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June 2, 2014 #56

June 2, 2014, Issue 56

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georgia WB issues $50 million for Georgia’s agro-development

he Board of WB Executive Directors approved a decision on financing Georgia’s irrigation and land market development by the International Development Association in the amount of $50 million.

Angela Merkel Meets with Georgian, Moldovan and Ukrainian Prime Ministers

Pg. 2

IMF Considers Georgia’s Public Debt Volume as Acceptable

Pg. 2

Kohl & Partner will study development opportunities of Tskaltubo resort

ompany Kohl & Partner will study development opportunities for Tskaltubo resort. Partnership Fund already singed respective contract with international company Kohl & Partner. Pg. 6

Pg. 6

Goodwill Creditors Accuse Rehabilitation Manager of Machinations

cis Russia, Belarus, Kazakhstan sign ‘epoch’ Eurasian Economic Union

ussia, Belarus, and Kazakhstan signed the historic Eurasian Economic Union which will come into effect in January 2015.

Pg. 10

Azerbaijan SOCAR expanded its filling station network in Romania

he State Oil Company of Azerbaijan (SOCAR) continues to expand its business in Romania. Pg. 11

WORLD NEWS China fines Johnson & Johnson, other firms for price fixing

ohnson & Johnson, Bausch & Lomb Inc and other major producers have been fined more than 19 million yuan ($3.04 million) for fixing prices in China’s eye glass and contact lens market, Reuters reported. Pg. 13

Shalva Fifia: Farmers will Receive 46 million GEL Loans under State Program Pg. 4

Wissol is Unpopular in Kutaisi

Businessman Soso Pkhakadze Confirms that “Wissol” Refused to Fund FC “Torpedo”

oso Pkhakadze, Chairman of the Supervisory Board of JSC Wissol Petroleum Georgia, exclusively confirmes in a conversation with radio “Commersant “ that he refuses to fund the FC ”Kutaisi - Torpedo”. The businessman says that at the time they informed the Ministry of Economy about this decision, as there were issues due to which “Wissol” can’t own the football club. Pkhakadze names relations with large financial institutions as a reason. According to Pkhakadze, at the request of these institutions, the company must deal directly with their busi-

ness because the company’s non-profile business is not acceptable for them. The first time it was reported that “Wissol” refused to fund the FC “Torpedo” in December last year. The company received the base of the club as investment commitments from the state for a symbolic price of 1 GEL in 2010. Investment commitment was designed for 7 years, but “Wissol” claims that more money than planned was invested in “Torpedo”. According to media reports, the government will re-register the club and after the local elections the new composition of the City Council will approve the club’s new budget.

Pg. 5

Levan Bezhashvili: “ We have to convince locals in importance of Khudoni Project” Pg. 8

Kakha Bendukidze: Ukraine is in a Grave Crisis, Default is a Very Mild WordPg. 4

main events caucasian business week

Merkel Meets PMs of Georgia, Moldova, Ukraine

erman Chancellor Angela Merkel met Prime Ministers of Moldova, Georgia and Ukraine in Berlin on Wednesday evening. Merkel discussed situation in the region, particularly in the context of developments in Ukraine, over dinner with Iurie Leanca of Moldova, Irakli Garibashvili of Georgia and Arseniy Yatsenyuk of Ukraine. Standing alongside the three PMs, Merkel said that Association Agreements, which Georgia and Moldova will sign on June 27 and political part of which has been signed with Ukraine, will help these countries with their aspiration to have closer ties with the EU. The Georgian PM said that his country has proved “its commitment to the European path with successful implementation of democratic reforms and modernization of our society in line with the European norms and standards.” PM Garibashvili will again meet Chancellor Merkel in Berlin on June 2 as part of his planned official visit. Bilateral relations, as well as relations with the EU and situation in the region and in Ukraine will be discussed, Chancellor Merkel’s spokesman Steffen Seibert said on May 28.

PM Garibashvili also said that Georgia stands firm “to irreversibly follow the European integration course, which is the cornerstone of our foreign as well as domestic policy.” “We should respond adequately to new challenges in the region,” he said. “Our country has proved over the past two years that we are absolutely constructive and predictable government. We have constructive dialogue with our neighbors. We have managed to strike a perfect balance.” “We are ready to successfully implement priorities of our European integration in order to build together with the European Union our common future in the European family,” the Georgian PM added. PMs of Georgia, Moldova and Ukraine will participate in a ceremony of awarding President of the European Council, Herman Van Rompuy, with Charlemagne Prize for his public service on May 29 in Aachen. “The fact that the German Chancellor has invited the Georgian Prime Minister twice in a short period of time, speaks about a huge support demonstrated by the German leadership towards Georgia,” Lado Chanturia, Georgia’s ambassador to Germany, said. “Cooperation with Germany has intensified very much in almost all the fields.”

Chinese companies keen on investing in Georgia

hinese companies are interested in the implementation of major infrastructure projects in Georgia. The construction of a hydro power plant and a port was discussed at the meeting of Georgia’s Deputy Minister of Economy and Sustainable Development, Ketevan Bochorishvili with Vice President of China’s Harbin Electric Group company and representatives of the China Harbour Engeneering company. Moreover, the Harbin Electric Corporation company expressed interest in the solid waste treatment project and co-financing of major infrastructure projects.

Harbin Electric Corporation is one of the largest companies in China, which produces equipment for power plants. The company’s annual income is $3.36 billion. The China Harbour Engeneering company has over 60 branches in around 80 countries. It mainly operates in the spheres of transport, road and bridge construction. The Chinese investors have visited Georgia at the invitation of the ministry. During the two-day visit, the Chinese investors are expected to meet with the heads of the country’s Partnership Fund and the Co-Investment Fund.

Russian markets open to Georgian products

ussia has permitted imports of Georgian vegetables and fruits into its markets- products with high phytosanitary risk. “The Russian Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor) reported that imports of vegetables, fruit, berries and potatoes from Georgia are resumed since May 26,” the Georgian ministry reported. It went on to added that the products have phytosanitary and re-export certificates from the Georgian Agriculture Ministry’s National Food Agency. Russia banned agriculture supplies from Georgia in 2006 due to quality issues. The brief war between the two countries in 2008 led to the restriction of trade relations.

Exports of Georgian wine and mineral water to the Russian market were resumed in May 2013. Later the Russian market were allowed to import tea and bay leaves from Georgia. In autumn 2013 imports of Georgian citrus, nuts, greens and some fruits were resumed. Georgian Agriculture Minister Shalva Pipia welcomed the Russian side decision. “This was another result of the talks we started with Rosselkhoznadzor in 2013,” he said. The export of Georgian goods to the Russian market increased by two times in 2013. Russia bought almost half of all wine exported by Georgia in 2013. The reopening of the Russian market to Georgia’s goods helps it to increase its local agriculture, alcoholic and non- alcoholic beverage production.

IMF predicts 5 pct economic growth for Georgia

eorgia’s economic growth will reach five percent in 2014 despite external risks. Resident Representative of the International Monetary Fund (IMF) in the South Caucasus Azim Sadikov made the remark talking to local media. Sadikov said the economic growth has started in the fourth quarter of 2013, which led to big budget spending. “Also, the National Bank has conducted a reasonable monetary policy,” he noted. Speaking about the inflation rate, Sadikov said the rate will reach six percent by the end of the

year. “But there are external risks, which may impact on the economy. In particular, the RussianUkrainian political crisis and slower growth of the Turkish economy,” he said. “Money transfers from these two countries account for half of all transfers of Georgia, which is 10 percent of GDP.” The Georgian government expects a five percent GDP growth in 2014. The economic growth was 3.6 percent in 2013. IMF executive director for Dutch and Belgium group of countries Menno Snel recently expressed confidence that Georgia will reach planned economic growth indicator as all the prerequisites exist in this regard.

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June 2, 2014 #56

Georgia, Iran keen on intensifying bilateral co-op

eorgia and Iran are interested in deepening bilateral cooperation in a range of sectors. The intensifying current bilateral ties were mulled as Georgian President Giorgi Margvelashvili met with Iranian Ambassador to Georgia Abbas Talebifar. The sides expressed their desire to expand cooperation in the economic and political directions, the presidential administration reported. The sides also focused on Georgia’s geopolitical position and its role in stimulation of the regional cooperation. Talebifar invited Margvelashvili to visit Iran on behalf of the Iranian President, noting that the visit will contribute to the deepening of the coop-

eration between Georgia and Iran. Georgia and Iran established diplomatic relations in 1992.

Alasania: By partnership with Azerbaijan and Turkey Georgia will be able to make a significant contribution in providing energy security of Europe

y partnership with Azerbaijan and Turkey Georgia will be able to make a significant contribution in providing energy security of Europe. Georgia has the geopolitical location, which gives opportunity along with Azerbaijan and Turkey provide energy security of Europe”, - Minister of Defense of Georgia Irakli Alasania stated in his speech on the energy

security conference in Germany. Day.az reports that in his speech Alasania also talked about the necessity of stability and security maintenance in the region. “We talked about achievements of Georgia during recent years, quick formation of the state structures, judicial reforms and readiness of Georgia to sign Association Agreement. It’s all what approaches us to Europe”, - Alasania stated.

Georgia’s EU integration mulled in Washington

eorgian Foreign Minister Maia Panjikidze within her official visit to Washington met with U.S. Deputy Secretary of State William Burns. The two sides discussed a wide range of bilateral cooperation, the ministry reported. The meeting was focused on the regional situation. The sides discussed the issues related to Georgia’s European and Euro-Atlantic integration, the prospects of enactment of the free trade area with the EU and the dynamics of Georgia’s

EU-integration. During the visit, Panjikidze also met with Assistant Secretary of State Victoria Nuland, with whom she discussed various issues concerning co-operation between Georgia and the U.S. The sides also discussed the process of Georgia’s European integration and the progress Georgia has made in this regard, as well as the upcoming signing of its Association Agreement with the EU. The signing of the association agreement between Georgia and EU scheduled for June 27.

WB issues $50 million for Georgia’s agro-development

he Board of WB Executive Directors approved a decision on financing Georgia’s irrigation and land market development by the International Development Association in the amount of $50 million. The project aims to develop irrigation and drainage systems in specific regions of Georgia, as well as improve the policy and procedures that are the foundation of a national land registration program, the Georgian office of the World Bank reported. The project has three components, namely, improving irrigation and drainage systems, land market development and project management. As a result of the project implementation, around 31,000 families living in villages and cultivating 26,000 hectares of land, will get benefit by increasing the productivity. Moreover, approximately 19,000 families, who have unregistered agricultural land plots in the pilot areas chosen for the land registration, will take advantage of the improved rules and procedures as part of the project. They will also be provided with an opportunity to register their

land plots. The project helps reduce the difference in terms of revenue growth and will contribute to the implementation of two main objectives of the World Bank - to reduce poverty and increase the general well-being, World Bank Country Director for the South Caucasus Henry Kerala said. “This will be achieved by increasing the productivity of farms, most of which relates to 40 percent of the poorest part of the Georgian population,” he stressed.

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June 2, 2014 #56

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Dear Caucasian Business Week Readers,

e are pleased to inform you that we are now at an advanced stage of preparing the Caucasus Healthcare Infrastructure & Pharmaceutical Summit, set to take place in Tbilisi on 18 and 19 June 2014. Euroconvention Global is delighted to invite you and your colleagues to take actively part into this conference and exhibition. An opportunity to get first hand information from policy makers and other private sector decision makers on recent development and opportunities in the sector. Networking time to enable one-to-one business to be initiated or contracted has been built into the program as well. Your peers and other key players in the healthcare infrastructure, medical technology and pharmaceutical industries will be attending, along with investors, banks, consultants, legal advisers, designers and constructors. A 2-day unique update on the Caucasus healthcare industry Healthcare policy makers, European professional associations, pharmaceutical regulators, International Financial Institutions and a select number of private sector speakers will participate in the various panel sessions, covering topics such as: 1. Overview of the healthcare sector in the Caucasus - reforming, innovating, investing 2. Pharmaceutical market - further growth, export, R&D, capital investment 3. Legal and regulatory environment for the pharma industry - status and best practices 4. Hospital build & sustainable healthcare delivery services - project finance & growing role of PPP 5. Advanced medical technology, innovative equipment and e-health solutions 6. Financing of the healthcare in the Caucasus and sustainability of health program 7. New opportunities for the insurance sector 8. Long term opportunities for investors in the new health projects Early Bird discount for registrations currently available! The detailed agenda and registration form are available upon your written inquiry to: administration@euroconventionglobal.com As CBW Readers, please note that you are benefitting from a 20% discount on all registrations and corporate packages. Simply quote â&#x20AC;&#x2DC;CBW-CHSâ&#x20AC;&#x2122; to apply the discount. Sponsorship, speaking opportunities and exhibiting at the Summit The Georgia, Azerbaijan and Armenia healthcare markets are offering significant business development opportunities. If you consider having a pro-active participation in the Summit, this unique industry gathering for the Caucasus will provide your company with an excellent occasion to raise your profile, to highlight your expertise or to showcase your product/service. Please ask for sponsorship/corporate packages available and I will be at your attention for any further clarification or to tailor together a package in line with your budget. We can speak at your earliest convenience to discuss the best format of presence for your company, whether you are interested in delegate registration(s), a speaking slot in the program, logo branding, a display stand space in the Summit foyer, etc. I look forward to hearing from you. Kind regards, Francis Smith Event Director Euroconvention Global; Avenue du Perou 84; 1000 Brussels - Belgium; Tel.: +32 2 662 16 12

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June 2, 2014 #56

Agriculture Minister: Farmers will Receive 46 million GEL Loans under State Program

An interview with Minister of Agriculture Shalva Pipia - Budget of the program “Produce in Georgia” amounts to 46 million GEL , of which 30 million will be spent on projects in agriculture, 16 million - on the industry. Based on whatconsiderations priorities were set? - I can say that as a result of the projects carried out in agriculture, interest in the sector has grown. As for the program, 46 million is only part of the funds – it’s mainly the state’s share in the repayment of interest on loans, which will be

issued to owners. In general, the program portfolio is much larger. - How does the government intend to help business? - Three types of assistance will be provided - financial, technical and infrastructural. From a financial point of view, the state is obliged to cover a large part of the interest of concessional loans amounting to 600 000 - 2 million GEL that businessmen will be able to take in the bank . The Ministry of Agriculture is already implementing such programs and projects amounting to 600 thousand GEL are already funded under the agro-lending program. Commercial banks also participate in it and issue loans on favorable terms and for fairly long-term. The state’s role in this project is to pay most of the interest on the loan. As for technical assistance, we will help businessmen to conduct their affairs properly. With regard to infrastructure, state property - land, separate buildings- will be transferred to the farmers free ofcharge, if businessmen can convincingly explain how they intend to use it. More than 100 objects have been selected across Georgia, which can be transferred for the implementation of specific projects with the proviso

that they will carry out the investment. It is also important that while receiving a bank loan, businessmen have to provide them a guarantee , and the government will help them in this providing guarantees by 30% to banks. It is very important for start-ups . It is from a financial point of view, many experts believe that the program will enable the development of large businesses while small and medium enterprises, especially start-ups, shouldn’t expect anything. We have no restrictions as to who can participate in the program. Any businessman will be able to get a loan if he presents realistic business plan. I do not see the tragedy in the fact that representatives of big business will participate in the program. Our goal is to create businesses that will be able to produce competitive products . - Will the state help entrepreneurs with innovative technologies? - Technical assistance covers a large part of the program, and this means that in the frames of projects new methods and innovations will be introduced. Unfortunately, primitive business is developed in Georgia, but the government wants to introduce new technologies in the country and

produce more competitive products. Especially in a time when in a month Georgia will sign an Association Agreement with the EU, which will enable Georgian manufacturers to export products to Europe without any barriers. - The project includes the industries that are declared priorities in different regions. Does this mean that the state will decide what enterprises will be created in regions? - We are talking about the main directions the development of which has great potential. With regard to processing plants, we deliberately put emphasis on them, as Georgia suffers from a lack of processing enterprises. Just these enterprises will give business the opportunity to develop and produce quality products. - Your opponents accuse the government in violating the antitrust laws and providing individual companies with benefits in the form of soft loans and donation of land and other facilities. Doyou agree with such views? - The state helps business only in a specific period of its formation, but during operation they will work as everyone else. Additionally, existing businesses can take advantage of the program in order to expand and to receive apreferential loan.

Kakha Bendukidze: Ukraine is in a Grave Crisis, Default is a Very Mild Word

kraine is in a grave crisis, a default - it is too light word. The new Ukrainian President’s adviser Kakha Bendukidze said in an interview with pravda.com.ua. “The advisory group was created upon the initiative of the Canadian government . The group consists of two Canadian professors of Ukrainian origin , two American economist- professors and me, as a practician. Our task is to discuss what is happening and give monthly strategic advice ,”- Bendukidze says. Bendukidze mentions his meeting with the Minister of Finance – “ I am very happy because I saw a very adequate understanding of the situation and problems. And the

man calls a spade a spade”. “Again, I repeat what I said many times - Ukraine is in a very serious condition. Default it is too mild word. As for the economy, as a whole in Ukraine we are seeing a set of these bad things that “ are not quite compatible with life “ of the patient , in the language of physicians. No, I’m talking about the fact that the patient is in a terrible state. But what is good ? Maidan . This means that people do not want to go on living like this. But one thing I can say for sure: if you do not carry out reforms, the country will not be. If you carry out reforms, there is a chance to save Ukraine within its present borders. Inaction equals death, the action can save with

some probability, and the choice is in general for people and for the elite. We need to do a lot of things at once”. In his words, there are reforms that are painful for the majority - the destruction of energy subsidies, although they can be replaced by direct cash subsidies to people, monetization of this business, and a pain will not be so strong, though it still will be . And, of course , the gas reform that will affect almost all , 80 % of the population. He notes that bureaucracy should be drastically reduced – this is a reform , which is very important for normal life. This reform will hurt only bureaucrats. There are lot of them, but ordinary people do not suffer from the fact that the bureau-

cracy disappears. According to him, major reforms are a subsidy for gas, fiscal reform, a global de-bureaucratization , reduction of officialdom in general. “And another very important not even reform but super- reform - this is what is called a power unit, and it is also economic reform, believe me”, Bendukidze adds. “If you dismiss the militia and collect, maybe three times less, but workable, effective, I think nobody will become bandit. Georgia is in this sense a unique example. I think if Ukraine is able to repeat this example , but I see that it can be repeated here, then success is guaranteed to a great extent”- he says.

Apart from Georgian Honey, Korean Businessman Plans to Export the Svan Salt to Korea

Why a Korean businessman starts a new business in Georgia, where he lost 8.5 million - David Park Shel Ho exclusively talks with commersant.ge on this topic

- As far as I know, at this stage you export the honey produced by “Meputkre” company. In general, why are you interested in doing business in Georgia? - My business story in Georgia started long ago. Before honey export, I passed a long way. I came to Georgia in 2008 and invested 8.5 million USD - I established the construction company. The project envisaged the construction of a residential building in Tbilisi. But I’ve lost everything. Nika Kvezereli (representative of the special forces detachment’ Omega ‘) and Nana Esakia deceived me. I did business with them, but they took away everything. As far as I know, Gigi Ugulava and Mamuka Akhvlediani were behind this. After I applied the Prosecutor’s Office , put President Saakashvili in the course of the case, but in vain. The property was sold at auction. After the change of power in Georgia, I appealed to the Chancellery of Government of Georgia, I met with Bidzina Ivanishvili , the latter promised to help, but to no avail. I’m waiting and hope for the best. - Do you have hope for the return of property ?

- Of course I do not lose hope and go ahead - I am working on new projects. In 2012 I started to work with the Korean tourism administration and in 2013 opened “Gold” travel company in Georgia. - After your property was deprived, weren’t you afraid to start a new business in Georgia? - Despite the fact that I lost everything, I still love Georgia. When I opened the tourist company I called two big Korean broadcasting companies to shoot a documentary film about your country and show it in Korea. This idea proved itself, the Koreans’ interest to your country is increasing every year . - Don’t you have statistics, on average, how many Korean tourists visit Georgia per year ? - The number is increasing every year. In 2008, there were 500 visitors , in 2009 – 1 000 , last year- 2 000 people. This year we expect 5 000 tourists. An average of 20 people arrive in Georgia a day. “Backpacks” travelers and rich people come to your country. Georgia has very good natural conditions - the air, the climate. Here only the air is the wealth. Also you have wonderful wine, peppers, cucumbers, tomatoes and honey. - Why are you interested in the export of honey ? - South Korea is a big market for honey. Koreans consume 25- 30 thousand tons of honey during the year, of which at least 4 000 tons are imported. I give Georgian honey produced by “Meputkre” company to all tourists who come here in a package specially designed for the Korean market and they like it.

- Is that why you started exporting? - Of course. I think that it is a very good product for health. People in Georgia are poor, I would like to open the plant and employ the Georgians. It will be a honey processing plant. I know a lot of people in Korea interested in Georgian honey, including, the influential Korean businessman. He is a very rich man and close to the Korean government structures. I’m holding talks with this businessman. At this moment, we are exporting chestnut honey, which will be sold in the Korean market under the name “Gold Honey “. In addition, the Korean government has a very strict system of testing and bureaucratic barriers. - Compared to European countries, are these regulations softer or tougher? - Exactly as strict as in Europe. It is difficult to get to the Korean market and the entry of Georgian honey into the Korean market speaks of its high quality. - What will be the price of honey in the Korean market? - You will be surprised, but this product that costs on average 7-10 GEL in supermarkets, will be sold for 100 USD in Korea. This is due to our tax system, for example, the VAT is too high ... - You have been working in Georgia for many years, how would you assess the business environment and doing business during the previous government and now? - One we should know : There are good and bad people in every country . But I will say that it is better now. - Are you going to start exporting other products

to Korea? - In the near future I will export other products as well. First of all, the Svan salt. - Have you chosen the company, whose salt you will export? -No, we are still choosing a company. Tourists, who come here, are in awe of the Svan salt. Koreans love salt, they eat everything salty. In addition, in the future, I think to export mineral water “Borjomi “. Negotiations are underway with the company. We also want to export lemonade and beer. When tourists arrive in Georgia and taste Georgian beer, they tell me that it’s better than German. That’s why I think that export of the Georgian beer to Korea will succeed. Georgian honey will be sold in upscale stores of Korea. If honey export succeeds, other products will enter the Korean market without any problem. Georgian honey in some extent is the country’s image. - Does Georgian Embassy assist with exporting products? - No. - You mentioned big taxes in Korea , wasn’t you interested in the Georgian market because of relatively liberal tax environment ? Could you compare tax environment in Korea and Georgia, where doing business is easier? - Georgia has a very good tax system. Imports are taxed, but the export is free, which is very good.The Korean government has a protectionist policy towards its own honey producing companies, that is why there are such high taxes. I believe that the Georgian honey will be popular in Korea.

June 2, 2014 #56

business & economy caucasian business week

Goodwill Creditors Accuse Rehabilitation Manager of Machinations

G Heidelberg Cement opened modernized plant in Rustavi

ice Premier of Georgia, Minsiter of Economy and Sustainable Development George Kvirikashvili and director general of Heidelberg Cement Michael Hampel opened a new modernized plant of Heidelberg Cement on Wednesday. Separator of last generation was launched in the plant, which will promote improvement of the quality and assortment of cement. The company made investment of 4 million GEL for the installation of the plant separator. Its construction started in 2013 and completed in a year. “The separator recently installed in the plant gives opportunity to get the cement of the fraction, analogue of which currently does not exist in Georgia. It’s a really German quality used in the infrastructural construction of the special sustainability. It’s very important that the company implements whole industrial chain in Georgia, from obtaining of the raw materials to the separation, and 1200 persons work in this system. In the whole, including adjacent enterprises, Heidelberg Cement has employed 5000 persons, which is very important. Opening of the similar separator is planned in the city Poti and we think that complete production of the cement with this quality fully corresponds to our infrastructural development plans”, - George Kvirikashvili stated.

Sales and Marketing director of Heidelberg Cement Irakli Makharoblidze said that the company owes several plants in Georgia, which means that they can supply cement of any quality o consumers throughout the country, in any region. The company follows to the modern world challenges in the industry and is ready for any order or requirement. In June in Berlin manager council of Heidelberg Cement will announce future strategy on the investment projects planned in Georgia. After the opening ceremony of Rustavi plant “Second Conference of the Heidelberg Cement Quality” was held in the hotel Sheraton Metekhi Palace. Minister of Economy and Sustainable Development of Georgia George Kvirikashvili, also representatives of Ministry of Energy, leading construction companies, international experts and quality managers attended it. On the conference representatives of Heidelberg Cement made presentations and introduced the technologies to the participants, through which the company produces high quality concrete and cement. George Kvirikashvili addressed with the welcome speech to the conference guests and mentioned that Heidelberg Cement has successfully operated on Georgia market over years and is distinguished with high quality products, which is very important for infrastructural projects development of the country.

Business Ombudsman’s Office Effectively Helps Affected Businesses, Says Ombudsman

usiness ombudsman makes explanations about the problems faced by business in a conversation with “Commersant”. George Gakharia says that formal legal side of all

cases filed by the businessmen affected during the previous government is completed. According to the Ombudsman, in cases where the court decision is made and the legal side is closed, the Ombudsman has no jurisdiction to interfere. Gakharia notes that the only thing they can offer is consultations and a hint of what would be an effective way to solve the problem. In his words, legal side has been finished or legal proceedings are underway in all the cases where businessmen demand the return of property. As for other types of appeals, Gakharia says that the applications mainly relate to tax and customs issues, competition, property protection and licensing. He adds that according to the estimated data, 48-49 % of the cases filed in the Ombudsman’s Office have been decided positively. When it comes to the outcomes of business ombudsman’s work for one year, George Gakharia will present a special report to Parliament after the elections.

April Records 25.5% downturn in Budget Revenues

n April budget incomes and expenditures reduced. According to Geostat data, in April budget incomes equaled to 531,5 million GEL, which is 182 million or 25.55 less than March data.

AS for expenditures of the state budget, in April spending of 579,8 million GEL has been made from the budget, which is 15,1 million less. It’s noteworthy that last April budget incomes equaled to 494,1 million GEL, expenditures 532,9 million.

oodwill creditors have expressed distrust to David Gvetadze, who is the company rehabilitation manager and PKF-Georgia director. After his appointment, David Gvetadze deliberately concealed important information from us, the creditors noted. A group of the creditors says David Gvetadze has concealed the information from the creditors and the court that he had mortgaged his 50% stake in LLC PKF UBC Service, a founder of PKF Georgia, in JSC TBC Bank that is a Goodwill creditor. He has also concealed that he and his family have got significant credit liabilities to TBC Bank. These facts prove the rehabilitation manager is in direct relation with the Goodwill’s major creditor TBC Bank. This fact comes in fundamental collision with the main principle. Namely, under the law on solvency proceedings, the rehabilitation manager must be completely independent from the rehabilitation process participants, that is, he must be independent from both the management and creditors. These fact and indifferent activities of Gvetadze on the position of Goodwill rehabilitation manager made the creditors to apply to the court with the demand for firing Gvetadze from the position. According to the TBC Bank’s official statement, if a concrete person is a bank’s client and borrower this factor is not hindrance for an international auditor company with high reputation in implementing the duties of a rehabilitation manager. It seems the reputation of PKF Georgia and its director David Gvetadze is questionable too. According to the public information, PKF UBC Service is an official representative of PKF Internacional in Georgia. David Gvetadze, who is the company founder, holds an 85% stake in the company. At the same time, the company has founded PKF Georgia and David Gvetadze holds a 35% stake in it. As reported, PKF Georgia, as a representative of PKF Internacional, is participat-

ing in the Goodwill rehabilitation process. PKF Georgia and its director David Gvetadze may be also involved in other international scandal as the implementation of parent company’s rights by a subsidiary company will become another disputable issue. Over the issue David Gvetadze promised to make comments after consultations with lawyers. One more important detail. Recently, on May 8, 2014 David Gvetadze applied to the business registry to add changes about sales of his 50% stake in PKF UBC Service (mortgaged in TBC Bank) to the company staff at 5000 GEL. The business registry has not registered this change because of technical reasons. Goodwill creditors note Gvetadze took this step to cheat the creditors and the court to hide he is in direct relation with TBC Bank.

Georgian Manufacturers Expect New Russian Embargo

ushroom -producing company “White hat “ will start export to Dubai in the near future. “Commersant” was told by the company’s Director Vano Ioseliani. He says that negotiations are still in progress and the company will begin exporting as soon as transport issue is resolved. The company planned to carry out export to Russia , but Ioseliani notes that the issue is deliberately delayed. According to the businessman, it has been reported that after the signing of the Association Agreement with the European Union, Russia may impose an embargo on Georgian products. “White Hat” products have been exported to Armenia

since the autumn of 2013. The company produces three kinds of mushrooms, the price in Georgia makes 4 – 7 GEL. As we reported, part of Georgian wine producers thinks about reduction of export to Russia due to possible risks. They say they do not want to be dependent largely on one market. According to one of the founders of “ Tbilvino” Zurab Margvealshvili, 25 percent of its products the company sells in Russia, and due to high political risks, does not plan to increase a volume. Next year German - Georgian wine company “Schuchmann Wine” will also reduce exports to the Russian market.

Bio-Bio to Open New Stores by End of 2014

hicken producer “ Chirina “ presented on the market under “Bio – Bio” trademark plans to open 20 brand booths by the end of the year. According to the company’s marketing manager Marita Genebashvili , at the stage “Bio- Bio” 7 booths are working in the capital , but the demand on crude production is so great that this number of booths is not enough to meet the needs of consumers Manager notes that “Bio - bio” has established its place in the local market and importers are forced to sell products at more competitive prices. She adds that consumers can easily notice the reduction in the cost of chicken products, as a result, consumption of chicken products has significantly increased.

“1 kg of chicken costs 5.50 GEL in our kiosks and fillet - 8 GEL, which is an unprecedented price for the crude products, “- Genebeshvili notes. In her words, the company’s 6 broiler farms (12 poultries) are functioning at this point. “Chirina” plans to increase the number of farms.

business

caucasian business week

Geocell and Microsoft offer an attractive solution for business development

eocell and Microsoft signed memorandum of understanding on joint solution, which provides a full set of solutions to mobilize small businesses and increase their efficiency Geocell – a connecting hub between business and virtual space of cloud services From now on Geocell corporate subscribers being small and medium entrepreneurs are offered a joint service by Geocell and Microsoft in order to run an easy solution of all office management issues for their business. Enjoy more freedom with Microsoft Office. The integrated offer of Geocell services (mobile devise with mobile internet and calling availabilities) and Microsoft Office 365 give possibility to Geocell corporate customers to stay up-to-date

when sharing emails, documents and calendars with clients and colleagues alike. It’s the perfect business partner. It’s cloud-based, so it gives you the tools you need to work almost wherever, whenever and on whatever device you want without local installation. So with this solution one has the possibility to save, modify and share files online, as well as to synchronize devices, mail system and services. Microsoft offering its safe, licensed services, will help entrepreneurs run a secure and reliable business without any worries and risks related to using unlicensed software. Geocell and Microsoft joint project aims to support healthy growth of small and medium sized companies by helping them to have basic technological services with great opportunities.

New Head of BP Georgia Talks about the Shah Deniz 2 Project

n May 15, ISET hosted Chris Schlueter, the new head of BP Georgia. Mr. Schlueter presented the new Shah Deniz 2 gas pipeline project, underlining its importance for Georgia and Europe and outlining the challenges facing the project. A short video was used to introduce the project. A 45 bln USD investment, the pipeline is supposed to transit gas from the Shah Deniz gas field in Azerbaijan to Europe through Georgia. A total of seven states, eleven companies and eleven gas suppliers are involved in the project. The route consists of three main parts: the South Caucasus Pipeline Expansion (TSPX) will be built through Georgia and this will be further expanded by the

Trans Anatolian Pipeline (TANAP) and the Trans Adriatic Pipeline (TAP), which will guarantee gas supply to Europe. Georgia will get financial, political and economic benefits from the new pipeline. Expected capital expenditure on the TSPX project is 2 bln USD and 20% of resources will be devoted to Georgian suppliers. In addition, about 2,000 workers will be employed during the peak construction phase and about 125 people will get long-term jobs. TCPX is expected to become operational by 2018. The EU, which is trying to diversify its gas supply, will need more gas in future as gas production within the region is expected to decline while an increase in demand is predicted.

June 2, 2014 #56

IMF Considers Georgia’s Public Debt Volume as Acceptable

MF resident representative in Georgia evaluates the country’s economic growth rate. Azim Sadikov says that Georgia’s economy began to grow in the last quarter of last year as a result of the big budget expenses and prudent credit policies pursued by the central bank. As for the inflation target rate, it will amount to 6% at the end of the year. According to Azim Sadiko, the public debt which is 33-34 % of gross domestic product is not alarming compared to other countries. However, the index of budget deficit is the most important, in the medium term it will not exceed 2.5 %. IMF forecasts economic growth to reach 5% in 2014.

MAF Carrefour Enters Armenian Market and Plans to Expand in Georgia

fter Georgia, “MAF Carrefour” enters the Armenian market . Commersant.ge was told by “MAF Carrefour Georgia” Director General. According to the French Ambassador to Armenia Henry Renault, the French company will bring new culture in Armenia and will work using proven methods that will allow to satisfy Armenian customers.

The diplomat says that service in supermarkets will be offered in the Armenian language and new jobs will be created. As for “Carrefour” plans in Georgia, “MAF Carrefour Georgia” Director General states they plan to expand their network in Georgia. Recall that “Carrefour” hypermarkets are located in the capital in “Tbilisi Mall”, “GTC “ and “Karvasla” shopping centers.

Tegeta Motors Wins Most Part of State Tenders

egeta Motors was the most active supplier to the state organizations last year. State Procurements Agency informs that in 2013 Tegeta Motors obtained 345 contracts and became a leader of 10 most ac-

tive suppliers rating. It’s noteworthy that cumulative value of 345 contracts equaled to 8,2 million GEL. With this data Tegeta Motors ranks 13th in the main suppliers rating. Silknet ranks second in the top-10 list of the active suppliers, Algorithm ranks 3rd. They had signed respectively 194 and 174 contracts last year. As for total value of these contracts - Silknet data is unknown because it did not appear in the top15 list according to the contact value. Algorithm had signed contracts of 18,95 million GEL last year and ranked third in the rating of the main suppliers. Top-10 list of the active suppliers also include My Mobile+ (154), New Moon (149), Geosm (141), Alta (131), PSP Pharma (126), Karz Paper (114) and Elitel (110).

Wizz Air Suspends KutaisiDonetsk Flights

ue to Ukrainian affairs Wizz Air temporarily suspends flights from Kutaisi International Airports to Donetsk, - Union of Georgia Airports stated. “To provide passenger transportation, from July

21 flights from Kutaisi International Airport to Kiev were added. In particular, air company Wizz Air will have 7 flights/week to Kiev, instead of 5”, - Union of Georgian Airports state and opens that situation in Ukraine will be regulated soon and all flights of Wizz Air will resume.

Kohl & Partner will study development opportunities of Tskaltubo resort

ompany Kohl & Partner will study development opportunities for Tskaltubo resort. Partnership Fund already singed respective contract with international company Kohl & Partner. “The research will be completed in several months and by the fall we’ll know what we can do for development of Tskaltubo, - “ Executive director of Partnership Fund stated on the signing ceremony. Irakli Kovzanadze said that the research techni-

cal-economy analysis, possible development of the actives that belong to the state, technical research of the natural actives, settlement and infrastructural renovation plan of the resort complex. It’s noteworthy that Tskaltubo resort is famous for Thermal-Radon water baths and was popular during Soviet period. Partnership Fund informs that Kohl & Partner works mainly for the development of the hotels and tourism and is represented in several European countries, among them in Austria, Germany, Switzerland and Bulgaria.

New Georgian Airline Launches Operation

ista Georgia, which represents Georgian Air Company performing charter flights to African and Asian countries hitherto, submitted application on the regular flights of Minsk-Tbilisi. One of the owners of the air company Jumber Iakobidze informs that flights will start in June. Agreement between Air Transport Department of Republic of Georgia and Civil Aviation State

Committee of Republic of Belorussia made on June 1, 1995 considers parity and appointment only 1 carrier is possible from Georgia. Belavia will be its partner, which provides flights to this direction for several years. Currently Georgian air market is represented by 26 air companies; among them 2 are Georgian ones - Georgian Airways and Vista Georgia. All others are foreign, among then 3 Turkish.

June 2, 2014 #56

Statistics

caucasian business week

hpp

caucasian business week

Vazha Beridze: “It is impossible to develop a country without using its hydro resources”

belong to those people who want to see their country developed, and this cannot be achieved without utilizing the hydro resources” – Vazha Beridze, Economic Expert commented on expediency of constructing Khudoni HPP.. According to him, “large hydro dams are identified as a priority given investments and guaranteed growth of GDP. When the coun-

try’s independence is at stake, on which its future relies, naturally it prevails over arguments of construction opponents” – Vazha Beridze said. He was concerned that the energy independence issue has not become a topic for wide and grounded discussion, especially in the country, where we passed through energy crises. We should be able to analyze threats better. The expert indicated about passive position of the government: “It is a weakness of the government that it is unable to convey even its beneficial intentions to the public. The state should be working on the energy policy.” He noted that the issue of saving the region needs to be introduced to the public since project allows to construct model villages there. These villages will not force Svaneti population to move to lowland and living in Svaneti is going to become attractive for population of the other regions. The expert sees the problem not only in insufficient activity of the government but also in peoples’ mentality, which is far from democracy. Vazha Beridze: “Construction of small HPPs shall continue and the process of utilizing renewable energy sources is to start. However, large dams are more attractive both for energy stability of the country and for investors.”

Emzar Jgerenaya: “Implementation of Khudoni Project will support investments to the energy sector”

hudoni type projects are accompanied with controversial opinions in all countries” – Emzar Jgerenaya, economic expert said and brought construction of Euro Tunnel as an example. This project had many opponents however the tunnel connecting France and Great Britain is now on the list of modern world wonders. As Emzar Jgerenaya emphasized construction of Khudoni Project would be important and needed to be implemented. “Khudoni is the project which necessarily needs to be implemented. Its construction will enhance not only the energy independence but also con-

tribute to regional development. In addition, Khudoni is needed by the country’s economy. I talked about this many times and will reiterate it once again, that this project provides for construction of basic power station needed by the country. In conditions of economic growth, after 5 years, Georgia will need 35% more energy and to achieve this capacity we need the second powerful basic HPP”,- Jgerenaya said. According to him by implementing this project investments will flow into the energy sector, additional taxes will get mobilized in local and central budgets and energy export will increase. The expert thinks that talks and fears about “unknown” investors is not serious. The information is open and investors have a representative in the country David Mirtskhulava with whom the information can be verified. Representatives of Trans Electrica Georgia, the investor company, during their visit in Tbilisi noted that the HPP construction would be performed with observance of international standards and that influential international organizations, consultants and experts would be engaged in the project implementation including World Bank. Trans Electrica is planning to invest USD 1.2 billion in Khudoni construction, which will have 702 mwt capacity.

Soso Jachvliani: “If Khudoni Project is important for the state what is to talk about?!”

ow important is Khudoni Project for the country and what its implementation is to bring for the country? These questions were answered by Soso Jachvliani, a Representative of Parliamentary Majority: “When a person goes to war he sacrifices himself for the homeland and for his family. If this project is so important for the country and ensures its energy independence and if you can explain this well to people and convince them then what it is to talk about? If this is so important for our country then I call the government and myself, to come to these people and talk to them and explain what we are going to do. I think I explained it well, we have to take interests of locals into consideration.”

June 2, 2014 #56

Levan Bezhashvili: “ We have to convince locals in importance of Khudoni Project”

hudoni project and the energy sector development are very important for Georgia. Given the plan that Georgia is to increase its industrial capacity and open new enterprises (which is to be an objective for any government and etc.) the country will need new energy resources in parallel with its economic development both for exports and import” – said Levan Bezhashvili a Member of Parliamentary Minority. When talking about importance of Khudoni Project implementation, Levan Bezhashvili, MP and a member of the United National Movement stated: “The government should always be looking for new ways for obtaining energy. Therefore Khudoni HPP is one of the most significant projects. However, the interests and position of locals need to be counted. We have to try, convince them and make them understand those household or cul-

tural heritage related issues that are linked to this particular area where the HPP is to be constructed. That is why the issue requires joint approach and decision making.”

Giorgi Ramishvili: “Khudoni HPP Construction is of Vital Importance “

usinessmen are actively discussing the key role of Khudoni construction in country’s development and emphasize importance of the government’s proactive approach (which at this stage needs to be limited to working with the population). According to Giorgi Ramishvili, a businessman, nobody doubts importance of Khudoni, since it represents one of the guarantees for independence. “Utilization of hydro potential is equal to country’s independence. Impeding factors are excluded if protection of natural resources is considered in the project” – Giorgi Ramishvili stated. The fact that consumption of energy resources is increasing in correlation with economic development is clear for everyone and HPP construction

does not serve emergence of a new export sector only. Businessmen indicate at inevitable energy deficit in 3-4 years. „Generated power will not be sufficient for the growing economy. Import from Russia will get limited since consumption is going to increase there as well. Number of tourists will increase in winter. The similar scenario is expected with Azerbaijan as well, especially as 80% of energy carriers are being imported to the country and Georgia does not have other resources.” – businessman said. Giorgi Ramishvili agrees with his colleagues, economi and highly qualified energy experts who regard non-utilization of hydro resources as obstructing the country’s interests and thinks that such approach is similar to sabotage.

June 2, 2014 #56

Banking news caucasian business week

TBC Bank’s Ratio on Individual Loans Market Constitutes 22.4% by May 1

BC Bank has named the diapason of the price for placing its global depository receipts (GDR) at the London Stock Exchange (LSE) as part of the initial public offering (IPO). According to a TBC Bank press-release, the diapason of each GDR that is equivalent to a TBC Bank share will range from 13 USD to 16 USD. According to the press release, TBC Bank may place a 50% increased capital as part of the IPO. Additional component of about 100 million USD will be also included in the form of secondary shares of the existing shareholders. . “Current shareholders of the bank that plan to of-

fer shares are as follows: IFC, EBRD, DEG, JPMorgan and Ashmore, as well as two individual stakeholders. At the same time, EBRD plans to keep about 10% of the shares in ownership after the IPO. The bank’s founder stakeholders Mamuka Khazaradze and Badri Japaridze and the bank management do not plan to sell their own shares”, the press-release reads. TBC Bank will direct the raised funds to increasing credit portfolios in retail, small and medium sized business sectors. Taking into account the diapason of the offer, the bank capitalization will range from 640.2 million USD to 764.9 million USD. The bank started creating a book and a road-show on May 27 and the process is expected to end on June 5. After that the bank will announce the price and statements. “Coordinators of the TBC Bank placement and the book managers are Barclays and UBS Investment Bank, as well as Renaissance Capital is the book’s manager and Peel Hun is a co-manager”, the press-release says TBC Bank executive director Vakhtang Butskhrikidze says the IPO will enable the bank to keep growing its ration on the market and become a market leader in the target segment.

By May 1 Share of TBC on retail credit market is 22,4%

y May 1 share of TBC Bank on the retail credit market is 22,4% (01/01/2014 -23%). Since the beginning of the year individuals credit portfolio of TBC gas increased by 56 million (5,2 %). By May 1 amount of the retail loans portfolio

stands at 1,124 billion GEL (01/01/14 -1,068 billion). Overall loan portfolio of the bank is 2,706 billion GEL (01/01/14 - 2,786 billion). Credit investment of the commercial banks exceeds to 10,5 billion GEL. Among them individuals loan portfolio is 5,017 billion GEL (01/01/14 -4,7 billion).

Republic organized Pro Bono forum for their business customers in the head office

ne-day interactive Pro Bono forum consisted of the workshops and discussions on various topics, in which the audience was actively involved. Managers of the bank Republic discussed following issued on the forum: strategy, leadership and change management issues, which should ne considered on issuing the credit, macroeconomic situation of Georgia, carrier management and

motivation schemes dispute management and legislation difficulties; digital marketing and social media, information security. Pro Bono is a unique projects devoted to 150th anniversary of the Group Societe Generale. It consists of several components: taking care on the public welfare (into Latin: pro bono public), strengthening of the bank’s consulting role and partnership with clients and promotion of effective business management by knowledge sharing.

BTA completed January-April with 2,6 million GEL loss

SC BTA Bank (Georgia) completed January-April with 2,6 million GEL loss (01/05/13 -1,5 million). By May 1, deposits (without banks’ deposits) equal to 33,3 million GEL (01/05/13-42,2 million GEL), credit portfolio 51,2 million GEL (01/05/13 -78,2 million), overall obligations - 104 million GEL (01/05/13 -101 million).

Bank’s actives stand at 124 million GEL, market share - 0,7% (01/05/13 - 126,6 million, 0,9%). BTA Bank operates since 2001. 49% of the stocks belong to JSC BTA BANK, 51% - to Silk Road Financial Group. Large benefitiaries are Fund Samruk Kazina (39,9%) and George Ramishvili (31,6%). Stock capital of the bank equals to 19,5 million GEL (01/05/13 - 25 million GEL).

Service network of the banking sector has increased by 25 units since the beginning of the year

ervice network of the baking sector has increased by 25 units since the beginning of the year and by May 1 it’s represented by 164 branches and 764 service centers. According to statistics of National Bank, authorized fund of the 21 operating commercial banks on Georgian market equals to 1,137 GEL (01/01/14 -1,054 billion GEL).

Stock capital is 3,06 billion GEL (01/01/14 - 2,9 billion GEL). Foreign capital contribution is in 20 banks; among them 2 are branches of nonresident banks. Financial sector of the country includes 1 107 exchange boxes (01/01/14 - 1 089) and 104 institutes, among the 17 of them are credit unions, 69 - microfinance organizations, 14 - insurance companies (01/01/1415), 5 pension funds and stock exchanges.

Rating of the unprofitable banks

4 Banks out of 21 operating ones completed January-April with loss of the total amount of 7,9 million GEL. By the end of the Q1 loss of these banks equaled to 3,8 million GEL. In the same period 2013 loss of the 7 banks (Ish Bank, Ziraat Bank, Private Bank, Halyk Bank) excluding ProCredit Bank, equaled to 4,6 million GEL. Net profit of the banking sector equals to 25,3 million GEL in April. In March Azerbaijani International Bank, in February Ish Bank excluded from the list of unprofitable banks. Rating of unprofitable banks:

Source: Commercial banks

VTB Bank Launches Unprecedented Installment Loans Campaign

ead of retail business development division of the bank Givi Vadachkoria mentioned on the presentation that specific advantage of the offer is its accessibility. Anyone can purchase any technology of any brand in Smiley network. No documentation is required, the customer is not requested to have income in the bank, all limitations have been removed. Contribution and installment is not required, in fact is for 0%, ap-

proved in 1 minute without loan approval and withdrawal fee. Givi Vadachkoria stated that the minimal requirement is only income of 150 GEL. Besides, sensation of the offer is in its scale. The installment is available for the persons who are in the creditinfo list. Vadachkoria stated that risk is justified for the universal project of 100 000 000 value. In the framework of the co-brand offer, total sales of this value are considered.

Halyk Bank Ends January to April Period with 565 000 GEL Losses

SC Halyk Bank completed January-April with 565 000 GEL profit. In the same period of last year the bank’s loss equaled to 215 thousand GEL. By May 1 credit portfolio of the bank equal to 87 million GEL (01/06/13 -49 million), deposits - 18 million GEL (01/06/13- 5 million), overall obligations - 93,4 million GEL (01/06/13

-50,4 million). Bank’s actives stand at 135 million GEL (01/06/13- 90,3 million), market share - 0,8% (90,3 million; 0,6%). JSC Public Bank of Kazakhstan (Halyk Bank) is a founder of the bank. They got license at the beginning 2008. Overall stock capital of the bank is 41,3 million GEL.

Progress Bank completed January-April with 183 353 GEL loss

SC Progress Bank completed JanuaryApril with 183 353 GEL loss (Q1 2014 - 135 383 GEL). By May 1 deposit portfolio (non-banking) equals to 38,2 million GEL (Q1 2014 37,9 million), loans - 42,1 million GEL (Q1 2014 -40,6 million). Overall obligations are 55.3 million GEL (Q1 2014 - 43,4 million GEL). Overall actives equals to 70,4 million GEL, market share - 0,4% (Q1 2014 -58,6 million, 0,3%).

78% of the bank’s stocks belong to Mike Zoy, which represents the company registered in Cyprus (Limassol). Kaka Kaladze sold control package to WEBION INVESTEMENTS at the end 2013. 22% of the share still belongs to Bidzina Ivanishvili. Ilia Kechakmadze also remains on his position in the management. He is also director of Kala Capital, former owner of 78% share of the bank.

Number of Finca Bank Clients is Over 50 000 Citizens

umber of Finca Bank consumers exceeded to 50 000 (28/05/2014). The bank informs that by the end of the year the management plans network expansion and offer of the new products. Currently 1 promo is on the agro loans, till June 1, with 0% for the loan to 1500 GEL (>1 500 <, proportionally with amount - 3%, 2,5%, 2%). Former micro-finance organization obtained

banking license on August 6, 2013. Hey maintained profile after transformation into the bank. Priority is to provide financial service to the entrepreneurs with low income. The bank is part of Finca Micro-finance Holding. Finca’s partner in the holding are IFC, World Bank Group, KfW Bankengruppe, FMO, German Development Bank, Netherlands Development Bank, responsAbility Global Microfinance Fund, Triple Jump and other international financial organizations.

CIS 10 Russia, Belarus, Kazakhstan sign ‘epoch’ Eurasian Economic Union caucasian business week

ussia, Belarus, and Kazakhstan signed the historic Eurasian Economic Union which will come into effect in January 2015. Cutting down trade barriers and comprising over 170 million people it will be the largest common market in the ex-Soviet sphere. “The just-signed treaty is of epoch-making, historic importance,” Russian President Vladimir Putin said. The troika of countries will cooperate in energy, industry, agriculture, and transport. “In fact, we are shaping the largest common market in the CIS, with huge production, scientific and technological potential and enormous natural resources,” the President added. Citizens of Russia, Belarus, and Kazakhstan will have the right to work freely throughout the member states without having to be issued any special work permits, Putin said.

Over the last three years, trade within the Customs Union has increased by $23 billion, or nearly 50 percent. At the end of 2013, it stood at $66.2 billion. Belarus and Kazakhstan are in third place in foreign trade with the Russian Federation, after the EU and China, Putin said. The Russian leader said that the document brings Russia, Kazakhstan and Belarus to a new level of integration yes lets each individual state fully retain its sovereignty. “We ensure a close and coherent economic collaboration and cooperation. Today we have created a powerful and attractive center of economic development, a large regional market that brings together more than 170 people. Our union has huge reserves of natural resources, including energy, which accounts for one fifth of the world’s gas reserves and 15 percent of oil reserves,” Putin said. “A new geopolitical reality of the 21st century is

Brazilian mining firm enters Kazakh market

razil’s largest mining enterprise, Magnesita will open its office in Kazakhstan as the company seeks to invest in the country, Kazakhstan’s Kaznex Invest national export and investment agency said. Magnesita and Kaznex Invest agency have signed a memorandum on investment cooperation during the 7th Astana Economic Forum, the

agency said. The Brazilian company is interested in creating refractory materials producing enterprise in Kazakhstan. Kaznex Invest will render information and analytical support and assistance in organizing negotiations with government bodies, national companies, development institutions and potential partners. Magnesita management has held meetings with Kazakhstan’s Deputy Prime Minister, Minister of Industry and New Technologies, Aset Isekeshev, management of Kazgeologiya national geological exploration company, Tau-Ken Samruk, Karaganda Invest, Ust-Kamenogorsk titanium magnesium plant and others. Magnesita owns some of the largest and highest quality magnesite deposits in the world with total estimated reserves of about 200 years. The company is the third largest selling supplier of refractory products in the world. The company operates in 28 industrial and mining facilities in Brazil, China, Germany, U.S., France, Belgium, Taiwan and Argentina.

Astana summit to discuss issue of Armenia’s accession to Eurasian Economic Union

t the meeting of the Supreme Eurasian Economic Council, to be held on May 29, the issue of Armenia’s joining to the Eurasian Economic Union (EAEU) will be discussed. As reports “Armenpress”, on May 28, this was told to the reporters in Moscow by the Russian Presidential aide Yury Ushakov. The negotiations are expected to address the practical aspects of the functioning of the Customs Union and the unified economic space, as well as issues relating to further expansion of the composition of Eurasian economic integration, including the accession of Armenia to the Treaty

on the Eurasian Economic Union and the work on the roadmap to adapt the legislation of Kyrgyzstan to the legislation of the Customs Union and the unified economic space” - said Ushakov. “The creation of the Union takes the member countries to a higher integration level. The three countries assume responsibility to guarantee free transit of goods, services, capital and workforce and conduct coordinated policies in key sectors of the economy (energy, industry, agriculture and transport). “The leaders of Russia, Belarus and Kazakhstan plan to sign a treaty on the Eurasian Economic Union, which will take effect on January 1, 2015”.

born,” Kazakh President Nursultan Nazarbayev said shortly after the final treaty was signed by the three leaders. “We see this as an open space and a new bridge between the growing economies of Europe and Asia,”Nazarbayev added. David Gray, head of PricewaterhouseCoopers, Russia, said he hoped improving trade will help boost investment, as in the EU. “If you look at the EU, for example, the reduction of trade barriers within the EU had a significant impact in terms of doing business, which does encourage investment. And I’m looking forward to similar results in terms of the Eurasia deal,” Gray said while speaking to RT at the St. Petersburg Economic Forum on May 24. However, Kazakh President Nazarbayev warned members to try and avoid repeating the mistakes of the European Union, which is still facing grave economic consequences from the continent-wide recession. “The point is that none of the participating countries were subject to de-industrialization, and traditional industries did not suffer. Lessons from the European recession are in this,” Nazarbayev said. Belarusian President Lukashenko hailed the signing, but said there was still major work to be done in areas of bilateral trade. “We believe the Economic Union will be the foundation for the future of political, military, and humanitarian unity,” he said. The Customs Union is a project to gather ex-Soviet states into a free trade zone to rival the European Union. The three member states of Russia, Belarus and Kazakhstan only comprise 2.5 percent to the Earth’s population, but account for 15 percent of the total land. “The geographical position permits us to create transport, logistic routes of not only regional, but

June 2, 2014 #56

also global importance that permits attracting massive trade flows in Europe and Asia,” Putin said ahead of the signing ceremony in Astana, Kazakhstan on Thursday. All member states will retain full state sovereignty. Russia is financing the lion’s share of the administration, but each state will have a one-third voting status. “The Eurasian Economic Union will operate on universal transparent principles understood by all, including standards and principles of the WTO,” Putin said. The idea of creating a regional trading bloc was first suggested by President Nursultan Nazabayev of Kazakhstan back in 1994, when he gave a speech at Moscow State University. The Customs Union began on January 1, 2010, and started operating under a comprehensive customs code in July 2011. Commonwealth Independent States (CIS) like Armenia, Tajikistan, and Kyrgyzstan may be brought into the free trade zone later. Kyrgyzstan plans to join the Customs Union by the end of 2014, President Almazbek Atambayev said at the meeting. A decision on Armenia’s membership will have to be made by July 2014, Kazakhstan’s President Nursultan Nazabayev said. Commenting on the fact Ukraine once wanted to join, Lukashenko said sooner or later, the country’s leadership will realize “where their happiness lies”, and what is “right for the Ukrainian people.” “We lost some [potential member states] along the way. Ukraine started this hard work with us, but it was very difficult for Ukraine,” the Belarusian president said. Neighboring oil-rich Azerbaijan hasn’t made a decisive move towards either the Customs Union or European Union integration.

Yatsenyuk demands $1bn worth of gas ‘stolen’ by Russia in Crimea

ussia owes Ukraine about 2.2 billion cubic meters (bcm) of gas worth around $1 billion, which was “stolen together with Crimea,” self-appointed Ukrainian PM Arseniy Yatsenyuk said Tuesday. “We have no idea what he means,” Reuters quotes Gazprom spokesman Sergei Kupriyanov as saying. Earlier on Tuesday Yatsenyuk said he was waiting for a reply from Russia on his claim 2.2 bcm of natural gas was “stolen” by Russia when it took over the Autonomous Republic of Crimea and consequently local gas supplier Chornomornafrogaz (Black Sea Gas). At Gazprom prices the value of the gas is about $1 billion, Yatsenyuk calculated. If Ukraine and Russia do not agree on a gas settlement by Thursday, May 29, “we’ll meet with Russia’s Gazprom in a Stockholm court,” the self-appointed head of Ukraine’s cabinet said. May 29 is a deadline for a pre-arbitration settlement of the Russia-Ukraine gas dispute. Russia “has so far not done anything to fix the row,” Yatsenyuk insisted. “We are ready to pay for the gas bought. However, in order to pay it’s necessary to sign the documents. We don’t have time,” he said. The comments follow Monday’s meeting between the energy leaders of Russia, Ukraine, and the EU, who tried to find a solution to the dispute. Each party at the energy talks in Berlin have sep-

arate views on the results of the meeting. While Russia’s Energy Minister Aleksandr Novak said the parties agreed on the first $2.5 billion payment to cover Ukraine’s gas debt, the Ukrainian Ministry of Energy Yury Prodan insisted that no specific agreements were reached. He also did not answer whether Ukraine will pay Russia a part of the gas debt this week. “It simply shows the risks that Ukraine won’t pay the gas debt till Friday is remaining,” Gazprom head Aleksey Miller said in an interview to Russia-24 channel. “Hope springs eternal, but following the way the press conference of the Ukrainian Ministry of Energy was held, I suppose everyone has felt that the risks are remaining and the risks are high”. Ukraine says it is ready to pay the gas debt to Russia that has grown to more than $3.5 billion after it confirms the price of further deliveries at $268.5 per thousand cubic meters, Oleksandr Shlapak, the Ukrainian Minister of Finance said. “We are ready to pay after they confirm to us the price of gas in the future. But the proposals which are expressed now: first you pay and then we will start negotiating, don’t suit us,” Shlapak said on Tuesday, Miller said that Russia is ready to reduce the gas price to Ukraine by lifting an export duty. However, it is subject to further negotiations after Ukraine pays at least a part of its multibilliondollar debt.

June 2, 2014 #56

Azerbaijan caucasian business week

SOCAR expanded its filling station network in Romania

he State Oil Company of Azerbaijan (SOCAR) continues to expand its business in Romania. According to SOCAR, the company has opened one more filling station in the country near Romanian-Moldovan border. As a result, SOCAR’s filling station network in

Romania grew up to 28 stations. Earlier, the company announced its plans to invest EUO 50 million in Romania in 2014. During the past 7 years of SOCAR activity in Romania the company invested EUR 50 million and created a network of 27 own petrol stations.

Azerbaijan interested in joint agricultural projects with Europe

zerbaijan is interested in establishing joint ventures with European manufacturers of agricultural machinery, Agriculture Minister Heydar Asadov said on May 22. “Over 470 harvesters and other agricultural machinery have been imported to the country since the beginning of the year. All this machinery was produced in Europe. We are certainly interested not only in the purchase, but also in the production of such agricultural machinery,” he told journalists. Asadov noted the ministry also continues to work over the implementation of the presidential instructions on the further development of the agrarian sector. “We have prepared a package of proposals for the development of agricultural insurance mechanism. We have also prepared a strategy for the development of a number of agricultural sectors that have been traditionally developed in Azerbaijan, such as cotton growing and others. The strategy reflects the current state of various fields, setting the goals and tasks for long term results. Both packages of proposals will be submitted to the head of state within 20 days,” Asadov added. In January-April 2014, the production of Azerbaijan’s agricultural goods amounted to 795.6 million manats, which is 3.3 percent more com-

pared to the same period last year. The agricultural sector is important not only for increasing Azerbaijan’s export potential, but also for restoring and protecting the country’s food security. Protecting the quality and price of food stuff produced in Azerbaijan and producing them in accordance with quality standards are among the top issues of the country’s food security. Azerbaijan is meeting the population’s demands for meat products by 90 percent, poultry meat by 81 percent, eggs by 80 percent, dairy products by 75 percent, vegetable oil by 65 percent, and butter by 50 percent through local production. As a result of the measures conducted in Azerbaijan to ensure food security, the production of husbandry goods has increased by 3.1 times, cattle-breeding by 3.4 times, meat production by 1.6 times, and grain production by 1.4 times in the past 10 years. The outlines of the state policy by 2015 include: to provide a balanced local and regional economic development, to carry out the relevant actions related to the protection of domestic food market from unfair competition, to continue the protection of ecological balance and bio-diversity, and to develop cooperation with international organizations to improve food supply. The official exchange rate is 0.7844 AZN/USD on May 22.

New contract for South Caucasus Pipeline Expansion project awarded

he South Caucasus Pipeline Company (SCPC) and the Shah Deniz consortium have awarded a new line pipe coating contract for the South Caucasus Pipeline Expansion (SCPX) project. The contract for line pipe coating worth approximately $70 million was awarded to Bredero Shaw International BV, BP reported on May 22. The scope of work includes coating of all pipes to be used for SCPX construction. Bredero Shaw International will coat the pipe externally with three layers of polyethylene material and internally with an epoxy coating. The duration of this contract is 18 months with the first shipment of line pipe planned to arrive in

Azerbaijan later this year. This award adds to the 13 contracts already announced and underlines the overall progress to schedule of the second stage of development of giant Shah Deniz field in the Azerbaijani sector of the Caspian Sea. The South Caucasus Pipeline has been operational since late 2006, transporting gas to Azerbaijan and Georgia, and starting July 2007 to Turkey from the first stage of development of Shah Deniz field. The shareholders are BP, operator (28.8 percent), SOCAR (16.7 percent), Statoil (15.5 percent), Total (10 percent), Lukoil (10 percent), NICO (10 percent) and TPAO (9 percent).

Profit of the only Azerbaijani gold producer drastically reduced

he profit of Anglo Asian Mining, the only Azerbaijani gold producer, drastically reduced in FY 2013. In accordance with the audited financial results of the company for 2013, profit before tax totaled $1.4 million (against $28.6 million in 2012) on revenue of $70.8 million (2012: $73.5 million). Gross profit made up $13.3 million (2012: $36.1 million) The company informs that drop in profit is associated with the increased primary cost of the production (from $37.5 million in 2012 up to $57.5 million) that is explained by larger expenditures for processing at the tank leaching plant commissioned in June 2013 and increased depreciation costs.

Total gold production made up 52,068 ounces (against 50,215 ounces in 2012). Gold sales of 46,076 ounces (2012: 42,557 ounces) completed at an average of $1,387 per ounce (2012: $1,666 per ounce). Silver production totaled 20,263 ounces (2012: 20,133 ounces). Copper concentrate produced at the company’s plant in Gedabek contained 327 tonnes of copper, 45,621 ounces of silver and 39 ounces of gold (2012: 502 tonnes of copper, 98,158 ounces of silver and 86 ounces of gold) Record copper concentrate sales totaled $6.4 million (2012: $2.1 million). Net debt of the company totaled $45.5 million at 31 December 2013 (2012: US$28.3 million).

SOCAR-AQS official awarded in Vietnam

senior official of SOCAR-AQS LLC, an integrated drilling and well services management company in Azerbaijan, has visited Vietnam. Deputy General Director of SOCAR-AQS for Safety Issues Tofig Mahammadov attended a number of official meetings as a member of Azerbaijan’s state delegation within the framework of Azerbaijani President Ilham Aliyev’s official visit to Vietnam on May 18. Mahammadov said Vietnam and Azerbaijan have more than a half-century experience of friendly relationships. “Azerbaijanis, especially oilmen, had provided a great, disinterested and effective help to Vietnam back in the Soviet times. After Ho Shi Min’s visit to Baku in 1959, Azerbaijan trained and developed thousands of research workers, especially, highly-qualified specialists in oil and energy sector for Vietnam,” he said. Mahammadov also spoke about the great role of Azerbaijani geologists and oilmen in the discovery of White Tiger and Dragon oil fields in Vietnam.

Mahammadov was awarded with ‘Friendship’ and ‘Labor’ medals of Vietnam for the training of professional employees and development of training materials for young oilmen. He is strongly confident that the relationships between the two countries in economy, politics, social and humanitarian areas will continue to develop in the future. SOCAR-AQS LLC was established between SOCAR and Absheron Drilling Company in 2007. The main scope of the company’s activities is the provision of work and services related to drilling oil and gas wells. Azerbaijani-Vietnam cooperation is fast developing. Azerbaijan opened its embassy in Vietnam last December, while the Azerbaijan-Vietnam inter-parliamentary friendship group was established in Hanoi in November 2013. The group includes six members of Vietnam’s National Assembly. In October 2013, Vietnam simplified the visa regime for Azerbaijani citizens, making it possible for Azerbaijani citizens to obtain a visa upon arrival at Vietnam’s airports.

Azercell starts new campaign in regions

zercell Telecom - the leader of mobile technologies market of Azerbaijan keeps on implementing the strategy on development and expanding the mobile networks in the regions of the country. In addition to existing attractive campaigns the Company offers its subscribers in the regions, Azercell presents a new special campaign for citizens of Ganja and Goranboy between 26.05-15.12.2014. So, for all new and ported pre-paid numbers Azercell offers a campaign “Pay 1 - Get 3”. The subscribers joining the campaign will get as a bonus twice the amount they topped from any payment card as a gift from Azercell. The bonuses are valid for on-net calls, on-net SMS and Internet within 30 days. Azercell Telecom constantly runs different event and campaigns for different groups of customers, depending on their preferred quantity and type of mobile communcation they consume. So far, Azercell implemented different campaigns and products for the citizens of the regions under the strategy on development and explansion of the mobile network in the country. Among the most popular ones is the tariff “Bolge” that provides ever user a chance to talk for free after

the third minute and reach all destinations for 5 qapiks per minute. Azercell will continue providing its subscribers with high-quality communication, professional customer service and cuttingedge techological solutions, as well as with the broad range of campaigns, services and favorable tariffs. Azercell Telecom LLC was founded in 1996 and since the first years sustains a leading position on the market. Azercell introduced number of technological innovations in Azerbaijan: GSM technology, GPRS/EDGE, 24/7 Customer Care, full-time operating Azercell Express offices, mobile e-service “ASAN imza” (ASAN signature) and others. With 53% share of Azerbaijan’s mobile market Azercell’s network covers 99,8% of the country’s population. By the end of 2013 the number of Azercell’s subscribers reached 4,5 million people. In 2011 Azercell deployed 3G and in 2012 the fourth generation network - LTE in Azerbaijan. The Company is the leader of Azerbaijan’s mobile communication industry and the biggest investor in the non-oil sector. Azercell is the part of the TeliaSonera Group of Companies, which has subsidiaries in more than 20 countries with total number of 186 million subscribers and 27 thousand employees.

Azerbaijani, Kazakh petroleum geologists agree on co-op

he Azerbaijani and Kazakh petroleum geologists will cooperate, Azerbaijan’s state energy company SOCAR said. The sides signed a relevant cooperation agreement on May 16 after a meeting between SOCAR First Vice-President Khoshbakht Yusifzade and Chairman of Kazakh Petroleum Geologists Society Baltabek Kuandykov, Trend Agency reported. Under the agreement, the two sides will hold joint research and geological exploration works, as well as exchange the personnel and hold vari-

ous consultations. Azerbaijanis and Kazakhs are both Turkic-speaking nations and share close historical, religious, and cultural ties. Both are the littoral states of the Caspian Sea and possess a common maritime border. About 130,000 ethnic Azerbaijanis live in Kazakhstan. A solid legal basis has been established between the two countries. Azerbaijan and Kazakhstan have signed more than 90 documents. These documents positively affect the development of trade relations between the two countries.

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China fines Johnson & Johnson, other firms for price fixing

Commission (NDRC) said the firms mandated their dealers to set the price of lenses strictly in accordance with a “suggested level.” They also allegedly ordered retailers to launch promotions jointly in major Chinese cities to keep prices stable.

Fb seeks EU antitrust review of WhatsApp deal – reports EU puts third round sanctions against Russia on pause

he European Union is to delay further sanctions against Russia, as Moscow signaled it is ready to cooperate with Ukraine’s likely President Petro Poroshenko. New sanctions were discussed, but not implemented at Tuesday’s informal summit of EU leaders and government officials in Brussels, ITAR-TASS reports. Previously European Commission leaders said they would impose a third round of sanctions against Russia if it interfered in the Ukrainian election on May 25. On Monday, Russian Foreign Minister Sergey Lavrov signaled that Russia is ready for dialogue with Ukraine’s new President -elect, Poroshenko, who currently leads the polls. “The possibility of de-escalation is here, finally,” French President Francois Hollande told reporters after the summit ended, Bloomberg reported. Holding off on sanctions is the EU’s response to Moscow’s apparent willingness to work with those newly elected in Kiev, as well as pulling back troops from Ukraine’s border to de-escalate the situation. “But we still need this strict reminder,” Hollande said. The US and EU had warned there would be more

sanctions if Moscow in any way interfered with the May 25 elections. “No one will opt to impose new sanctions right away but we should unanimously say that Europe is ready for further sanctions if Russia doesn’t give up its policy to support separatists,” said Polish Prime Minister Donald Tusk, who has taken a tough stance against Russia’s involvement in Ukraine. “We have agreed to continue to prepare for possible further steps (to impose restrictive measures against Russia), if the circumstances require it,” the statement from today’s meeting said. Possible further sanctions against Moscow could take aim at finance, energy and defense industries, and restrict Russian exports including diamonds, precious metals, furs and black caviar, as well as chemicals, auto parts, ships, weapons and oil. The Commission also discussed the “tough” course of action, which would limit new investment in the Russian economy and the strict application of EU rules on Russian assets inside European companies. EU leaders will continue to carry out predatory work on “possible targeted measures against Russia” but only “should events so require”. So far the EU has blacklisted 83 Russian and Ukrainian officials and two companies.

acebook has asked EU antitrust regulators to examine its $19 billion takeover of mobile messaging service WhatsApp, Reuters reported, citing sources. Companies, which need approvals for mergers from several national regulators in Europe, typically prefer to take their

case to the European Commission. The deal was cleared in the US last month by the Federal Trade Commission (FTC). It said WhatsApp must adhere to its current privacy practices after the merger, including a promise not to use WhatsApp users’ personal data for targeted ads.

Peak fat

The ever-expanding world

‘Death of money’: Author Rickards predicts collapse of global monetary system

he collapse of the monetary system awaits the world in the near future, says financial expert James Rickards. Russia and China’s desire to rid the US dollar of its global reserve currency status is an early sign of the “increasingly inevitable” crisis. “China has three trillion dollars, but they are buying gold as fast as they can. China worries that the US is going to devalue the dollar through inflation so they want to have a hedge if the dollar goes down, so the gold will go up,” Rickards told RT. As one of the key events in support of his forecast, Rickards points to the words uttered by Russian President Vladimir Putin at the 18th International Economic Forum in St. Petersburg that took place earlier this month. “Putin said he envisions a Eurasian economic zone involving Eastern Europe, Central Asia, and Russia. The Russian ruble is nowhere near ready to be a global reserve currency, but it could be a regional reserve currency,” he said, as quoted by ETF Daily News. Rickards’ book about the demise of the dollar was released in April under quite an apocalyptic name – ‘The Death of Money.’ However, the author is surprised that the events are unfolding much faster than he predicted. “If anything, the tempo of events is faster than expected. Therefore, some of these catastrophic outcomes may come sooner than I wrote about.” Last Wednesday, China and Russia signed a historic US$400 billion gas deal which will provide the world’s fastest growing economy with the natural gas it needs to keep pace for the next 30 years. Experts say this could be the catalyst that dethrones the greenback as the world’s reserve currency. The best-selling author writes that the “linchpin”

of the collapse is the approaching failure of the dollar since it is at the foundation of the system. Powerful countries such as Russia, China, Iran, and India do not rely on the US in their national security and would benefit from the US economy being weaker, thus desiring to break free from the dollar standard. He elaborates that the dual collapse “looks increasingly inevitable.” “The mistakes have already been made. The instability is already in the system. We’re just waiting for that catalyst that I call the snowflake that starts the avalanche,” he said, as quoted by ETF. There are three big international factors that are pressuring the dollar right now – Russia, China, and Saudi Arabia. “Since the 1970s, Saudi Arabia [has been] the leader in what’s called the petrodollar. It basically means that Saudi Arabia and, by extension, OPEC, price oil in dollars, so the world market is in dollars. “Russia is a major natural resource exporter; they price their exports in dollars as well. But Russia now is engaged in a financial war with the US around the issues in Crimea and Ukraine.” The threats to the dollar are “ubiquitous,” the author states in his book. The only way the US can pay off its $17 trillion debt is with inflation, which would drive other countries away from the dollar while the accumulation of gold by Russia and China presages the shift to a new reserve asset. “The next time we will have a liquidity crisis in the world it’s going to be bigger than the ability of central banks to deal with it. The IMF will basically have to bail out the world by printing the SDRs (an international reserve asset created by the IMF in 1969 to supplement its member countries’ official reserves). By that time, you will see the SDR emerge as the new global world currency,” Rickards told RT.

AISTLINES are widening everywhere. The percentage of adults who are overweight or obese has swelled from 29% in 1980 to 37% in 2013, according to a new study in the Lancet. People in virtually all nations got larger, with the biggest expansions seen in Africa, the Middle East and New Zealand and Australia. The chunkiest nations overall are found in the tiny Pacific islands and Kuwait, where over three-quarters of adults are overweight and over half are obese. And the world is unlikely to slim down soon. While the rate of increase has slowed in the rich world, it is still rising in poorer countries, where two-thirds of the world’s 2.1 billion overweight adults live. China is home to the largest number anywhere— 335m, more than the population of America. This

is not just because of its sheer size, but also because economic growth led to cellulite growth: a quarter of adults are now overweight compared with one in ten in 1980. Mexicans just outweigh neighbouring Americans. In both countries, two-thirds of people could lose a pound or two, though more Americans are obese. Agreeing on how to combat the problem is tricky, given that experts continue to bicker on what, precisely, makes us fat. Worryingly, the study— led by the Institute of Health Metrics and Evaluation at the University of Washington—showed that children are fattening at a faster pace than adults. Last week the World Health Organisation set up a new commission to curb child obesity. But it will be some time yet before the world reaches peak fat.

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Anchors â&#x20AC;&#x201C; Kotiko Toloraia, Levan Gogoreliani will offier refined humor, provide good mood and invite interesting guests for the program audience. The program consists of three parts: the first block offers humor and apolitical monologue with funny video clips, pictures and so on. The second and third blocks are dedicated to famous public figures that will be invited as guests. The show will start Wednesdays at 21 oâ&#x20AC;&#x2122;clock and it will cover all interesting issues excluding politics to guarantee good mood for the audience.

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June 2, 2014 #56

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 16 Akhmeta Str., Avlabari, 0144 Tbilisi. 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: +995 32 2 75 21 11, Fax: +995 32 2 75 21 20 Kingdom of Sweden Embassy 15 Kipshidze St. Tbilisi Tel: +995 32 2 55 03 20 , Fax: +995 32 2 22 48 90 Kingdom of the Netherlands Embassy 20 Telavi St. Tbilisi Tel: 27 62 00, Fax: 27 62 32 People’s Republic of China Embassy 52 Barnov St. Tbilisi Tel: 225-22-86, 225-21-75, 225-26-70 E-mail: zhangling@access.sanet.ge Republic of Bulgaria Embassy 15 Gorgasali Exit, 0105 Tbilisi, Georgia Tel: +995 32 291 01 94; +995 32 291 01 95 Fax: +99 532 291 02 70 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

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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 Asian Development Bank Georgian Resident Mission Address: 1, G. Tabidze Street

Freedom Square 0114 Tbilisi, Georgia Tel: +995 32 225 06 19 e-mail: adbgrm@adb.org; Web-site: 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

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

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

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

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

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

The Best Georgian Honey of chestnuts,acacia and lime flowers from the very hart of Adjara Matchakhela gorge in the network of Goodwill, Nikora and smart

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