Terminal – Poti and Agricom, makes up

500,000 t. The opening ceremony was attended by the governmental officials.

skaneli Brothers will return cognac on the Russian market soon. Wine is already imported and 0,5 million bottles realization is planned for the starting year (3 times more than before embargo). Irakli Bekauri, director general of the company says that statement of Onishenko regarding irrelevance of the cognac to the standards, disseminated some days ago in the media, is not truth. On Friday’s special press conference Jimsher Chkherize, one of the founder of the company stated that the company sent special group to clarify misunderstanding and asked for explanation from Rospotrebnadzor. The management excludes questioning of quality. In addition that wine, cognac and Chacha of Askaneli Brothers are successfully positioned on the markets of 15 countries for many years, the products successfully passed 3-stage certificates. According to expert Irakli Lekvinadze’s evaluation, any company who’s going to enter on the Russian market, should be prepared to repel such

provocations. No company, despite their quality standard and experience, is ensured from such campaigns. “There is always such risk and similar statements may me made in the future, because there are competitors who are concerned with appearance of high-quality products, as they find difficult decent competition”, - Irakli Leqvinadze states. Askaneli Brothers produces 8 kinds of cognac, 32 kinds of wine, 4 kinds of Chacha. They’ve received over 100 awards on various exhibitions and degustation. Their export countries are USA, Ukraine, China, Germany, Great Britain, Estonia, Lithuania, Latvia, Poland, Czech Republic, Kazakhstan, Finland, Azerbaijan and Belorussia. The company had 15th anniversary this year. On May 23 media-tour will be arranged, its participants will acquire to full producing cycle and taste drinks. Chkhaidze mentions that Askaneli Brothers enterprise is equiped with the modern technology and is one of the few companies in Georgia, which has brand and Chacha distilation apparature.

ECONOMY

caucasian business week

May 20, 2013 #05

GEORGIAN REFORMS DISCUSSED IN BRUSSELS

iscussion titled “Georgian Political Reforms: Challenges and Prospects in Transition Period” has launched today in Brussels. The meeting is organized by European Policy Center in cooperation with Transparency International’s office for EU communication. As TI Georgia notes (its executive director Eka

Gigauri takes part in the Brussels event), consideration of reforms related to democracy and governance is very important in the view of European Eastern Partnership summit, sheduled to be held in Vilnius in November. The organization points that the summit may decide issues of Georgia’s association agreement and deep and comprehensive free trade agreement with EU.

STATE CONSTRUCTION COMPANY REGISTERED IN “WHITE LIST”

MONEY TRANSFERS IN APRIL In April 2013, the volume of money transfers from abroad constituted 122.4 million USD (202.3 million GEL), which is 9.7 million USD (16.1 million GEL), or 8.6 percent more than the same amount for April 2012.

gency for Competition and State Procurements reported that LLC State Construction Company was registered in so-called “white list” of the Agency. Membership on this list gives the company some preferences dur-

ing tenders on state procurements. Currently, the “white list” includes 36 companies. On the other hand, “black list” of the companies, which are banned to take part in the state tenders during a year, includes 168 entities.

EXTERNAL MERCHANDISE TRADE OF GEORGIA IN JANUARY- APRIL 2013

xternal Merchandise Trade (excluding non-organized trade) of Georgia amounted to USD 3006 million in January-April 2013 (preliminary data), 4 percent less from the previous year. The value of export grew by 8 percent and reached USD 785 million, while import decreased by 8 percent with respect to the same period of the previous year and amounted to USD 2220 million. Trade deficit amounted to USD 1435 million and share in trade turnover reached 48 percent. geostat.ge

94.0 percent of total money transfers from abroad fall on those 12 big donor countries, from which the volume of such transfers exceeded 1 million USD in April. In April 2012 the share of these 12 countries constituted 95.0 percent of the total volume of money transfers.

GOVERNMENT STATISTICS: PRICE OF VINEYARDS GROW 4 TIMES ON AVERAGE In April 2013, 137 million USD (or 22.7 million GEL) were transferred from Georgia instead of 7.9 million USD (or 12.9 million GEL) in April 2012. In the reference month, the structure of remittances by electronic wire systems is shown on the graph below.

nbg.gov.ge

he price of vineyards in Georgia has increased, the Georgian Prime Minister’s press service says. The price of a hectare of vineyard stood at 5 000 to 6 000 USD in 2012, while the figure has increased to 20 000 USD in 2013, the press service says. The process of planting new vineyards has also resumed in Georgia after a 10-year pause. Over

3 million vines are being planted in both eastern and western parts of Georgia. The previous years have recorded a 20% growth in wine exports, while this year the figure has increased by 35%. Georgian brandy exports have gorwn by 60%. The price of assets of winemaking companies have climbed up by 300% BPI

May 20, 2013 #05

BUSINESS

caucasian business week

THE STATE SIGNED HIGHEST NUMBER OF CONTRACTS WITH TEGETA MOTORS LAST YEAR

C ILIAUNI BUSINESS REVIEW: NATAKHTARI HAS A BEST CALL AMONG GEORGIAN BRANDS OF SODA DRINKS, WHILE COCA-COLA – AMONG FOREIGN ONES

liaUni Business Review said that Natakhtari has a best call among Georgian brands, while Coca-Cola – among foreign ones on local market of soda drinks. At that, the second place in 7 areas of Tbilisi was occupied by Fanta, while in 6 areas – by Pepsi. The respective research was conducted during 5 days in 68 supermarkets of Tbilisi, including ones of such chains as Goodwill, Populi, Ioli, 2 Steps, Vejini and Carrefour. Subject of research were such Georgian brands as Natakhtari, Zedazeni, Zandukeli, Kazbegi, Iberia, Lagidze, Char-

Rating of the activiest suppliers:

gali and foreign ones – Coca-Cola, Sprite, Fanta, Pepsi, Mirinda, 7 Up, Lipton Cold Tea. In terms of price, Coca-Cola appeared most cheap in Goodwill and Carrefour (2.10 lari), while most expensive in local stores (2.50 lari). Lowest price for Natakhtari (0.95 lari) was in Goodwill, Populi, Vejini and some local stores, while highest (1.00 lari) – in local stores, as well as in chain stores 2 Steps and Smart. Price comparison was made on 2 l bottles for foreign brands and 0.5 l bottles – for Georgian ones. BPI

TURKISH OZQILIJ GROUP PLANS INVESTMENTS IN AJARA

epresentatives of Turkish province Diyarbakir’s business association, participating in meeting in Ajara chamber of commerce and industry, expressed desire to invest. In particular, president of Ozqilij Group Aziz Ozqiliji said that his company is interesting in construction and tourism spheres. He noted, however, that this is their first visit in Georgia and it is of introductory character.

GERMAN BUSINESSMEN INTERESTED IN CONSTRUCTION IN GEORGIA

eorgian Minister of Regional Development and Infrastructure David Narmania met group of German businessmen today. The sides have discussed prospects of construction business development in Georgia and participation of German capital in this process. Within their visit to Georgia, German businessmen plan to meet representatives of various private and state structures. They are going to acquaint with course of road construction on Agara-Ruisi section of East-West highway tomorrow. The visit, started today, is organized by German Federal Ministry of Economics and Technology and German Association of East and Central Europe (OMV). It is scheduled to last until May 19. According to Sakstat, German direct investments in 2012 amounted to $141.69 million.

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 home-grown talents bringing some of the most brilliant and innovative pioneers from the industries under one roof.

TOP-10 ACTIVIEST COMPANIES SIGNED CONTRACTS OF 39 444 474 GEL Operational incomes of Mobitel increased by 24% in a year

perational income of Mobitel, member of Vimpelcom (trade mark Beeline) equaled to 33 million GEL in the first quarter of the current year. According to financial report, published by Vimpelcom, the cellular operator gad received 27 million GEL income in the analogic period of last year. Accordingly, annual growth of incomes

equaled to 24%. By the end of quarter of the current year, the company had 972 thousand subscribers, which was 11% more than at the end-March 2012, when it served to 875 subscribers. Company’s Average monthly income from each subscriber both in the first quarter 2013 and analogic period of last year equals to 10 GEL. GBC

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 industry 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; MARKETING CONFERENCE - MAIN TOPICS • Understand what CEOs, Business Leaders are expecting from Marketing and PR Seniors

• PR in Emerging Markets: Challenges & Changes. Communications in a Dramatically Changing Regions • Creating a framework for winning Marketing and PR strategies; main factors to consider at the early stages of development • Integrating Digital and Traditional Marketing • Emerging Technologies at Digital Marketing and PR: Reputation management and exposing the true value of employee generated content • Creating Influential Corporate Image Movies: professional vs immature movies • Building the Brand Inside Out : how persuasive storytelling helps to align internal employee beliefs and behaviours to your customer promise • New Ways of Measurement and Evaluation • Navigating the Sustainability, CSR and PR Participation in the Marketing Brilliance Awards gives you instant prestige and exposure to the finest representatives of the Marketing industry. Join the evening of opulence to not only recognise and celebrate the successes of the year but to also enhance and build key relationships within the industry. Events official and regional partner is Marketer.ge For more information http://www.boc-uk.com/conferences/marketingbrilliance-awards For more information please contact the project manager: Sam Davies Email: Sam@boc-uk.com Phone: +44 (0) 207 112 4846

BANKING NEWS caucasian business week

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TBC Bank Ends 1Q13 in Profits of 22.32 million GEL

T PRIME MINISTER MET TO BANKERS

epresentatives of the local banks reported about agro sector crediting process to Prime Minister. As Prime Minister’s administration informs, Shalva Pipia, acting Minister of agriculture also attended meeting of Bidzina Ivanishvili and bankers. 3-component state program, which provides issue of product, credit and investment preferential credits, started on March 27. According to April 22 situation, 375 individuals got agro loans.

In the framework of the first component 264 installments of 158 557 GEL are approved; 108 loans of 2 156 800 GEL were issued in the framework of the second component; 3 subject got $1 294 500 in the framework of the third component. 445 loans were under processing in the framework of the second components, with total value of 10 540 000 GEL, 55 loan of $11 860 000 in the framework of the third component. 11 banks and 2 micro-finance organizations are involved in the project.

BANK OF GEORGIA GRANTS PROPERTY INSURANCE TO APARTMENT RENOVATION CREDITTAKERS

ank of Georgia announced that those clients, who will take credit for apartment renovation until June 30, will get property insurance free of charge. Credits are available to take in lari and the US dollar. Rate of interest makes up 18%, while volume

BC Bank reported profit of 22.32 million lari for the 1st quarter. If compared with the same period of 2012, the showing is declined by 6.77%. As of March 31, total assets of the bank amounted to 3.44 billion lari, increasing year-on-year by 2.66%. Net loans made up 2.25 billion lari (growth – 5%). Ratio of idle loans to total credits made up 10.42%, instead of 4.02% in the same period of 2012. Total liabilities amounted to 2.87 billion lari (year-on-year growth – 0.77%). Sum on clients’ current accounts made up 448.86 million lari (decline – 13.03%). Demand deposits amounted to 541.2 million lari (growth – 26.06%), fixed deposits – to 1.28 billion lari (growth – 14.55%). As of reporting quarter, shareholders of TBC Bank are EBRD (20.19%), IFC (20.19%), TBC Holding Ltd. (19.59%), DEG (11.54%), FMO (5.37%), JPMorgan Chase Bank (4.67%), Ash-

BASISBANK COMPLETED JANUARYAPRIL WITH 3,5 MILLION PROFIT

depends on area of flat, subjected to renovation. Duration of credit varies within 6-72 months, while no initial payment is required. Renovated flat should be put as the credit guaranty. The bank issues the loan according to presented cost estimation, not requiring confirmation of minimal income at that.

SC Basisbank completed first month of the second quarter with 0,1 million GEL. January-April profit is defined by 3,5 million GEL. By May 1 deposit portfolio (without banks deposits) equal to 173,07 million GEL (01/04/13 -117 million GEL), loans - 119,06 million GEL - (01/04/13 -114 million GEL). Overall obligations are 216,1 million GEL (01/04/13-162 million GEL). Bank actives have increased by 36% since the

Bank of Georgia OFFERS LOAN FOR 15% TO BUYERS OF TOYOTA COROLLA

ank of Georgia announced that buyers of Toyota Corolla Comfort+ ($18,800) or Toyota Corolla Elegance ($19,600) can take car loan for interest rate of 15%. Duration of the loan ranges from 4 months to 5 years. Those borrowers, who will fill application in

Toyota Center Tbilisi and will pay $5,640 as initial payment, will be offered to opt between 9-month grace period and 1-year car insurance. At that, trade in of old car is available. As the bank says, the loan is issued with borrower’s co-participation (at least, 30%) and its approvement requires only presentation of ID card.

KSB COMPLETED Q1 WITH PROFIT OF 1.62M LARI

OR Standard Bank (KSB) reported profit of 1.62 million lari for the 1st quarter. If compared with the same period of 2012, the showing is declined by 71.74%. As of March 31, total assets of KSB amounted to 392.9 million lari, declining year-on-year by 1.01%. Net loans made up 222.81 million lari (growth – 8.29%). Ratio of idle loans to total credits made

more Cayman SPC (4.29%), Bob Meijer (2.81%), David Khazaradze (1.66%). To compare, as of previous published data (September 30, 2012, no data for the 4th quarter of 2012 is published yet), shareholders’ structure was as follow: TBC Holding Ltd. (20.68%), EBRD (19.80%), IFC (19.80%), DEG (11.32%), Liquid Crystal International NV (7.06%), JPMorgan Chase Bank (4.93%), Ashmore Cayman SPC (4.52%), FMO (3.23%), Bob Meijer (2.75%), David Khazaradze (2.53%), Vakhtang Butskhrikidze (1.04%).

up 6.51%, instead of 5.72% a year ago. Total liabilities amounted to 305.59 million lari (year-on-year growth – 3.18%). Shareholders of KSB are Sheikh Nahyan bin Mubarak Al Nahyan (45%), Sheikh Hamdan bin Zayed bin Sultan Al Nahyan (20%), Sheikh Mansur bin Zayed bin Sultan Al Nahyan (15%), Sheikh Mohamad bin Butti al Hamed (15%), Investment Trading Group (5%).

beginning of the year and equal to 271,2 million GEL by May 1 (01/01/13 - 199,9 million GEL). Basisbank operates since 1993. European Bank for Reconstruction and Development (EBRD) is its stockholder since 2008 (15%). Large Chinese company Xinjiang Hualing Industry & Trade (Group) Co ltd became owner of 90% of its stocks in 2012. 10% is equally divided between bank founder Zurab Tsikhistavi and EBRD. Overall stock capital equals to 55,1 (01/04/13-55 million GEL).

FINCA GEORGIA HAS INCREASED PROFIT

icro-financial organization FINCA Georgia reported profit of 6.73 million lari for 2012. If compared with 2011, the profit increased by 14.1%. As of December 31, 2012, total assets of FINCA Georgia amounted to 99.44 million lari (year-onyear growth – 27.75%). Total liabilities made up 78.04 million lari (growth – 28.38%). FINCA Georgia was established in 1998. Cur-

rently, the organization has 35 branches countrywide.

MICRO-FINANCE ORGANIZATIONS WILL BE DEFINED FINE LIMIT

icro-finance organizations will be defined upper limit of fine for preliminary coverage of the loan by 2%. Analogic limitation was established for commercial banks in 2011. National Bank of Georgia (NBG) will adopt corresponding regulation, which is rewarded by this authority by newly added norms to Georgian Law on Micro-finance organizations. The change also deals to organizations licensing, although non-procedural. Additional precondi-

tions were added to law, in accordance with international requirements, which make licensee’s competence more specific – whether they cooperate with the organizations mentioned in money laundering; how transparent it is. Currently 63 micro-finance organizations are registered on the market. The fine differs according to loan amount, tem and coverage date. Fine for preliminary payment of the loan, covered 50% is mainly 0%. Before that in some organizations debtors have to pay 1-month principal amount and interest rate, is come cases – some percent of the overall loan.

FOREIGN PRESS  GEORGIA

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GEORGIA SEEKS RESET WITH RUSSIA Georgia’s Prime Minister Bidzina Ivanishvili says he wants Georgia to normalise its relations with Russia. He also expects Georgia to become a member of NATOin the near future. Those were the two main points in Ivanishvili’s recent keynote speech at the Council of Europe Parliamentary Assembly (PACE) session in Strasbourg. After his speech, euronews reporter Natalia RichardsonVikulina spoke to Ivanishvili. Q: “You have come to Strasbourg to attend thePACE session where delegates from Georgia and Russia planned to meet for the first time since the 2008 conflict. Does this mean that relations are gradually improving? Can we expect a ‘reset’ of relations in the near future?” A: “I hope really that the situation will develop in this way and I am doing my utmost to improve relations with our big neighbour. The current situation is in nobody’s interest. Georgia has lost 20 percent of its territory and we will do everything to regain it. At the same time, the current situation is not acceptable for Georgia or Russia. And as I have said we will regain this territory but I would like to emphasize that everything will be done by peaceful means and negotiation. Violence and force are not acceptable, so I reiterate that our goals will be achieved by peaceful methods and negotiations. We hope that the international community will support and help us to achieve this.” Q: “Serbia and Kosovo have announced the normalisation of their relations and initialised an agreement in Brussels. Maybe this example will inspire Tbilisi on the normalisation of relations with Abkhazia and South Ossetia?” A: “This is a very good example. It also reaffirms that the world is changing and the people who did not succeed in the past have now found a common language and have managed to somehow come to an agreement. So we should do our best and settle relations with our brothers, the Ossetians, Abkhazians and of course with Russians.” Q: “Recently an investigation of the conflict in 2008 was launched. And Mikhail Saakashvili called it as the Russian scenario. How would you characterise this investigation?” A: “This is Saakashvili’s strategy. He blames everything he doesn’t like on Russia. And this has been his policy for nine years. It was this policy that actually led us to deadlock. And I think it is normal that the investigation has started.” Q: “You expect NATO to commit to making Georgia a member. And your opponent Mikhail Saakashvili supports this. However, you think it’s possible to maintain good relations with both NATO and Russia. But Saakashvili does not agree. Why do you

think it’s possible?” A: “We have quite a few good examples from European countries. Some of them had strained relations with Russia. But they chose the way of Western development and relations improved. “The best example is perhaps Slovakia. They didn’t spoil their relationship with Russia and acceded to NATO. And I think that this example is exaggerated by Saakashvili. It is possible to have good relations with both Russia and NATO. He was irritated by Russia.” Q: “Is it possible for Georgia to become a member of NATO, let’s say, in the next decade?” A: “Ten years is too long. I think that it can be accomplished much faster. We also need to take into account the dynamics of the changing world. The world is changing. Everything is changing. So in a year or two, Russia itself may change and it may have better relations with NATO.” Q: “Do you expect that Georgia will become a candidate for EU membership?” A: “We would like the European perspective of Georgia to be noted before the Eastern Partnership summit in Vilnius in November. Georgia is heading in this direction at a higher speed than before. Although our opponents say that this isn’t the case, we can say that in the next two years we can have a close association with Europe.” Q: “Will Georgian athletes participate in the Winter Olympics in Sochi?” A: “Certainly. We’ve mentioned that our athletes will take part in the Olympic Games. Sport and culture are the tools for improving the situation, for setting the scene, and specifically the Olympic Games. Take, for example, ancient Greece where even wars were stopped during Olympic Games. So sport and culture will help improve the situation. And we’re even ahead of the situation when it comes to trade. So it will help us in every way.” Q: “Oh sport – you are peace!” A: “Yes of course, oh sport – you are peace, yes!” FYI: “Oh, sport, you are peace!” refers to the poem “Ode to Sport” by Pierre de Coubertin which won the gold medal for literature at the 1912 summer Olympics. euronews.com

GEORGIA’S PRIME MINISTER USES BUSINESS SAVVY His spacious office high above Tbilisi, Georgia’s newly elected prime minister – and wealthiest citizen – Bidzina Ivanishvili talks about his plans to boost investment, to mend the relationship with Russia and to manage a difficult political cohabitation. Q. What lessons have you learnt from your success as a businessman that you can apply to your role as prime minister? A. Nowadays, I have no time to be a businessman. The business experience I am bringing in is the creation of three investment funds that will support business in Georgia. Q. What are these three funds and how will they work? A. Three funds, three targets: a sovereign fund to support foreign investors, an investment fund to bolster local businesses and a youth fund to sustain young Georgians. The sovereign fund will be $2bn. The idea is that foreign investors will come to Georgia and will be greeted by the fund and be co-partners. As I have learnt, when local capital meets foreign capital, the business sector can only flourish. I met JPMorgan’s top executives to discuss their participation. The private investment fund is an idea I have had for a long time, it will be $3bn to $4bn [in size] and I will invest my own capital in it. The third fund will be smaller and it aims to support young scientists and researchers and limit the brain drain phenomenon. Q. You stated that you will use your own capital, at least for one of the funds. This can pose questions about corporate governance and potential conflict of interests between your two roles. A. My capital and that of other businessmen will help to set up the fund, but no public official will

be involved in its management – telling businessmen what to do – which is what used to happen. No one will see whose capital has been put in. The board will be independent and transparent in its decision making, and absolutely business oriented. We need to build up trust. The experience of the past, when the government would control the business sector through monopoly, is gone. This is not going to happen again. Q. The sovereign fund seems to be designed along the same lines of the partnership fund that the previous administration created in 2011. What will happen to the partnership fund? A. The sovereign fund will build upon the partnership fund. We want to make it clear and transparent as the partnership fund failed to communicate its vision and aims to investors. We will make sure that foreign investors understand the terms of reference and of participation, including their contribution to the overall cost of investment which we set between 25% and 75% of the overall cost of the investment. Q. You founded Cartu Bank and your family still owns a stake in the institution. Is there any conflict of interest there? A. Cartu Bank remains the only business my family is involved with and the bank paid for its association with me. [In November 2011, a month after Mr Ivanishvili announced his decision to enter politics, the previous government approved legislative amendments that gave the

tax authorities priority over the secured claims of financial institutions. Cartu lost assets worth $114.6m which it had acquired as security. The regulations were in force until April 2012]. It is unacceptable that government should infringe on and violate businesses and their property rights. It is impossible to work in such an environment, and that was the case under the previous government. As soon as I stepped into politics, they attacked the bank. Q. So, will you sell the stake in Cartu? A. The status quo will not change. My family’s participation is not that visible and the bank is not a major player in the Georgian banking sector. It is definitely not the leading bank today. Q. The International Monetary Fund set the outlook for economic growth in 2013 at 6%, but the government said that that figure is conservative. A. We will see considerable growth later this year. I expect growth to really take off from 2014, as we are laying the foundation for significant investment. It takes time, since the economy needs to build up momentum. In terms of sectors, agriculture is certainly a priority as it employs the majority of the workforce but its contribution to the gross domestic product is minimal [9% according to GeoStat, the national statistics agency]. Q. There is general optimism about exports increasing in 2013 given talks with Russia and the re-opening of the Russian market. Is this a realistic expectation? A. Totally realistic. Our delegation visited Russia at the beginning of February 2013 and a Russian delegation visited Georgia soon afterwards. We

are approaching the finishing line as far as the first set of agreements is concerned; it is basically a done deal. We are working on getting Georgian products back to a wider market. In addition, Russian capital is also coming to Georgia. Q. Do you foresee an opening at the political level or do you remain cautious in this regard? A. I believe business has a great influence on politics. The next step will be ensuring Georgia’s territorial integrity, and moving towards a friendly relationship with Russia. That takes time, it will not happen in one day. But creating business opportunities, and opening the borders so that people can travel to each country will help the process. Of course, that is not enough. We are quite cautious in the words we say. Using the wrong rhetoric, as [president Mikheil] Saakashvili did, led to the closure of the borders with Russia before the war [in 2008]. Q. How would you reassure investors that your political cohabitation with president Mikheil Saakashvili will not affect investment in the country? A. There is a problem of cohabitation, but we are ensuring the re-establishment of justice in the country. The opposition calls it selective justice, and, to a certain extent, also international partners use the same definition. This is not the case. Re-establishing justice, and building up trust in the judicial system, is an important step and we will continue towards that. I believe the business elite understands well what is going on and will not be put off by political rhetoric. In a month or so, the dust will settle. thebanker.com

AZERBAIJAN

10 AZAL LAUNCHES DIRECT FLIGHT BAKUYEKATERINBURG

zerbaijan’s national airline CJSC Azerbaijan Airlines (AZAL) opens direct flight via route Baku-Yekaterinburg/ YekaterinburgBaku from 20 June 2013. The Company informs that flights will be operated by comfortable and modern aircrafts such as Airbus A-319 and Airbus A-320 twice a week, on Thursdays and Sundays. “Departure from Baku - 3.25 pm and arrival in Yekaterinburg - 7: 15 pm. Departure from Yekaterinburg - 8.25 pm and arrival in Baku – 10.05 pm. On Sunday (Monday) departure from Baku – 8 pm and arrival in Yekaterinburg - 11.50 pm. Departure from Yekaterinburg – 1 pm (+1) and arrival in Baku - 2.40 pm (+1) on local time,” AZAL reported. abc.az

BANK IBA-GEORGIA’S ASSETS INCREASED BY 57% FOR YEAR

ssets of International Bank of Azerbaijan-Georgia (IBA-Georgia) as of 1 April 2013 amounted to GEL 144.9 million with a rise by 56.7% compared to the 2012

same term. The IBA press service reports that loan portfolio of IBA-Georgia amounted to GEL 113.5 million against GEL 75.5 million in the 1st quarter of 2012, thus, the annual growth rate is equal to 50.28%. The Bank keeps successfully the trend of increasing the number of customers. Thus, the quantity of legal entities and individual customers of the Bank as of 1 April 2013 was 1,792 (rise by 55.9%). Deposit portfolio increased by 85.6% and reached GEL 106.6 million. IBA-Georgia’s net income increased in comparison with the 2012 same period by 199.3%. Bank’s authorized capital as of 1 April 2013 totaled GEL 22.7 million. IBA-Georgia received state and tax registration in 2006. Later, on 7 February 2007 the National Bank of Georgia issued a license for banking operations to IBA-Georgia. The official exchange rate on 16 May is AZN/ GEL 0.479. abc.az

EBRD FUNDS €7 MILLION FOR NEW PRODUCTION LINE FOR GYPSUM PLASTER AND DRY MIXES IN AZERBAIJAN

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oday, the European Bank for Reconstruction and Development has given a €7 million loan to Azerbaijan’s Matanat-A for new production line for gypsum plaster and dry mixes. “Matanat is a home-grown enterprise which not only strives to provide high quality products to the construction sector, but has demonstrated its commitment to the highest standards of management and corporate governance – exactly the kind of enterprise the EBRD aims to support. Matanat will benefit not only from EBRD financing but from expert advice through the Enterprise Growth Programme,” said Neil McKain, EBRD Head of Office in Baku. To date, the EBRD has invested over €2.1 billion in various sectors of the Azeri economy, mobilizing an additional €5.3 billion from other sources of financing. abc.az

SOCAR SETS OPENING DATE OF FIRST FUEL STATION AFTER REBRANDING IN SWITZERLAND

OCAR Energy Switzerland, whollyowned by Azerbaijan’s state energy firm SOCAR, plans to open its first gas station following the rebranding in the Swiss district of Kreuzlingen in Lake Constance area. SOCAR acquired all shares in Esso Schweiz GmbH and thus took over Esso’s network of petrol stations in Switzerland in July 2012. Over the next twelve months, the new brand SOCAR is planned to gradually take the place of the Esso brand throughout Switzerland. The company reported that the official opening of the gas station is scheduled for May 25-26. In March, SOCAR Energy Switzerland opened a quick charging station for electric vehicles near Bern under the EVite project of the Swiss eMo-

bility Association. The company reported that charging at the new station, located on road A-1, takes about 20 minutes and is available free of charge. The EVite project, which was launched in Bern last November, involves creating a charging infrastructure for electric vehicles throughout Switzerland and accelerating the electric mobility market development in the country. As one of the main partners of the EVite project, SOCAR will support construction and operation of stations for the fast charging of electric vehicles in Switzerland. SOCAR started its operation in Switzerland in September 2012 with commissioning its first petrol station in Zurich. In December, the first gas station under the SOCAR brand was opened in

western Switzerland. The company reports that by mid-2013 more than 160 gas stations under the SOCAR brand will operate in Switzerland. SOCAR sells classic fuels such as gasoline and diesel fuel in Switzerland. However, they are enriched with special additives that ensure optimal level of combustion which is important from an environmental point of view and in terms of the cost and performance of the internal combustion engine of the car. SOCAR has also taken over the Wangen-Olten gas station, and a number of gas stations and joint ventures specializing in aircraft fuelling at the Geneva and Zurich airports, as well as a Swiss company that controls joint ventures managing terminals and pipelines. azernews

AZERBAIJAN’S ECONOMY RISES 3.8 PCT

zerbaijan’s GDP grew by 3.8 per cent In January-April 2013 compared to the same period of last year amounting to 17.23 billion manat, according to a report of the State Statistics Committee. Nominal GDP growth was at 1.6 per cent. GDP per capita increased by 2.5 per cent reaching 1,861.9 manat ($2.372.8). Production of added value in the non-oil sector grew by 10.9 per cent over the year amounting to 8.88 billion manat, or 51.5 per cent of the GDP and fell by 2.3 per cent in the oil and gas sector. Production of added value in the services sector increased by 6.4 per cent to 5.249 billion manat compared to the same period in 2012. Total production in all sectors of the economy grew by 2.2 per cent compared to January-April

2012 and totalled 10.823 billion manat or 62.8 per cent of GDP. Alongside, industrial production in the country decreased 2.1 per cent to 8.852 billion manat, or 51.3 per cent of the GDP. In January-April, production of added value in the agriculture, fisheries and forestry was 426.8 million manat, or 2.5 per cent of the GDP, in the construction sector - 1.543 billion manat (nine per cent of GDP with a 38 per cent increase), in trade and in repair services of vehicles - 1.339 billion manat (8.3 per cent of GDP with a 9.4 per cent increase), in transport and warehousing - 1.068 billion manat (6.2 per cent of GDP with a 5.3 per cent growth), in communications and information - 301.2 million manat (1.8 per cent of GDP with a 8.9 per cent growth), in the field of accommodation of tourists and catering - 348.6 million manat (two per cent of GDP with a 21.3 per cent growth) and in social and

other services - 2.191 billion manat (12.7 percent with a 2.8 per cent increase). Net taxes on products and imports increased by 9.7 per cent amounting to $1.158 billion manat, or 6.7 per cent of GDP. The official exchange rate on May 16 is 0.7846 AZN / USD. azernews

KFW IS IN BAKU TALKS ON COOPERATION WITH AZERBAIJAN RAILWAYS

fW mission is visiting Baku for consultations on cooperation with CJSC Azerbaijan Railways (ADY). ADY reported that the mission aims to discuss possible assistance within the framework of Rail Trade and Transport Facilitation Project. “The project is focused on the support for purchase of new locomotives for ADY by the German bank,” ADY informed. Earlier the Bank made renewed proposals for funding of these works are accompanied by strong technical support. KfW offered for ADY to make at its own expense a feasibility study and

tender documents for a tender for purchase of 50 electric locomotives. Payment of this work will be carried out in volume to be determined by ADY when raising a KfW loan to pay for supplies of this equipment. Previously, purchase of 50 electric locomotives was taken out of the WB project that enabled to finance the implementation of its other components without additional funding. ADY later determined its medium-term minimum demand for rolling stock at the level of 12 multi-system electric locomotives and 100 passenger cars. “These estimates cover ADY needs in the development of passenger traffic only for 2-3 years. We are preparing documentation to meet all the needs of the Azerbaijani railways in rolling stock,” the KfW office said. Even if the tender for supply of electric locomotives had been announced today, the supply of equipment would have begun at least in a year or two. Last year the Azerbaijani government stated of the need to raise 400 million euro from KfW for a series of works to increase the capacity of Azerbaijani railroads and speed increases. The Azerbaijani government has reasoned neces-

sity for the bank’s attraction to Rail Trade and Transport Facilitation Project financing by project budget deficit. But restructuring of the project allowed financing the purchase of signaling systems at the expense of already given loans. In spring 2008 the WBG Board of Directors endorsed a $450 million loan for Rail Trade and Transport Facilitation Project that has become the WBG biggest one since 1995 when WBG opened financing for Azerbaijan. The loan will be disbursed through International Bank of Reconstruction & Development (IBRD) for 17-year period with 4-year grace term. The project targets to improve railway services in Azerbaijan, as well as the competitiveness, financial sustainability, operating and cost efficiency and capacity of ADY. The project with $795 million budget was focused on development of corridor toward to Georgia. Presently $450 million form the World Bank and EUR 250 million from the Export Bank of Czech Republic is already not enough and the project budget deficit makes about EUR 400 million. Earlier KfW claimed readiness to provide up to EUR 500 million to Azerbaijan for railways. abc.az

BP TO USE 20TH EXHIBITION CASPIAN OIL & GAS FOR FAMILIARIZING POTENTIAL CONTRACTORS WITH ITS DEMANDS

he jubilee 20th International Caspian Oil & Gas Exhibition Incorporating Refining and Petrochemicals will be held in Baku on 4-7 June 2013. Event organizer Iteca Caspian reports that the exhibition will gather over 300 companies from 27 countries. Over 40% of exhibition space at Caspian Oil & Gas is taken up by leading organisations such as SOCAR, BP Azerbaijan, OMV, Conoco Phillips, Statoil, Total, Petkim, TPAO, RWE and many others. National groups from Germany, China and Russia are also regular participants.

The General Sponsor of Caspian Oil & Gas 2013 is SOCAR, the Gold Sponsors are BP Azerbaijan and Statoil, and other sponsors of the exhibition and the conference include Nobel Oil, AzfenTekfen, Azeri MI Drilling Fluids, Bos Shelf, Caspian Drilling Company, Caspian Marine Services, Cross Caspian Oil and Gas Logistics, Russneft, Interpipe and McDermott Caspian Contractors. As part of this year’s exhibition, BP on behalf of its co-venturers in ACG, BTC, SD and SCP hosts the 2nd “Meet the Buyer” event, which will gives Azerbaijani companies an opportunity to present products and services to potential clients. It is a

platform for domestic companies to become acquainted with leading international and Azerbaijani suppliers of oil and gas equipment. Around 90 local companies will take part, specialising in operational support, engineering, construction, logistical support, waste management, service provision, and much more. More information about the event is available on its web-site www.cog.az. The site also provides express registration for participation in the exhibition on link: www.caspianoilgas.az/registration. abc.az

May 20, 2013 #05

ARMENIA

ARMENIAN GOVERNMENT LOOKING FOR PRIVATE INVESTORS FOR JOINT INULIN PRODUCTION PROJECT

he Armenian government on Thursday decided to release three million drams to the ministry of economy which it must use to attract private investors, including foreign ones, for implementation of an Armenian-Chinese program

to create a venture for the production of inulin. This money will be used, particularly, to conduct an international tender for the project. Prime minister Tigran Sargsyan said the government will support cooperation between public and private sectors.

He said from 3,000 to 4,000 hectares of land will be allocated for the cultivation of Jerusalem artichoke, which is the main raw material for the production of inulin. The project is expected to create over a thousand new jobs in agriculture and another 300 jobs at the plant. Sargsyan said the Chinese side has offered to participate in this project as an investor, as it provides the technology. In addition, it guaranteed in a letter to the Armenian government 100% sales of inulin. “This significantly reduces the risks for investors”, he said. According to the government, this project requires $33 million in investment. Economy minister Vahram Avanesyan suggested that information on this project be published in The Economist magazine. Inulin, an organic substance from the group of polysaccharides is easily absorbed by the human body and due to this is used in medicine as a substitute for starch and sugar for people with diabetes. ARKA

ARMENIA SET TO ISSUE FOREIGN CURRENCYDENOMINATED BONDS

he Armenian government on Thursday approved the concept for issuing foreign currency-denominated bonds. “Today we are taking a political decision, and for the first time we will start issuing foreign currency –denominated bonds. This will open a new page in the economic policy of Armenia not only in terms of public funds management, but will also provide the private sector with an opportunity to attract cheaper funds from international financial markets,” prime minister Tigran Sargsyan said.

He cited international organizations and financial institutions working with Armenian economic entities as saying that since Armenia does not issue foreign currency-denominated bonds, attraction of additional financial resources is always 1-1.5% more expensive. The prime minister added that due to successful placement of bonds this year and attracting cheaper funding from external sources next year, the government plans to repay the $500 million Russian stabilization loan. “We have started a dialogue with our Russian

partners and have their consent and cooperation so that the repayment of the loan is smooth, if the interest rates are softer than those envisaged by our interstate agreement”, he said. Sargsyan said for issuance of foreign-currency denominated bonds the government t needs professional assistance and that is why it approved a decision to sign a contract with Cleary Gottlieb Steen & Hamilton LLC. According to official data, Armenia’s state debt stood as of March 31 at $4.2 billion, of which $3.597 billion were external debt. ARKA

NEARLY 6 MILLION EUROS INVESTED IN ARMENIA’S SME OVER 10 YEARS AS PART OF EBRD BUSINESS ADVISORY SERVICES

early 6 million euros have been brought to Armenia over the last 10 years to finance small and medium-sized businesses under the European Bank for Reconstruction and Development’s Business Advisory Services (BAS), EBRD head of regional program to promote SME Jaap Sprey said today as he was speaking at a special event marking EBRD’s 10th anniversary in Armenia. According to him, over ten years 930 projects were implemented on funds attracted from Canada, China, the UK, the U.S. and EBBED Shareholder Special Fund. Head of the EU Delegation to Armenia, Traian Hristea, noted that development of SMEs is one of the priorities of the European Union. Hristea said by the end of the year the Associa-

tion Agreement between Armenia and the EU is expected to be initialed, which, in his opinion, will become the cornerstone for the Armenian economy. “This means that the Armenian businesses will be forced to re-engineer their businesses to take advantage of the opportunities that will be provided by the agreement”, he said. The Association Agreement stems from the EU’s Eastern Partnership program that offers six former Soviet republics of Armenia, Azerbaijan, Georgia, Belarus, Ukraine and Moldova the prospect of deeper integration with the bloc in return for political and economic reforms. The EU has been Armenia’s leading trading partner and main export market for the past decade. ARKA

flation was recorded in Armenia in April. As a result, a 12-month inflation was recorded at 3.9%, as projected. According to the regulator’s forecast, the 12month inflation rate will rise before the end of the second quarter, but will fluctuate within the upper benchmark of the projected range, and later will come close to the projected 4%. The central bank’s board placed it on record that the world demand remain low and that some deflation was seen raw materials and foods markets across the world in the beginning of the second quarter. The regulator also says that prices for agricultural products are believed to rise, since the last year’s supply shock in agriculture products markets is already subsiding. This will neutralize the expected impact of the outside deflation on inflation rate in the country. The central bank says economic activity in Arme-

PSRC BEGINS REVISION OF ELECTRICITY PRICE

rmenia’s Public Services Regulatory Commission (PSRC) said it began at its own initiative a revision of the price of electricity. It said in a statement that the process of revision of prices for energy generation and distribution, as well as revision of prices for final consumers was launched in view of projected changes in gas price, used for electricity generation, fluctuations in the value of US Dollar and other factors. Earlier this week Armenia’s Russian controlled gas operator ARG and Transgaz LLC asked the regulator to revise upward the current tariff for Russian natural gas. They want to raise the price for consumers using up to 10 thousand cubic meters a month from current 132,000 drams per one thousand cubic meters (including VAT) to 221,000 drams. Armenia currently buys 1,000 cubic meters of Russian gas for $180.

GOLD PRICE IN ARMENIA DROPS BY 0.6 PERCENT

he State Depository of Precious Stones and Metals Agency, an affiliation of Armenian Finance Ministry, has set new prices for government agencies to buy and sell precious stones and metals which are effective for this week. The new prices are for one gram of chemically pure metals. The gold is to be bought at 17,871.37 drams (a 0.6 percent decline ) and sold at 19,425.40 drams (+118.12); silver is to be bought at 291,87 drams (-3.29) and sold at 317.25 dram (-3.58); platinum is to be bought at 18,356.54 drams (+26.11), and sold at 19,952.76 драмов (+28.38); palladium is to be bought at 8,511.63 drams (+26.24), and sold at 9,251.77 drams (+28.52).($1 – 415.25 drams).

ARMENIA’S GROSS INTERNATIONAL RESERVES REDUCE 9.3% TO $1 631.2 MILLION IN 1ST Q 2013

rmenia’s gross international reserves totaled $1,631,218,357.35 by the end of the first quarter 2013 after shrinking 9.3% over the quarter. According to the report available on the central bank’s official website, the bulk of the country’s assets – $1,631,217,920.70 – is held in convertible currencies. Then country’s SDR in IMF amounted to $1.65 million in late March 2013 against $31.7 million in early January 2013. ($1- AMD 416.69 drams).

EBRD HAS INVESTED ABOUT 620 MILLION EUROS IN ARMENIA

ARMENIAN CENTRAL BANK LEAVES 8% REFINANCING RATE UNCHANGED

he board of the Central Bank of Armenia left today the current eightpercent refinancing rate unchanged, the central bank’s press office reports. The central bank also says that a 0.1-percent de-

caucasian business week

nia will remain quite high due to the fast growth shown by the industry and services sectors (especially trade volumes) and the fast-growing individual consumption. These impacts on domestic prices were cushioned by the tax and budgetary policy, which was more deterrent than the basic scenario of monetary policy for the first quarter. Taking into account these developments, the central bank’s board finds it reasonable to continue pursuing a neutral monetary policy. In their short-term forecast, the board members say inflation risks may emerge because of impacts of bad weather on agriculture and possible revision of consumer prices for energy. If such risks appear, the regulator may revise the rate in the future. The latest revision of the refinancing rate was on September 6, 2011, when the central bank downed it from 8.5% to 8%. ARKA

he European Bank for Reconstruction and Development (EBRD) has invested about 620 million euros in various projects in Armenia since its inception here in 1992, head of EBRD Yerevan Office Valeriu Razlog said today at a special event marking EBRD’s 10th anniversary in Armenia. He said about half of the amount – some 310 million euros- were channeled into financing the banking sector. Another 25% of the EBRD’s investments went to finance the transport sector, in particular, the modernization of Yerevan airport and customs points, 15% were used to finance a string of projects in the energy sector, in particular in the field of renewable energy, including support to 25 small hydropower plants, as well as the transportation and distribution of electricity. According to Razlog, the remaining 10% of the total investment were allocated to private and municipal sectors, in particular, for reconstruction of the Yerevan metro, water system, as well as to the food industry. The EBRD is one of the largest investors in Armenia. ARKA

CIS & TURKEY caucasian business week

May 20, 2013 #05

NO QUICK TURNAROUND IN SIGHT

The EBRD Office of the Chief Economist looks at the regional economic prospects for EBRD countries of operations as of May 2013

egional vulnerabilities in this region remain significant due to the reliance on external demand (both from the EU and Russia) to support growth, terms of trade pressures (as all countries except for Azerbaijan are net energy importers, and the Caucasus countries depend on import of foodstuffs), and volatility of remittances (Armenia, Georgia and Moldova). Risks to the outlook are related to developments inexternal demand, commodity prices, and stability of the domestic and, in some cases, broader European financial sectors, as well as domestic policy slippages. The latter may in some cases threaten the delivery of needed international support and could reignite balance-of-payments pressures. UKRAINE’S economy has been affected by the difficult external environment but also by domestic policy uncertainty in some critical areas. Lower external demand and subdued steel and other commodity prices led to a contraction of machine building, steel and chemicals sectors. The construction sector continued to decline following completion of significant public infrastructure investments related to the Euro-2012 football championship. Consumer demand, fuelled by rising real wages through 2012, is showing signs of a slowdown. Following a period of tight monetary conditions, the central bank allowed interest rates to decline, and lending has shown early signs of recovery. Agricultural output, which suffered from adverse weather conditions in 2012, has also started to recover. In 2012 the National Bank lost about a quarter of gross external reserves which now cover less than three months of projected imports. Ukraine’s economy is very much exposed to developments in the Eurozone and Russia, and the slowdown in both will continue to negatively affect the country’s growth and economic stability. ARMENIA’S output growth has accelerated, led by manufacturing and mining. The authorities are pursuing fiscal consolidation and structural reforms under an IMF-supported programme. The economy continues to benefit from large remittance inflows and substantial official financing. Immediate risks are related to the uncertain external environment, in light of the country’s dependence on remittances and export concentration, and financial sector dollarization. After recovering from a deep, policyinduced crisis of 2011, the economy of BELARUS has been unable to sustain momentum. Domestic investment and construction had to be curtailed as the government cut back on the direct investment programmes. Industrial production also slowed down, likely due to falling external demand. Domestic consumption grew fast in mid-2012 after the authorities implemented significant public wage increases, but slowed down more recently. As inflation pressures subsided, the central bank has been able to steadily reduce the policy rate. Soft loans from a CIS stabilization fund and bilateral loans as well as windfall hydrocarbon revenues from Russia have been used to increase critically low external reserves. After two years of fast paced recovery from the financial crisis, MOLDOVA’S output growth came to a halt in 2012 in response to the weakening external demand and unfavourable weather conditions. Shortterm growth prospects are uncertain and depend on the evolution of remittances, exports and investment sentiment. GEORGIA’S economic growth slowed down at the end of 2012, likely due to lower investment and uncertainty related to post-election political transition. As the external financing package mobilised by a range of donors during the twin crises of 2008 has largely been exhausted, the new authorities’ challenge will be to mobilise private sources of financing for supporting investment in key sectors. Uncertainty about the external environment has been mitigated by a precautionary arrangement with the IMF. Further normalisation of trade relations with Russia should help support export-led growth over time. After successfully weathering the financial crisis, AZERBAIJAN’S economy has slowed as the pace of oil extraction decelerated. The decline of oil output has been more than offset by the encouraging growth of the non-oil sector, led by construction and

services. The lack of diversification of the economy remains important as risks associated with high oil dependence became apparent during the 2008-9 crisis, when oil prices declined. Some recovery of the oil sector and continued expansion of the non-oil economy should lead to an acceleration of output growth in 2013. Immediate macroeconomic risks continue to be mitigated by a very strong fiscal position including from oil reserves. Economic growth in RUSSIA ground to a halt in Q1 2013. GDP growth fell to an estimated 1.1 per cent year-on-year during the first quarter of 2013 (a quarterly contraction when correcting for seasonality), from around 5 per cent a year earlier. When looking at high frequency seasonally adjusted data, it becomes apparent that the slowdown started in fact already in Q4 2011, and appears to have been driven mostly by a fall in domestic demand, as indicated by slowing private consumption, investment, imports, and inflation. While the slowdown was initially driven by slowing consumption, it has now increasingly been driven by slowing investment as well. Part of the slowdown can be attributed to the deteriorating external environment. First, the Eurozone crisis negatively affected consumer and investor confidence worldwide, with Russia not being an exception. Second, the fact that oil prices stopped growing naturally contributed to a slowdown in export and tax revenues, which in turn may have affected public and private spending on non-tradables and investment. Finally, the global slowdown has reduced returns on, and valuations of, foreign assets, again contributing to lower demand. However, part of the slowdown appears to be the result of domestic supply and demand factors. Supply-side bottlenecks have likely started to constrain growth, given that capacity utilisation in manufacturing has remained high at around 80 per cent for the past two years, while official unemployment remains low at around 5½ per cent. On the fiscal side, there has been a slowdown in social expenditure following the preelection surge, while public investments were cut at the expense of increased defence spending. On the monetary side, the CBR may have resisted policy rate cuts for too long, as inflationary risks now seem to have abated. In addition, wealth effects may have played a role, as Russian equity values have fallen by about 30 per cent on average since mid-2011, while housing price growth has slowed since early 2012. Finally, investor confidence has likely been dented following the TNK-BP buyout by Rosneft and other setbacks with business environment and civil society reforms. This could also help explain the pickup in net capital outflows to US$ 26 billion in the first quarter of 2013. Looking forward, GDP growth is expected to recover slightly but remain subdued. Even when assuming a gradual recovery through 2013, GDP growth for the year is unlikely to exceed 2 per cent in 2013 but may increase to 3 per cent in 2014. Growth could be higher in case of substantial fiscal loosening, but prospects for such loosening are limited given the government’s appropriate commitment to its fiscal rule, plus the fact that oil prices are projected to remain below the budget-balancing break-even level of US$ 115. With inflation slowing, there may be some space for monetary loosening even within the current inflation targeting framework. The most effective way to stimulate growth, however, is to speed up reforms to radically improve the business environment and the investment climate, particularly for foreign investors. In most of Central Asia, economic growth continued decelerating in response to the global economic slowdown. The deepening slowdown in Russia may have a further negative impact on growth in this region, mainly through the impact on remittance flows, which have so far performed strongly. However, large natural resource exploration projects remain broadly on track throughout the region, despite certain delays, and are expected to make a sizable contribution to growth in 2013 and over the medium term. In KAZAKHSTAN, GDP growth slowed from 7.5 per cent in 2011 to around 5 per cent in 2012 and 4.5 per cent in the first quarter of 2013 owing to more difficult external environment. It is expected to remain around this level in 2013, as production capacity at new oil and gas fields may come on stream slower than originally expected. In March 2013 Unicredit sold ATF Bank, its Kazakh Subsidiary, to local buyers. More broadly, the banking sector remains weak, suffering from overhang of non-performing loans. Inflation has accelerated somewhat, to around

7 per cent in March 2013, but remains broadly within the targeted range. In the KYRGYZ REPUBLIC, a strike and weather-related disruption at the Kumtor gold mine in early 2012 caused a significant temporary drop in gold production and resulted in an output contraction of around 1 per cent for the year as whole. Given the one-off nature of the disruption, output rebounded strongly in the first quarter of 2013 and growth is expected to reach 6.5 per cent for 2013 as a whole, reflecting the base effect, before subsequently moderating. Inflation picked up from around 2 per cent in August 2012 to 7.9 per cent in March 2013 owing to higher food prices but is expected to slow down. In TAJIKISTAN, GDP growth remained strong at 7.5 per cent in 2012, broadly unchanged from 2011. However, growth is expected to slow down to 5 per cent in 2013 on account of slowing remittances, particularly from Russia. Moreover, the growth outlook in Tajikistan is particularly uncertain given fundamental weakness of the banking system and continued tensions with Uzbekistan that may lead to further interruptions in gas supplies and railway shipments. Inflation picked up somewhat from 5 per cent in August 2012 to around 6.4 per cent in March 2013 owing to higher food prices. TURKMENISTAN continues to experience a buoyant economic expansion with GDP growth of 11.1 per cent in 2012, driven by large public construction projects and increased gas exports to China and Iran. GDP growth is expected to reach 10 per in 2013 and remain strong over the medium term, supported by exploration of Turkmenistan’s abundant gas reserves and further diversification of export routes. UZBEKISTAN’S GDP growth remained strong at 8.2 per cent in 2012 largely driven by public spending, di-

versification of gas export routes and accommodating monetary conditions. Growth is expected to slow down somewhat to around 7.5 per cent in 2013. TURKEY After a strong performance in 2010 and 2011, the Turkish economy slowed down significantly last year as real GDP growth dropped to 2.2 per cent from 8.8 per cent a year earlier. The drop in growth was a result of weak domestic demand and manufacturing activity, coupled with a large drop in private sector capital investments. This slowdown occurred despite positive contributions to growth from public spending and net exports. More recent higher frequency data indicate a pick-up in domestic demand in Q1 2013, driven by higher credit growth and slowly expanding industrial production, while an accommodative monetary policy should support activity in the coming months. However, exports, which have been the major contributor to growth in the last five quarters, are showing signs of weakening. Over the past year, decelerating imports and strong export growth and tourist revenues had helped bring down the current account deficit to a more sustainable level around 6 per cent of GDP. Inflation is proving stubborn, having reached 7.3 per cent y-o-y in March 2013, significantly above the central bank’s target of 5 per cent. Growth in 2013 is likely to increase, but macroeconomic risks remain. Imports have visibly picked up in the first few months of this year, while exports have slowed down, and the current account deficit has widened again in the first two months of 2013. Most importantly, funding remains relatively short-term and dependent on portfolio flows, which are vulnerable to shifts in global market sentiments. FDI inflows fell by around a third over the past year and covers only 17 per cent of the current account deficit. While the global hunt for yield continues to help Turkey meet its external financing requirements, it could exacerbate the risk of high credit growth leading to an even wider current account deficit. EBRD

WORLD NEWS

May 20, 2013 #05

caucasian business week

EUROZONE AND US INFLATION FALLS BACK ON WEAKER OIL PRICE

nflation in both the 17-strong eurozone bloc and the US has fallen to its lowest level in years. The eurozone figure, for April fell to 1.2% - a three-year low. US inflation was running at 1.1% - a two-year low. Both countries target inflation at 2%. In both cases the prime cause of the fall was a lower oil price, which is down from just less than $120 a barrel in March to about $93 a barrel now. Weak demand across both economies was also a factor. The sharp fall in the cost of fuel caused the US monthly inflation rate to fall at its sharpest pace since December 2008. The US economy is growing more strongly than most of Europe, but remains patchy, while high unemployment has put downward pressure on wages, making it harder for retailers and other firms to raise prices.

Deflation

Figures on Wednesday showed that the eurozone was still in recession, as weak growth in some parts was offset by budget cuts and unemployment in others.

Inflation fell in France, which was reported to have slipped back into recession this year, and in Germany, which grew by an anaemic 0.1% in the first three months of this year. Greece saw overall deflation - on average, prices were actually lower than previously - instead of what is seen in normal economic conditions, in which some prices rise and some fall. Earlier this month, the European Central Bank (ECB) cut interest rates to a record 0.5%, a move designed to spark growth. Low interest rates can also unleash inflation, but when economic growth is very weak, authorities worry more about deflation. This can depress economic activity, as consumers hold off buying goods in the expectation they will become cheaper in coming months. There are few signs that inflation is likely to be a threat in the near future, it is well below the ECB’s target rate of 2% in any case. The highest price rises were found in Romania, Estonia and the Netherlands. BBC

JAPAN’S ECONOMY SHOWS RECOVERY SIGNS IN BOOST FOR ABE

apan’s economy, the third largest in the world, expanded at its quickest pace in a year, showing signs of an economic recovery. Gross domestic product grew 0.9% in the three months to March compared to the previous quarter, indicating an annualised rate of 3.5%. Japan grew at a rate of 1% at the end of 2012 as it emerged from a recession. Analysts said it was a good report card for Prime Minister Shinzo Abe’s aggressive stimulus measures. “The Japanese economy is on the right track to recovery,” said Hideki Matsumura, from the Japan Research Institute.

He cited a jump in individual spending on the back of a rally in Japanese stocks, as well as recovering exports, as the main reasons. “The economy is expected to grow further for now thanks to the impact of Abenomics,” Mr Matsumura added, referring to the name given to Mr Abe’s attempt to stimulate Japan’s stagnant economy with big government spending and aggressive central bank monetary easing.

Exporter boost

The policy shift is aimed at beating deflation, which Japan’s economy has been suffering for almost two decades. Falling prices deter business and consumers from spending as they tend

to hold out for a better deal. The central bank has therefore pumped trillions of yen into the money supply, pushing down the currency’s value. That has helped exporters, making Japanese firm more competitive in overseas markets and increasing the value of their repatriated profits. The yen has lost about one quarter of its value since November last year, and that has also lead to a huge rally in Japanese stocks as investors rush to take advantage of bigger earnings potential for companies. The main Nikkei 225 index has risen 45% this year. A growth rate of 3.5% would mean Japan is out-

SAVING CYPRUS:

IMF APPROVES $1.3BN RESCUE PACKAGE

he IMF has approved a three-year, $1.3 billion loan to jump start recovery in Cyprus and restore financial credibility to its indebted banking industry. The funds will be distributed to stabilize the banking industry, tame the debt deficit, and to restore economic growth on the island. The IMF announced on Wednesday it had approved the first $111 million (86 million euro) installment of the loan, which was made immediately available to the Cypriot government. The next installment of $1.3 (1 billion euro) will be wired before June 30th, 2013 and fostered by the Luxembourg-based European Stability Mechanism. The bailout is part of a $13 billion (10 billion euro) monetary package funded by Troika lenders over the next three years.The financial assistance is intended to prevent a further crisis and to revive the economic pulse of the debt-stricken nation. The loan “is intended to stabilize the country’s financial system, achieve fiscal sustainability, and support the recovery of economic activity to preserve the welfare of the population,” the IMF said in a statement. Klaus Regling, chief of the European Stability Mechanism, said on Monday, “The loans granted by the ESM help to maintain financial stability in the euro area and buy time for Cyprus. This time enables Cyprus to undertake the reforms necessary to rebuild its economy on a sustainable basis.” This is the fourth eurozone loan from the IMF crisis lending fund. Greece, Portugal, and Ireland have all received bail-out support from IMF lending. Taking out loans from the IMF increases the organi-

zation’s power in the eurozone. The more debt it owns, the more influence it holds over policy. Cypriot women supporters of left-wing political parties hold a protest outside the parliament in the capital Nicosia on April 30, 2013. The IMF is optimistic at Cypriot prospects, but is still cautious about a possible debt relapse. “Challenges ahead are significant, including restoring credibility in the banking sector and reducing fiscal deficits and debt to sustainable levels,” IMF Managing Director Christine Lagarde said of Cyprus. “There is no room for implementation slippages.” On Wednesday, the EU statistics office confirmed the 17 nation eurozone remained in recession with an overall regional contraction of 0.2 percent in the first financial quarter, from January to March.

The Cypriot economy shrank by 1.3 percent. Official figures show France has returned to its second recession in four years, as the economy shrank by 0.2 percent in Q1 of 2013, after shrinking the same amount in the final of quarter of last year. The eurozone’s strongest economy, Germany, also showed some sluggish signs of growth. GDP grew by just 0.1 percent in the first quarter, far less than 0.3% expected by economists, showing sluggish signs of growth. The Netherlands, which entered recession three months ago, also showed contraction, with GDP falling by 0.1 percent in the first quarter of this year. Once one of the strongest-looking members of the eurozone, the Netherlands suffers from rising unemployment and the housing market bubble bursting. rt.com

pacing the US, which expanded 2.5% in the January to March quarter, as well as the eurozone, which contracted 0.9%. However some analysts were more cautious, questioning whether the recovery could be sustained. They pointed at company spending, which fell 0.7% in the three months despite expectations of an increase. Some analysts said it was a sign that despite improved business sentiment Japanese companies were still hesitant to boost investment. Convincing companies to spend is a key part of Mr Abe’s plan to pull the country out of deflation. BBC

SKODA SALES IN APRIL HIT BY SWITCH TO NEW MODEL

nit sales at Skoda Auto fell by 4.6 percent in April due to a switch to a new Octavia model and continued weak demand in someEuropean markets, the car maker said

on Thursday. Skoda, the Czech Republic’s largest exporter and a unit of Germany’s Volkswagen VOGW_p.DE, is seen as a gauge of the export-reliant economy’s performance. The car producer sold 77,600 units in the month of April. In the January-April period it sold 298,000 cars, down by 8 percent year on year, it said. Board chairman Winfried Vahland said the company had expected sales in the first half of 2013 would be below the 2012 levels due to the introduction of the new Octavia and Octavia Combi models. “Moreover, some markets continue to be under a strong pressure which we cannot entirely avoid,” he said. Skoda’s Yeti model came top in a British national satisfaction survey and sales in Britain rose by 16.4 percent in April. But in Western Europe as a whole it sold 29,900 units, 1.4 percent down from last year. The car producer’s expectations regarding its performance over the whole year of 2013 are “basically positive” with regards to launching eight new or re-adjusted models, the company added. The central European economy shrank by a much larger-than-expected 0.8 percent in the first quarter of 2013, preliminary data showed on Wednesday, as exports have ceased to prop up growth. Reuters

ational flags on public buildings are flown at half-staff on Thursday to honor three Georgian soldiers killed in the May 13 insurgent attack on an outpost in Shir Ghazay, Helmand province in Afghanistan. Master Sergeant Zviad Davitadze, 33; Corporal Aleksandre Kvitssinadze, 26, and Corporal Vladimer Shanava, 24, served with the 42nd battalion from the fourth infantry brigade. The bodies of the three men were flown back to Georgia by U.S. air force aircraft on Thursday.

HEROES

caucasian business week

May 20, 2013 #05

BODIES OF THREE GEORGIAN SOLDIERS KILLED IN AFGHANISTAN FLOWN HOME Defense Minister Irakli Alasania and Georgian army commanders, as well as fallen soldiers’ family members were in the Tbilisi airport attending repatriation ceremony; U.S. charge d’affaires Bridget Brink and head of NATO Liaison Office in Georgia William Lahue were also present. Earlier on Thursday Defense Minister visited the fourth army brigade’s base in Vaziani outside Tbilisi, where he told soldiers that the Georgian servicemen, killed in the May 13 attack in Afghanistan, “sacrificed their lives for the future of

our country.” Public service for fallen soldiers will be held in the Kashueti Orthodox church in downtown Tbilisi on Thursday evening. The recent incident brought total death toll of the Georgian soldiers in the ISAF mission to 22; at least 113 Georgian soldiers were wounded in Afghanistan. Georgia has over 1,560 soldiers in Afghanistan making the country the largest non-NATO troop contributor to the ISAF mission. Georgia’s first contribution to the Afghan opera-

tion came in 2004 when 50 soldiers were briefly deployed in the country under the German command as part of ensuring security during the presidential elections. In November, 2009 Georgia deployed 173 soldiers in Kabul under the French command and in following year Georgia increased presence in Afghanistan by sending an infantry battalion in the Helmand province serving along with the U.S. marines and Georgia sent one more battalion to the Helmand province in autumn, 2012. Civil.ge

May 20, 2013 #05

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 12 T. Tabidze St. Tbilisi Tel: 55 03 20, Fax: 25 12 26 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

TBILISI GUIDE

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: Chavchavadze Ave. 39a 0162 Tbilisi Tel: 225-06-19, 225-06-20, 225-06-21 Fax: 225-06-22 e-mail: tpapuashvili@adb.org; www.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

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

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

For Sale 550000 $ / 846 $ m² Space 650 sq.m Land 150 sq.m Address Tbilisi, Vake-Saburtalo, Saburtalo, Sairme hill Phone 595008000 All floors: 4 Room(s): 12

Price: 2.950.000$ Business center Total Space: 3000 sq.m. Home conditions: New building Renovation: Newly renovated Adress: , Tbilisi, Vake-Saburtalo, Didi digomi, Agmashenebeli alley Telephone: 2333560; 599363399

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

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caucasian business week

May 20, 2013 #05