Caucasus Business Week #116

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October 5, 2015 #116

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October 5, 2015, Issue 116

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ADB SEEKING STRONGER RELATIONS WITH GEORGIA

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he Asian Development Bank (ADB) is enhancing its support for Georgia to foster inclusive and sustainable growth and to strengthen regional connectivity. Pg. 2

A MULTI-CLINIC INNOVA OPENED IN TBILISI WITH SUPPORT OF BANK OF GEORGIA

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new multifunctional clinic Innova opened on Sandro Euli Street #7. The clinic’s main areas of work will include neurosurgery, gynecology, traumatology, and general surgery. Pg. 11

INFLATION RATE WILL SEE A NEW HIGH IN SEPTEMBER

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he inflation rate has overridden the target indicator ahead of schedule. The National Bank of Georgia (NBG) expected the inflation rate to reach 5% point by the end of 2016, while the International Monetary Fund (IMF) was forecasting only 3% inflation rate. Pg. 10

Credit Interest Rates Exceed Deposit Yields by 300%

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ommercial banks may further increase loan interest rates because of GEL exchange rate depreciation and high risk factors. The National Bank of Georgia (NBG) has already increased the refinancing policy rate. As a result, refinancing loan interest rates have also surged. Despite this tendency, deposit interest rates have not changed. This signifies the Georgian bank sector remains one of the world leaders in terms of the spread indicator (the difference between

credit and deposit interest rates). Deposit yields make up 5.2% on average, while credit interest rates mark 14.8%. This signifies credit interest rates exceed deposit yields by 300%. According to the World Economic Forum (WEF) report, in 2012 the spread in Georgia was 15%, while the NBG reported the indicator at 10%. In the developing markets, this indicator is 4-5%, while the figure exceeds 8-9% in undeveloped countries. Pg. 10

Georgia Reveals its Investment Potential to World Business Leaders

A PRESENTATION OF FOX INTERNATIONAL CHANNELS TOOK PLACE IN TBILISI’S RADISSON BLUE IVERIA HOTEL

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he company FOX International Channels is the leading international company that produces wolrd’s leading TV channels, including FOX, National Geographic Channel, FOX Life, Nat Geo Wild, FOX News, Sky News, Baby TV. Pg. 12

GEORGIAN BUSINESS SECTOR GROWS

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eorgia’s business sector is growing in a range of directions, generating increased turnover and employing more people with higher salaries. Pg. 2

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eorgia is fast becoming known as a globally attractive business environment thanks to various business and investment forums where Georgia is positioning itself as a stabile country with a liberal trade regime, low

taxes and business efficiency. Overnight (local time) Georgia’s Prime Minister Irakli Garibashvili hosted an investment forum in New York on the topic ‘Georgia-Making Business Easy’, which was attended by more than 300 investors from different countries.

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Temur Chkonia: Zedazeni Swerved from the Principle and Breached Agreement

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Batumi Seaport’s Cargo Turnover Hits 10 Years’ High Mr. JANNAT KUSAINOV The Batumi Seaport Director General Pg. 6

Why Khudoni is a Great Idea The Georgian Authorities have resumed discussions over the Khudoni hydro power plant (HPP) construction project. In parallel regime, the people objecting to the project have also intensified activities. They do not change the position. No one plans to live in caves, but an operation of three huge HPPs (Enguri HPP, Khudoni HPP and Nenskra HPP) in the same valley will annihilate the Balskvemouri part of the Svaneti Region, the remonstrant residents assert. An extensive area will be flooded. This will be a huge mirror and our country will become enormous water storage in the near future; the existing climate will change, woodlands will disappear, flora and fauna will be annihilated, landslip processes will intensify. The changed climate will also affect the Racha Region and unique grape varieties will go withered. Operation of so many hydro power plants will entirely Pg. 9

Legendary Toyota Corolla and RAV4 for Unprecedented Prices

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Georgia is Ready to Fight HIV and Tuberculosis Independently

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Georgia puts “culture on the map” with EU and Eastern Partnership

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2 MAIN EVENTS INTERIOR MINISTER ANNULS SPECIAL DRIVING PERMITS AFTER SCANDALOUS VIDEO FOOTAGE

GOVERNMENT NEWS ADB SEEKING STRONGER RELATIONS WITH GEORGIA

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eorgia has taken a bold step to ensure safety on all roads by annulling special permits that enabled representatives of state law-enforcement bodies to drive freely, which included violating traffic laws. Georgia’s Minister of Internal Affairs Giorgi Mghebrishvili annulled the special permits that have been issued to certain state officials since 2009. This action was taken after a scandalous interview former Ministry official Giorgi Babunashvili with Georgian news agencies Timer and Krinika +, where Babunashvili stressed that special permits had been given to family members of current, high-ranking officials.

SYMBOLIC LEUVILLE CASTLE IN FRANCE COULD BECOME GEORGIAN PROPERTY

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historic castle in the small French village of Leuville could soon become property of Georgia in recognition of the country’s connection to the site. The castle in Leuville-sur-Orge, located about 30km south of Paris, is symbolic for Georgia as the first independent government of Georgia in exile settled there in 1921. For this reason, the area is described by some as “small Georgia”. Georgia’s State Minister for Diaspora Issues Gela Dumbadze said the Georgian Government had allocated €107,000 (285,000 GEL) to settle all details involving transfer of ownership of the estate to Georgia.

VINTAGE PROFITS MARK 51 MILLION USD

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his year’s harvest in Georgia’s wine-producing Kakheti region has already generated 51,669,513 GEL, and the harvest is not over yet. Georgia’s Agriculture Minister Otar Danelia presented an interim report about the progress of this year’s grape picking and processing activities in Kakheti. He revealed more than 84,000 tonnes of grapes had been processed in Kakheti, with the season still in full swing.

TOURISM ADMINISTRATION HAILS VALUABLE MARKETING FOR GROWTH IN TOURIST INFLOWS

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ead of Tourism National Administration declares, that as soon as negative sings have been fixed in the inflow of international passengers, reduction reasons have been considered and the need of market diversification has been defined. “According to the plan, the accent has been made on those international activities, which should make stimulus to the travelers increase from the new markets and improve situation on the existed market”

BUDGET BILL GOES TO PARLIAMENT

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he government hopes, that the volume of receivables and payments will be 9,920 billion GEL in 2016. Receivables are increased by 20 million comparing to the plan of 2015, while growth amounts to 345 million in the payments. As for the budget revenues, its volume is defined by 8,355 billion GEL, which exceeds over 404 million to the predicted index of 2015. However, the expenditures amount to 8,373 billion GEL and that means, more than 357 million GEL should be spent comparing to this year.

TBILISI ZOO RELOCATION WORKS UNDERWAY

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bilisi Municipality has already announced tender on fencing the area of the Zoo. Supposed value of the procurement amounts to 1,877 million GEL. Proposal submission term expires at 13:00 on October 1. Tender winner company must start the work within 7 days after the signing the agreement and finish before December 11.

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caucasus business week

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he Asian Development Bank (ADB) is enhancing its support for Georgia to foster inclusive and sustainable growth and to strengthen regional connectivity. The Bank’s new country director for Georgia said the Bank had a strong relationship with the small

Caucasian nation and it pledged to deepen this relationship further to support the country as it worked towards its Euro-Atlantic integration goals. ADB and the Government of Georgia have forged a strong partnership for enhancing infrastructure and service delivery to the people of Georgia …

I look forward to building on these achievements as the portfolio grows in collaboration with our key stakeholders in Georgia,” said the new ADB Country Director for Georgia Yesim Elhan-Kayalar after assuming office yesterday. Newly-appointed Kayalar met Georgia’s Economy Minister Dimitri Kumsishvili yesterday. The sides talked about the ongoing projects that were financed by the ADB in Georgia and agreed on continuing active communication and fruitful cooperation in the future. Over the years ADB has provided support for Georgia in a range of directions, such as road rehabilitation and construction, energy, water supply and sanitation infrastructure and service delivery, public sector management, private sector development, financial sector deepening and financial inclusion, good governance, gender equality and knowledge solutions. Supporting these areas of development was mentioned in the Bank’s current Country Partnership Strategy (CPS) with Georgia for 2014-2018. Earlier this year ADB approved a $75 million USD program to assist the Government’s reforms on resource utilisation, and issued the first Georgian Lari-denominated bonds, raising 100 million GEL to support the development of the Georgian capital market and small businesses. Georgia became a member of ADB in 2007. Since then the Bank’s portfolio has grown rapidly with $1.6 billion USD in loan approvals as of 31 December 2014. Financing for the current CPS was estimated at $1 billion USD.

ECONOMY MINISTER: GEORGIAN BUSINESS SECTOR GROWS

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eorgia’s business sector is growing in a range of directions, generating increased turnover and employing more people with higher salaries. Georgia’s Economy Ministry released information that revealed 2015 was proving to be a “very successful year” for the business sector in Georgia, with particular gains experienced in the second quarter (Q2) of the year. TURNOVER IN GEORGIA’S BUSINESS SECTOR Georgia’s business sector experienced 16 percent growth in Q2 of 2015 and exceeded 12.8 billion GEL. The Economy Ministry figures revealed turnover in the country’s business sector increased in almost every field. Revenue from the mining industry increased 91.8 percent (63.8 million GEL) while income from the agriculture sector increased 36 percent (20.7 million GEL). The hotel and restaurant sector jumped 31.3 percent (54.9 million GEL), the real estate sector increased 28.7 percent (140.1 mil-

lion GEL) and the construction sector improved by 26.9 percent (201.8 million GEL). Georgia’s education sector increased 23.2 percent, the electricity, gas and water production and distribution jumped 21.7 percent, transport and communication rose 16 percent (198.6 million GEL), trade increased 10.2 percent (592.6 million GEL) and the manufacturing sector enjoyed a 2.5 percent (39.1 million GEL) increase. PRODUCTION The cost of enterprise production exceeded 22.5 percent or 1.3 billion GEL in Q2 of 2015, compared to the same period of 2014, said the Economy Ministry. The business sector’s production capacity increased in almost every field of economic activities: Mining industry – 68.7 percent; Agriculture – 50.4 percent; Hotels and restaurants – 30.6 percent; Real estate – 29.9 percent; Trade – 23.6 percent; Education – 22.6 percent; Construction – 19.6 percent;

Electricity, gas and water production and distribution – 21.7 percent; Transport and communication – 10.6 percent; Manufacturing – 3.8 percent. EMPLOYMENT RATE The number of people employed in Georgia also increased in Q2 2015, said the Economy Ministry. Twelve percent more people were employed in the business sector in Q2 2015 compared to Q2 2014, which equated to an additional 60,000 people in employment. A total of 568,500 people were employed in Q2 this year. The majority of employed persons worked in the trade sector (24.4 percent) followed by industry (19 percent), construction (10.5 percent) and transport and communication (10.4 percent). SALARIES The average monthly salary of a person employed in the business sector reached 942.2 GEL – this was 10.6 percent more than in Q1 2015 and 10.1 percent more than Q2 2014.

GEORGIA SEEKS INVESTORS FOR BIG PROJECTS IN AGRICULTURAL SECTOR

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eorgia is taking decisive action to restore the country to its agrarian state through several state projects, which are developing the industry and offering a range of promising investment opportunities for investors of large-scaled projects. Developing the local agricultural industry was one of the main priorities of the current Government, as was encouraging investors to utilise Georgia’s favourable investment conditions. Georgia’s Deputy Minister of Agriculture Gocha Tsopurashvili spoke about the efforts taken to develop the industry to APK-Inform – an agri-

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business consulting agency within CIS countries - journalists this week. He stated Georgia had established a special cofinancing fund to assist the investors to realise large-scaled projects in the agricultural sector. Tsopurashvili specified an investor could provide only half of the required sum, and the fund would provide the other half. At the same time, the investor could later buy out the fund’s share. In addition, if the investor had any proposal that met the public interests, such as construction of any plant or processing complex, the authorities might offer an area of land for the project for free.

Additionally, depending on the invested sum, the authorities could compensate one quarter, one fifth or one sixth of the sum with certain assets. Tsopurashvili used the example that if an investor wanted to invest $1.2 million USD in an agricultural project, then it was possible for the state to give the investor $300,000 USD in the form of property. Meanwhile, the APK-Inform agency announced the international conference Georgia Agro Forum 2015 will be held on November 19 at ExpoGeorgia, Tbilisi, where participants will discuss development prospects of Georgia’s agriculture sector and its investment attractiveness.

The weekly is distributed to top companies, banks, embassies, state sector, Tbilisi and Batumi hotels, Tbilisi, Batumi and Kutaisi Airports, as well as in the town of Marneuli. The newspaper will also penetrate Azerbaijan in the near future

Editor: Nino Gojiashvili. Mobile phone: 595 050404 Reporters: Nutsa Galumashvili; Lazare Gvimradze; Shiva Parizad

Source: www.commersant.ge, www.bpi.ge, www.gbc.ge, www.agenda.ge, www.civil.ge


PUBLICITY October 5, 2015 #116

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LEGENDARY TOYOTA COROLLA AND RAV4 FOR UNPRECEDENTED PRICES

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he Toyota’s Official representation in Georgia has launched a campaign of unprecedented autumn discounts for legendary Toyota Corolla and RAV4 models. Toyota’s both official dealers in Georgia enable customers to enjoy this wonderful opportunity and get hands on a new vehicle. “Highest quality, durability and reliability are the main criteria in the vehicle purchasing process. The best harmonization of all these aspects draw much interest towards Toyota vehicles in both Georgia and worldwide. Current campaign enables our customers to buy Toyota’s highest quality vehicles at surprisingly low prices”, the Toyota Caucasus Office noted. A legendary sedan of Toyota Corolla is drivers’ favorite model worldwide. Record sales of these vehicles prove this statement. Toyota has already sold more than 40 million vehicles of this model. Moreover, the Guinness Book of World Records names this model as the bestselling vehicle. For about 50 years, Toyota Corolla has been constantly evolving by producing 11 generations up to the current appearance. The latest generation is bolder and even more self-confident. Attractive lower front panel and aerodynamic forms emphasize its strong characteristics. Corolla is a legendary and, at the same time, modern and an elegant sedan. Driving Corolla’s new model makes you feel comfortable and restful thanks to special materials and refined style of the interior. The evenly balanced saloon creates comfortable environment on backseats. “Moreover, an introduction of the renovated autumn discount campaign for RAV4 models will

also please crossover fans. Comfortable and universal new RAV4 includes five seats for passengers and a wide boot. The saloon is enriched with storage compartments. The level of the boot’s fixation and power door enable to more conveniently and practically place the luggage into the

vehicle. The new RAV4 ensures safe driving. A unique integrated dynamic driving system makes the driving process more emphatic and maintains the surface friction. This modern technology ensures smooth and stable driving on highways in any

climate conditions. Now every drive fills us with great pleasure. As part of the campaign, Toyota’s official dealers in Georgia Toyota Center Tbilisi and Toyota Center Tegeta offer the following discount rates for Toyota RAV4 and Corolla models:

Toyota Corolla Active – $13 100 instead of $16 322 Toyota Corolla Elegance + - $16 700 instead of $20 102; Toyota RAV4 2WD Urban - $22 550 instead of $24911; Toyota RAV4 4WD Prestige - $28960 instead of $32 681. Toyota’s autumn campaign gives unique opportunity for buying Toyota’s highest quality vehicles at best prices.


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INTERNATIONAL RELATIONS caucasus business week

“Let me address Apkhazs and Ossetians: Brothers and sisters, I deeply believe that no one has the power to rewrite history and erase our common past; Every try that is aimed at neglecting the connection between us and creating an abyss between our peoples, will be unsuccessful.”

“I CONDEMN RUSSIA’S CREEPING ANNEXATION OF GEORGIA”

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n his address at the 70th United Nations General Assembly, Irakli Garibashvili, Georgia’s Prime Minister said his country is building democracy even in the face of security threats in the region, and condemned Russia’s ongoing annexation of its territories. “Since my last address to the UN, I regret that the Russian Federation signed so called ‘integration treaties’ with Sokhumi and Tskhinvali. Russia therefore continues to illegally extend its control over Georgian sovereign territory. I condemn this creeping annexation and Russia’s disregard for international law,” he declared. He also noted that this seizure has led to the displacement of a large number of locals in the occupied territories of Georgia. “The freedom of movement and the basic rights of a free nation are crushed along with the hopes and dreams of hundreds of thousands of victims of ethnic cleansing who only wish to return to their places of origin,” he declared. The Prime Minister also urged Russia to uphold the resolution on the ‘Status of IDPs and Refugees from Abkhazia, Georgia, and the Tskhinvali Region]South Ossetia, Georgia,’ annually adopted by the UN General Assembly. He asserted that relations with Russia cannot be settled at the expense of sovereignty and territorial integrity of Georgia. “I hope that the Russian Federation will finally fulfil its international obligations, including the August 12, 2008 Ceasefire Agreement and act as a responsible member of the international community,” he said. However, the Prime Minister added that despite the annexation, Georgia is keen on forging pragmatic relations with Russia. “To that end, we have taken a number of concrete steps to advance trade, transport communication, humanitarian contacts, and tourism when and where possible with Russia,” he explained. As for the Abkhazian and Ossetian peoples, he said that he firmly believed that no one will rewrite history and “erase our common past. All attempts to cut off our ties and divide our peoples will fail.” “You will benefit from a growing Georgian economy and from our Association Agreement with the European Union – including increasing trade and visa liberalization. The arc of history is for more cooperation, more integration, and more

“Our fighters are among the world’s best. They are my nation’s pride worthy sons. I want to use this opportunity to pay respect to the brave Georgian fighters; the ones who stand in their nation’s service and sacrifice themselves to its peace and freedom”

October 5, 2015 #116

prosperity. When we work together, we all succeed and benefit. I look forward to the day when you will share in our mutual prosperity,” he said. He also informed the Assembly that despite the challenges Georgia has made attempts to solidify its democracy, improve healthcare, create employments, provide education, and advance its economy. The Prime Minister also announced that Georgia will host a first-ever high-level Silk Road Forum in Tbilisi in a few weeks. Located centrally between Europe and Asia, Georgia played host this year to the annual meeting of the European Bank for Reconstruction and Development and the first meeting of the Asian Infrastructure Investment Bank. “Re-opening the Silk Road is an important opportunity to ensure deeper economic and cultural ties between Asia and Europe. The Silk Road region accounts for two thirds of the world’s population and 60 per cent of its [gross domestic product]. I am convinced the Tbilisi Silk Road Forum offers great potential to promote cooperation and regional integration,” he added.

“Our aim is to achieve economic growth, strengthen the governing bodies, create more jobs and opportunities for the Georgian people. For this purpose we will turn Georgia into a place where conducting business is advantageous and making foreign investments is attractive”


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INTERNATIONAL RELATIONS

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WHY GEORGIA? GEORGIA REVEALS ITS INVESTMENT POTENTIAL TO WORLD BUSINESS LEADERS

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eorgia is fast becoming known as a globally attractive business environment thanks to various business and investment forums where Georgia is positioning itself as a stabile country with a liberal trade regime, low taxes and business efficiency. Overnight (local time) Georgia’s Prime Minister Irakli Garibashvili hosted an investment forum in New York on the topic ‘Georgia-Making Business Easy’, which was attended by more than 300 investors from different countries.

“The Georgian Government will support you, your partners and all investors who decide to start and run a business in Georgia” PM GARIBASHVILI

The Most Promising Sectors in Georgia

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he Prime Minister named the banking industry, the transport and logistics industry, the energy sector and the manufacturing and processing of agricultural products as the priority sectors in Georgia where the best conditions were available for investors. While discussing in detail each avenue of business, Garibashvili said Georgia’s banking sector was one of the most developed in the region, while the country’s energy sector was attractive due to its abundance of natural resources. The PM also accented Georgia’s growing touristic potential. Georgia is attractive for tourists all throughout the year. Georgia is diverse with its destinations – it has beautiful beaches, ski resorts, vineyards, the oldest cave towns, gorgeous mountains and forests,” said Garibashvili. Georgia, as the cradle of wine and cuisine, has potential to develop wine and cuisine tourism. Last year about five million tourists visited Georgia, which is more than the country’s population,” he added. As for the transport and logistics industry, the Georgian official spoke about the Baku-Tbilisi-

Kars railway project, which connected Azerbaijan, Georgia and Turkey and would carry containers, cargo and passengers from Asia to Europe 45 percent faster than the current route. The demand on Georgia’s ports has increased significantly. We have taken into account the growing demand and are building the Anaklia Deep Sea Port. The project includes seven phases. The Port’s annual turnover will be 100 million tonnes and will take Georgia’s logistic opportunities to the next level,” Garibashvili said.

Georgia’s Reforms

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n front of hundreds of world leaders Garibashvili proudly discussed all the democratic reforms Georgia had implemented. He said the country had made significant progress in all spheres. Garibashvili noted Georgia had a strategically important location that gave the country huge potential. He said Georgia was a democratic country with no corruption and highlighted the World Bank recognised Georgia as a country where it was easy to do business. The PM also talked about Foreign Direct Investments (FDI) and said Georgia attracted $1.75 billion USD FDI in 2014, which was 87 percent more than in 2013 and a seven year record high.

We support new players in the market. In this regard we have created two multimillion investment funds – the Partnership Fund and Georgia’s Co-Investment Fund,” said Garibashvili. We run a universal health care programme and are proud of strong educational system. Our country is evaluated as stable and positive by leading rating agencies,” he added. Garibashvili also underlined the importance of a free court system.

Georgia in Ratings

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he audience learned about how Georgia had significantly improved its positions in all indicators in a recent World Bank report measuring fairness of governments worldwide. The report said Georgia ranked highest in 2014 in all of six dimensions of governance, covering voice and accountability, political stability and absence of violence/terrorism, government effectiveness, regulatory quality, rule of law, and control of corruption. Since 2012 Georgia advanced 16 places in the voice and accountability category, by 22 places in political stability and absence of violence/terrorism and government effectiveness, by 13 places in regulatory quality, by 19 places in rule of law and by 23 places in control of corruption.

Georgia Strives to Attract More American Capital

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igh officials from the Georgian Government are visiting the United States and meeting the local business community to raise the profile of Georgia and persuade them to invest in the country. Georgia’s Vice Premier and Foreign Minister Giorgi Kvirikashvili said the Government was doing its best to attract more American capital, which would spur continuing development. Attracting more American capital is strategically important for Georgia,” said Kvirikashvili yesterday at the ‘GeorgiaMaking Business Easy’ investment forum in New York City. He said the Government’s goal was to introduce Georgia’s investment environment to more American businessmen. It is very important for investors to get information about the country directly from the Government head. The Prime Minister [Irakli Garibashvili] presented an extensive report on Georgia’s investment environment. It is very good that the forum was attended by representatives from some large American companies. Such meetings should be held everywhere in the US”. Meanwhile, Prime Minister Garibashvili has met with representatives from the international rating companies Moody’s, Standard and Poor’s and Fitch. The sides talked about the liberal and preferential business environment that Georgia now offered as well as the political circumstances in the region.


6 BUSINESS GEORGIA’S GDP GROWTH AMOUNTS TO 2.3% IN AUGUST

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eorgia’s estimated real Gross Domestic Product (GDP) growth rate enjoyed a 2.3 percent increase year-on-year (y/y) in August 2015, says the country’s National Statistics Office, Geostat. The country’s estimated real GDP growth for the first eight months of 2015 reached 2.8 percent y/y, noted Geostat. In August Georgia attracted more Foreign Direct Investments (FDIs) that before. FDIs in Georgia for 2014 amounted to $1.758 billion USD – an 87 percent increase on 2013 figures. The Geostat data showed a growing trend in FDIs from 2009 to 2011 before offshore investments decreased in 2012 and 2013. But by 2014 FDIs jumped significantly from $942 million in 2013 to $1.758 billion (in 2014).

TRANSASIA-CAUCASUS TRAIN DELIVERS CHINESE CONSIGNMENT IN 7 DAYS

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he second container train arrived from China to Georgia. The train arrived in the shortest time via Silk Road Rout, in seven days. “Georgian Railway” regards, that short term of transportation should become an additional stimulus for the shipping companies. 28 unit container wagons has been unloaded in “Trans Caucus Terminal”.

BULGARIA RANKS SECOND AMONG GEORGIA’S MAJOR EXPORTS MARKETS

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xport volume is growing with this EU country in the recent years. Of 8 months data, it ranks 2nd among Georgia’s biggest exporting markets and Bulgaria is merely behind by $15 million to the number one exporting market – Azerbaijan. However, Georgia has been the second exporting market of Georgia by the statistics of January-July, while as of the foreign trade data of the first six months, Turkey has been on that position.

84 000 TONS OF GRAPES PROCESSED BY SEPTEMBER 29

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t that, 39,500 t - Rkatsiteli, 33 500 t – Saperavi, 2 000 t – Kakuri Mtsvane. According to National Wine Agency, 85 wine producing companies are engaged in the process. To note 18 plants are hired by the state. Over 11 000 farmers have sold the grape. As a result, 52 million GEL is gained as a revenue. Price of Rkatsiteli and Kakhuri Mtsvane is subsidized, 1 kg – 0,35 GEL, Saperavi – 1 kg - 0,15 GEL.

GOODWILL OPENS NEW ASSET IN BATUMI DESPITE GEL DEPRECIATION

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oodwill” opens a new outlet in Batumi. The branch will be opened on October 15 and will be located on the area of 2 400 square meters. As “Goodwill” Director Irina Kosashvili states to “CBW”, a similar object has not existed in Batumi before. “It will be quite large and modern facility with commercial areas on the second floor “, - Irina Kosashvili explains.

KAZAKH MANAGEMENT’S RETURN TO KAZTRANSGAS-TBILISI MAY BE POSTPONED AGAIN

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return of the Tbilisi gas distribution company “KazTransGas-Tbilisi” under the control of the Kazakh side can again be postponed. Georgian Deputy Energy Minister Mariam Valishvili told Trend News. “The term of office of the Georgian commission managing the company, expires on 1 April. But, most likely, the period will be extended, the question of extending the powers will be discussed, “- she said.

LAVAZZA REPRESENTATION TO OPEN COFFEE PLANT IN GEORGIA

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n exclusive importer of the Italian premium coffee Lavazza opens the coffee plant in Georgia. “Commersant” was told at the “New Coffee Company” that the factory will be opned by “BB Company” owned by the founders of their company, they say for this purpose a total of $ 2 million will be invested, of which one million was taken within the framework of “Invest in Georgia” program.

INTERVIEW

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BATUMI SEAPORT’S CARGO TURNOVER HITS 10 YEARS’ HIGH Transportation of oil and oil products, general and bulk cargoes has transformed Batumi Seaport into a vital hub in the European transportation corridor. Batumi has become one of the important logistics centers in the Caucasus. Currently, the seaport’s turnover has significantly increased and become the largest transit destination for transporting Kazakh and Azerbaijani oil and oil products. Batumi Seaport (hereinafter – Seaport) is the main sea gate of Georgia and its stable operation determines the economic development of the Ajara Autonomous Republic (hereinafter – Region) and the whole country. Namely, thanks to logistics location and various infrastructures, the seaport has become the major transportation destination making huge contribution to the geo-economic development of the Region and the whole country. The Seaport is also a vital hub in transportation corridors promoting external trade and growing the transit function of the Region. The Batumi Seaport director general Mr. JANNAT KUSAINOV talks about the seaport’s plans.

-The seaport is specialized in transshipment of a wide range of cargo consignments. The seaport is the deepest one along the east coastline of the Black Sea and it represents a transportation hub embracing seaborne, railway and land transports. Transit of oil, general and bulk cargoes prevails in the structure of cargo turnover. Currently, an oil terminal operates in the Seaport (berths №1, №2, №3 and loading without berth, that are able to receive 4 tankers simultaneously), multipurpose container terminal (berths №4 and №5), a berth for seaborne railway ferry, dry cargo terminal (Berths №6, №7, №8 and №9) and passenger terminal (Berths №10 and №11). Highest throughput of the oil terminal constitutes 15 million tons a year, the cargo terminal – 2.1 million tons, and seaborne ferry – 700 000 tons. The seaport also brings significant fiscal effect by making huge transfers to budgets on various levels. Moreover, the seaport is the Region’s one of the major employers. At the same time, the seaport has made a 100 000 GEL donation to the June 13 natural disaster fund. The money was transferred to the special account of the state treasury designed to assisting the natural disaster victims. In January-September 2015 turnover of general and other cargoes made up 830 000 tons. The plan was fulfilled by 84%. Turnover of oil and oil

The Seaport is also a vital hub in transportation corridors promoting external trade and growing the transit function of the Region

products marked 2 852 000 tons. The plan was fulfilled by 128%. The seaport has handled 129 ships in the reporting period. For the first time in the history of Georgian seaports, in the third quarter of 2014 the seaport received SOYA MAY, one of the biggest dry cargo vessels with 229 meter in length, 36.8 meters in width and 87 146 tons in deadweight. Moreover, in the third quarter of 2015, the seaport handled the first consignment of spiral pipes of 188.5 tons. The weight of each spiral pipe marked 31.5 tons with 32 meters in length. It should be noted this is the first case of handling similar sort of cargoes in Georgian Seaports. The 100 specific steps for implementing 5 presidential reforms of the President of Kazakhstan call for integrating Kazakhstan into international transport-communications networks and inaugurating a project for creating multimodal transport corridor of the Eurasian Transcontinental Corridor to carry out free cargo transit from Asia to Europe. The transport corridor will cross: the first route will cross the territories of Kazakhstan, Russian Federation and reach Europe. The second route will cross the territory of Kazakhstan from Khorgos to the seaport of Aktau, reach the Caspian Sea in Azerbaijan, cross the territory of Georgia and reach Europe. The seaport has concluded memorandums on cooperation with the seaport of

Dublin (Ireland), KTZE – KhorgosGateway (Kazakhstan) and Grain Union of Kazakhstan. As part of the TransCaspian international transport route, a number of memorandums and protocols have been signed: a working protocol between Batumi Seaport and Azerbaijan Railways; memorandum on cooperation between Batumi Seaport, Aktau International Sea Trade Port and Baku International Sea Trade Port; memorandum on cooperation between Batumi Seaport and Georgian Railway; memorandum on cooperation between Batumi Seaport and KTZ Express.

Transportation of oil and oil products, general and bulk cargoes has transformed Batumi Seaport into a vital hub in the European transportation corridor


October 5, 2015 #116

LABELING

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TEMUR CHKONIA: ZEDAZENI SWERVED FROM THE PRINCIPLE AND BREACHED AGREEMENT

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eorgian Finance Minister Nodar Khaduri has visited the Zedazeni enterprise to inspect the recentlyinstalled labeling equipment. According to the August 10 decree, soft drinks will be obligatorily labeled starting November 1, 2015. The Association of Soft Drink Manufacturers continues protesting against the decision. Around the issue Coca-Cola Bottlers Georgia founder Temur Chkonia noted he and the Association of Soft Drink Manufacturers had no information about this decision of Zedazeni. Seemingly, the company does not have equipment for making valuable and correct registration, Chkonia noted. “Installation of equipment means nothing. I just disliked the fact Zedazeni has swerved from the principle and breached our agreements”, Chkonia said. Under the agreement, Georgian manufacturers do not want the government to pay money to foreign companies for counting job. Businessmen called the yesterday meeting a communist show, Chkonia noted. “In this way they are demonstrating to the society as if Temur Chkonia is a remonstrant and all of them are brave. I still assert that the government should not pay money to foreign companies for counting job and if someone has problems with registration, they should install equipment. However, I do believe this is an anti-state approach”, Chkonia noted. The Association has objected to introducing the labeling. Zedazeni is also a member of the association, but Chkonia says they seem to be planning to set up separate relations with the Government. “If they want to set up new friendly relations with the Government, there is no problem. We want to keep valuable relations with the Authorities”, Chkonia noted. The businessman does not rule out Zedazeni and the Government may have achieved a certain deal. Similar approaches hinder the development of business and the whole country, Chkonia added. “The problem is the government acts as if it aims to defeat the business, but this will be not victory, but a bad decision for the country”, Chkonia noted.

Nodar Khaduri inspected the labeling equipment that was recently installed at the Zedazeni enterprise

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he plant representatives introduced the labeling machines and the labeling process to the Finance Minister and media. The Finance Minister told the IPress the labeling is to make order in the registration process. The Minister noted the obligatory labeling will liberate business from many problems. “Many countries have introduced similar system of labeling. For example, in Italy fish products are labeled. This is a widely applied practice. We care that no additional barriers bother the business sector and the products not to rise in price. The Revenue Service will cover the labeling costs from its own revenues. The business sector will get rid of many problems. Many manufacturers say they have problems with losses and this problem will be removed. The main thing is that the registration problems will be removed without additional human resources. The improvement of labeling process is one of the important issues. We have taken reciprocal steps and postponed the decision several times. I met with them (Enterprisers) and we removed some aspects. However, we must register and count to determine whether this is really unnecessary and everything works correctly. We have no statistics yet. We are supervising over the dynamics, prices on products. Naturally, we are collecting similar information”, the Finance Minister told the IPress.

GEORGIA PUTS “CULTURE ON THE MAP” WITH EU AND EASTERN PARTNERSHIP

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eorgia and five other Eastern Partnership (EaP) countries are teaming up with EU member states to deepen cooperation between the cultural and creative sectors and mainstream cultural heritage as a key component in the drive to achieve integrated, sustainable and participative urban development. Representatives from the Ministries of Culture of the EaP countries, European Commission and Council of Europe officials launched the Eastern Partnership Culture Program 2015-2018 last month in Georgia’s capital Tbilisi. The Program covered six EaP countries (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine) and included two components: EUEastern Partnership Culture and Creativity Program and Community-led Urban Strategies in Historic Towns (COMUS). The Program aimed to enhance the cultural and creative sectors contribution to sustainable social and economic development. Society’s participation coupled with a strong link with government has made it possible for culture to claim a more prominent place on the agenda. Engaging citizens and administrations at all levels is vital for the success of cultural sector devel-

opment,” said deputy head of the EU Delegation to Georgia Carlo Natale. Within the program six to 12 pilot towns will be selected in Georgia’s regions to capitalise on cultural heritage as a key feature of sustainable urban development. There is a genuine desire to increase the practical importance of culture in the region. The Program’s priorities include the creation of mutually beneficial alliances and integration of local cultural organisations into the European cultural space including through increasing participation in European cultural networks and professional associations,” said the EUEaP Culture and Creativity Program leader Terry Sandell. Meanwhile, manager of the Creative Europe Program of the European Commission Rob Van Iersel presented ‘Creative Europe’ which aimed to provide European culture and the media sectors with access to new international opportunities, markets and audiences. Before embarking on your own project learn from others and gain experience. Use your European partners and get their advice to learn the positives and negatives,” said Iersel. Georgia and Moldova were already part of ‘Creative Europe’, while Ukraine would join in the near future.


HEALTHCARE

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October 5, 2015 #116

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n September 30, an agreement between the Georgian Government and Global Fund was signed. More than 300 delegates from over 30 countries convened in the Georgian capital for a three-day Regional Dialogue “Road to Success” to discuss the financing of response to infectious diseases in the countries of Eastern Europe and Central Asia (EECA). Until now financing of medical treatment for the three illnesses had been allocated by the Global Foundation, a global fund focused on putting an end to Aids, tuberculosis and malaria as epidemics worldwide. The Global Foundation fund raised an invested nearly $4 billion USD a year to support programs run by local experts in countries and communities most in need. The Foundation has been financing treatment in Georgia since 2006 and spent $100 million USD so far. However over the next three years this financing would be “gradually decreased”, Sergeenko said. If the current Government remained in power following next year’s elections, the state would slowly replace Global Foundation financing, starting at five percent and increasing up to 75 percent over the next three years. The remaining costs would continue to be financed by the Global Foundation.

Georgia is Ready to Fight HIV and Tuberculosis Independently

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“In 2017–2019 all Global Fund programs will gradually transition to national funding in Georgia”

ccording to MR GAMKRELIDZE, Georgia will transition from the Global Fund funding to national funding without losses, and all proposals in this regard will be taken into account in the process of planning the budget for 2016-2019 and subsequent years. – Georgia started to work with the Global Fund in 2003, when we received a grant for three areas: HIV/ AIDS, tuberculosis and malaria. In total, since then we have received about 100 million dollars. The cooperation has been very successful, and today Georgia is the only country in Eastern Europe and the former Soviet Union with the universal availability of antiretroviral drugs. Treatment is provided for all those who need it (and there are about 2,600 people). According to the international guiding documents, the availability of drugs should be about 80% of the estimated number of people in need of treatment. Our belief in the 100% availability is based on the fact that all registered patients receive treatment. It should be noted that the HIV programs serve as a kind of bridge between us and Abkhazia, as via us and the Global Fund Abkhazian patients have access to antiretroviral therapy.

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inistry of Health of Georgia and Global Fund signed an agreement, according to which the Georgian government commits to cover over 90% of HIV treatment costs, which will be delivered according to the international treatment standards. Global Alliance president DR. JEANELIE MALKIN, who consults Ministry of Health in improving Georgia’s health care system, also commented on the importance of the framework agreement. “Universal Health Care Program in terms of HIV and tuberculosis are very important issues. The country should step by step move to national funding for treatment and prevention programs. Global Fund is leaving the region, the main challenge for Georgia is to switch from having international donors to self-financing the domestic HIV and TB programs.” Global Alliance supports Georgian government in raising funds for implementing these programs. “For us it is very important to advise Georgian government on finding alternative ways to fund its HIV and TB elimination programs,” Jean-Elie Malkin said.

“The main challenge for Georgia is to switch from having international donors to self-financing ”


October 5, 2015 #116

HPP

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WHY KHUDONI IS A GREAT IDEA The Georgian Authorities have resumed discussions over the Khudoni hydro power plant (HPP) construction project. In parallel regime, the people objecting to the project have also intensified activities. They do not change the position. No one plans to live in caves, but an operation of three huge HPPs (Enguri HPP, Khudoni HPP and Nenskra HPP) in the same valley will annihilate the Balskvemouri part of the Svaneti Region, the remonstrant residents assert. An extensive area will be flooded. This will be a huge mirror and our country will become enormous water storage in the near future; the existing climate will change, woodlands will disappear, flora and fauna will be annihilated, landslip processes will intensify. The changed climate will also affect the Racha Region and unique grape varieties will go withered. Operation of so many hydro power plants will entirely

transform the local nature. The objectors assert EU countries are introducing renewable energy systems (wind and solar energy systems), while the nature of Georgia is being sacrificed to mercantile interests of some groups. For example, Belgium is not a sunny country. Rains and rainstorms predominate there, but even this country has moved to renewable energy systems. In this respect, Georgia has huge resources; for example, hot waters vainly run in the Samegrelo Region, while the country is able to make considerable benefit thanks to this resource. Huge reserves of wind and solar energy, as well as underground thermal waters in western Georgia are not employed. No house and building is constructed in Israel without water heating systems, while one heating system emits huge thermal energy. Moreover, the objectors assert the Khudoni

“I Believe Khudoni HPP will Be Georgia’s Most Reliable Reserve”

“Khudoni HPP Construction will Sharpen Risk Factors”

The Association of Young Financiers and Businessmen (AYFB) reveals its position regarding the Khudoni HPP construction project. AYFB analyst ANDRIA GVIDIANI says Khudoni HPP will be the most important chain in the Georgian power system and this station should be inevitably built. “A lot of different approaches are expressed regarding the Khudoni HPP project. Environmentalist organizations are basic objectors. Naturally, we understand their position, because major HPPs genuinely affect the environment to a little extent. At the same time, we should follow the current realities and tendencies. Georgia’s electricity consumption volume grows year by year and the growing demand should be satisfied. Therefore, I believe new assets of generation should be constructed. I believe that during the construction process we should maximally adjust the power system to the environment protection interests. While talking about the environmental issues, I recall the 1989 environment impact assessment act promulgating the Khudoni HPP could not change the general climate of the Upper Svaneti and the river Enguri basin. As to the Khudoni HPP seismic steadiness, the asset is able to withstand a 9-magnitude earthquake and it will be the strongest and steadiest building in Georgia (for comparison: Enguri HPP was planned to withstand an 8-magnitude earthquake). There are also certain considerations that the territories flooded by major HPPs provoke various cataclysms and natural disasters. In reality, to say without emotions, this argument is very weak, because cataclysms and natural disasters used to happen even before invention of electricity. An important factor in construction of major HPPs is that similar HPPs are able to create reliable reserve in the power system, without which the network cannot be reliable and cannot work valuably. Therefore, I believe Khudoni HPP will be the most reliable reserve in the Georgian power system. Currently, steam power plants create similar reserves and they operate on imported raw materials. Major HPPs are also able to stabilize electricity tariffs in the long-term perspective. Domestic generation assets will replace imported electricity and raw materials. Electricity import in the peak periods is very expensive and it makes negative affect on electricity tariffs. Moreover, dependence on imports makes our energy security vulnerable. The Khudoni HPP project is attractive and of vital importance in terms of economic characteristics. As reported, the project will draw 1.2 billion USD investment to the Georgian economy and this injection will revive the state economy”, Andria Gvidiani said.

Doctor in Energy Sciences MIRON PIRTSKHELANI says the Russian Federation acts behind the Khudoni HPP project. He calls on the Authorities to keep pre-election promises and either reject constructing giant HPPs or openly declare a genocide against the Svaneti residents. The specialist says the Khudoni HPP construction will increase risk factors, including earthquakes and natural disasters (avalanches, landslips). In case of hostilities, cascades will be first brought under attack, including the Khudoni Cascade. He recalled the 2008 hostilities, when Russian jets were flying over Enguri and Zhinvali water storages. ‘The disaster provoked by all three reasons will bring catastrophic outcomes. Intense fall of 1.5 cubic meters of water into the Black Sea will pose a disastrous hazard to the whole Imereti Lowland, Samegrelo and Abkhazia, the Black Sea basin countries, particularly, the Turkish coastline. Residents of Khaishi, Idliani, Chuberi will have to leave their places. This signifies the Balskvemouri part of the Svaneti Region will be depopulated. And who will take the profits? The foreign owner will completely sell the 1.5 billion kilowatt-hour electricity, but the price of a kilowatt-hour will be so high Georgian consumers will not be able to consume this electricity. Georgia will have to purchase power from neighboring countries at cheaper tariffs (from Russia, Azerbaijan, Armenia). The regulatory commission has already revised the tariff system and naturally, tariffs will increase there too, because the GEL devaluation affects them too. Is it worth to resettle residents of the Balskvemouri part of the Svaneti Region for 15 million USD? We have many tributaries to the river Enguri and these resources may be employed”, Miron Pirtskhelani noted. Georgian militants, including the Club of Generals and various research works substantiate that not an Indian company, but Russian Federation acts behind the Khudoni HPP project. Namely, in 10 kilometers from the Khudoni Cascade Russian troops are deployed in the Kodori Gorge and they aim to somehow resettle the local population to pave a direct way to Lentekhi, the Bavari Gorge, then to Kvaisa that is Racha Region, where also the so-called South Ossetian troops are deployed. Therefore, a joint integrated line will be composed and the 500-kilometer line of the Caucasian watershed will be fully cut from the remaining part of Georgia.

HPP construction project violates the third clause of the state constitution promulgating the joint power system must be administered by the Georgian state sector. The power system may be alienated, but the Authorities must own the controlling interest. For example, the Brussels recommendations call for opening energy market and admitting foreign investors to European countries, but the EU members refuse to fulfill this requirement, because domestic power monopolists control the sector. The European

power system remains under strict control. For example, the French government is sure that admittance of foreign investors to the sector will pose a threat to the strategic course of the country.

“Only Ignorant and Wrecker People Consider Power System in Isolated Regime”

ANZOR CHITANAVA, a vice president for the national energy academy of Georgia, says the Russian Federation does not act behind the Khudoni HPP project. The project was drafted in the Soviet period and it was considered as a constituent part of the Soviet Union power system, because Georgia was considered to be one of the main power hubs in the South Caucasus. Khudoni HPP parameters were selected to satisfy these requirements. “And now we should answer the question whether the Soviet Era parameters fit the today requirements. I have been working in this field for 52 years. I started as an ordinary engineer and finally, became a head of the field in terms of projection, scientific research and supervision. My institute was carrying out this entire job, and I have worked as a director for 30 years there. Today I assert the Khudoni HPP project fits the current requirements. The people, who consider the power system in an isolated regime in behalf of only their own country are ignorant and wreckers. Intersystem communication, relations, exchanges are the first source for upgrading the energy efficiency. Khudoni HPP should be considered as the South Caucasian asset. Nothing has changed in the South Caucasus and Russia, Azerbaijan, Armenia and Turkey still exist in this region. Consequently, the range of its influence has broadened. Hence, Khudoni HPP parameters will satisfy tomorrow requirements too”, Anzor Chitanava said. As to negative factors, Anzor Chitanava confirmed

the local residents should be resettled, but the investor must create comfortable living conditions for them by arranging a new settlement of Khaishi. A corresponding project has been already developed and it may be implemented in the lower part of the area, he added. As to the negative environmental impact on the Svaneti climate, he said only micro-limited zones will be affected. This impact will reach only the water storage level, on 800 meters from maximal zone and on 1.5 kilometers from the last point of the water storage. “They said the Svaneti Region will be depopulated, landslips and cataclysms will be intensified. Cataclysms intensification may be provoked by the aggression the people may show in this or that phase of the construction works. We should not demonstrate aggression. On the contrary, we should restrain from our aggression. Khudoni HPP electricity tariffs become disputable for the people who are ignorant of power system and the way in which the electricity tariffs are determined in the power system. The tariff will be high during the investment return period. This signifies it will take about 8-10 years to return the investment, but the tariff will be evenly shared to the whole country, the weighed tariff will be set. After this period, the tariff will drop to the electricity cost price. Initially the price of a kilowatthour of Khudoni electricity will be 0.12-0.15 USD, but this does not signify electricity tariff will rise in Georgia. The investments will be returned in 8-10 years thanks to the mentioned tariff and after that period, lower tariff will be introduced. The HPP exploitation period ranges from 50 to 80 years. Moreover, Anzor Chitanava says they have taken a decision not to construct major water storages and cascades above Khudoni HPP, because aggression, environment impact, explosions, change of the riverbed will inspire irreversible processes in the Svaneti Region. Therefore, a combination of Enguri HPP and Khudoni HPP is sufficient, Anzor Chitanava concluded. “Show me the people who object to this project and I will persuade them in everything”, Anzor Chitanava noted.


CURRENCY

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October 5, 2015 #116

INFLATION RATE WILL SEE A NEW HIGH IN SEPTEMBER MERAB KAKULIA The NBG’s former vice president

“It is untimely to assert whether the GEL has found its new benchmark of balance. We remember statements by both the NBG and government officials that the crisis had passed, but in reality, we received entirely different situation. Therefore, I refrain from making preliminary statements. I would just note the 40% devaluation was not a logic outcome of either external or internal factors. The inflation rate is higher than it should be. Nevertheless, it is untimely to name the GEL’s new balance point. Various internal and external factors indicate that we are in the zone of certain stabilization, but we do not know what outcomes these external factors will bring”.

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he inflation rate has overridden the target indicator ahead of schedule. The National Bank of Georgia (NBG) expected the inflation rate to reach 5% point by the end of 2016, while the International Monetary Fund (IMF) was forecasting only 3% inflation rate. It should be noted for 6 years the NBG has failed to maintain the inflation process within the target frames. For the past years, we have witnessed doubledigit inflation, deflation, but never the target inflation rate. It is noteworthy the inflation has overridden the target rate amid significant contraction in oil and food product prices worldwide. Seemingly, the NBG cannot lay down professional analysis of expected developments for preventing inflation processes. In due time the NBG ignored the GEL depreciation tendencies and later this negligence was reflected in the inflation rate. The NBG representatives have frequently stressed their constitutional mandate entitles to care for the inflation, not to stabilize the GEL rate. However, today the inflation is over the target norm and the NBG is obliged by the law to take due measures. As a result, the NBG has tightened the monetary policy rate. We should also remember negative outcomes accompanying the GEL’s 40% devaluation. The

Banks & Finances has often emphasized this factor. The NBG has underscored this circumstance in its statement too: “The supply-related factors still determine the inflation rate growth tendencies, namely, a rise in transitional production costs in the aftermath of the exchange rate depreciation and a growth in prices of distinct imported goods. Increased electricity tariffs have also affected the inflation indicator”. The NBG statement emphasizes the grave situation in the business sector, but we should also recall earlier statements, where the NBG asserted the GEL devaluation had guaranteed competitive capacity of the state economy and this process was important for bolstering the domestic production. The NBG’s former vice president Merab Kakulia overviews inflation and monetary policy tendencies for the Business Contact program. “The NBG determines the inflation target indicator that is approved by the Parliament. The annual inflation indicator was planned at 5%. In July the indicator marked 4.9%, in August – 5.4% and the September report will be published in October and we expect higher inflation rate. In this situation, the inflation target indicator was overridden and the failed plan has generated certain inflation expectations that should be neutralized. Therefore, the NBG has taken a decision on

raising the monetary policy rate. As to the sufficiency of raising the monetary policy rate by 1%, we should remember that in July and August the NBG increased the rate by 0.5%, but the move turned out insufficient, because the process was deepening and negative expectations were increasing. Therefore, the NBG has enlarged the range and diapason of growth. Today, we do not know the September inflation indicator and its inclination level and I believe at this stage a 1% growth and it inclination amplitude is sufficient to give a quite powerful signal to economic bodies that the NBG follows a purposeful and target policy to curb the inflation process”, Kakulia said. The inflation indicator will not soar to a double-digit level, because inflation processes did not strengthen immediately in November 2014, when the GEL plunge started, Kakulia added. In February, the annual inflation marked 1.5%. This signifies the period from November 2014 to February 2015 has recorded a downturn trend in the inflation rate. In this case, we can say the devaluation was not reflected in the inflation rate. The devaluation trend was later reflected in the inflation rate. Only adequate measures will settle problems, Kakulia said. A rise in the monetary policy rate is one of the first steps taken after the negotiations between the government and the NBG, he added.

CREDIT INTEREST RATES EXCEED DEPOSIT YIELDS BY 300%

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ommercial banks may further increase loan interest rates because of GEL exchange rate depreciation and high risk factors. The National Bank of Georgia (NBG) has already increased the refinancing policy rate. As a result, refinancing loan interest rates have also surged. Despite this tendency, deposit interest rates have not changed. This signifies the Georgian bank sector remains one of the world leaders in terms of the spread indicator (the difference between credit and deposit interest rates). Deposit yields make up 5.2% on average, while credit interest rates mark 14.8%. This signifies credit interest rates exceed deposit yields by 300%. According to the World Economic Forum (WEF) report, in 2012 the spread in Georgia was 15%, while the NBG reported the indicator at 10%. In the developing markets, this indicator is 4-5%, while the figure exceeds 8-9% in undeveloped countries. The spread is one of the determinant factors for the competition quality. The above-mentioned indicator signifies the competition quality in the Georgian bank sector is unsatisfactory. Nearly 70% of deposits, that is, about, three fourths have been accumulated in three commercial banks and this factor deteriorates the competition environment. Healthy competition environment will provide more efficient interest rates on credits and deposits, specialists noted. Macroeconomics specialist VAZHA KAPANADZE noted, according to the NBG indicators, the gap between credit and deposit interest rates is huge. “In general, credit interest rates

calculation is treated like the case with bread”, Vazha Kapanadze said. The interest rate in attracted sources is the first determinant of the credit. Reserve interest rate is the second factor and the NBG has reported it at 4%. This coefficient grows the figure to 10.2%. Then we should also take into account an averaged inflation indicator jointly with a bank’s expenses and profits. As a rule, in all civilized countries the ratio of net profits of a commercial bank within the interest rate ranges from 0.5% to 1.5%, Kapanadze noted. “Regretfully, this indicator grows because of the risk coefficient. The interest rate is composed in this way. However, based on all these indicators, the averaged 15% rate on credits is very high. This signifies the bank competition is weak in Georgia and only several commercial banks determine the market tendencies”, the economic expert noted and added Georgia would make real benefits by drawing one of the 10 top foreign commercial banks. A strong bank will intensify the competition and chances for lowering credit interest rates will increase. MIKHEIL TOKMAZISHVILI, the former member of the NBG board, said the big gap was caused by inflation. “The target inflation in Georgia is 5% and at least 5% should be added to the amount from a deposit, as well as various interest rates from various operations. Consequently, the huge difference between credit and deposits interest rates was caused by inflation expectations. Georgia remembers deflation processes too that

“Regretfully, this indicator grows because of the risk coefficient. The interest rate is composed in this way. However, based on all these indicators, the averaged 15% rate on credits is very high”.

“Moreover, a high indicator of the spread is related to the value of money. In Georgia it depreciates faster compared to the developed countries”.

has lasted for a long period, but this process did not narrow the spread. Mikheil Tokmazishvili explains the key role belongs to the NBG planned target inflation indicator that remains always high. “Everything depends on what is the target orientation of the national bank. The NBG’s target orientation starts with high inflation expectation – 6% in 2014, 5% in 2015 and about 4.5% in 2016. Interest rates are based on these indicators. Deflation processes are also available, but the NBG follows an entirely different target orientation”, Mikheil Tokmazishvili said. Moreover, a high indicator of the spread is related to the value of money. In Georgia it depreciates faster compared to the developed countries. For example, the national currency in relation to USD has depreciated by 100% since the introduction, while the GEL purchasing power has narrowed 4 times.

As to competition, Mikheil Tokmazishvili said, monopolistic competition is more characteristic for the Bank sector. At the same time, the demand for credits is higher than the supply. As a rule, such a demand is risky. Other factor that causes the high spread is related to the exchange rate. Commercial banks draw money resources mainly from foreign financial institutions, while the conversion is made in GEL. Therefore, commercial banks try to maintain high interest rates on credits to maintain a certain corridor for fulfilling the obligations. Despite similar explanations, specialists noted serious research works should be carried out to determine the reasons for such enormous difference between credit and deposit interest rates. Commercial banks include high-risk coefficient in credit interest rates, while deposit yields are free of risk factors.


October 5, 2015 #116

COMPANY NEWS

A MULTI-CLINIC INNOVA OPENED IN TBILISI WITH SUPPORT OF BANK OF GEORGIA

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new multifunctional clinic Innova opened on Sandro Euli Street #7. The clinic’s main areas of work will include neurosurgery, gynecology, traumatology, and general

surgery. The head of Innova Giorgi Kipiani addressed the gathered audience on the opening day of the clinic. “We are very pleased to open a new multifunctional clinic in Tbilisi. Innova is equipped with ultra-modern medical technology. We have gathered the best specialists of the South Caucasus region in our clinic. Starting today, the population of Georgia will have an opportunity to get medical treatment of highest quality at our clinic. A large portion of Georgia’s population is enrolled in the Universal Healthcare program. Today there is no medical center that is not part of Universal Healthcare program, so we are also going to be cooperating with this program,” the head of the clinic noted. Innova’s founder is Tbilisi Central Hospital, which still continues investing in the medical field. This is Tbilisi Central Hospital Group’s second totally new medical clinic. The project was fully financed by Bank of Georgia, which contributed financially not only into construction, but also the acquisition of inventory. Bank of Georgia has been actively involved in the healthcare field in Georgia for the last couple

of years. The Bank plans to continue crediting in order to financially assist healthcare projects that have great promise. “Today yet another high-tech medical center opened in Tbilisi. I am delighted that the clinic has been equipped with latest technology since the phase of its design. The clinic has a wellthought out fully functional equipment. Such technology will allow the clinic’s personnel to aptly respond to any new challenges facing it. Innova is practically a universal center. There are more than 104 beds in the clinic, along with the large ambulatory. I wish success to my colleagues,” Minister of Health David Sergeenko said. “The Bank of Georgia is very active in financing the health sector. We have financed this group’s three projects already. The previous 2 projects were very successful. I am sure this project will also be very successful, “Bank of Georgia Deputy Director-General said. Innova clinic has a 7,000 square meters of space and is equipped with latest high-tech technology. It has 8 operational blocks, 30-beds reanimation, and a 70-spot hospital. The clinic also has a hightech diagnostic center where such professional and successful doctors as Mr. Aghlemashvili, Vadim Khatiashvili, Rezo People, Irakli Todua, Gocha Chutkerashvili, Irakli Chelishvili (pecho), David Datoshvili and Zurab Narimanidze, are going to work together.

ENTREPRENEURS DEMAND TO LOWER TAXES FOR RENTAL PROPERTY

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egal entities require to introduce tax relief on property that applies to individuals. In particular, we are talking about income tax reduction from 20% to

5%. This law is already in force for individuals but the entities are still paying 20%. Employers who rent the property consider that a 20% tax should be reduced, because they already pay 20% to the state in the form of the income tax. Along with that, it does not matter that the law generally creates problems for those who rent property and does not concern directly tenants, but eventually the tenants have to pay for everything. “If the government considers this view of business, it will be a big help for the business. But if such a decision is not taken, then the business may stall. Our goal is to make business in Georgia more attractive and interesting. Of course, the state should get revenues from taxes, but not at the percentages that are defined today. It would be better the state collected less taxes, but the

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business worked more actively, “- President of the Developers Association Irakli Rostomashvili says. Mikheil Chelidze, Small and Medium-sized Enterprises Association President, doesn’t share this requirement. “If a person is engaged in the business, he has to pay taxes, as regards the level of taxes, 20% is very little, and certainly it is not the tax burden, which could cause serious damage to business,” - he notes. In his words, Georgia has lower taxes compared to other countries. “If we compare with other countries, in Georgia taxes are quite low, however, everyone demand their decrease. And then what will happen to the budget - no one cares, “- President of the Association explains. Legislative changes took effect in Georgia since 1 January 2015, according to which, the tax on profits derived from the rental of apartments has been decreased from 20% to 5%. The new law referred only to natural persons, while legal entities pay as usual.

TBC is the Most Active Bank in Social Networks

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BC Bank is revealed to be Georgia’s most active bank in social networks, according to the internet portal Taripebi.ge. As of September 28, 2015 TBC Bank has 506,804 likes on its Facebook page, 4, 242 Instagram followers and 4,062 subscriptions on the Youtube channel. The survey, in which TBC became the leader company, was conducted among all Georgian banks.

“For us this is a success and a sign that our communication with the customers was productive. Over these years, we tried to be an open and a cheerful brand offering a lot of innovations to our customers. Our advantage in social networks are the unique ideas and projects that we implement. Our unique news creates the brand. We always try to take our clients wishes into consideration and avoid excessive and unnecessary information,” Manager of TBC Digital Marketing Tato Norakidze told CBW.

INTERNET AND MOBILE BANK LOTTERY FROM TBC BANK On 1.10.2015 TBC bank offers one more lottery to the customers using internet banking. The customers who use TBC internet banking service are provided with an opportunity to get involved in the lottery and win nice prizes. The luckiest customer, who uses internet and mobile banking, will have an opportunity to win Apple products, money prizes and a surprise – an apartment in Gudauri. All the customers, who are registered on TBC bank internet bank and carry out any transaction via internet and mobile bank since 1st October till 31st December, will have an opportunity to participate in the lottery. The customers will accumulate certain amount of points for each transaction and they will get one lottery ticket for five accumulated points. The scheme of accumulating points is as follows: - Logging on to the internet banking system – 1 point - Transfers among personal accounts or currency exchange – 2 points - Any other type of transfer -2 points - Opening a deposit or purchasing other bank product – 2 points

- Increase of credit limit or taking out a preapproved loan -2 points Doubled points are accrued for any transaction carried out via mobile bank. The lottery winners will be announced on 11th November, 11th December and 15th January. At the first stage of the lottery 10 iPad minis will be raffled, at the second stage 10 iPhone6s. On 15th January, at the final stage of the lottery, 10 people will win 1000 GEL. The super prize, an apartment in Gudauri will be raffled at the final stage. The results of the raffle will be published on TBC bank website. Hurry up, take your chance, get involved in the lottery and win! For further information about the lottery visit TBC bank website: tbcbank.com.ge


EVENT 12 A presentation of Fox International Channels took place in Tbilisi’s Radisson Blue Iveria Hotel last week

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he company FOX International Channels is the leading international company that produces wolrd’s leading TV channels, including FOX, National Geographic Channel, FOX Life, Nat Geo Wild, FOX News, Sky News, Baby TV. FOX International Channels will be available in Georgia’s small and large satellite providers including Silknet, Magtisat, and Caucasus Online. FOX channels are brought to Georgia by Caucasus Media Services since 2011. FOX International Channels is a great addition to the existing TV channels provided by Caucasus Media Services. FOX Internationl Channels portfolio in Georgia will include such popular TV shows as Walking Dead, Dexter, Weeds, Game of Thrones, and Breaking Bad. The shows will be broadcast in Georgia within 24 hours of their release in the United States.

Channel’s

FOX LIFE is FOX International Channel’s global mother brand in the lifestyle segment. Developed originally in Italy, the brand now reaches 48 million homes in 73 countries and 19 languages. It delivers TV Shows including Scandal, Grey’s Anatomy, The Voice, Next Top Model and Project Runway

The National Geographic Society has been inspiring people to care about the planet since 1888. It is one of the largest nonprofit scientific and educational institutions in the world. Its interests include geography, archaeology and natural science, and the promotion of environmental and historical conservation.

Nat Geo Wild is a cable/satellite TV channel focused primarily on wildlife and natural history programming. It is a sister network to National Geographic Channel and it is the latest channel to be jointly launched by the National Geographic Society and Fox Cable Networks.


October 5, 2015 #116

WORLD NEWS caucasus business week

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PUTIN’S GAMBLE

Syria Move Born of Hopes of Coming in From Cold

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hen Syrian President Bashar alAssad’s forces seemed on the verge of losing control of the capital over the summer, Vladimir Putin saw an opportunity. Encouraged by hardliners in his inner circle, the Russian president sensed not only a chance for the Kremlin to shore up its last remaining ally in the Middle East, at least temporarily. He also saw a way to muscle his way out of the isolation he faced following the Ukraine crisis, re-asserting the nation’s role as a global power, senior Russian officials said. Putin’s audacious military move could shift the conversation away from the conflict in Ukraine to Russia’s ability to help stem the flow of refugees from Syria now flooding Europe and possibly lead to an easing of sanctions. The airstrikes are also fraught with risk for the Kremlin, raising the prospect of worsening the violence in Syria. That could scuttle hopes of rapprochement with the West and potentially drag Russia into a military quagmire that could undermine Putin’s now-huge public support. Battered by a more than 50 percent plunge in oil prices and U.S. and European sanctions imposed since Putin’s annexation of Crimea and support for pro-Russian insurgents in eastern Ukraine, Russia is in the midst of what is forecast to be the longest recession since the contraction that followed the collapse of the Soviet Union. “Russia is using the situation in Syria, where the West really needs our help, to show that we aren’t the enemy,” said Viktor Kremenyuk, deputy head of the Russian Academy of Sciences USA-Canada Institute.

Big Risk

Publicly, Russia’s government says the Syrian air campaign is aimed only at helping Assad’s forces to fight terrorists, denying any broader motivation. But in private, officials say the Kremlin’s plans emerged over the last several months, fueled by setbacks Assad’s forces suffered on the battlefield in the spring and summer and by the continuing deep-freeze in

relations with the U.S. and Europe over Ukraine. This account is based on interviews with five senior Russian officials in the past week, all of whom spoke on condition of anonymity because they were discussing confidential matters. The officials admit that the Syrian move is a big risk. To succeed, the airstrikes have to help Syrian forces win back land lost to Islamic State and other terrorist groups, something a year of bombing by the U.S. and its allies has failed to do. The Kremlin is preparing for a major campaign that could last at least several months, officials said. The military presence, though, will remain in Syria much longer, according to a senior diplomat. In addition to the risks of losses on the battlefield in a war polls show most Russians don’t support, the Kremlin faces dangers at home from Islamist terrorists who’ve killed hundreds in attacks in the last two decades. The Kremlin’s gambit that military success in Syria will jump-start its ties with the U.S. and Europe also could fail, given the deep skepticism lingering in western capitals after what officials there say were repeated Kremlin lies during the Ukraine crisis. On Thursday, U.S. officials expressed anger that Russia began its airstrikes without using the new channels of communication the countries had promised to set up.

‘Highest Price’

White House press secretary Josh Earnest said Russia risked exacerbating the sectarian conflict in Syria, where more than 250,000 people have been killed and millions have fled their homes in the past 4 1/2 years. “But ultimately, it’s the Russians that will pay the highest price for that.” Putin on Friday meets his counterparts from France, Germany and Ukraine for a summit in Paris aimed at reviving a stalled peace accord that has succeeded in quelling fighting in eastern Ukraine without resolving the conflict. The airstrikes this week forced Syria onto the agenda in those discussions, as well. “We will have to change our relationship with Russia,” German Vice Chancellor Sigmar Gabriel said

Sept 25. Europe can’t keep up sanctions on Russia forever and at the same time ask Russia for help on Syria, he said. The 28-member EU must agree unanimously to extend economic sanctions that expire at the end of January. Russia started to consider the use of force in Syria in August when it became clear that Assad was on the edge of collapse, the senior Russian diplomat said.

Damascus Danger

“There was a real threat of Damascus falling,” said Igor Korotchenko, a member of the Russian Defense Ministry’s advisory board. “The capture of Damascus would be a huge symbol that would provoke a new burst of extremist activity across the world.” Initially, Russia stepped up its diplomacy, meeting with Saudi Arabia and the U.S. in Doha, Qatar, in early August and inviting Arab leaders to Moscow the same month to discuss a potential transition away from Assad. U.S. officials stuck to their position that Assad was part of the problem in Syria. The military plan was pushed by the head of the presidential administration, Sergei Ivanov, a former KGB colleague of Putin’s, as well as Defense Minister Sergei Shoigu and Nikolai Patrushev, the head of the Security Council, according to two officials. Taking on the Islamic State in Syria would show Russia could succeed where the U.S. and its allies had failed. The Kremlin made no public comments on its military plans, but the steadily growing deployment of troops, fighter jets and anti-missile systems to an air base near Latakia last month, got U.S. attention. Ini-

tially, the U.S. sought to block Russian arms shipments, but the Kremlin routed them via Iranian and Iraqi airspace. Later, U.S. Defense Secretary Ashton Carter discussed the buildup with his Russian counterpart on Sept. 18 to discuss the buildup, the first such direct military contact between the countries since the Ukraine crisis began. ‘Completely Understand’ Ten days later, President Barack Obama met Putin on the sidelines of the United Nations General Assembly, just weeks after U.S. officials had said there was nothing for the two to discuss. Wednesday, Russian aircraft began bombing targets in Syria, with a one-hour warning for the U.S. Russian Foreign Minister Sergei Lavrov on Thursday in New York dismissed accusations the warplanes were hitting targets other than Islamic State and other terrorist groups. Presidents Putin and Obama “completely understand each other,” he said. “But for some reason, this complete understanding cannot be translated into complete joint action, complete cooperation.” Later Thursday, Secretary of State John Kerry met to discuss the situation in New York with members of the U.S.-led coalition that opposes Islamic State. A European official, speaking on condition of anonymity to discuss private deliberations, said the sentiment in the room was that Russia is making the Mideast -- and probably the related refugee problem in Europe -- much worse and much more dangerous for everyone, and that perhaps Putin’s government hasn’t fully thought through the longer-term implications.

WHAT DOES THIS WEEK’S UNEMPLOYMENT DATA MEAN FOR US INTEREST RATES?

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n Friday this week we shall find out how the US Jobs market fared in September and whether there will be any additional impetus from the unemployment numbers, as far as the Feds actions on US interest rates are concerned. At the time of writing the Fed Funds Futures market is suggesting there is a less than 20% chance of the Fed pulling the trigger in October and despite Janet Yellens’ recent comments to the contrary, a declining chance of a rate rise in 2015 at all. In the press conference following Septembers FOMC meeting the Fed chair flagged that external factors rather than domestic ones had caused the monetary policy committee to hold rates at their current low levels. The question must be therefore even if we had much better jobs number than anticipated

on Friday would this enough to persuade the Federal Reserve to act? The chart below shows both the Non-Farm Payrolls data and the underlying US Unemployment rate over the last five years. During this time we have seen job creation rates which have rarely dipped below 100k per month and a declining rate of unemployment, which is now just above 5% and approaching levels that could be considered as being at or near full employment for the USA. Given this relatively benign employment outlook it’s tempting to think that we could be “pushing on a string” if we expect jobs data to be the catalyst for an early US interest rate rise. Consensus forecasts for Fridays NFP are at 203,000 according to data from Bloomberg / Econoday. The Fed considers other items in its mandate including inflation, where it is attempting to engineer

a move to its 2% target rate. There is much debate about which measures of inflation most accurately reflect price changes in modern globalized economies. But if we consider core inflation (think the CPI number minus the Food and Energy Components) in the US, then we are closer to this 2% threshold than you might imagine at 1.8%. However the picture becomes much less promising if we overlay this with the broader inflation rate (at just 0.2%) which includes Food and Energy prices. As can be seen in the chart below. The latest factor to be introduced into the equation is the performance of the global economy and in particular China and the Emerging Markets. We have spoken on numerous occasions about the vulnerability of the Emerging Markets and the uncertainty about the real state of play in the Chinese economy and at times we have felt like a voice in the wilderness. However our view is now starting to become the orthodoxy. In a recent research note Citigroup suggested that “Real” China GDP growth rates are perhaps nearer to 4% than the headline figures of 6.8% to 7%. Admittedly this is an estimate based on the banks modelling of the Chinese economy with all the assumptions that this entails. Nonetheless this does not bode well for the future and would certainly suggest to me that a hard landing is the most likely outcome for China. In fact some commentators have taken the view that the hard landing is happening now, it’s just that the official data has yet to fully reflect it.

In its recent strategy note Citi flagged a 55% possibility of a China led global recession occurring by the second half of 2016. That number can be broken down as follows: A 40% chance of a moderate recession and a 15% chance of what Citi calls “a severe recession and financial crisis”. But we should also note that Citi allocated a 30% chance to the global economy effectively moving sideways, neither growing nor contracting. A sideways move in the World economy or the expectation of one, would likely stay the Feds hand for longer, a mild global recession might persuade it to consider additional targeted stimulus. However a severe recession in the global economy would put the Fed in very difficult positon. As it would have little room for maneuvere, as far as cutting rates was concerned, without considering crossing into the bizarre world of negative interest rates and the possibility of a fourth round of QE. We could also see some of the remaining fiscal and monetary taboos broken in these circumstances via what is known as monetisation. Where in effect the Government and Central Bank print money to spend in the real economy or pay down government debt. Historically this type of action has been associated with the currencies of failing states and has been considered off limits to stable developed nations. However that could now change, with Japan seen as the most likely candidate to break ranks in any further economic adversity.


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October 5, 2015 #116

Embassy United States of America Embassy 11 Balanchivadze St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 53-23-34 E-mail: tbilisivisa@state.gov; askconsultbilisi@state.gov United Kingdom of Great Britain and Northern Ireland Embassy 51 Krtsanisi Str., Tbilisi, Tel: 227-47-47 E-mail: british.embassy.tbilisi@fco.gov.uk Republic of France Embassy 49, Krtsanisi Str. Tbilisi, Tel: 272 14 90 E-mail: ambafrance@access.sanet.ge Web-site: www.ambafrance-ge.org Federal Republic of Germany Embassy 20 Telavi St. Tbilisi Tel: 44 73 00, Fax: 44 73 64 Italian RepublicEmbassy 3a Chitadze St, Tbilisi, Tel: 299-64-18, 292-14-62, 292-18-54 E-mail: embassy.tbilisi@esteri.it Republic of Estonia Embassy 4 Likhauri St., Tbilisi, Tel: 236-51-40 E-mail: tbilisisaatkond@mfa.ee Republic of Lithuania Embassy 25 Tengiz Abuladze St, Tbilisi Tel: 291-29-33 E-mail: amb.ge@urm.lt Republic of Latvia Embassy 16 Akhmeta Str., Avlabari, 0144 Tbilisi. E-mail: embassy.georgia@mfa.gov.lv Greece Republic Embassy 37. Tabidze St. Tbilisi Tel: 91 49 70, 91 49 71, 91 49 72 Czech RepublicEmbassy 37 Chavchavadze St. Tbilisi ;Tel: 291-67-40/41/42 E-mail: czechembassy@gol.ge Web-sait: www.mzv.cz Japan Embassy 7 Krtsanisi St. Tbilisi Tel: +995 32 2 75 21 11, Fax: +995 32 2 75 21 20 Kingdom of Sweden Embassy 15 Kipshidze St. Tbilisi Tel: +995 32 2 55 03 20 , Fax: +995 32 2 22 48 90 Kingdom of the Netherlands Embassy 20 Telavi St. Tbilisi Tel: 27 62 00, Fax: 27 62 32 People’s Republic of China Embassy 52 Barnov St. Tbilisi Tel: 225-22-86, 225-21-75, 225-26-70 E-mail: zhangling@access.sanet.ge Republic of Bulgaria Embassy 15 Gorgasali Exit, 0105 Tbilisi, Georgia Tel: +995 32 291 01 94; +995 32 291 01 95 Fax: +99 532 291 02 70 Republic of Hungary Embassy 83 Lvovi Street, Tbilisi Tel: 39 90 08; E-mail: hunembtbs@gmail.com State of Israel Embassy 61 Agmashenebeli Ave. Tbilisi Tel: 95 17 09, 94 27 05 Embassy of Swiss Confederation’s Russian Federation Interests Section Embassy 51 Chavchavadze Av., Tbilisi Tel: 291-26-45, 291-24-06, 225-28-03 E-mail: RussianEmbassy@Caucasus.net Ukraine Embassy 75, Oniashvili St., Tbilisi Tel: 231-11-61, 231-12-02, 231-14-54 E-mail: ukraina_pu@wanex.net; emb_ge@mfa.gov.ua Consular Agency: 71, Melikishvili St., Batumi Tel: (8-88-222) 3-16-00/ 3-14-78 Republic of Turkey Embassy 35 Chavchavadze Av., Tbilisi Tel: 225-20-72/73/74/76 E-mail: turkemb.tbilisi@mfa.gov.tr Address: 8, M. Abashidze str. Batumi, Georgia; tel: (8-88-222) 7 47 90 Republic of Azerbaijan Embassy Kipshidze II-bl . N1., Tbilisi Tel: 225-26-39, 225-35-26/27/28 E-mail: tbilisi@mission.mfa.gov.az Address: Dumbadze str. 14, Batumi Tel: 222-7-67-00 Fax: 222-7-34-43 Republic of Armenia Embassy 4 Tetelashvili St. Tbilisi Tel: 95-94-43, 95-17-23, 95-44-08 E-mail: armemb@caucasus.net Web: www.armenianembassy.ge Consulate General, Batumi Address: Batumi, Gogebashvili str. 32, Apt. 16 Kingdom of Spain Embassy Rustaveli Ave. 24, I floor, Tbilisi Tel: 230-54-64 E-mail: emb.tiflis@maec.es Romania Embassy

TBILISI GUIDE

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7 Kushitashvili St., Tbilisi Tel: 38-53-10; 25-00-98/97 E-mail: ambasada@caucasus.net Republic of Poland Embassy 19 Brothers Zubalashvili St., Tbilisi Tel: 292-03-98 Email:tbilisi.amb.sekretariat@msz.gov.pl Web-site: www.tbilisi.polemb.net Republic of Iraq Embassy Kobuleti str. 16, Tbilisi Tel: 291 35 96; 229 07 93 E-mail: iraqiageoemb@yahoo.com Federative Republic of Brazil Embassy Chanturia street 6/2, Tbilisi Tel.: +995-32-293-2419 Fax.: +995-32-293-2416 Islamic Republic of Iran Embassy 80, I.Chavchavadze St. Tbilisi, Tel: 291-36-56, 291-36-58, 291-36-59, 291-36-60; Fax: 291-36-28 E-mail: iranemb@geo.net.ge United Nations Office Address: 9 Eristavi St. Tbilisi Tel: 225-11-26/28, 225-11-29/31 Fax: 225-02-71/72 E-mail: registry.geo@undp.org Web-site: www.undp.org International Monetary Fund Office Address : 4 Freedom Sq., GMT Plaza, Tbilisi Tel: 292-04-32/33/34 E-mail: kdanelia@imf.org Web-site: www.imf.ge Asian Development Bank Georgian Resident Mission Address: 1, G. Tabidze Street

Freedom Square 0114 Tbilisi, Georgia Tel: +995 32 225 06 19 E-mail: adbgrm@adb.org; Web-site: www.adb.org World Bank Office Address : 5a Chavchavadze Av., lane-I, Tbilisi, Georgia ; Tel: 291-30-96, 291-26-89/59 Web-site: www.worldbank.org.ge Regional Office of European Bank for Reconstruction and Development Address: 6 Marjanishvili St. Tbilisi Tel: 244 74 00, 292 05 13, 292 05 14 Web-site: www.ebrd.com Representation of the Council of Europe in Georgia Address : 26 Br. Kakabadze, Tbilisi Tel: 995 32 291 38 70/71/72/73 Fax: 995 32 291 38 74 Web-site: www.coe.ge Embassy of the Slovak Republic Address: Chancery: 85 Irakli Abashidze St. Tbilisi, 0162 Georgia Consular Office: 38 Nino Chkheidze St. Tbilisi, 0102 Georgia Phone: 2 222 4437, 2 296 1913 e-mail: emb.tbilisi@mzv.sk

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 CORNER HOUSE Tbilisi, I. Chavchavadze ave. 10, Tel: 0322 47 00 49; Email: contact@cornerhouse.ge RESTAURANT BARAKONI Restaurant with healthy food. Georgian-European Cuisine Agmashenebeli Alley 13th Phone: 555 77 33 77 www.barakoni.com CHARDIN 12 Tbilisi , 12 Chardin St. , Tel: 92 32 38 CAFE 78 Best of the East and the West Lado Asatiani 33, SOLOLAKI 032 2305785; 574736290 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 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

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,

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 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

Real Estate International Real Estate Company (IREC) Tbilisi. 9 P. Aslanidi St. Tel: +995 32 238 058 Mob: 599 95 76 71 Email: Info@irec.ge www.irec.ge

GSS Car rental offers a convenient service for those who are interested in renting car in Georgia. Rental fleet mainly consist of Japanese made SUV’s, the company has various models of cars including sedans and minivans which are in good technical condition. Contact information: Email: info@gsservices.ge. Address: Shalva Dadiani 10

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

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

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


PUBLICITY

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caucasus business week

Two residential complexes include 464 apartments with parking, green area, outdoor swimming pool and playground for children. ”Metrocity” is unique with its special maintenance services. “Metrocity” integrates two five star hotels, private school and residences with private swimming pool, panoramic terrace restaurants, casinos, Spa, shopping center including 100 brand stores, sport club, cinema, bowling center, playground for children, gold sand beach and the biggest conference hall in Transcaucasia for 1500 guests.”MetroCity” can be found just 2 km from Batumi International Airport and 500m from the city center. The complex with its location is harmoniously mixed with mountains and sea views. The project implementation has begun in February 2015 and will be successfully completed in April 2017. Residences from 38 m2 to 300 m2 are available.

10% Deposit 36 MONTH INTERNAL CREDIT 25% Deposit 60 MONTH INTERNAL CREDIT

STARTING PRICE IS FROM 1425 $ Address: Leh and Maria Kachinsky Str.1, Batumi Tel: +995 577 14 17 14 sales@metrocity.ge www.facebook.com/MetroCity.GE

www.metrocity.ge

October 5, 2015 #116