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BUSINESS WEEK June 10, 2013 #08

caucasian business week

June 10, 2013, Issue 08

BE INFORMED, DO BUSINESS

GEORGIA JOB PLACES SHRINK BY 42 000 ONES IN PRIVATE SECTOR IN 1Q13

umber of employees in Georgian enterprises increased by 15,7 thousands, declined by 42 000 for the quarterly data. Pg. 6

MARKET RATING OF INTERNET PROVIDERS ACCORDING TO MARKET SHARE

caucasian1

SEVEN GEORGIAN SOLDIERS DIE IN AFGHAN TRUCK BOMB ATTACK

FM:When We Went To Power, We Met Debt of 1.5 B Lari Due to Advance Collection of Taxes

ccording to TOP.GE data, Silknet is a leader of the rating of Georgian providers in May 2013, as last year. Pg. 6

ILIAUNI BUSINESS REVIEW: SERVICE QUALITY OF VESTEL DESERVES 3.8 OF 5 AVAILABLE POINTS

conomic Researches and Consulting Center of Ilia State University’s business school conducted study in Vestel chain of household appliance shops. Pg. 7

Pg. 5

EBRD OPENED 2 CREDIT LINES TO BANK OF GEORGIA

o fund energy-saving investments of bank of Georgia, European Bank for Reconstruction and Development (EBRD) opened 5-years long $10 million credit line and assigned 10 million Euros in the framework of Trade Facilitation Program (TFP) to support international factoring. Pg. 8

ing ISAF mission in November, 2009. This recent attack brings total death toll of the Georgian soldiers in ISAF mission to 29. Three Georgian troops died in a similar incident on May 13, 2013 when an explosives-laden truck hit their outpost in the Helmand province. 25-year-old corporal Teimuraz Ortavidze; corporal Giorgi Adamov, 23; private first class Zurab Gurgenashvili, 32; private Mikheil Narindoshvili, 26; corporal Boris Tsugoshvili, 29; private first class Zviad Sulkhanishvili, 22, and private first class Giorgi Guchashvili, 21, (the latter’s dead body was found in rubble) died in the June 6 attack. All were from from the 42nd light infantry battalion of the fourth brigade, which was deployed in the Helmand province in April, 2013. Total of ten soldiers from this battalion have died since deployment in Afghanistan in April. President Saakashvili expressed condolences over death of the Georgian soldiers in a live televised address. He declared June 7 the national day of mourning.

aku hosts 20th international conference Caspian Oil & Gas, the refrain of which is the Southern Gas Corridor, being created by the European Union. Pg. 10

even Georgian servicemen were killed and nine wounded after a truck bomb hit one of the forward operating bases in the Helmand province of Afghanistan on June 6, less than a month after three Georgian soldiers died in a similar incident in Helmand. At the time when the Georgian Ministry of Defense (MoD) first made the announcement late on Thursday about the attack, six soldiers were confirmed dead and MoD said that rescue operation was underway to recover one serviceman from rubble left by the powerful explosion. But shortly before the midnight on Thursday the MoD said that the soldier was found dead in rubble, increasing death toll from the June 6 attack to seven. Injuries of nine soldiers are not life threatening, said Irakli Dzneladze, chief of the joint staff of the Georgian armed forces. He said that the attack was carried out by “a suicide bomber” with an explosives-laden truck. For the Georgian troops this attack brought the largest death toll in any single incident since join-

ARMENIA RUSSIA AND GEORGIA BOUGHT ENTIRE CONSIGNMENT OF EXPORTED GRAPES FROM ARMENIA

FITCH EXPECTS 3% ECONOMIC GROWTH IN GEORGIA

BUSINESS SECTOR IN GEORGIA, I QUARTER 2013

akstat reported that investments in fixed assets totalled in the 1st quarter to 101.6 million lari, declining by 21% year-onyear. Large business accounted for 68.9% of total volume, middle-sized one – for 2%, while small business – for 29.1%. In the reporting period, enterprises’ turnover totalled to 8.6 billion lari. Pg. 9

AZERBAIJAN SOCAR PRESIDENT: AZERI GAS SUPPLIES FOR EU NOT TO START UNTIL 2019

he volumes of the export of the fresh or dried grapes from the Republic of Armenia to the Russian Federation in the first three months of 2013 have increased by 22% in comparison with the same period of the previous year. Pg. 11

CIS RUSSIAN RAILWAYS WANTS TO PRIVATIZE GREEK PORT

ussian Railways chief Vladimir Yakunin has asked President Vladimir Putin to support its participation in the privatization of the Greek port of Thessaloniki, a news report said Wednesday. Pg. 12

WORLD NEWS EUROPEAN CENTRAL BANK CUTS GROWTH FORECAST

he European Central Bank (ECB) has revised down its eurozone growth forecast as it voted to hold rates at historic lows. Pg. 13

PM Says Deadly Afghan Attack ‘will Not Make Us Retreat’ Pg. 3

Pg. 3

ating agency Fitch Rating expects 3% growth of GDP in Georgia this year, - Charles Seville, director Europe Developing country director of the agency exclusively stated to the FINANCIAL. He explains, that Fitch expects that in the remaining period of the year economic growth will be accelerated, which is connected to the possible opening of the Russian market and expected incomes from tourism. “Last data about direct foreign investments belong to the last quarter of 2012 and accordingly, we have not seen what impact had power change on the foreign investments. Although large strategic investor, Azerbaijan State oil company, still stays faithful of Georgia,” - Seville stated. “According to preliminary data of Geostat, there’s 1,7% growth in the first quarter, which means slowdown of the growing temps. Trend is same in terms of import. There’re several reasons. Unfortunately, government change plays some role, for example their planned changes in the labor code triggers investors to wait and see. Another

David Narmania: Relations with President’s Attorneys Warmed, Except for Kvemo Kartli region Pg. 4 Gogi Topadze: A lot of Georgia’s land was sold to foreigners, it is a tragedy Pg. 4 Mikheil Machavariani: The New Labor Law would Hinder Job Creation in Georgia Pg. 5 Georgian Wines to Appear on Russian Market Next Week

reason is regional economic context. Growth is slowed down in Russia, that’s why international money transfers in Georgia increase more slowly, than in analogic period of last year”, - Charles Seville stated. It’s noteworthy that Fitch competitor Standard & Poor’s prognosis is more optimistic. It expects 3,5% growth in Georgia this year. Ministry of Finance has the most optimistic view on this year economic perspective of Georgia. It is not going to review 6% growth prognosis, as planned last year. It’s also noteworthy that on May 30 Geostat, publishing April economic statistics, corrected preliminary data of economic growth of the first quarter 2013 and increased it fro 1,7% to 1,9%.

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Strict Standards of Services Planned to be Enacted for Pharmaceutical, Insurance and Hospital Businesses Pg. 5

TOP NEWS

PM SAYS DEADLY AFGHAN ATTACK ‘WILL NOT MAKE US RETREAT’

n his video address on June 7, expressing condolences over death of seven Georgian soldiers in truck bomb attack in southern Afghan province of Helmand on Thursday, PM Ivanishvili said that Georgia “will continue fight for peace in the world.” “Our country has made a huge sacrifice for the struggle for international security and the entire world knows it,” PM Ivanishvili said. “Our brothers and sons sacrificed their lives for struggle for peace and fight against terrorism.” “Fight against terrorism is difficult, but at the same time very honorable mission,” he said. “Far from Georgia, on foreign land, our troops are defending our homeland at the cost of their lives. These guys stand guard for stability of our country and for the security of our future generations.” “Despite of this horrible tragedy, nothing will break us; no one will make us retreat,” he said. “We will continue fight for peace in the world, peace in Georgia.” Expressing condolences over death of the Georgian soldiers, President Saakashvili said in his live televised address on June 6 that Georgia “made yet another sacrifice on its difficult path to freedom, independence and joining the family of world’s civilized nations.” Saakashvili, who declared June 7 national day of mourning, also said: “It is our obligation before the memory of our fallen soldiers not to give up, not to step back and to continue moving towards the Euro-Atlantic space, to continue daily struggle for Georgia’s independence.” The June 6 bombing – the deadliest attack on

Georgian troops in Afghanistan – is likely to give rise to debates about Georgia’s contribution to the ISAF. The Taliban claimed responsibility for the June 6 attack, which it said took place in the Now Zad district of Helmand province. Hours before the announcement was made about the death of seven Georgian troops, Georgian online community was abuzz about YouTube video, titled “Taliban Jihad Against Georgian Troops in Afghanistan”, which emerged earlier on June 6 and in which a man’s voiceover in English threatens Georgian troops and their families and warns of bringing fight into Georgia. Chief of Georgian president’s administration, Andro Barnovi, said on June 6 that he doubted Taliban was behind this video and blamed those “forces”, which, he said, were trying to undermine Georgia’s pro-western foreign policy course. “We believe that source of this video… is much closer to Georgia than it is Afghanistan,” he said. “I want to call on the society to keep calm and on the law enforcement agencies to find out source where this video originates from.” Interior Minister, Irakli Garibashvili, said in a statement on June 7 that probe was underway to find out source of the video. “Our foreign partners are actively helping us. I cannot provide other details at this stage,” he said, adding that there was no reason for panic. Parliament speaker, Davit Usupashvili, suggested on June 7 that there was no need to make much hype out of this video; he said did not believe emergence of the video was “directly related” to the deadly attack on the Georgian troops in Afghanistan. Reports say that the security services have already launched probe into the video to find out its source. Georgia currently has 1,561 soldiers in Afghanistan, making the country the largest non-NATO troop contributor to ISAF mission and the seventh largest contributor after the U.S.; UK; Germany; Italy; Poland and Romania, which has 1,595. Civil.ge

SEVEN GEORGIAN SOLDIERS DIE IN AFGHAN TRUCK BOMB ATTACK

From 1st Pg.

“Georgia made yet another sacrifice on its difficult path to freedom, independence and joining the family of world’s civilized nations,” Saakashvili said. “It is our obligation before the memory of our fallen soldiers not to give up, not to step back and to continue moving towards the EuroAtlantic space, to continue daily struggle for Georgia’s independence.” PM Ivanishvili released a written statement expressing condolences over “appalling tragedy that hit Georgia.” Chief of the Georgian army staff, Irakli Dzneladze, said that despite of this recent attack “the Georgian soldiers, who are protecting security of our country in this international mission, will not step back.” Georgia became the largest non-NATO troop contributor to ISAF mission after it almost doubled its presence in Afghanistan to over 1,560 soldiers last autumn. Georgia has two battalions in the Helmand province and up to 50 soldiers in Kabul.

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Georgia’s first contribution to the Afghan operation came in 2004 when 50 soldiers were briefly deployed in the country under the German command as part of ensuring security during the presidential elections. In November, 2009 Georgia deployed 173 soldiers in Kabul under the French command and in following year Georgia increased presence in Afghanistan by sending an infantry battalion in the Helmand province serving along with the U.S. marines and Georgia sent one more battalion to the Helmand province in autumn, 2012. Currently 50 Georgian soldiers remain in the Afghan capital Kabul; they were initially under the French command, but as France gradually withdraws its troops from Afghanistan, Georgian troops in Kabul were placed this month under the U.S. command and redeployed at the Camp Phoenix - the base in Kabul which is used primarily by the U.S. forces involved in the training of the Afghan army. Civil.ge

ALASANIA VISITS AFGHANISTAN AFTER 7 GEORGIAN TROOPS DIE IN ATTACK

eorgian Defense Minister, Irakli Alasania, is visiting Afghanistan after truck bomb attack in the Helmand province killed seven Georgian troops – the deadliest attack on Georgians in Afghanistan. “The Defense Minister cut short his visit to Brussels, where he was holding bilateral meetings with counterparts from NATO-member states and left for Afghanistan,” Vako Avaliani, an adviser to the

defense minister, told Rustavi 2 TV. He said that Alasania had already met his Afghan counterpart Bismillah Khan Mohammadi. “Alasania will meet Georgian troops’ commanders on the ground, as well as ISAF commanders and then he will personally take part in return of bodies of our fallen soldiers [back to Georgia],” Avaliani said. Civil.ge

NATO, GEORGIAN DEFENSE MINISTERS MEETING

ATO Defence Ministers met with their Georgian counterpart Irakli Alasania in frames of NATOGeorgia Commission in Brussels on 5 June to discuss Georgia’s reform plans and further cooperation. “We greatly appreciate the active support that Georgia has made to our operations – past and present,” NATO Secretary General Anders Fogh Rasmussen said in his opening remarks at the NATO-Georgia Commission. “We greatly value the professionalism and the courage of Georgian troops. And we honor their sacrifice. These efforts are all the more impressive given the demanding defence reforms that Georgia is now undertaking.” He said that NATO was closely following Georgia’s domestic developments. “We are looking to the Georgian government to respect the rule of law, human rights and the rights of minorities. And we encourage Georgia to continue key reforms and to conduct free and fair presidential elections later this year,” Rasmussen said. “And I look forward to a future in which Georgia is in the Alliance. The decisions taken at the NATO Summit in Bucharest still stand. Georgia will become a member of NATO provided it meets the requirements for membership,” he added. NATO said in a press release that defense ministers from the Alliance thanked Georgia for its readiness to participate in the post-2014 mission in Afghanistan “in order to train, advise and assist the Afghan security forces” and hailed Georgia’s “dynamic efforts and achievements in moving towards Euro-Atlantic integration.” Alasania also participated on June 5 in a meeting of NATO defence ministers with counterparts from non-NATO ISAF contributing nations. The meetings were part of two-day NATO defense ministerial event that focused on cyber defence, the mission in Afghanistan and military capabilities. Speaking at a news conference, summing up twoday NATO defense ministerial meeting, Rasmus-

sen said on June 5, that Georgia was NATO’s “committed partner.” He also said that Georgia was conducting reforms which “are demanding, and far-reaching.” “Today, [defense] ministers expressed their appreciation for all Georgia has done to support our common goals. They reaffirmed NATO’s continued support for Georgia’s territorial integrity and sovereignty within its internationally recognized borders. And they made clear that they are ready to support and assist Georgia as it moves ahead with its reforms,” Rasmussen said. “Our partnership is based on values. NATO stands for the respect of human rights and fundamental freedoms. So we look to Georgia to respect the rule of law, human rights and the rights of minorities. And we encourage Georgia to continue key reforms and to conduct free and fair presidential elections later this year,” he added. Asked about so called ‘borderisation’ process by the Russian troops across breakaway South Ossetia’s administrative boundary line, Rasmussen said that installation of wire fences was “a violation of international law” and of 2008 ceasefire agreements. “Building fences impedes freedom of movement, it can further inflame tensions, it is simply not acceptable,” the NATO Secretary General said. “We urge Russia to live up to her international obligations.” Asked about detention of former PM and secretary general of UNM party Vano Merabishvili, Rasmussen responded that NATO was “following these developments with great concern.” “Obviously we are not going to interfere with legal cases and the judiciary in Georgia. In today’s meeting with the Georgian Minister of Defense I made clear, and ministers made clear, that we take it for granted that the Georgian authorities will fully respect the fundamental principles of rule of law and will guarantee due process. We have made clear that even the perception of politically motivated arrests should be avoided and we expect Georgia to live up to those fundamental principles,” Rasmussen said. Civil.ge

4 SOVEREIGN FUND TO LAUNCH OPERATION BY THE END OF 2013

he newspaper REZONANSI reports that Sovereign (investment) Fund, which should be established on the base of partnership fund, will be launched by the end of this year. Head of the Partnership Fund Irakli Kovzanadze declares that “by autumn, we will submit to the Parliament a legislative package, which envisages methods for selection of projects, subjected to funding by the Fund, criteria, etc”. Currently, Kovzanadze says, works in this direction are underway jointly with representatives of IMF, World Bank and law firm Reed Smith. At the same time, Paul-Henri Forestier, former representative of EBRD in the South Caucasus, considers that enactment of funds, announced by the government, is utopia. At that, EBRD representatives regards that business environment in Georgia is good, but new government’s messages to the business are vague, the article notes.

INTERVIEW caucasian business week

DAVID NARMANIA: RELATIONS WITH PRESIDENT’S ATTORNEYS WARMED, EXCEPT FOR KVEMO KARTLI REGION An interview with Regional Development and Infrastructure Minister DAVID NARMANIA

TBILISI HOSTS INTERNATIONAL WORKING MEETING ON E-GOVERNMENT ISSUES

nternational working meeting of e-government issues is launched in Tbilisi, being organized by the World Bank and Georgian Ministry of Justice with financial support of Austrian Finance Ministry. The event, which will last through June 6, is attended by over 100 representatives of 20 countries of Europe, Central and South Asia, Near East and North Africa. As Irakli Gvenetadze, chairman of the Justice Ministry’s Agency for Data Exchange, said that Georgia was selected by the World Bank as a host country due to its interesting experience, which was named by to-be participants of the meeting, who were interviewed in advance. In his turn, Merab Labadze, representative of Informational and Communications Technologies Business Council, pointed at such novelties, as launch of single web portal for e-governance, diversification of electronic service delivery channels, especially through mobile devices.

CASH PERFORMANCE OF REGIONAL DEVELOPMENT AND INFRASTRUCTURE MINISTRY’S EXPENDITURE INCREASED BY 57.4%

inistry of Regional Development and Infrastructure reported that cash performance of expenditure in the 1st quarter exceeded by 57.4% the rate of the same period of 2012. In the reporting period, cash performance of the Ministry’s expenditure amounted to 87.12 million lari against of 55.35 million lari in the 1st quarter of 2012. At that, 64.81 million lari was spent for road infrastructure improvement (in the same period of 2012 – 28.66 million lari). The Ministry noted that this sum includes 3.2 million lari of last year’s expenditure, which cash performance was implemented already in January, therefore, yearon-year growth made up 115%. Road maintenance cost 23.73 million lari, exceeding by 65.7% the showing of the same period of 2012. Construction of highways cost 39.9 million lari, exceeding by 170% the showing of the same period of 2012.

June 10, 2013 #08

- What kind of work has the ministry done during these months? - Financial indicators for the first quarter of 2013 exceeded the figures for the same period of 2012 by more than 36 percent. The amount of money we spent on the implementation of infrastructure projects totaled 75 million GEL. Approximately the same amount was spent in the following 2 months. From the beginning of the year in total 150 million GEL has been spent on various infrastructure projects such as highway construction as well as the construction of internal roads of the state importance and improvement measures of the water supply system. Based on these indices, we are far ahead compared to the same period under the previous government. So, our political opponents’ rhetoric regarding the delayed infrastructure projects, and so

on, are groundless. We responded to their rhetoric with figures which show a different situation. This refers to the extension of the transitional projects as well as to the expenses related to the newly initiated projects. Therefore, all transitional projects are being carried out and some of them have been completed, as well as newly initiated projects are funded and implemented in a regular mode. Unannounced tenders are not virtually left. - How satisfied are you with the quality of roads? If you’ve studied the situation and how quality roads we’ll get? Over the years, there were constant talks and remarks on this issue, including from international experts. Are you satisfied with the quality of work performed by the companies winning tenders? - First of all, I’ll name the figures. 500 million GEL was spent on road works from our budget which amounts to 900 million. This applies to construction of highways and internal roads of national importance. To tighten quality control, we implemented the next thing: First: before one-year warranty contracts were concluded with companies. We have already moved to a 2 - year warranty contract, which means that roads should serve for at least two years. Next year we are going to move to a 3 - year contract. Second, we began bitumen quality control. Instruction is being prepared and in the next few days it will be completed and discussed. Third, we have developed criteria by which the constructed roads are randomly checked. Based on this principle, we took five different sections for the laboratory examination. As soon as the lab results are ready, the public will be informed.

- What companies are winning in tenders? Who is more active, Georgian business or international companies? - Foreign companies are more active in highway construction, because foreign companies are not interested in small projects. Therefore, the field of their interest is motorways construction. In addition, opportunities of local companies in connection with the highways construction are relatively limited and only 2-3 Georgian companies are able to carry out the relevant work. As for the internal roads of the state importance, mainly local companies are represented here. The interest from foreign companies has significantly increased. - How things are going in water supply system? - I would add two more issues. Apart from our projects and expenditures, rehabilitation of infrastructure is carried out in the frames of “Village Support Program” and “Fund for regional projects” program. 50 million GEL are allocated for the first program and more than 200 million GEL for the second. So, work has already begun and will intensify even more. As for water supply works, “United Water Supply Company” located in our submission implements transitional projects and within “The European Investment Bank” program will launch rehabilitation of water supply system in 25 municipalities and 3 boroughs. A total of 40 million Euro will be spent for this purpose. - Governors announce that the infrastructure ministry does not work, there is no communication and so on. Has anything changed in this regard? - We continue to communicate with them because it is an obligation under the law. Those who have some pain and problems inform us and we jointly analyze everything. Relations are getting warmer and we have a certain progress in this regard. Except for one exception- Kvemo Kartli region, the head of the administration of which is not in Georgia for some time, but communication with deputies is going on.

GOGI TOPADZE: A LOT OF GEORGIA’S LAND WAS SOLD TO FOREIGNERS, IT IS A TRAGEDY An interview with the majority member GOGI TOPADZE - You’ve made an application for the creation of a new “Georgian Dream - Entrepreneurs” faction on the Committee on Procedural Issues and Rules. The faction consists of six members. Why did you decide to create a faction and who are the members? What businessmen are we talking about and what issues will you work on? - We decided to create a faction long ago. The parliamentary reality requested this. It was necessary that more or less specialists of this field to be united in one faction in order to simplify something for businessmen. Many things need to be improved; too many things have to change. People must believe that their property will not be confiscated. In recent years, no one wanted to expand the business, stagnation started. This led to the creation of an inert atmosphere. Therefore, the previous government has left so many problems that to resolve them a separate faction was needed. It unites prominent businessmen. In particular, Zurab Tkhemaladze, Tamaz Khacheishvili, prominent lawyers, for example, Giga Kakhiani (majoritarian from Samtradia), Paata Kiknavelidze (majoritarian from Baghdadi), Temur Bashaleishvili (the artist), and so on. The faction has a lot of work to do. We have attempted to simplify the tax code to make it un-

derstandable for small and medium businesses. It was very difficult for entrepreneurs to understand the Code. This allowed the relevant bodies to read it how it was acceptable for them and fine entrepreneurs. Therefore, we consider that it was necessary to create a faction. In addition, there are many other problems. For example, a land problem. A lot of Georgia’s land has been sold to foreigners recently. This is a tragedy. The faction will discuss this issue as well. - In what directions will you have to work? - Our specialists have created a new tax code twice. The first was in 1999. So, we have the experience. Prime Minister always speaks about the support of business in order it to know that this is a government that is interested in putting the country on its feet. There are many themes. For example, the tax base may be changed because one and the same product is taxed multiple times. This code was created to bankrupt a farmer and a businessman, if he was not in contact with the previous government. - You mentioned that businesses need to believe that the new government’s goal is a development of business, why has it failed to convince the business in this for the past 8 months? - We’ve destroyed the country for 9 years and do

you want to build everything in 8 months? The government and parliament despite fierce resistance from the minority will stand pat. - Including economic filed? - Definitely. I assure you that the economy will move forward, the people rejoice, the country will get back on its feet. You’ll see how many investors will come to Georgia in 1-2 years and express readiness to cooperate with us.

June 10, 2013 #08

INTERVIEW

MIKHEIL MACHAVARIANI: THE NEW LABOR LAW WOULD HINDER JOB CREATION IN GEORGIA An interview with one of the leaders of the “National Movement” MIKHEIL MACHAVARIANI

- “National Movement” attitude to the changes in labor law is that business will somewhat suffer. What arguments is your position based on and, on the whole, what will the new labor law change for the employer, the employee and Georgia as an investment country? - Unlike our government, we are consistent and remain in the position we were 2-3 years ago.

This Code will hamper the creation of new jobs in Georgia and complicate the development of business in the country. Unfortunately, the government did not listen to us then and now they have to consider everything in a bad, ugly way. This code has already played its bad role, because during these two months that this discussion is going on, entrepreneurs are thinking not only of how to create jobs, but whom to release from work , how to make fixed working day, how to keep the money because they will have to pay too much for extra working days. That is why entrepreneurs were very active in Parliament and I welcome this. It was good that they had a meeting with Prime Minister and told him very frankly what the new Code would bring to the economy. Whatever these people will adopt there will be a feeling that the code is bad and hinders industry development. - What bad role are we talking about? Background was created that it is hampered for business, will the international community take it like this? - When we were in power, there were notes from the international organizations and the EU regarding this Code. We prepared amendments to the bill, which would have been consistent with international organizations, on the one hand, but

on the other hand, would not frighten the entrepreneurs and not appalled them, on the contrary, would have given guarantee that these processes cannot be carried out against them. Recall that the government could not hide their negative attitude - remind you Margvelashvili’s reaction. What we have been saying publicly, unfortunately, the government talked quietly and among themselves. - What is the Code we have today? - Everything principal has been postponed. On Friday there was an attempt to influence Health Committee to create a working, conciliation group, which will propose a new version of these articles. The main issues are delayed. - Is there a prospect that the agreement will be reached on main issues, on fixed-term contracts, an irregular working day and so on? - I cannot say I’m not Nostradamus. It is very hard for me to speak about Parliament which two weeks ago took one decision and later another. One thing I know is that this code has already played a negative role. The entrepreneurs hope they are, but I would not hope because It is very easy to confuse the situation and an unhealthy attitude was created. It’s very difficult to establish order and create a feeling that everything is good and stable.

STRICT STANDARDS OF SERVICES PLANNED TO BE ENACTED FOR PHARMACEUTICAL, INSURANCE AND HOSPITAL BUSINESSES An interview with the head of the Independent Insurance Service LASHA NIKOLADZE - What kind of decisions is the government preparing? Is it about the fact that insurance companies should no longer own clinics and pharmaceutical companies? If any changes are planned, when should it happen? - The issue itself contains certain conflict of interest. It is also important that the state obliged the insurance industry to create the hospital sector. So, at this point to say explicitly that it is planned to remove from them would be wrong. But, nevertheless, it is evident and lies on the surface that there is some conflict of interest. Among other decisions that can be defined rigorously at this stage is services standards. These standards will allow avoiding such decisions as to get rid of the medical sector by insurance companies. In contrary, it was the state’s demand. Therefore, this issue, as health minister says, should be approached with caution, needs comprehensive review, and these discussions have started in the ministry and other circles. We try to avoid the possible risks of conflict of interest. In any case, everyone will be involved in the discussion and the best decision and way will be found. - Some representatives of the sector asked the question: at a time when non-core assets of the banking sector are not defined, why did this discussion begin in health care industry? Does it create any problem? Or you actually saw that the problem exists and made this decision? - Unlike the banking sector, there was no commitment from the government to enter other businesses. Therefore, considering international and banking standards, this issue can be more easily regulated. As for insurers and hospitals, insurance sector still has a commitment to build 12 clinics. Thus, it seems to me at least too early to talk about the isolation at this stage. But the conflict

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of interest is apparent. And standards introduction allows to avoid this. One side, the hospital sector is trying to offer as many services as possible and the second, the insurance industry is trying to be as cheaper as possible. This is often incompatible with each other. When both parties know about how much should be paid for services, conflict of interest will be minimized. As for the banking sector, it is a little different issue. There was no obligation for banks from the state, so it is easier to consider international approaches. - Here is a very important detail, namely, the investor’s attitude. What is important for an investor, particularly in Georgia, to implement an investment only in the insurance company or in everything that will bring more financially benefit to him? Can it create any problems in terms of investments or what will be the attitude of those who already invested? - In several countries the insurance companies own clinics, and it’s a proven method. However, not in the same scale and approaches as in Georgia. Relations between insurers and clinics are established and they have gone through the rules of the game we are taking now 200 years ago. This is why it cannot be considered a major hindering circumstance for investors. Therefore, our task is to make the insurance market as attractive as possible. - When can this decision be taken and during the transition to universal health care program can this step

be any problem to give full effect to the second phase of this program? - I do not see a contradiction. In any case, in order to enact the universal health care program, it is not the most important for the state who controls the clinics but how accurately they work and meet the quality requirements. This neither interferes nor supports the implementation of the universal health care program.

FINANCE MINISTER: WHEN WE WENT TO POWER, WE MET DEBT OF 1.5B LARI DUE TO ADVANCE COLLECTION OF TAXES

eorgia’s Finance Minister Nodar Khaduri declared that “When we went to power, we met debt of 1.5 billion lari, aroused due to advance collection of taxes”. Khaduri told journalists that the mentioned sum includes “some part of VAT” (not specified), being paid in advance, but “other taxes were excessively paid too”. He noted that those excessive taxes were used “for painting-repair of facades and other processes” in pre-election period. We are actively working on designing the mechanism for repayment of the mentioned sum, Khaduri declared, noting that simultaneous repayment will be difficult for the state.

FINANCE MINISTER: CONSOLIDATED BUDGET SURPLUS MAKES UP 144 MILLION GE

inance Minister Nodar Khaduri declared that according to 5 months’ data of this year, proficit of consolidated budget makes up 144 million lari. This “confirms that all expenditure, envisaged by the Georgia’s budget, will be performed by the end of the year”, the Minister told journalists today. He pointed that in the same period of last year, “deficit of consolidated budget amounted to 15 million lari”. Speaking on tax revenues of consolidated budget, Khaduri said that 2.656 billion lari was mobilized during January-May, exceeding by 82 million lari the showing of the same period of 2012.

PMC: STRICTER LABOR MARKET REGULATIONS MAY COMPLICATE ADAPTATION IN CASE OF ECONOMIC CRISIS

oughening of labor market regulation may complicate adaptation during possible economic crises, while artificial strengthening of trade unions may cause growth of share of informal (hidden) economy, research unit of PMC (Policy and Management Consulting) said. PMC conducted an empiric study in Tbilisi, interviewing managers of small, middle and large enterprises. The study revealed sharply negative attitude of business towards regulation rules for collective agreements, strengthening of trade unions’ role and authority of the state to became middleman for collective agreements by own initiative. 46% of interviewed managers consider that presented amendments to Labor Code will have no positive effect for business environment improvement, while 51% are sure that these amendments will not facilitate job creation. PMC recommends to diminish maximally or cancel at all restriction on conclusion of collective termed agreement, secure equality of both sides during cancellation of such agreement and increase level of freedom for such agreement conclusion. According to Giorgi Jerenashvili, director of PMC’s project on public sector consulting, the study shows that regulation on conclusion and cancellation of labor contracts clearly rises businessmen’ cost on labor force and declines freedom of enter and exit for labor relations. Growth of businessmen’ cost will decline demand for labor force, which will negatively impact in its turn rate of employment, as businessmen will have less stimulus for job creation in conditions of termless labor agreement, Jerenashvili said.

BUSINESS

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PATARDZEULI MAY SUSPEND PRODUCTION, KODA SALES SHRINK BY 90% IN REGIONS

atardzeuli” Director-General states to “Commersant’’ that sales have almost stopped because from 110 thousand eggs only 10 thousand are sold a day. According to Otar Muchiashvili, they’ve cut production by 20%, however, if sales do not increase, the company could stop production. Head of Sales Department of “Koda” company talks about a significant drop in sales as well. In Kakha Megrelishvili’s words, sales decreased by 90% in regions, while in Tbilisi a 10% decline in sales is observed compared with last year. He says the company has not reduced the production but if the situation does not change, they might think of cutting production as well. Eggs import, mainly from Iran, is named the main reason for the current situation in the egg business.

ISRAELI INVESTORS TO LAUNCH THREE NEW PROJECTS IN GEORGIA

t the end of July, Israeli investors plan to launch three new projects in Georgia’s real estate and tourism sectors. The head of Israel – Georgia Chamber of Business states in a conversation with radio “Commersant” that the 300-million investment implemented with support of Georgia - Israel Chamber of

Business needs to move to a new stage. Itzik Moshe notes that Israel is still a great potential partner, particularly in the private investments and it’s preferable interest groups, the willingness and the means to be studied more professionally. In his words, the security and social and economic stabilization will be incentives for existing and future investors.

KAZAKH MANAGEMENT TO RETURN TO “KAZTRANSGAS- TBILISI” BEFORE WINTER COMES

azakh management will be returned to “KazTransGas-Tbilisi” prior to the winter period - Deputy Energy Minister Ilia Eloshvili told commersant.ge. He says that the return process will be completed before the winter season comes and the company will be returned to the former owner, Kazakh side. Note: Authority of “KazTransGas- Tbilisi” tem-

porary manager will last until June 2014. However, as the Ministry of Energy explains, the decision is an ordinary legislative procedure that envisages appointment of an interim manager until the debt is returned and as soon as the parties hold negotiation and the debt is repaid (even before the term’s expiration), under the law, the Kazakh side will be given the right to return in the company. A return of “KazTransGas- Tbilisi” to the Kazakh side was one of the main topics during Energy Minister’s visit to Astana. Kakha Kaladze explains that the decision on the return of Tbilisi gas distribution company to the Kazakh side has been already received by the government. In his words, Prime Minister Bidzina Ivanishvili participated in consultations as well. After returning the company to the Kazakh side, the Ministry of Energy will conduct monitoring of the work carried out by “KazTransGas- Tbilisi”.

“TBILISI - PLAZA” CONSTRUCTION SUSPENDED INDEFINITELY

he construction of a multifunctional business–center “Willbrook - Platinium Tbilisi - Plaza” has been suspended indefinitely. The business center that had to be completed in 2012 is being built on the site of a former department store “Tbilisi” on Rustaveli Avenue. According to “Willbrook” representative in Georgia Ucha Gelashvili , at the stage the construction

works have been suspended. Gelashvili refrains from providing detailed information. However, explains that the project will be completed. According to the project, shopping and entertainment facilities will be located in one of the two buildings with a total area of 85 thousand square meters while in the second - offices. Approximately a 100 million investment was planned to be made in the project.

SOCAR SHIPPED 80 784 TONS OIL THROUGH BAKU-SUPSA IN MAY

zerbaijan state oil company (SOCAR) informs that in May Azerbaijan oil import declined by 4% in comparison with April and equaled to 2,141 tons. Azerbaijan information agency abc.az informs, that SOCAR shipped 1,9 million tons oil through Baku-Tbilisi-Ceyhan (BTC) in May of the current year, 80 784 – through Baku-Supsa pipeline.

As for 5 months data, in the current year 10,170 tons oil were shipped from Azerbaijan to different directions. Among them shipping data through BTC equaled to 8,4 million tons, though Baku-Supsa – 1,2 million tons. Last year 20,2 million tons oil were transported through BTC, 2,7 million tons – through BakuSupsa. GBC

JOB PLACES SHRINK BY 42 000 ONES IN PRIVATE SECTOR IN 1Q13

umber of employees in Georgian enterprises increased by 15,7 thousands, declined by 42 000 for the quarterly data. Geostat informs that in the first quarter of the current year, total number of employees of the enterprises equaled to 485 745 persons, while 470 041 persons were employed in the analogic period 2012, 527 828 persons – in the 4th quarter 2012. Total number of employees according to enterprise sizes is divided in this way: large business – 59,1%, mid-size business – 14,9%, small busi-

ness – 26%. According to official statistics, total number of enterprise employees equaled to 465.4 thousand persons, among them 40% are women, 59,6% men. Total expenditures on the personnel, made by enterprises equaled to 1012,1 million GEL. Besides, average monthly salary in the business sector equaled to 717,7 GEL, among them – 529,4 GEL for women. Average monthly salary according to enterprise size is following: Large business – 881,1 GEL, mid-size business -556,0 GEL and small business – 389,5 GEL.

MARKET RATING OF INTERNET PROVIDERS ACCORDING TO MARKET SHARE

ccording to TOP.GE data, Silknet is a leader of the rating of Georgian providers in May 2013, as last year. By the end of May of the current year, market share on this provider was defined by 42,06%. According to ratind, second place in the top-3 list belongs to co.ge (Caucasus Online)with 31,7% share, third place – to egrisi.ge with 11,63% share. It’s noteworthy that market shares of 3 leaders are sligtly declined in comparison with analogic period of last year. In May 2012 market share of silknet.com equaled to 44,25%, co.ge – 31,9% and egrisi.ge – 11,78%.

In May 2013, total share of top-3 companies equals to 85,39%, remaining 14,61% comes on other 24 providers

BUSINESS

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GEORGIAN WINES TO APPEAR ON RUSSIAN MARKET NEXT WEEK

ead of Georgian National Wine Agency Levan Davitashvili declared that entering Russian market will became available for Georgian wine from next week. First excise stamps were already issued and delivered to Georgia, he said at today’s press conference. “Remaining depends on logistics and speed of preparation by Georgian producers of their production for delivery to export”, Davitashvili declared. At first stage, delivery of 1 million bottles is planned to Russia.

BRAZIL APPEARED AMONG COUNTRIES OF GEORGIAN WINE EXPORT

s Georgian National Wine Agency reported, Brazil appeared for the first time among countries of Georgian wine export. First export to this country made up 34,000 l of wine, bottled in 0.75 l bottles, the Agency said, not mentioning the exporter company.

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According to the Agency, top five markets of Georgian wine export are Ukraine (44% of total export, as of May), Kazakhstan, Belorussia, China and Latvia. In total, export is implemented to 25 countries. In May, export of 6.91 million l was implemented, exceeding by 27% the showing of last year’s same period.

ILIAUNI BUSINESS REVIEW: SERVICE QUALITY OF VESTEL DESERVES 3.8 OF 5 AVAILABLE POINTS

conomic Researches and Consulting Center of Ilia State University’s business school conducted study in Vestel chain of household appliance shops. The Center evaluated various parameters of the chain’s work according to 5-point scale. According to IliaUni Busi-

ness Review, published by the Center, the study revealed the following averaged rates: service quality (consultants’ work quality, politeness, competence, etc.) – 3.85 points, service (delivery of purchased goods at the buyer’s home, installation, etc.) – 3.8, quality of brand production – 3.87, situation with queues – 4.15 points.

ILIAUNI BUSINESS REVIEW: 45% OF CUSTOMERS CONSIDER THAT SERVICE QUALITY OF FURSHET GEORGIA SUPERMARKETS NEEDS IMPROVEMENT

liaUni Business Review, customers’ opinion poll issue of Ilia State University, conducted study of customers’ attitude for supermarket chain Furshet Georgia. As the report said, 50% of customers are satisfied with quality of service, 45% consider that the quality could be better, while 5% are discontent. Regarding price level of the chain, 34% consider that all prices are acceptable. 59% consider that only part of production has acceptable prices, while 7% said that the chain has high prices.

15% of interviewed visit supermarkets of the chain regularly, 24% – quite often, while 61% – rarely. Age distribution of interviewed was as follow: 23% – below 18 years, 59% – 19-30 years, 15% – 31-51 years and 3% – above 51 tears old. According to Business Registry, Furshet Georgia was registered in February 2012. Its single owner was Koba Kurdgelashvili, former majoritarian MP from Kaspi, but after August 2012, the company belongs to Aphidex Ltd., registered on Virgin Islands.

ALGORITHM WON CONSOLIDATED TENDER ON COMPUTERS’ DELIVERY GEORGIA AND POLAND TO well as entities of public law, chancellory of the government and State Procurements Agency. ENHANCE COOPERATION IN The company told Sarke that starting price made up 715 lari per PC, but declined by 6 lari during the tender, so the final price made up 709 lari. TOURISM SECTOR

lgorithm won consolidated tender on state procurement of personal compters for 2013. The company was the only participant of the tender. According to the tender terms, Algorithm should serve ministries and their subordinated units, as

Total size of lot makes up 5,970 computers. So far, we are working on agreement, Algorithm said, noting that the state did not order tho whole lot, being brought on the tender. The company excludes decrease of the lot in size, pointing that supplier provides the mentioned final price only for the mentioned number of computers. According to the tender terms, the company should deliver computers within 45 days after initial request, while within 15 days – after next requests. At that, the company should provide 3-year warranty, either repairing or replacing the defective computer within 10 working days. Single owner of is Givi Kokharashvili.

UGT BECAME GEORGIAN PARTNER OF F5

T company UGT received status of official Georgian partner of F5, provider of solutions for network access to applications. Sandro Karumidze, head of telecom infrastructure unit of UGT, told Sarke that from now on, the company is able to sell F5 solutions for lower price than non-parter companies. F5 so-

lutions, which are intended for large enterprises and public agencies, which servers have heavy load and require respectively better security, cost thousands of the US dollars, he noted. Besides, UGT is authorized to conduct consultations and trainings and is able to involve specialists of F5 in this activity if needed, Karumidze said.

SILKNET OPENED NEW SERVICECENTER IN TBILISI ommunications operator

SilkNet opened new service-center in Tbilisi today. As the company said, the outlet, located on Rustaveli Avenue, has replaced the one, located on Rose Square. Staff of the new service-center includes 4 operators and 1 manager. Currently, SilkNet runs 10 service-centers in Tbilisi.

AVERSI HOSPITAL OBTAINS ISO9001 CERTIFICATE

ertificate of compliance to ISO9001 standard was given to Aversi hospital today in Tbilisi. As it was said at the ceremony, this is the first case in Georgia, when multipurpose hospital passes such certification. Certification was conducted by German TUV Suddeutschland.

eorgia and Poland are going to facilitate cooperation deepening in tourism sphere, investment encouragement, information exchange and experience sharing. For that end, memorandum on cooperation in tourism sphere was signed on June 3, within framework of the 3rd meeting of Georgia-Poland intergovernmental commission on economic cooperation. Poland has assisted already preparation of paper and electronic maps of Khevsureti (mountainous

area in North-Eastern Georgia), as well as guide book in Georgian and Polish. Georgian Deputy Minister of Economy and Sustainable Development Dimitri Kumsishvili noted that number of Polish tourists has increased by 60% last year, while in the 1st quarter of this year – by 43%. According to Georgian National Tourism Administration, number of Polish tourists made up 20,296 in 2012, while 1,848 – in the 1st quarter of this year.

TAV GEORGIA: NEW AIR CARRIERS MAY APPEAR ON GEORGIAN MARKET IN SUMMER

AV Georgia, operator of Tbilisi and Batumi international airports, declared that new air carriers will implement flights in Tbilisi and Batumi, in line with summer increase of passengers’ number in these airports. No particular companies were named, however. As TAV Georgia told Sarke, “We hope that ev-

erything will be clear for June 20”. The company noted that 2-3 air companies have expressed desire for flights from Kuwait. According to TAV Georgia, 9 leading carriers have already increased frequency of their summer flights (March 31 – October 28) to Tbilisi. At that, Israeli Israir Airlines has started flights between Tel Aviv and Tbilisi on May 14.

AIRONIX AIRLINES STARTED SIMFEROPOL-TBILISI FLIGHTS

krainian Aironix Airlines launched regular flights between Simferopol and Tbilisi. Flights are implemented 2 times a week (Tuesdays and Saturdays) by Boeing-737. According to the company, cost of one-way ticket makes up 151 EUR, while of return one – 251 EUR. TAV Georgia, operator of Tbilisi and Batumi international airports, stressed that this is first direct regular flight between Tbilisi and Simferopol.

BANKING NEWS

8 NBG PRESIDENT: IMF DEBTS WILL BE PAID OFF BY 2015

resident of National Bank of Georgia (NBG) Giorgi Kadagidze declared that Georgia’s debt toward IMF will be almost fully paid by 2015. He said that payment started in 2012, when $250 million was paid, while $300 million will be paid this year and $260 million – in next year. According to Finance Ministry, Georgia’s debt to IMF amounted to $744 million as of December 31, 2012. As of April 30 of this year, debt made up $736.74 million.

CAUCASUS DEVELOPMENT BANK – GEORGIA RECEIVED BANKING LICENSE

ational Bank of Georgia has issued banking license to JSC Caucasus Development Bank – Georgia. The license has indefinite validity term. To remind, the mentioned company was Tbilisi branch of Azerbaijanian Caucasus Development Bank until now.

EBRD OPENED 2 CREDIT LINES TO BANK OF GEORGIA

BY MAY 1, 23,4% OF THE RETAIL LENDING MARKET CAME ON TBC

BC share on the retail landing lending market equals to 23,4% by May 1, 2013 (01/01/13 - 25%). Individual loan portfolio increased by 14 million GEL, to 890,5 million GEL in April (01/01/13 - 859,5 million GEL). Overall loan portfolio of the bank equals to 2,236 billion GEL (01/01/13 - 2,249 million GEL). Amount of Commercial banks’ credit investment (including loans issued on non-residents) exceeds 8,8 billion GEL, among them 3,8 billion GEL comes on the individual credit portfolio. GBC

PRIVATBANK TO OPEN 7 BRANCHES THIS YEAR

rivatBank told Sarke that it is going to open 7 new outlets this year, both in Tbilisi and in regions. The bank noted that cost of one branch makes up about $50,000-60,000. According to the bank, current network of branches numbers 98 outlets countrywide, including 39 ones in Tbilisi.

BANK REPUBLIC OFFERS SUMMER CASHBACK ACTION TOGETHER WITH HYUNDAI

ank Republic jointly with Hyundai car center announced promo-action, in terms of which installment for interest of 14% is available for more than 10 models of Hyundai. Those, who will apply for action (June 2 – August 2), will be given automatic cashback of 5-10% of the bank. Besides, participants will get also car insurance from GPIH. Cost of cars, subjected to the installment, ranges between $14,000 and $52,000. Maximal duration of installment makes up 72 months. Getting of the installment, which starts with co-participation of 40%, is available upon presentation of ID card in Hyundai car center. According to Republic, eligible borrower should have monthly income of 700 lari.

Irakli Gilauri, director general of bank of Georgia stated that energy-credit will accessible both for individuals and legal entities. Bruno Balavanera, EBRD director in Caucasus, Moldova and Belorussia talked about innovative approaches of the partner banks, - “Euro bank is glad to continue funding of real economy and lending of energy-efficiency. Development of sustainable energy finding market is important for us”. On the signing ceremony of the contract Balavanera mentioned that energy-credit is useful both for individuals and legal entities, in the case of purchase of 20% energy-saving equipment, necessary loan will be cheapened by 15% - the debtor gets money back. This privilege is considered for retail market as well. It’s possible to get loan for conditioner, energy-saving doors, window or other techniques. GBC

IŞBANK COMPLETED JANUARYAPRIL WITH 134 900 GEL LOSS

TBC BANK OFFERS CONTACTLESS CARDS

BC Bank announced about option for holders of Visa cards to upgrade them to contactless ones. The upgraded cards have the same terms as old ones. Operations on amount, exceeding 45 lari, still require enter of PIN code, however. Currently, more than 700 trade outlets accept contactless cards in Georgia.

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ranch of Turkish İşbank completed January-April with 134 900 GEL loss. By May 1 deposits (current accounts) equals to 1,045 million GEL, overall loans - 1,7 million GEL, overall obligations - 1,7 million GEL Bank actives are defined by 14 million GEL, market share 0,1%. Batumi branch of the largest Turkish bank -

İşbank got license for operating in Georgia on July 13, last year. The bank is represented by one branch in Batumi and a service center, located in Batumi airport. In autumn it will be opened in Tbilisi as well. 40,4% of the bank stocks belongs to Pension Fund of İşbank, 28,1% - to Republican Public Party, other part belongs to bank employees and other persons. Stock capital equals to 12 million GEL. İşbank operates in 11 countries of the world, among them in Russia. Actives are defined by $250 billion. The bank, which was founded in 1924, operates in various businesses, among them glass production, telecommunication, industry and service sectors, glass industry. As bank representatives inform, the group made first investment in Georgia in 1997, in the glass production. GBC

LIBERTY BANK DENIES ALIENATION RUMORS

ormer owners of People’s Bank are planning to file a lawsuit in court. The announcement was made today. According to the former 45% shareholders of the bank Irina Jincharadze and Elene Kovalenko, they’re waiting for a response from the Prosecutor’s Office and then will file a lawsuit in court, claiming that in 2009 they were forced to alienate the shares. Moreover, Jincharadze and Kovalenko claim Vnestorbank

is interested in the acquisition of Liberty Bank. Liberty Bank (former People’s Bank) shareholders are Lado Gurgenidze, former PM of Georgia and Dinu Patriciu, Romanian billionaire. As the PR representative of Liberty Bank told TV3, current management of the bank has not acquired the shares from the complainants and prefers not to make any statement. The bank also denies alienation rumors. BPI

PRIVATE BANK BECAME GENERAL SPONSOR OF OPERA AND BALLET THEATRE

rivate Bank (Georgia) became general sponsor of Opera and Ballet Theatre. The sides signed 1-year long agreement on June 7. Several performances are left till the end of the season and also annual international premium The Star, which is held for the fourth times. Following donors sponsored theater in different times: Liberty, Republic and KSB Bank.

BANK REPUBLIC INTRODUCES 11.95% INTEREST RATE SUMMER LOAN

ank Republic announce about summer loan with 11,95%, which does not have limited aims. Credit is for all who needs money for travel, vacation, study, cottage rent, purchase of technic, renovation of furniture or wardrobe, shortly, for any wish. New loan conditions are also innovation. In addition to monthly salary, it also includes income from lease of private business.

“Stability is the most important for customers. That’s why we offered consumer loans with interesting and comfortable conditions, which are distinguished with unprecedentedly low interest rate. Our new offers of consumer loan is equally attractive for the persons with monthly salaries, also for those whose income source is leasing or business”, - Ramaz Kukuladze, commercial director of the bank stated.

LIBERTY ENLARGES NETWORK

iberty Bank announced about modernization and enlargement of the branches and service centers. George Arveladze, deputy director general will open newly renovated branch in Tbilisi, #2 Kostava Street at 12:00 on Friday. The branch will provide fill service to individuals and legal entities. Bank informs that it’s possible to get almost all kinds of loans in the branch, also usage of international and local money transfers, opening various deposits, coverage of communal taxes. In 2012-2013 Liberty bank provided opening and modernization of over 30 new branches and service centers throughout Georgia. Liberty Bank owns the largest bank network in Georgia, through which it serves to 1,4 million individuals and over 58 000 legal entities. According to actives, market share of Liberty Bank equals to 7% by May 1, 2013.

INVESTBANK ENDS JANUARY TO APRIL PERIOD IN 482 000 GEL LOSSES

SC InvestBank completed January-April 2013 with 482 000 GEL loss (2012 profit: 3,3 million GEL). Nonbanking deposits portfolio is defined by 22,2 million GEL (2012 - 15,9 million GEL), loans - 7,5 million GEL (2012 - 6,9 million GEL). Overall obligations equal to 7,5 million GEL (2012 - 17 million GEL). Amount of bank actives are 40 million GEL (2012 - 32,3 million GEL), market share - 0,3%. Stock capital equals to 14,5 million GEL (2012 15,3 million GEL). InvestBank has operated since 2003. 70% of the bank stocks belong to KSN Foundation, 30% - TRENDFOR HOLDING LTD. Beneficiaries are Michael Hagen (70%), Brenda Patricia Cocksedge (15%), Stefan John Kelly (15%).

BTA ENDS JANUARY TO APRIL PERIOD IN 1.452 MILLION GEL LOSSES

SC BTA Bank (Georgia) completed January-April with 1,452 million GEL loss. By May 1 deposits (without banks’ deposits) equaled to 42,2 million GEL (2012 32,3 million GEL), credit portfolio - 78,2 million GEL (2012 - 80,3 million GEL). Overall obligations are 101 million GEL (2012 - 97 million GEL). Bank’s actives are 126,6 million GEL (2012 - 122,6 million GEL), market share - 0,9%. BTA Bank operates on Georgian market since 2001. 49% of the stocks belong to JSC BTA BANK, 51% - to Silk Road Financial Group. Fund Samruk Kazina (39,9%) and George Ramishvili (31,6%) are the largest beneficiaries. Stock capital of the bank equals to 25 million GEL (2012 - 25,6 million GEL. GBC

AZERBAIJAN INTERNATIONAL BANK COMPLETED JANUARYAPRIL WITH 725 121 GEL PROFIT

zerbaijan International Bank (Georgia) completed January-April 2013 with 725 121 GEL profit. Last year profit of the financial institution equaled to 3,5 million GEL last year. Bank informs, that by May 1, loan portfolio equals to 110 million GEL (2012 İ - 100,3 million GEL), deposits - 18,4 million GEL (2013 İ . - 19 million GEL), overall obligations - 115 million GEL (2012 İ . -106,8 million GEL). Actives are 140 million GEL (2012 İ . - 131,4 million GEL), market share 1%. Azerbaijan International Bank is represented by subsidiary bank on Georgian market since 2007. Ivane Chkhartishvili represents Georgian side with 12,5%. 37,65% of the stocks belongs to Azerbaijani Republic State Committee of Property. Stock capital of the bank equals to 25,2 million GEL (2012. -24,6 million GEL). GBC

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STATISTICS

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INVESTMENTS IN FIXED ASSETS DECLINED

akstat reported that investments in fixed assets totalled in the 1st quarter to 101.6 million lari, declining by 21% year-on-year. Large business accounted for 68.9% of total volume, middle-sized one – for 2%, while small business – for 29.1%. In the reporting period, enterprises’ turnover totalled to 8.6 billion lari, increasing by 6.2% if compared with the same period of 2012. Total output for the period amounted to 4.3 billion lari (year-on-year growth – 4.9%). Large business accounted for 82.6% of total turnover, middle-sized one – for 6.7%, while small

business – for 10.7%. Respectively, their shares in total output made up 81.2%, 7.8% and 11%. Distribution in terms of activity was as follow: trade – 51.7% of total turnover, manufacturing – 13.5%, transport and communications – 12.1%, production/distribution of electricity, gas and water – 6% and construction – 4.8%. Same distribution for total output was as follow: manufacturing – 25.3%, trade – 17.9%, transport and communications – 16.9%, construction – 10.3%, operations with realty, leasing and service to customers – 7.6%. Total number of employees made up 485,000 (growth – 3%), of which 39.7% were women.

Business sector in Georgia, I quarter 2013

AZERBAIJAN

10 PASHA BANK GETS PRIZE ‘BEST CORPORATE SOCIAL RESPONSIBILITY PROGRAM IN EUROPE’

SOCAR PRESIDENT: AZERI GAS SUPPLIES FOR EU NOT TO START UNTIL 2019

he official ceremony of distribution of Europe Banking Awards 2012 was held in Vienna yesterday. One of the leading banks of Azerbaijan - PASHA Bank has been recognized in two categories at once: the Bank was recognized as the Best Investment Bank of Azerbaijan and declared the best in Europe in terms of corporate social responsibility (CSR). After the award ceremony Bank’s board member and chief investment officer (CIO) Taleh Kazimov stressed that the results of PASHA Bank’s work in investment direction was again highly appreciated by the professional community, due to which the Bank received this award for the second time in succession. “For a little more than two years PASHA Bank issued corporate bonds of 6 issuers - representatives of different sectors, including banking, leasing and telecommunications sectors (10 issues totaling approximately AZN 102.4 million). PASHA Bank provides market-making services on the secondary market on all the big issues, where it is the underwriter. I recall that in 2012 PASHA Bank started rendering market-making services on mortgage bonds of the Azerbaijan Mortgage Fund. Given the high liquidity in the market, the yield of 7-year mortgage-backed securities in the secondary market has fallen from 3% to 2.962% (volume of the issue is AZN 55 million). By the end of 2012 the Bank’s portfolio of local securities amounted to about AZN 300 million (over $382 million) that makes up more than 50% of the securities in the local market. Bank’s total securities portfolio for the year exceeded AZN 335 million (over $427 million) - an increase against the previous year was 23.7%,” Kazimov said. Sona Abbasova, director of PASHA Bank’s Marketing & Public Relations Department, says that despite the relatively short period of activity, the Bank within its development strategy for 201214 has outlined quite clearly for itself the goals, objectives and priorities in the field of CSR and has already successfully implemented many projects in the fields of culture, education and sports. “By implementing a wide range of initiatives as part of its CSR program, PASHA Bank contributes to the growth of welfare of the society and the further development of Azerbaijan. We are pleased that our efforts have received such high estimate of the international business community,” Abbasova said. abc.az

AZERBAIJANI CENTRAL BANK’S CURRENCY RESERVES HIT $12.5 BILLION

he total amount of currency reserves held by the Central Bank of Azerbaijan (CBA) reached $12.572 billion by the end of May, the bank said in a statement posted on its website. According to the statement, since the beginning of the year currency reserves have risen by 7.5 percent, or $877.5 million. The Central Bank’s foreign exchange reserves amounted to $11.694 billion in early 2013. azernews.az

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aku hosts 20th international conference Caspian Oil & Gas, the refrain of which is the Southern Gas Corridor, being created by the European Union. At the opening of the conference, president of the State Oil Company of Azerbaijan (SOCAR) Rovnag Abdullayev claimed that the country is currently experiencing a second oil boom. “With oil and gas reserves of 10 billion tons of standard coal, which is enough for 100 years, the country is making serious efforts to develop the non-oil sector, making significant investments in human capital,” he said.

According to Abdullayev, production of quality oil has created conditions for Azerbaijan’s entrance into the world market. “Azerbaijan has already become a natural gas exporter and is taking steps to ensure the energy security of Europe. The EU appreciates Azerbaijan as an important exporter for the continent. Azerbaijan also contributes to the energy security of Turkey and Georgia. If earlier the country exported gas only to one country, now it is an exporter for 4 countries,” Abdullayev added. He also pointed out that Azeri gas transportation via the Southern Gas Corridor will ensure the stable development of the economy and enhance the international image of Azerbaijan. “For the realization of the idea of the Southern Gas Corridor the country, together with Turkey, has made concerted efforts to build Trans-Anatolian gas pipeline (TANAP), via which 10 billion cu m of gas a year will be delivered to Europe. The first transportation of gas via TANAP, the construction of which will begin in 2014, is scheduled for 2019,” Abdullayev emphasized. Earlier supply of Azeri gas to the EU was scheduled for 2018. At the same time, current estimates made before the choice of export route to the EU and making of a final investment decision on Shah Deniz Project 2 are also not final and may continue to shift. abc.az

SOCAR AND BP PREPARE TO INVITE BIDS FOR CONSTRUCTION OF BAKU WASTE UTILIZATION CENTRE

he State Oil Company of Azerbaijan (SOCAR) in conjunction with BP is to build an oil waste recycling center in Garadagh. At Caspian Oil & Gas conference SOCAR vice president Rafig Huseynzadeh has stated today that construction of the center will cost AZN 50-60 million. “It will be commissioned in early 2014. The tender for the construction company will be announced in the near future,” Huseynzadeh said. Work on a parity basis will be financed by SO-

CAR and BP. “The center is expected to deal with disposal, basically, drill cuttings coming from onshore and offshore structures, as well as oil mud and formation water. The waste will be transported to the land from the platforms and utilized to the last stage. Thereby this will solve the problem of environmental pollution,” Huseynzadeh said. The matter of technical and economic feasibility is under consideration now. Infrastructure of the center will be built by SOCAR. abc.az

EBRD: AZERBAIJAN HAS FAVORABLE CONDITIONS FOR INVESTMENT IN SECURITIES MARKET

zerbaijan has provided favorable conditions for investment in the securities market, Vice President of the European Bank for Reconstruction and Development (EBRD) for Finance, Manfred Schepers, has said in a meeting with Deputy Chairman of Azerbaijan’s State Committee for Securities Ilgar Muradov in Baku. During the meeting the parties discussed the expansion of cooperation, which, according to Muradov, will create new opportunities in the domestic securities market. Muradov briefed the interlocutors on the reforms successfully implemented in Azerbaijan in recent years, as a result of which the indicators of socio-economic development reached new highs, the infrastructure of the securities market has dynamically developed, and good results in shaping modern market architecture have been achieved. He also spoke about the objectives of the state program for the development of the securities market in Azerbaijan for 2011-2020. The total turnover of transactions on all instruments at the Baku Stock Exchange (BSE) in January-April 2013 amounted to 2.143 billion manats. The market of government securities exceeded 1.92 billion manats, while the corporate securities turnover constituted 220.81 million manats. The corporate securities market nearly tripled. The official exchange rate as of June 1 was

0.7846 AZN/USD. According to a recent report of the Central Bank of Azerbaijan (CBA), Azerbaijan’s economy and banking sector retained their attractiveness for foreign investors in the first quarter of 2013. Established in November 2008, Azerbaijan’s State Committee for Securities is in charge of regulating activity in the securities market, creating favorable investment conditions, creating and maintaining an environment for healthy and fair competition in the securities market, protecting the rights of investors and shareholders, etc. The EBRD has been working in Azerbaijan since the republic gained independence in 1991. Its focus is on helping to speed up reforms and address some of the challenges facing Azerbaijan. The bank is focused on three main areas: industry, commerce and agribusiness, finance and energy and infrastructure. Priority areas include increasing investments in the country’s non-oil sector, funding financial sector development and support for small business entrepreneurs. The bank seeks to engage with other international financial institutions and the business community in policy dialogue with the authorities, in order to implement reforms and improve the investment climate which includes advisory support, institution building and legal transition work, mobilizing donor financing in support of the preparation and implementation of projects, etc. azernews.az

AZERBAIJAN LEADS ON MIDDLE CLASS SIZE IN SOUTH CAUCASUS: ILO

zerbaijan leaves behind the other two South Caucasus countries for the size of the middle class population, according to an International Labour Organization (ILO) report. The annual report on the state of labor markets worldwide, the “World of Work Report 2013”, issued on June 3, shows that some 20 percent of the Azerbaijani population has a daily income worth $10-$50. In Georgia and Armenia, the other two regional states, only about 10 and 8 percent of the population has such income respectively, according to the report. Azerbaijan was regarded as a country with the population’s income higher than the average level. Most of the country’s population was defined as the “floating group” with earnings of $4-$10 a day. About 18 percent of Azerbaijan’s population falls under the group of people earning less than $4 per day, ILO said. In Georgia, some 40 percent of the population falls under the low-income group (earning less than $4 a day) and in Armenia, the number of the needy people amounts to 20 percent. ILO says that as the global economy continues a slow recovery from the financial crisis, most emerging and developing countries are experiencing rising employment and narrowing income inequalities compared to their high-income counterparts. However, the gap between rich and poor in most low and middle-income countries remains wide. Many families who have managed to rise above the poverty line are at risk of lapsing back. The report shows that middle-income groups in many advanced economies are shrinking. Raymond Torres, Director of the International Institute for Labour Studies, the research arm of the ILO, said that the shrinking size of middleincome groups in advanced economies is a matter of concern, not only for the inclusiveness of those societies but also for economic reasons. According to him, long-term investment decisions by enterprises also depend on the proximity of large and stable middle-income groups which are in a position to consume. “More and better jobs are needed so there can be a more balanced distribution of income in both advanced and developing economies, Torres said. azernews.az

AZERBAIJAN’S POWER GENERATION LOWERS BY 11.1% IN MAY

zerbaijani national energy producer Azerenerji OJSC reduced generating power by 11.1% in May against April 2013. The last year’s power generation index exceeded the 2011 figure by 6.5%. The Azerenerji’s press service, citing the Central Dispatcher Control Office, reported that it was generated 1.6 bn kWh of electricity in May versus 1.8 bn kWh in April, 2 bn kWh in March and 2.1 bn kWh in January. By 2.2 kWh were generated in March and January and the indices were the best for 2012. The best indicator for 2011 (also 2.1 bn) was registered in December 2011. In 2010 highest generation was registered in January (1.9 bn kWh). “For Jan-May 2013 it was generated 9.3 bn kWh of electricity,” it was informed. In 2012 it was generated 21.3 bn of kWh of power, and generation of electricity in 2013 still makes up 36.6% of this volume. Data on generation of power at thermal electric power stations and hydroelectric power stations is not brought. In 2011 it was produced 20 bn Kwh, including 17.3 bn kWh at TEPs and 2.7 bn Kwh at HPSs, and by 8.7% exceeded its generation for 2010 when it made up 98.9% of generation for 2009. In 2010 it was generated 18.4 bn of kWh of power. Data on thermal and hydroelectric power stations was not published. In 2009 power generation made up 18.6 bn kWh (including 16.3 bn kWh at thermal power stations and 2.3 bn kWh at hydroelectric power stations) and in 2008 - 21.2 bn kWh (including 19 bn kWh and 2.2 bn kWh respectively). abc.az

June 10, 2013 #08

ARMENIA

caucasian business week

IMF TO RELEASE NEW MACROECONOMIC OUTLOOK ON ARMENIA IN JUNE

he International Monetary Fund (IMF) will release its new outlook on Armenian macroeconomic situation in June, said Guillermo Tolosa, IMF Resident Representative in Ar-

menia. IMF will release its new report within the next two-three weeks and will present it at the Board of Directors meeting over the official end of the funding program, he added. The report, according to him, will contain the outlook on the main macroeconomic figures. Tolosa didn’t uncover the figures to be highlighted in the new report, noting “the last publication is still effective.” The IMF said in its April World Economic Outlook report, Armenia will post a 4.5-percent GDP in 2013, and 4.1%- in 2014. Consumer price index in Armenia is to rise by 4.2% in 2013, and 4% in 2014, the negative balance will be 9.6% of GDP in 2013 and 8.2% -in 2014. According

to the report, the unemployment rate will drop to 18.5% in 2013 and 18% -in 2014. Tolosa noted IMF is optimistically set towards Armenia, however, the current situation doesn’t merely feed this optimism and it is necessary to “shift gears and speed up the pace” in the economic policy. Armenia is heading forward through the path of deep changes, and that’s why we recommend to speed up the pace today, he clarified. It doesn’t mean the IMF sees no progress in Armenia, though, according to him. He pointed out it is just the right time for the authorities to concentrate on this issue, especially now, when the principal processes in the political field of Armenia remained behind. Tolosa, who is finishing his mission in Armenia, said the IMF refers to Armenia as to a country which has already exited the list of low-income states, thus, the attitude to it has changed. Armenia is shifting to the new stage and is seen

as a new emerging market, where the bids grow and expectations expand, he believes. The situation in the country is changing through several angles as Armenia is shifting from stabilization and restoration into the new spheres, he resumed.

GDP growth is anticipated at 6.2% in Armenia’s 2013 budget, inflation- 4% (±1.5%). According to the assessments of IMF, WB and EBRD, the GDP growth in Armenia will stand at 4.6%. ARKA

ARMENIAN CIVIC ACTIVISTS TO ASK RUSSIA AND GEORGIA BOUGHT REGULATOR TO POSTPONE PUBLIC ENTIRE CONSIGNMENT OF EXPORTED GRAPES FROM ARMENIA DISCUSSION OF PROPOSED INCREASE

reported by Armenpress, in the first three months of 2013 859 thousand 900 kilograms of fresh or dried grapes was exported from the Republic of Armenia to the Russian Federation with the total customs value of more than 1 million 200 thousand USD. By the data provided by the State Revenue Committee at the Government of the Republic of Armenia, in the first three months of 2012 702 thousand 400 kilograms of grapes was exported from Armenia to Russia. The total volumes of the grapes exported from the Republic of Armenia in the first three months of 2013 made 1 million 256 thousand 300 kilograms. In the first three months of 2013 another large buyer of the Armenian grapes was Georgia with 396 thousand 500 kilograms. The total volumes of the export from the Republic of Armenia in 2012 made 1 billion 428 million USD. In 2012 the export volumes from Armenia to Russia made 280 million USD. In 2012 9 million 584 thousand 100 kilograms of grapes was exported from the Republic of Armenia to the Russian Federation. ARMENPRESS

IN GAS AND ELECTRICITY PRICES

rmenian civic activists will ask the Public Services Regulatory Commission to postpone a session that is to discuss the proposed increase of prices for natural gas and elec-

tric power. “Before considering the increase, it has been necessary to organize public hearings to give people an opportunity to express their views,” Aram Grigoryan, the executive director of the Union of Public Defenders, said Thursday at a news conference. “But no such discussions have been held. That is why tomorrow our civic initiative will propose the Public Services Regulatory Commission to postpone the session for one month”. On May 29, the commission failed to hold public hearings, since the people who gathered in the hall demanded to postpone it until another hall that would accommodate more than 100 people were found. Meri Khachatryan, a lawyer, on her side, said that Armenian citizens display passiveness toward this issue. She called on citizens to join the

initiative. On May 14, ArmRosGazprom asked the regulator to revise upward the current tariff for Russian natural gas. It wants to raise the price for consumers using up to 10 thousand cubic meters a month from current 132,000 drams per one thousand cubic meters (including VAT) to 221,000 drams. Earlier this week the PSRC unveiled on its official website new prices of gas. Thus, consumers using up to 10,000 cubic meters of natural gas per month will be paying 156 thousand drams, including VAT, for one thousand cubic meters, up form current 132,000 drams. Corporate and other enterprises consuming 10,000 and more cubic meters will be paying about $276.98. The new prices will come into force from June 7 to 10. Prices for electricity are expected to rise as well. The Public Service Regulatory Commission says the day-time price for one kilowatt/hour (from 7:00 to 23:00) may rise up to 38 drams from the present 30, and the night-time price may rise from the present 25 to 28. ($1 – AMD 414.92) ARKA

ARMENIAN GOVERNMENT APPROVES STAGE-BY-STAGE AIR SERVICE LIBERALIZATION STRATEGY

he Armenian government approved today the strategy of stage-by-stage liberalization of air service area in the country. Armenian Civil Aviation Chief Artem Movsisyan said this document imply at least three national air companies in Armenia. He said that the General Department of Civil Aviation of Armenia and the Public Council have repeatedly met and discussed prospects for development of this area, and the approaches proposed at these meetings can be divided into three general groups: the establishment of a private national

air company or an air company with state participation, the implementation of so-called open sky policy by the government and the implementation of a stage-by-stage liberalization policy. Movsisyan stressed the importance of establishment of a national air carrier, saying it is related to national security, but at the same time, he pointed out some adverse points of that. “Over the course of time, this private company may weaken, as it has already happened in Armenia,” he said. “Besides, such a company will be in need of the government’s patronage, and this will affect first of all the process of creation of com-

FLY DUBAI TO INCREASE FLIGHTS TO ARMENIA FROM 4 TO SIX A WEEK

ly Dubai airline from the United Arab Emirates said it will increase the number of flights between Dubai and Yerevan from current four to six a week from June 23. Head of the airline’s office in Yerevan, Vachagan Sargsyan, said the increase was permitted by the Armenian Chief Civil Aviation Department following the bankruptcy of Armenia’s national air carrier Armavia.\ Armavia stopped flights from 1st April of 2013 to begin bankruptcy proceedings. Following this, the government began talks with foreign airlines to increase the number of flights to Armenia. Sargsyan said the price of a two-way ticket from the second half of the summer will be about 85 thousand drams (about $205). Fly Dubai is a low cost airline based at Dubai International Airport. ARKA

petition environment.” The second proposal that implies unconditional introduction of an opensky ideology in Armenia with the absence of own national air carrier may jeopardize establishment of national carriers in the future. The third approach, liberalization, should equally apply not only to Armenian, but also to foreign national carriers. “Such an approach can be most effective in a country that has own air carriers, which already operate on a competitive field and which have already accomplished and won their aviation reputation,” Movsisyan said.

Expressed favor for the third proposal that implies stage-by-stage liberalization, he said it will spur competition in the civil aviation area. Air routes will be provided to air companies via tenders. Maybe, two companies will operate flights to the same directions. The civil aviation chief also said that Armenian air companies will use Armavia’s specialists and its experience. On April 1, 2013, Armavia, Armenia’s national air carrier, stopped operating flights and launched its bankruptcy procedure. ARKA

CIS

Kazakhstan

resident approves Kazakhstan transition to ‘green economy’ concept. The decree of the Head of state about the concept on transition of the Republic of Kazakhstan to “green economy” is approved. The text of the decree is published on June 1 on an official seal. In the decree Nazarbayev decides “to approve the concept of Kazakhstan transition to “green economy”. According to the decree, the government of Kazakhstan needs to approve the plan of measures on concept implementation. In the comment to the decree it is noted that the concept of Kazakhstan transition to “green economy” lays the foundation for deep system transformations for the purpose of transition to economy of a new formation by means of welfare increase, Kazakhstan population life quality increase and country’s entry into the number of 30 most developed countries of the world at minimisation of environmental load and degradation of natural resources.

ungarian oil and gas company MOL to join KazEnergy Association. ‘It is connected not only with the current, but also with the prospective activity of the Hungarian firm on the Kazakh fields’, the association press service report said. This issue was considered during the second meeting of the KazakhHungarian Business Council, headed by deputy chairman of the KazEnergy Association Jambulat Sarsenov and the executive vice president of the Hungarian oil and gas company MOL Shandor Fashimon. MOL Hungarian Oil and Gas Plc. has a 49 per cent stakes in the KS EP Investments BV Company which in turn owns Karpovsky Severniy LLP. Karpovsky Severniy LLP has the right for subsurface resources management on the basis of agreement on the exploration of oil, gas and condensate on the site of Karpovsky Severniy in the Western area of Kazakhstan.

azakhstan, Belarus, Russia urged to create large transnational corporations. Enterprises of Kazakhstan, Belarus and Russia can create large transnational corporations, First Vice Premier of Belarus Vladimir Semashko said at the plenary meeting of the SES Business Forum. “Enterprises of Belarus, Kazakhstan and Russia should not compete with each other but create large transnational corporations,” said Vladimir Semashko. “We must conduct a coherent industrial policy to avoid creating duplicate manufacturing faculties”. “Integration is getting momentum with the Eurasian Economic Union. For that by 1 May 2014 we should draft relevant documents necessary to create this new integration entity. Thus, the theme of the forum sounds very up-to-date - “Eurasian Economic Union: Business Expectations” said Vladimir Semashko. Business really expects beneficial conditions for development, for increased industrial cooperation, concentration of financial and intellectual resources. The main objective of this process is to increase exports, raise foreign investments.

June 10, 2013 #08

caucasian business week

he right species of foreign agent can get incentives to prosper and propagate in Russia, as shown by a deal announced Thursday. A unit of state-controlled lender Sberbank said it agreed to loan 1 billion rubles ($33 million) to an agricultural company for expanding its herd of U.S. bovines. Owned by Miratorg Agribusiness Holding, the herd of 12,000 meat cows and bulls from Arkansas grazes in the country’s westernmost region of Kaliningrad on the Baltic Sea. One of Russia’s largest agricultural investors, Miratorg brought in the first shipment of the Aberdeen Angus cattle to the region in December. It also runs the country’s biggest beef farm near Bryansk, where the Aberdeen Angus herd consists of more than 60,000 head. Miratorg is betting on the government’s plan to reduce dependence on foreign agricultural products. Russia is now the world’s biggest beef importer, with an annual bill of $3 billion. The loan sets a milestone for the farming industry. It’s the first time an agricultural company

borrowed for a period of 15 years. Enabling these sort of long-term loans, the Cabinet in December extended to as many years the time period for which it will refund the interest paid on them. “The fact … allows us to feel more confident when carrying out major projects with long production cycles,” Miratorg President Viktor Linnik said in a statement. There have been cattle imports by other farms around Russia, and U.S. breeder Darrell Stevenson even set up a ranch to facilitate the animal immigrants infiltration of local pastures. The enthusiasm about U.S. livestock came before Russia banned imports of U.S. beef — as well as pork and chicken — in February, saying it didn’t like the use of feed additive ractopamine. The government is unlikely to lift the restriction soon, as some observers believe the measure relates more to politics than to safety issues. It may have been retaliation for recent U.S. legislation that punishes Russian officials implicated in human rights violations. Themoscowtimes.com

RUSSIAN RAILWAYS WANTS TO PRIVATIZE GREEK PORT

ussian Railways chief Vladimir Yakunin has asked President Vladimir Putin to support its participation in the privatization of the Greek port of Thessaloniki, a news report said Wednesday. The selection of candidates may begin as early as June, Kommersant reported, citing a letter from Yakunin to Putin on May 26. Deputy Prime Minister Arkady Dvorkovich has been tasked with analyzing the pros and cons of potential involvement. The deal includes the privatization of the rail carrier TrainOSE and repair company Rosco, and has an estimated starting price of 140 million euros. TrainOSE is estimated at 30 million euros, Rosco at 10 million euros, and the port of Thessaloniki

at 100 million euros. The head of state-owned Russian Railways said that without public funding his company would have to consider forming a consortium with a foreign partner to buy the assets. Other companies from France, China and Arab states are also showing interest in the assets, as well as Russian state agencies authorized by the government, the letter states. Yakunin said that the port’s privatization represented a unique opportunity to combine rail and port projects in Greece with infrastructure projects already implemented in Serbia. Last year 4.4 million tons of freight passed through Thessaloniki, one of the main ports in Greece, while the net profit exceeded five million euros. themoscowtimes.com

azakhstan-China gas pipeline capacity to be increased. Kazakhstan and China will increase the power of the first section of the main gas pipeline between the two countries through the construction of additional threads. The Minister of Oil and Gas of Kazakhstan has submitted the draft law “On the ratification of the Protocol on Amendments to the Agreement between the Government of Kazakhstan and the Government of China on cooperation in the construction and operation of the Kazakhstan-China gas pipeline from August 18, 2007” to the Majilis (lower chamber of parliament). “The bill would increase the power of the first section of the Kazakhstan-China main gas pipeline (threads A and B ) by building a thread C and will transport additional 25 billion cubic meters of gas a year,” Mynbaev said. The cost of the project, according to him, amounts to $5.45 billion. A loan in the amount of $ 4.7 billion is provided by the China Development Bank for the construction. The missing part of the funding will be covered at the own expense of the Asian Gas Pipeline LLP.

Uzbekistan

man and Uzbekistan discuss bilateral cooperation in economic sphere. Representatives of the Ministry of Foreign Affairs of Uzbekistan and the Ambassador of the Sultanate of Oman Mohammed bin Said al-Lavati discussed issues of cooperation within bilateral and multilateral formats as well as the course of joint work on long-term projects in different fields. As reported, during the state visit of the President of Uzbekistan to the capital of Oman, Muscat in 2009, 19 interstate, intergovernmental and interdepartmental documents were signed and the main areas of bilateral cooperation determined. Also, an agreement was reached on joint investment projects worth over $1 billion. A preliminary agreement was also reached during the business forum on allocation of $ 100 million to UzOmanCapital in 2013 for the implementation of joint projects in Uzbekistan in the field of textile, electronics, building materials with the total project cost of about $ 300 million.

zbekistan joins CIS free trade zone. A free trade agreement between Uzbekistan and the CIS was signed at a meeting of the Council of CIS Heads of Governments in Minsk. Uzbekistan became the ninth member of the free trade zone. The agreement on free trade zone within the CIS was signed on October 18, 2011 by eight countries - Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan and Ukraine. Three more countries - Azerbaijan, Turkmenistan and Uzbekistan have expressed their desires to further examine possible accession to the treaty. Only Kyrgyzstan and Tajikistan have not ratified the treaty yet, but the procedure is being finalised.

YANUKOVYCH PRESSES EU ON TRADE AND POLITICS

resident Viktor Yanukovych pressed the European Union on Thursday to conclude a milestone political and trade deal with Ukraine this year, but he gave no ground on a key EU demand that he free jailed opponent Yulia Tymoshenko. Yanukovych made his call in a state-of-the-nation address issued in text form only, stirring the anger of pro-Tymoshenko lawmakers who demanded he appear in person to deliver it. Kiev would like to sign agreements with the EU on political association and free trade at a summit with other east European states in November in the Lithuanian capital Vilnius. But the 27-member bloc first wants more tangible proof of Ukraine’s commitment to democratic reforms, including the release of Tymoshenko, a former prime minister and Yanukovych’s fiercest opponent, from a seven-year jail sentence. The free-trade agreement potentially on offer from the EU would open up a huge market for Ukrainian exports — steel, grain, chemicals and food products — and provide a powerful spur for much-needed foreign investment.

“Concluding the agreement on association for Ukraine … will shift our state’s cooperation with the EU onto a qualitatively new level of political association and economic integration,” Yanukovych said in his address. “We hope that it will be signed at the Vilnius ‘Eastern Partnership’ summit at the end of 2013,” he said. He made no mention of Tymoshenko or of the EU conditions for signing the association agreement. Tymoshenko, the 52-year-old heroine of the 2004 “Orange Revolution” street protests that overturned an election rigged in Yanukovych’s favor, was sentenced in October 2011 for abuse of office linked to a 2009 gas deal she brokered with Russia. The EU says her sentence smacks of political vengeance by Yanukovych and use of “selective justice.” Yanukovych’s comments followed Ukraine’s signing of a deal to secure observer status in a Russia-led Customs Union trade bloc that also includes two other former Soviet republics, Belarus and Kazakhstan. Ukraine has come under pressure from Russia to join the Customs Union, a move that would bring

it much-needed cheaper gas from its main energy provider, but has resisted because it would not be compatible with an EU free trade agreement. As the clock ticks down towards the Vilnius summit, EU diplomats say pressure is growing on Yanukovych to review his hardline stance on Tymoshenko and bring about her release. In April, Yanukovych won rare praise from the West for freeing former interior minister Yuri Lutsenko — a Tymoshenko ally — from a fouryear sentence for abuse of office. But Tymoshenko is a much tougher case. If she were freed and politically rehabilitated she could mount a formidable challenge for the presidency when Yanukovych seeks re-election in 2015. EU heavyweight Germany has offered to provide Tymoshenko with medical treatment in Berlin for chronic back problems she has suffered for most of her time in detention. Some analysts see this as a possible solution that would allow Yanukovych to clinch a deal with the EU while also ensuring that Tymoshenko, who ran him close for the presidency in February 2010, remains out of the political running in 2015.

“The only and most likely option is for Tymoshenko to go abroad for medical treatment. Negotiations are going on about this including with Tymoshenko herself,” said Volodymyr Fesenko, analyst of the Penta political think tank. “It is the only variant which can be acceptable to Europe and the Ukrainian leadership. Other possibilities, for example freeing Tymoshenko and dropping criminal charges against her, are extremely unlikely,” he said.

June 10, 2013 #08

WORLD NEWS

ISTANBUL GEZI PARK PLAN TO PROCEED - TURKISH PM ERDOGAN

urkish Prime Minister Recep Tayyip Erdogan has said plans to redevelop a park in Istanbul will go ahead despite mass protests rocking the country. Describing some of the demonstrators as “extremists”, he said seven foreigners had been arrested over the unrest. Mr Erdogan made the remarks in Tunis. He is to return to Turkey from a North African tour later on Thursday. A large protest group has called for further demonstrations in response to the comments, correspondents say. The demonstrators had hoped for a sign of compromise but Mr Erdogan’s comments are likely to fan the flames of discontent, says the BBC’s Mark Lowen in Istanbul. The economic response was swift, with the stock market dropping nearly 5% after the prime minister’s announcement. The original sit-in at Gezi Park spiralled into nationwide unrest after police cracked down on activists defending the green space near Istanbul’s

and environment,” he said. “What we are doing is to protect the rights of the majority and to preserve the beauty of Istanbul.” Tunisian riot police surrounded the Turkish embassy in Tunis during Mr Erdogan’s visit, after local left-wing groups called for protests to show solidarity with the demonstrators in Turkey, the AP news agency reports. Meanwhile several of Turkey’s largest unions called for calm on Thursday. “Violence and fighting don’t solve anything, and they make it impossible to solve problems,” the unions said in a joint statement. In Istanbul, thousands of striking workers joined the demonstrations on Wednesday. They held banners addressed to Mr Erdogan reading: “This nation will not bow to you!” and “Taksim Square is everywhere!” In the coastal city of Izmir, police have released about 30 people detained earlier for posting “misinformation” on Twitter, the state-run Anatolia news agency reports. Mr Erdogan has called the micro-blogging site a “menace” used to spread “lies”. Taksim Square from developers. For days, demonstrators in Istanbul, Ankara and other cities have been calling for the three-term prime minister to quit. They accuse his government of becoming increasingly authoritarian and trying to impose conservative Islamic values on a secular state. Four people including a police officer are reported to have died, thousands have been injured and hundreds arrested in the unrest.

‘Implicated in terrorism’ Speaking in Tunis, Mr Erdogan acknowledged that police had used “excessive force” against activists at the original sit-in. But he said that a small group of extremists was now manipulating what had started as an environmental protest. “Among the protesters, there are extremists, some of them implicated in terrorism,” he told reporters. Mr Erdogan also defended the urban development plan for Gezi Park. “The project respects [Turkey’s] history, culture

Sit-in Earlier this week, Deputy PM Bulent Arinc apologised for police violence in the original protest, which took place a week ago. Protest representatives who met Mr Arinc on Wednesday presented a list of demands, which included the dismissal of police chiefs, a ban on the use of tear gas, the release of detained protesters, the sacking of Istanbul’s governor, and the scrapping of the plans for the redevelopment of Gezi Park. Opponents of the plan say the park is of the few green areas left in central Istanbul - many had been camping out there for several days in protest. But Mr Erdogan has repeatedly said the project would go ahead, and that the historic Ottomanera military barracks would be rebuilt on the site as planned. His ruling Justice and Development Party has governed Turkey since 2002, winning a series of election victories. bbc.co.uk

EUROPEAN CENTRAL BANK CUTS GROWTH FORECAST

he European Central Bank (ECB) has revised down its eurozone growth forecast as it voted to hold rates at historic lows. The ECB now expects the euro area to contract by 0.6% this year, having earlier predicted a GDP fall of 0.5%. ECB President Mario Draghi said the Bank still saw “downside risks” for the eurozone economy, but insisted a gradual recovery would begin in 2014. The ECB’s benchmark rate was kept at 0.5%, after being cut last month. May’s cut from 0.75% was the first in 10 months. The decision not to cut rates further came despite an ongoing recession across the 17 countries that use the euro. ‘Recovery in 2014’ Mr Draghi told a press conference the bank had also marginally revised up its 2014 forecast to 1.1% growth. “The governing council continues to see downside risks surrounding the economic outlook for the euro area,” he told journalists. “They include the possibility of weaker than expected domestic and global demand and slow or insufficient implementation of structural reforms in euro area countries.” However, he stuck with previous predictions that a gradual recovery would begin in the second half of the year. “Export growth should benefit from a recovery in global demand, while domestic demand should be supported by the accommodative stance of our monetary policy and by the recent real income gains due to lower oil prices and generally lower inflation,” the president said.

caucasian business week

Draghi ducked questions about precisely how many members of the ECB’s Governing Council voted to cut interest rates. Instead he said “the vastly prevailing consensus” was there had not been any events deemed significant enough to merit a cut. European shares took a hit after the press conference, with investors disappointed that the president seemed unwilling to dig deeper into the ECB’s tool box to stimulate the economy. “As regards any future policy measures, ECB president Draghi kept all options open but also tempered expectations about a quick ECB fix for

Draghi kept all options open but also tempered expectations about a quick ECB fix.

the real economy,” noted ING economist Carsten Brzeski. The eurozone’s GDP shrank 0.2% in the first quarter - the sixth quarter of decline in a row. The rate announcement came shortly after figures showed unemployment in France rose to 10.8% in the first quarter of the year - its highest level since 1998. The jobless rate grew from 10.5% in the last quarter of 2012, the official Insee statistics agency said. The French economy went into a recession after seeing GDP fall by 0.2% in the first quarter. bbc.co.uk

KILL THE BILL: SWISS PARLIAMENT STALLS BANKING SECRECY BILL

he legislation to disclose client names and data to resolve an ongoing tax-evasion spat between Switzerland and the US, was met with sharp critique by the lower house of parliament in Bern, who halted the vote. The legislation, which has been dubbed by some Swiss media outlets as ‘American dictate’, is a strong demand by the US in a step for Switzerland to end their banking secrecy regime and bring transparency to their shady practices. The accord, if enacted into law by Swiss parliament, aims to better track tax evasion in the alpine nation. Last week, Finance Minister Eveline Widmer-Schlumpt told reporters that her cabinet had approved the bill. The Swiss news agency, ATS, reported 90 votes were in favor, and 100 opposed to debate the new law, which is expected to decided upon during the summer parliament session, which began on Monday and will come to a close on June 21. Before voting, members from various political parties voiced concerns over the details of the deal to hand over sensitive data to Washington. A committee, supported by elected members of the Swiss People’s Party, the Christian Democrats and the Ticino League, have until Decem-

ber 4th 2014 to collect 100,000 signatures to put the proposal to a national vote. On Tuesday, the right-wing Swiss People’s Party launched a campaign to kill the bill and said the package was too ‘vague’ and could create trouble for Swiss bankers. The bill is vague because Washington and Bern are keeping mum about the details and conditions of the deal, and plan to keep quiet until after the Parliament approves it. Once approved, Parliament will not be able to amend the accord. wiss Finance Minister Eveline Widmer-Schlumpf last week said that U.S. authorities had proposed a“unilateral offer, one that we couldn’t negotiate”. Following a public scandal in France, bank secrecy was written into Swiss law in 1934. It has served as a financial safe haven for funds from all corners of the world, and its tight lipped policy helped it build its $2 trillion financial industry. The US pressure mounted in 2009, when Switzerland’s biggest lender, UBS, admitted to helping 52,000 American clients evade taxes. The bank narrowly escaped prosecution in exchange for handing over 5,000 client names and paying a $780 million fine. In January Switzerland’s oldest private bank, Wegelin & Co, said it would close down for good after over 250 years of service, following its guilty plea to charges of helping prosperous Americans hide more than $1.2 billion from the Internal Revenue Service through secret accounts. A managing partner at the bank, Otto Bruderer, confirmed in court that “from about 2002 through to about 2010, Wegelin agreed with certain US taxpayers to evade the US tax obligations of these US taxpayer clients, who filed false tax returns with the IRS.” rt.com

PRESENTATION

caucasian business week

June 10, 2013 #08

GEORGIAN CHANTING FOUNDATION TO FOCUS ON PROMOTING TRADITIONAL GEORGIAN SONGS AND CHANTING

iming to promote traditional Georgian songs and chanting, as well as educational programs, the Georgian Chanting foundation, will organize its first event on

June 11. “The fund helps Georgian traditional song and chanting to develop and become popular worldwide,” Anzor Erkomaishvili, a member of the foundation’s council said at a special press conference on June 6. The press conference was accompanied by the songs of local folk ensemble Basiani, which performed Kakhuri Mravaljamieri, a traditional Georgian song and chant created by Ilia II, the Catholicos-Patriarch of All Georgia. According to Erkomaishvili, the long-term goal of the foundation will be to study Georgian traditional songs and chants scientifically, to find old recorded patterns and to restore them. “The foundation will organize conferences and seminars on the issue, will help create schools and chant centers abroad, as well as organize festivals and concerts throughout Georgia and overseas to promote our culture,” Erkomaishvili noted.

The official inauguration of the foundation will be on June 11 which was set up with the financial support of Georgian businessman and founder of the Georgian Chanting Foundation, Vano Chkartishvili. According to Erkomaishvili, for the past several years, Chkartishvili continues to support Georgian traditional polyphonic singing. “With his help, the Georgian Chanting and Folk Song Institute was created in 2006. The institute helps prepare bandmasters,” Erkomaishvili said. Alekhandr (Lexo) Toradze, a classical concert pianist who is also among the council of the fund, expressed gratitude towards Chkartishvili and emphasized that such support will help Georgian culture to survive and become even more popular worldwide. On June 11 at the Rustaveli Theatre, the foundation will organize its first concert, where several choirs from various regions throughout Georgia will take part: Alekhandr (Lexo) Toradze along with local ensembles such as Rustavi, Sakhioba, Didgori, Shavnabada, Imeri, Basiani, Elesa, the United Children’s Choir, as well as the Patriarchate Choir of Tbilisi Trinity Cathedral will sing traditional songs and chants at the concert.

June 10, 2013 #08

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

TBILISI GUIDE

caucasian business week

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

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

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

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

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

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

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

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

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

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

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caucasian business week

June 10, 2013 #08