Caucasus Business Week #125

Page 1




December 7, 2015 #125

December 7, 2015, Issue 125

caucasus business Partnerweek News Agency


Metrocity Forum shopping mall in Batumi


MEHMET AYAG Chairman of the Board of JSC Metro Avrasya Georgia Pg. 4

Dubai’s Tax Free Market Opens up for Georgian SME’s AMIR KHWAJA Director of Evergreen Businessmen Services in Georgia Pg. 6

Valeri Kvaratskhelia: We Should Make Universal Healthcare System CostEffective Pg. 11

Pg. 9

GEORGIAN STATE BUDGET FOR 2016 10-Billionaire Budget with 3% Growth and 3% Deficit The 2016 state budget bill has become a subject of active discussions. The bill determines indicators for revenues and expenditures for the next year. Various representatives of the Authorities have made multiple statements that the 2016 budget bill is oriented on social programs. The year of 2015 has brought various political unrests in the Region. Therefore, the Georgian Authorities had to revise the next year’s economic parameters and forecast

indicators several times. However, the final edition demonstrates that the GDP real growth forecast is 3% for 2016, while the GDP deflator is 4.5%. In the midterm period, the economy real growth forecast is around 5.5%. The budget deficit volume also represents one of the important indicators of the macroeconomic parameters. For 2016, this indicator is planned at 3% in relation to GDP. The state budget expenditures are planned at 9.920 billion

GEL, including: budget amount constitutes 9.110 billion GEL, grants – 130 million GEL, and credits – 680 million GEL. Total amount of the state budget expenditures accounts for 8 373.2 million GEL, including: payroll fund – 1 438.7 million GEL, expenditures on goods and services – 1 008.1 million GEL, interest rates – 477.1 million GEL, subsidies – 247.1 million GEL and all other expenditures – 1 275.4 million GEL. Pg. 7

BOLD NEW SOCIAL NETWORK COMING FROM GEORGIAN DEVELOPERS Joint venture with US tech experts and an innovative new approach to social networking – Caucasus Business Week has the exclusive scoop on what’s brewing for Georgia’s future in digital media

FOREIGN COMMERCIAL BANKS BEWARE OF OLIGOPOLISTIC MARKET IN GEORGIA Saxso Bank does not plan to unveil a branch in Georgia. Nor GP Morgan, a major investment group, has appeared in the country, as promised by the former Prime Minister. Foreign finance institutions are not interested in Georgia’s small and oligopolistic market. Therefore, we should not have vain expectations some of them will open a branch in Georgia. Recently, Georgian media agencies spread the

information as if Saxo Bank, one of the major finance companies, planned to launch operation in Georgia, but Saxo Bank founder Lars Seier Christensen told the Banks & Finances newspaper that the company had no plans for unveiling a branch in Georgia. Saxo Bank owns branches in 26 countries and Georgia is a very small and lessdeveloped market for us, the bank’s founder said. Saxo Bank is represented in Georgia as part of its

cooperation with Georgian companies. Namely, Galt&Taggart has introduced an online trading platform jointly with this finance institution. Any person is able to trade by shares at the global financial markets in online regime from home. Moreover, one of the heads of Saxo Bank has pledged to organize “a window” for Georgian businessmen to make Georgian shares attainable for foreign investors. Pg. 9

Caucasus Business Week has received exclusive information regarding an upcoming social media platform that aims to revolutionize the way people connect with one another. A joint venture by Georgian and US-based developers, the new service aims for global acclaim and will offer an unusual but effective twist to the default social Pg. 8 media formula.



December 7, 2015 #125

caucasus business week

MAIN EVENTS Tourism Administration Predicts Growing Number of Tourists in the Winter Resorts Director of the National Tourism Administration of Georgia expects an increase in the number of tourists in the winter resorts compared to last year. George Chogovadze states “Commersant” that the Administration is actively working on the development of winter resorts. According to him, artificial snow making system has been installed which helps to prolong a winter season in the resort and get more revenues. In Chogovadze’s words, a lot has been done in terms of infrastructure so a better season is expected this year, although the head of the Tourism Administration refrained from specific numbers.

Energy Minister not Rules out Georgia might not Need Russian Gas If Georgia is able to obtain additional volume of gas from Azerbaijan in 2018, then it will not need the Russian gas – Energy Minister Kakha Kaladze states commenting on the Turkish Prime Minister who said that TANAP gas pipeline will be launched ahead of schedule and will enter into operation in 2018. According to him, in this situation the gas from Gazprom may not be necessary, although it is unclear if it is technically possible to complete the project by 2018. “Initially the completion was scheduled for 2019-2020 years. Now 2018 year is considered. It is difficult to say how it is real to implement such a major project in such a short time. Although I can say that in Georgia its implementation will be carried out without delay,” says the Minister. He notes this project will bring many benefits to Georgia – primarily the country will receive an additional amount of cheap gas. “If the pipeline is put into operation in 2018, we will have a contract with Gazprom only for the transportation of gas to Armenia from where we get 10% of the transported gas as a transit fee. If we need Russian gas before 2018, we are going to buy it,” Kakha Kaladze points out.

Inflation in Georgia Reaches 4-year Low Rate of inflation in Georgia has intensified. According to the data by Geostat In November 2015 the annual inflation rate in Georgia equaled 6.3 percent, which is 4-year maximum. According to Geostat, in November inflation rate equaled to 0/3% compared to previous year. The annual inflation rate was mainly influenced by price changes for the following groups: Food and non-alcoholic beverages: the prices surged 5.2 percent and contributed 1.58 percentage points to the overall inflation rate. It is worth noting price increases for the following subgroups: fruit and grapes (22.9 percent), oils and fats (15.3 percent) and coffee, tea and cocoa (10.2 percent); Health: the prices increased 11.5 percent, with the relevant contribution of 1.09 percentage points to the overall annual inflation. The prices mainly rose for the subgroup of medical products, appliances and equipment (28.3 percent); Furnishings, household equipment and maintenance: the prices for the group increased 12.9 percent, contributing 0.81 percentage points to the overall index change; Housing, water, electricity, gas and other fuels: the prices increased 9.2 percent compared to previous month, contributing 0.78 percentage points to the overall inflation rate. Prices substantially grew.



ore than 100 high officials from 50 countries are gathering in Georgia’s capital Tbilisi to discuss ways to strengthen regional and global energy security, minimise damage to the environment, develop effective energy markets and create a favorable investment climate. For Georgia, the occasion was a chance to raise awareness of the country’s promising energy sector and attract investors. Tbilisi host the 26th session of the Energy Charter Conference. The conference will discuss Georgia’s ambitious initiative to foster electricity cooperation in the South Caucasus through the establishment of two Ministerial Level Task Forces, divided into two groups based on their location in the Caucasus region: (bullet points) EWEC: East-West Electricity Corridor Task Force, comprising of Azerbaijan, Georgia, Turkey, Turkmenistan; and NOSEC: North-South Electricity Corridor Task Force, comprising of Armenia, Georgia, Iran, Russia, Turkey. Georgia’s Prime Minister, Energy Minister and Economy Minister delivered speeches. Secretary General of Energy Charter Urban Rusnák and director of the Energy Community Janez Kopač also participated in the first part of the event.

Regional cooperation is fundamental to sustainable development The conference was officially opened this morning by Georgia’s Prime Minister Irakli Garibashvili. He welcomed the guests and said it was impossible to experience high quality energy safety without developing regional cooperation. Georgia, as the chair country of the Energy Charter, initiated to deepen energy cooperation in the South Caucasus regarding regional electricity trade. Garibashvili named the Baku-Tbilisi-Supsa, Baku-Tbilisi-Ceyhan and South Caucasus Pipeline projects as “successful examples” of regional cooperation and stressed more could be done for mutual benefit.

Renewable energy the way forward While delivering his speech Georgia’s Prime Minister also talked about climate change and the necessity to use renewable energy as it provided clean, sustainable energy for the country.


The Editorial Board Follows Press Freedom Principles Publisher: LLC Caucasian Business Week - CBW Address: Aleksidze Street 12 Director: Levan Beglarishvili Mobile phone: +995 591 013936 WWW.CBW.GE Email:

Georgia is rich in hydro resources. We have potential to produce energy from wind, solar, biomass and geothermal waters. This enables us to create an additional energy supply [but it can only be done] with support from local and foreign investments,” Garibashvili said.

stable” economic environment, low taxes and preferable conditions for doing business in the country. He added Georgia was successfully implementing the regulations outlined in the EU-Georgia Association Agreement (AA), and its Deep and Comprehensive Free Trade Area (DCFTA) section.

Georgia expects membership to Energy Community Georgia expected to become a member of the Energy Community (EC) – an international organisation that dealt with energy policy – in September 2016.

I am sure in the future we will be able to integrate into the European Union’s energy space. Georgia has already started negotiations with the Energy Community in this regard. We hope very soon Georgia will become a member of the organisation,” Garibashvili said.

Investments in Georgia’s energy sector In recent years Georgia had taken many promising steps to develop the country’s energy sector, said Georgia’s Economy Minister Dimitry Kumsishvili at the conference. He noted this would not have been possible without support from international financial institutions and with their aid the country had been able to implement several “important” investments in energy infrastructure. While it was a good start, Kumsishvili said Georgia needed an additional $7 million USD in investments to further develop its energy sector. “This means in the next 10 years we would have about $700 million USD investments [in this sector],” he said. Kumsishvili noted one of the most important projects implemented in Georgia’s energy sector was the Black Sea Transmission Network Project (BSTN), and he thanked the international financial institutions for their investments. The project outlined rehabilitation and expansion of the existing transmission system to facilitate electric power transmission from Georgia to Turkey, and was financed by the European Investment Bank, the European Bank for Reconstruction and Development, the German development bank KfW and the Development Bank of Austria. Using this example, Kumsishvili stressed the necessity of foreign investments for Georgia and he reminded the audience about the country’s prosperous investment climate. The Minister stressed Georgia offered investors a “liberal and

What does Georgia expect from the Energy Charter Conference? Georgia’s Prime Minister, Economy Minister and Energy Minister all hoped this conference will encourage investors to invest in Georgia’s energy sector. The leaders believed the international forum would facilitate bilateral and multilateral cooperation and facilitate efforts to develop regional cooperation in the energy sector. Furthermore, the Georgian officials believed the conference would contribute to raising Georgia’s awareness as a country rich in various energy resources that were yet to be utilised.

Editor: Nino Gojiashvili. Mobile phone: 595 050404 Reporters: Nutsa Galumashvili; Lazare Gvimradze; Shiva Parizad. Designer illustrator: Giorgi Magradze. Technical Assistant: Giorgi Kheladze


PUBLICITY December 7, 2015 #125

caucasus business week



INTERVIEW caucasus business week

December 7, 2015 #125

METROCITY FORUM - SHOPPING MALL IN BATUMI Interview with Mehmet Ayag, Chairman of the Board of JSC Metro Avrasya Georgia clients. Do you plan to undertake any marketing or PR campaigns in this direction? - Our company will enable tourists to enjoy the Ring Service. The last stop will be at the Metro City Forum shopping mall. Metro Forum is located in Batumi, at the very promising place and this location is favorable for both local residents and the whole country to enjoy better shopping mall services without crossing state borders. Our company will provide weighty PR and marketing campaigns for popularizing the shopping mall.

I believe the Qemal Pasha Fair will have to compete with us, not we.

- The next year a new big shopping mall will open in Batumi. What is the concept of this shopping mall and which segment do you focus on? - As reported, Metro City project includes 464 residential apartments, 415 hotel suites, and the biggest casino in Georgia. A major part of residential apartments has been already sold and they will be put into exploitation in July 2016. Consequently, the shopping mall will also open in the same period. We make accents on tourists and residents in new apartments, the hotel guests. The affordable prices will also enable local residents to enjoy our services. Moreover, we have also resolved one of the main challenges in Batumi and we have organized a parking place for 310 automobiles.

Georgian citizens go to Turkey, namely, to Qemal Pasha, Khopa

and Trabzon for doing shopping and they withdraw currency from Georgia. Therefore, we aim to strengthen the Georgian economy so as currency of local residents and the money tourists spend here remain in Georgia, not in foreign countries. - The shopping mall will be located within Batumi and this is a good factor, but the Qemal Pasha Fair is also located near Batumi and you will have to offer sharp competition to this Fair, at the initial stage, to draw new

- What would you say about renting commercial spaces at the shopping mall? What percent have you already rented? Have you already achieved a final agreement with any famous brands? - Let’s keep the names of the brands incognito, because we want to make a surprise to Batumi residents. I just confirm that we are conducting negotiations with the company that will be very popular in Georgia and that will have successful sales in this country.

We have already rented 65% of commercial spaces in the shopping mall. Negotiations are underway on the remaining 35% of the commercial spaces. - Besides the brands that have been already represented in the Georgian market, do you conduct negotiations for attracting new ones?

- Naturally, we have contacted almost all famous international brands and negotiations are underway with them. -Ajara is considered a seasonal resort, as a rule. Do you expect the due demand for the shopping mall services in unseasonal period? I mean various stores have oversaturated the city. Do you expect the shopping mall’s workload to be satisfactory in the autumn and winter periods? - This is a good question. You have noted stores of various brands operate across Batumi. In rainy weather it is quite difficult to receive pleasure from doing shopping in Batumi Streets.

Our goal is to enable local residents to enjoy services of a variety of brands at the shopping mall, as well as various entertainment centers, such as: movie theater, restaurants with terraces, entertainment center for children, billiard and bowling centers, where people will spend the time jointly with friends and family members. - How much is the rental per square meter, if not secret? - The rental per square meter starts from 25 USD plus the VAT. The rental amount depends on the floor, space and location. - Metro City is implementing a large-scale project in Batumi. What is the investment value of this shopping mall and in which period do you expect to return back the investments? - Total value of the project exceeds 120 million USD. We also plan to expand our activities by implementing the Metro City Phase 2 project. Naturally, it is important for our company to return the investments, but the preference is given to creating stable job places and products for Batumi residents.

• 16.000 m2 Shopping Mall with world famous Brands; • Cinema; • Children Entertainment Areas; • Bowling and Billiard Center;

December 7, 2015 #125

PUBLICITY caucasus business week



INTERVIEW caucasus business week

December 7, 2015 #125

DUBAI’S TAX FREE MARKET OPENS UP FOR GEORGIAN SME’S Interview with Director of Evergreen Businessmen Services in Georgia, Amir Khwaja We can answer most of their questions related to registration and kind of approvals required to setting up their business in Dubai where world is going to participate in larger format in the year 2020. - How do you evaluate Georgia’s business environment? Why did you choose Georgia? - I had recently attained the program organized by Alliance Group Holding with Jordan Belfort in Tbilisi Concert hall, and was very happy to see the response; it was a full house, sold out concert. This concert was based on sales training; every SME owner in some or the other ways have to sell him self or his products. There were many students and young generation participated in this program they can be future business owners. Even at the Agro related exhibition held recently shows the potentials of growth in the production of this these industries. If such products are displayed in the right market where world come to trade, which will boost the exports to new levels.

“UAE does not implement income tax, or corporate tax, or VAT. It becomes much easier for an SME to plan its finances. 100% repatriation of investments and profits is also possible” - Tell us briefly about your company, what you do and how long have you been on the global and Georgian markets? - Our company Evergreen Businessmen Services LLC is Dubai, UAE based company registered in the year 2013, which is a take over of a 10-year-old company in Dubai. Currently we are managing 200 plus companies and growing strong every day, giving them solution, related to business registration and on going approvals and other related services. We help Small and Medium Enterprises (SME) all over the world to register their own business in Dubai, UAE; so that they can also participate and grow their business with one of the most vibrant city in the world. Dubai has achieved great heights in various industries and areas. In the year 2014 Dubai had 13.2 millions visitors and 2015 figures will be even higher. For any business to grow faster and wider its important to showcase it to bigger market so that it can get the right international exposure. We expect that (13.2 millions visitors) these figures are just warming up, as Dubai is getting ready for World Expo 2020. Soon after the announcement of Dubai’s win to host World Expo in the year 2020 many projects came in to full swing and will try to complete in next coming years. It’s the best opportunity for any local business to display its products and services in such a market where world is participating together in one place, as it will be highlighted in much brighter way.

I have been into consulting, in Dubai since 2004, my last job was with Barclays Bank as a Sr. Investment Manager, consulting high net worth individuals in Dubai, UAE and other countries. Currently we are in process with ISO 9001 – 2008 quality services certification. We are also in process with Diploma in UAE HR Law.

In Georgia we recently started our satellite office to help Georgians business owners who would like to be part of this bigger opportunity available in Dubai. Which can help exporters, manufactures, service related business owners, or even startups that would like to grow their business to next levels.

We choose Georgia because of its geographical location, as it’s located in the crossroads of Eurasian countries, touching Western Asia and Eastern Europe. Our experience so far with Georgia had been very pleasant; People are open minded, friendly and ready to discuss on new ideas. Processing time is also appropriate as it should be, and more important many things are online friendly. Which actually welcomes new generation, to participate. Who would not like to work with such population? - What are your company’s goals?

In most of the countries SME sector contribute more then 73% to its economics growths, and our goal is to help these SMEs register and perform at the best levels if they can increase their sales to new heights, by extending their products and services to international markets. It’s a costly affair if any businessmen try to travel to various countries in search of new business. And what if it’s been offers at one destination in Dubai? Where world comes to connect and display its various products and services.

- You offer Georgian small and mediumsized businesses a tax-free market, but at the same time a very competitive one, based on Georgia’s economic situation, how do you think Georgian companies will enter Dubai’s market and then become successful? - UAE does not implement income tax, or corporate tax, or VAT. It becomes much easier for an SME to plan its finances. 100% repatriation of investments and profits is also possible. I always believe doing business in a healthy competitive market is much better then doing business where you first have to create a need in that market. Normally SMEs will struggle to spend on economic research and feasibility study reports in full details, which a large corporates does before entering any new market. In fact it’s much easy for an SME to create and focus on WOW factor in such competitive marker if they would like to be successful, competitive and so they can take off their client’s eyes from the price list. For example offer some thing little extra services or products which their competitive are currently not offering. - In a business trust is a very important element; in the other words are your customers safe? - Although Dubai, UAE being a tax free country, Customer satisfaction and consumer courts are very well regulated if any company found violating such laws are warned and fined on immediate basis also can loose its license in extreme cases. It has almost not corruption environment. No one would ever dare to even offer a bribe. Doing business in such situation we need to be much précised and sure on our offerings. Apart of this we need to answer to the auditors on regular basis for ISO 9001-2008 authorities for our services and quality standards.

Most important asset we hold is the trust of our existing clients that we are currently offering our services with our well trained and qualified staff, to serve these clients. - Why you? Why Georgian companies have to choose you? - If you read this consider us your personal friend who wishes to ignite this driving desire of success system to flow in you also, we all should remember that success and happiness is not easy to achieve, but every thing in this world worth having is worth working for. We are also Georgian registered company and contribute to local economy having local staff that speaks Georgian language, which makes the translation and understanding of process and our services much easier and simplified. Understanding the local culture is more important specially when offering an opportunity to enter international markets. Good decision should be followed with action, without action, a good decision becomes meaningless. So if you decide today to grow don’t let this energy go the other way, take the step forward towards your own success. Web: Email:

December 7, 2015 #125



caucasus business week


10-Billionaire Budget with 3% Growth and 3% Deficit Nothing Threatens State Budget Fulfillment

Nodar Khaduri The Minister of Finance of Georgia


he 2016 state budget has exceeded 10 billion GEL. Tax Revenues constitute about 80% of the budget and this is the achievement of the Georgian economy. The issue is of about 8 billion GEL revenues from

The 2016 state budget bill has become a subject of active discussions. The bill determines indicators for revenues and expenditures for the next year. Various representatives of the Authorities have made multiple statements that the 2016 budget bill is oriented on social programs. The year of 2015 has brought various political unrests in the Region. Therefore, the Georgian Authorities had to revise the next year’s economic parameters and forecast indicators several times. However, the final edition demonstrates that the GDP real growth forecast is 3% for 2016, while the GDP deflator is 4.5%. In the midterm period, the economy real growth forecast is around 5.5%. The budget deficit volume also represents one of the important indicators of the macroeconomic parameters. For 2016, this indicator is planned at 3% in relation to GDP. The state budget expenditures are planned at 9.920 billion GEL, including: budget amount constitutes 9.110 billion GEL, grants – 130 million GEL, and credits – 680 million GEL. Total amount of the state budget expenditures accounts for 8 373.2 million GEL, including: payroll fund – 1 438.7 million GEL, expenditures on goods and services – 1 008.1 million GEL, interest rates – 477.1 million GEL, subsidies – 247.1 million GEL and all other expenditures – 1 275.4 million GEL. The state budget allocations to the ministries and state-funded offices are as follows:

taxes that will be mobilized in 2016. This figure is up by 0.5 billion GEL compared to 2015 and exceeds the initial budget bill forecast by 200 million GEL, that was submitted to the Parliament in September 2015. It should be also noted we plan to reduce issuing loans in the domestic market and the next year we will issue only 200 million GEL T-bills, while this year, at the first stage, we planned to issue 600 million GEL T-bills. In the process of drawing up the 2016 state budget bill, naturally, we were based on the reality that arose in the Georgian economy in 2015. We also took into account the reality among Georgia’s main economic partners, including in the neighboring countries. At the same time, we have provided active cooperation with international finance institutions. The forecast is quite conservative. We have tried to make up as realistic budget as possible. Therefore, nothing threatens the 2016 state budget fulfillment.

The Ministry of Health and Social Protection

The funds allocated to various ministries prove that the 2016 budget bill makes considerable accent on the healthcare direction. The major portion of budget funds is allocated to the Health Ministry (3.070 billion GEL), including the social protection and pension programs will be financed by 2 183.0 thousand GEL, the healthcare protection programs will be financed by 799.5 million GEL and allocations for medical facilities rehabilitation and equipment are 32 million GEL.

The Ministry of Education and Science

The 2016 budget bill also gives priority to the education sector. The Ministry of Education and Science ranks second in terms of budget allocations of 975.2 million GEL, including: general education allocations – 572.9 million GEL. The 2016 state budget also calls for increasing salaries to teachers. In September 2015 the basis salaries for teachers increased by 50 GEL to 355 GEL, while in April 2016 the salaries will increase to 405 GEL. Budget allocations for stimulating the vocational education makes up 36 million GEL and higher education and scientific programs will be financed by 174 million GEL. The education facilities infrastructure development will be financed by 94.4 million GEL.

The Ministry of Agriculture

The budget bill calls for allocating 281.4 million GEL to the Agriculture Ministry, including melioration and irrigation systems development will be financed by 64 million GEL, preferential agro credits will be financed by 50 million GEL, vintage support programs will be financed by 25 million GEL, financial liabilities for purchasing or leasing agricultural machines will be financed by 23 million GEL, agriculture cooperatives support programs will be financed by more than 7 million GEL, and agro insurance measures will be financed by 10 million GEL.

The Ministry of Regional Development and Infrastructure

The 2016 state budget will finance infrastructural projects by 950 million GEL. Namely, road infrastructure improvement will be financed by 526.6 million GEL, regional and municipal infrastructure rehabilitation will be financed by 246.2 million GEL and water supply infrastructure restoration-rehabilitation works will be financed by 170.6 million GEL.

Other Ministries

The Ministry of Defense will receive 670 million GEL, the Interior Ministry – 595 million GEL, the State Security Service – 95 million GEL, the Ministry of Corrections – 153 million GEL, the Ministry of Energy – 135 million GEL (including gasification programs will be financed by 20 million GEL), The Ministry of Economy – 85 million GEL (including Produce in Georgia program will be financed by 20 million GEL); The Ministry of Foreign Affairs – 100 million GEL; The Ministry of Culture and Monuments Protection – 95 million GEL; The Ministry of Justice – 86.5 million GEL; The Ministry of Refugees and Accommodation – 70 million GEL; The Ministry of Sports and Youth – 75 million GEL; The Ministry of Environment Protection and Natural Resources – 40.7 million GEL; The Ministry of Finances – 90 million GEL. The 2016 state budget also makes focus on regional development programs through financing regional projects and agribusiness support programs by 280 million GEL. Moreover, the state budget will also allocate 20 million GEL to the Five Highland Settlements Development Foundation as part of the Georgian law on Highland Regions Development. Moreover, the government’s reserve fund will be financed by 50 million GEL and the President’s reserve fund will be replenished by 5 million GEL.

The State Budget’s Main Challenge Comes from 3% Economic Growth Forecast ZURAB JAPARIDZE The head of the Girchi (Cone) new political center


he only designation of the final edition of the state budget bill, that has been submitted to the Parliament, is to ensure the victory of the ruling political force, in this case the Georgian Dream coalition, in the coming elections. This is the mainstream of this budget, not fulfillment of failure or something positive. The budget serves that the ruling political force collect a majority of votes in the elections. One of the main challenges in the 2016 budget is related to the planned 3% economic growth, because such a growth means nothing for a country like Georgia. We ram the same place. The growth will take place in Tbilisi and in several urban centers, while regions will record economic downturn. This signifies our citizens in regions will be further impoverished. If we calculate the economic growth in previous years and the 2016 economic growth forecast, if we calculate the economic growth for the last 4 years, i.e. the period the Georgian Dream has been governing the country, and if we really reach the 3% economic growth, then the four years’ growth will make up 13%, while Georgia recorded 13% growth in only 2007, when Kakha Bendukidze carried out economic reforms. At the same time, the expenditures for the last 4 years have grown by 37%, the payroll part has also increased by 37%. In reality, expenditures are increasing catastrophically, while the economy does not strengthen.

Investors will Lose Interest. This Signifies Domestic Enterprises will not Work Efficiently VASIL REVISHVILI The Free Democrats member “Our budget is not deisgned for growth. Consequently, the social-oriented budget will increase social expenditures, because the population grows and regretfully, the economic situation does not enable to reduce poverty. Consequently, we have to permanently increase social expenditures. This signifies financial resources will be improperly directed in the economy and the country will lose chances for implementing interesting investment projects. The sample with infrastructure expenditures prove this consideration. Infrastructure expenditures have decreased, have nearly halved. The next year we should expect worse situation. This signifies the investors will lose interest in our country and domestic enterprises will not be able to work efficiently. Thus, the country cannot maintain stability for a long period with similar paces”.



caucasus business week

December 7, 2015 #125



Joint venture with US tech experts and an innovative new approach to social networking – Caucasus Business Week has the exclusive scoop on what’s brewing for Georgia’s future in digital media.

aucasus Business Week has received exclusive information regarding an upcoming social media platform that aims to revolutionize the way people connect with one another. A joint venture by Georgian and US-based developers, the new service aims for global acclaim and will offer an unusual but effective twist to the default social media formula. The developers of the platform, who will remain anonymous until the project’s planned unveiling, got in touch with CBW and revealed the initial teasing tidbits of information. The yetunannounced social network has been in development for the past four years and is not short on ambition; long-term plans to take on digital giants like Facebook are not entirely out of the question, according to the project’s lead. “We are building something that capitalizes on a powerful feature of today’s internet and social media services that has never really been realized to its fullest potential, and is instead seen as a simple gimmick or a hidden tool,” the developer company’s representative told CBW. “However, we’re not yet ready to outright state what that feature is. What we tried to do was to make it into the cornerstone of our tech and then build a truly next-gen social media platform around it, so stay tuned for more details soon!” Caucasus Business Week has confirmed a time window for when the project will be unveiled – and we can expect the first large-scale Georgian foray into social media to have an official name as soon as in the next couple of months. We will continue covering the story as it develops.



OCAR (State Oil Company of the Azerbaijan Republic) will restore a historic building located on the territory of the company’s representative office in Tbilisi, SOCAR said. The historic building was built in 1900-1905 by architect Alexander Shimkevich. First it will be moved to its previous place and then it will be restored. Dutch Bresser company will be involved in these operations. It moved a historic building in Baku two years ago. From a technical point of view, moving of Tbilisi’s building will be the first unique project in the South Caucasus and neighboring regions. The building will be moved at 3.4 meters and will be restored after the consolidation of the foundation. The building will be used as a SOCAR Georgia guest house after the reconstruction. The project is being implemented with the support of Tbilisi City Hall, the Ministry of Culture of Georgia and the National Agency for the Preservation of Cultural Heritage of Georgia.

December 7, 2015 #125



caucasus business week



ommercial banks have tightened the crediting conditions, increased interest rates and they show a higher level of caution in issuing loans Commercial banks still consider the trade sector a target segment, but similar approaches do not foster the sector development. After the National Bank of Georgia (NBG) stopped growing the refinancing loans volume, commercial banks have to increase interest rates on deposits and draw GEL resources in this way. Similar approaches have further grown GEL denominated loans in value. Last period interest rates on individual loans rose by 2.1% to 24.5%. The interest rate on USD denominated loans declined by 0.1% to 10.9%. Moreover, for preventive purposes, commercial banks issue loans in GEL, but receive them back due to the USD exchange rate and substantiate the decision by the GEL devaluation. According to the NBG report, the month of September has recorded an issuance of about 90 million GEL loans. Anyway, the ratio of GEL denominated loans remains low and accounts for only 36% (5.5 billion GEL), while the ratio of USD denominated loans is 64%, as commercial banks and finance organization know very well that they should not issue such amount of loans that may be devaluated after a certain period. Loan interest rates grow because of passive economy and legislative “intensity” that makes serious effect on tariff policy, increases risks in the bank sector and restricts access to loans, the President of the Association of Banks of Georgia (ABG) said.

“The bank sector always provides realistic appraisal of the economic developments in the country and shows adequate reaction in relation to interest rates and this reaction is provided immediately and covers a certain period”, the ABG President Zurab Gvasalia noted.

This refers to both loan and deposit interest rates and the fastest reaction is provided when the refinancing rate is changed. “The bank sector takes steps in response to the existing economic developments. The sector has always reflected the economy, as well as credit and tariff policy”, Zurab Gvasalia noted. What criteria do commercial banks use to determine the loan interest rates? Besides verification of personal credit history, financial institutions supervise the price growth indicators too. For example, amid 1%-2% inflation rate, the 3%-4% interest rates on loans suffice to maintain purchasing value of the returned money. In Georgia the price growth pace is nearly 6%, it may even reach two-digit indicators, and in this situation considerations about cheap credits are unserious.

Therefore, commercial banks set 12% or 15% to compensate a growth in prices and not to bear losses. Anyway, it should be noted, the difference between the inflation and the average weighed interest rate on GEL denominated loan is about 6%. Meanwhile, the population is facing growing difficulties with covering the loans and attracting due resources to serve the interest rates. They have to reject cooperation with commercial banks. Frequently, borrowers have to take additional credits or debts from private persons with high interests to pay interest rates of old loans and these factors aggravate their budget. As a result, they fail to pay off any of the credits. They face difficulties with paying loans in both GEL and USD, but they are trying to mobilize financial resources from month to month, take the so-called online loans. All these factors push families into heavy social conditions.



axso Bank does not plan to unveil a branch in Georgia. Nor GP Morgan, a major investment group, has appeared in the country, as promised by the former Prime Minister. Foreign finance institutions are not interested in Georgia’s small and oligopolistic market. Therefore, we should not have vain expectations some of them will open a branch in Georgia. Recently, Georgian media agencies spread the information as if Saxo Bank, one of the major finance companies, planned to launch operation in Georgia, but Saxo Bank founder Lars Seier Christensen told the Banks & Finances newspaper that the company had no plans for unveiling a branch in Georgia. Saxo Bank owns branches in 26 countries and Georgia is a very small and less-developed market for us, the bank’s founder said. Saxo Bank is represented in Georgia as part of its cooperation with Georgian companies. Namely, Galt&Taggart has introduced an online trading platform jointly with this finance institution. Any person is able to trade by shares at the global financial markets in online regime from home. Moreover, one of the heads of Saxo Bank has pledged to organize “a window” for Georgian businessmen to make Georgian shares attainable for foreign investors. At the same time, recently appeared company Private Banker, that operates in the field of savings management, is conducting intense nego-

tiations with Saxo Bank. If the parties achieve agreement, Private Banker clients will be able to use Saxo Bank products. As to JP Morgan, the former Prime Minister Bidzina Ivanishvili noted in 2013 that he would invite JP Morgan to Georgia in order to draw new investments. Shortly after this statement, having returned from the Davos Economic Forum, Ivanishvili stressed he had met with the JP Morgan President in Davos who had expressed readiness to cooperate with Georgia. JP Morgan was to become a main partner of the sovereign foundation, but nobody has seen either JP Morgan or the sovereign foundation in Georgia. Moreover, for several years no new foreign bank has appeared in the bank space of Georgia that would destroy the monopoly of several banks and offer competitive bank products to the business sector. Several changes have taken place in the bank sector for the last period. Major commercial banks have amalgamated. The controlling interest of 78.21% of Progress Bank shares was purchased by Panama-registered PINTEX GROUP CORP, while Bidzina Ivanishvili owns a 21.71% stake in the bank. Before, Bank of Georgia purchased Privatbank. Far earlier, TBC Bank bought Constanta. Currently, the Georgian bank sector registers 19 commercial banks with total assets of 24.4 billion GEL. In September to October, the bank sector’s total revenues made up 2.643 billion GEL,

while net profits exceeded 377 million GEL. Despite these indicators, specialists stress that the sector lacks for competitive environment, because only 3-4 commercial banks control the whole market. The 79% market ratio is controlled by four commercial banks, while the remaining 15 commercial banks control only 15% ratio. At this stage the Georgian bank sector is oligopolistic and it is ridiculous to talk about competition in this situation, the bank sector specialist Lia Eliava said.

“Olygopolistic market cannot ne efficient ever. It harms other sectors. Major banks hamper the development of other commerecial organizations”, Lia Eliava said and added that’s why none of commercial banks of the developed countries has appeared in Georgia. On the contrary, several years ago British Bank HSBC left Georgia.

“To put simply, HSBC was banished from the country, because the bank had introduced low interest rates. This was a good sample how the olygopolic market cannot endure different rules”. I have heard from the bank sector representatives in private conversations that they are ready to work on low interest rates, but the existing conditions hamper them. In the oligopolistic market small banks seem to be servants of major banks”, Lia Eliava noted. Georgian finance market is very small. The Bank sector is well developed and other banks cannot find a niche, Doctor of Economics David Aslanishvili said. “Consequently, they have no interest to put money in this country”, David Aslanishvili said and noted foreign finance organizations are not interested in opening the regional branches, because the situation is not better in Armenia, while the Azerbaijani market is specific, even more so oil prices have declined.


AWARDS caucasus business week

December 7, 2015 #125

WELCOME TO GEORGIA National Tourism Awards 2015


wards Ceremony - celebrating evening of achievements and success! The very first Awards Ceremony of the Welcome to Georgia! National Tourism Awards has held at Funicular Restaurant Complex in 20th November 2015. More than 350 guests were attended the Ceremony. With a careful waiting we were hoping that our project would be proceed in proper way, but we never could have imagined that the Ceremony would be so successful and Festive mood permeated. Awards Ceremony was consists from 3 parts: first was welcome drink, where our guests meet each other, had conversation and prepared for the main part of the Ceremony, which was Awarding ceremony process, at this time all were exited and waiting for the winners, the third part was after party, where all our guest had a good time, enjoy live music, delicious food and relaxing atmosphere. The main mission of the project as we already mentioned before is promote country’s tourism and hospitality industry in a new level and develop the Tourism and hospitality progress of the country, it was a chance to celebrate the highest-achieving tourism businesses and brands that work towards creating a positive image of Georgia worldwide. On the Tourism segment oriented directions, like are: hotels, restaurants, wine producing companies, tour operators, travel agencies, events and others are gathered at an Award Ceremony.

On the Ceremony were named the winners and finalists of 21 categories of nominations, which become: 1. BEST STANDARD ACCOMMODATION AWARD – the winner was Hotel Alpina. 2. BEST OUTBOUND TOUR OPERATOR AWARD - the winner became Interco Travel Group. 3. BEST ADVENTURE TOURISM AWARD – and the winner of this category was 4. BEST DELUXE ACCOMMODATION AWARD - congratulation to Hilton Batumi. 5. BEST SKI ACCOMMODATION AWARD – winner -Hotel Carpe Diem. 6. BEST SEA ACCOMMODATION AWARD – and the winner became Radisson Blu Batumi Hotel. 7. BEST SPA ACCOMMODATION AWARD – winner was Lopota Lake Resort & Spa. 8. BEST HOSTED ACCOMMODATION AWARD – and won Envoy Hostel and Tours. 9. BEST BUSINESS TOURISM AWARD HOTEL - and won Tbilisi Marriott Hotel. 10. BEST LUXURY ACCOMMODATION AWARD –winner become Radisson Blu Iveria Hotel. 11. BEST CULTURAL AND HERITAGE TOURISM AWARD – the nomination winner become The Funicular Restaurant Complex. 12. BEST BUSINESS TOURISM AWARD TRAVEL AGENCY - BTL Georgia. 13. BEST INCOMING TOUR OPERATOR AWARD – congratulations to CAPITAL GEORGIA TRAVEL. 14. BEST VISITOR INFORMATION AND SERVICES AWARD – won TravelGIS. 15. BEST NEW TOURISM DEVELOPMENT AWARD – nomination winner was Adjara Hospitality Group. 16. BEST TOURISM EDUCATION AND TRAINING AWARD - and the winner of this category become Discover Georgia. 17. BEST MARKETING CAMPAIGN IN TOURISM WINERIES AWARD - winner become Chateau Mukhrani. 18. BEST MARKETING CAMPAIGN IN RESTAURANTS AWARD – won Tsiskvili Group. 19. UNIQUE ACCOMMODATION AWARD - the nomination winner become Rooms Hotels. 20. BEST DESTINATION MARKETING AWARD – (the finalists) 1) Georgian Tourism Association; 2) Tourism & Reality 21. BEST FESTIVAL OR EVENT AWARD - (the finalists) 1) International Festival Night Serenades; 2) Tbilisi Summer Set.


wards team congratulates all mentioned winners and finalists, participants and guests. Also Awards team congratulates and appreciates for their support all our partners: MINISTRY OF ECONOMY AND SUSTAINABLE DEVELOPMENT OF GEORGIA; TBILISI CITY HALL; BATUMI CITY HALL; GEORGIA DEPARTAMENT OF TOURISM AND RESORTS OF AUTONOMOUS REPUBLIC OF AJARA, MINISTRY OF CULTURE AND MONUMENT PROTECTION OF GEORGIA. An Independent Auditor of the Award BDO Georgia Company. Sponsors: MercedesBenz Georgia, Julius Meinl, Hidro Dizayn, Yan Air, Inglot, Sam Raan, TV Lux, HRS, Weekend Max Mara, Elements Group, Dessange, Sarajishvili, Tbilisi Marketing, Bagrationi, Kamelia, Savaneti, Event Promotion, DHL, Financial Office, Funicular Restaurant Complex, TAV Georgia, Ardi, Tbilvino, Favorite Style, KMS, UTS. The main organizer of the project is Ukraine Company LLC “Elements Group”, which is al-

ready second year leads active in market. It should also be noted that Georgian National Tourism Administration is a Co-organizer of the Welcome to Georgia! National Tourism Awards. As we already mentioned the Ceremony the project rules was totally transparent and fair, the jury members have selected the finalist companies, afterwards the independent auditor – “BDO” summarized final information and carefully checked it. The project organizers definitely believe in Awarding Ceremony will have it’s future in Georgia and become annually project as well. Next year the Welcome to Georgia awards ceremony is planned to be held in a different city of Georgia. It will help to promote other regions of the country, for participants it is a good chance to review and increase their creativity and experience. The project opens a wide door for the key players of the tourism and hospitality sphere, gives them a good chance to have direct contact with their customers; creates a perspective platform for develop tourism business in Georgia as a whole.

December 7, 2015 #125



caucasus business week

GLOBAL ALLIANCE PROVIDES RECOMMENDATIONS TO THE MINISTRY OF HEALTH IN GEORGIA We Should Make Universal Healthcare System Cost-Effective On November 19-22, the Georgian Health Ministry hosted Bernard Kouchner, the chairperson of Global Alliance supervisory board. As part of the meeting, the board members and the Health Ministry officials held a meeting behind closed doors, where Georgian officials received recommendations around the ongoing reforms and future plans. Deputy Health Minister VALERI KVARATSKHELIA talks about the details of Bernard Kouchner’s visit to Georgia and meeting with the board members. - The Georgian Health Ministry concluded an agreement with Global Alliance international consulting company several months ago. The company had to fulfill certain obligations, including they were to submit intermediary documents in late October in the directions we have jointly worked on. They introduced two bills for universal healthcare system and DRG payment system that mainly refers to the pharmacy segment. We were given a 8-day period for exploring the documents and approving this interim document. As to Bernard Kouchner’s visit, it was successful and useful. Mr. Bernard Kouchner is a famous and influential person in the world politics and the world health system. He has led the Health Ministry of France three times under the ruling of various political forces and this is a genuinely unprecedented case. Moreover, Mr. Kouchner has founded the Doctors without Borders organization and its members are first to enter all hot spots worldwide. Amid the Ebola virus spread, the organization was the first to enter the region and only after that, the

World Health Organization and other influential organizations appeared in the region, to provide active job in Georgia, especially in the field of tuberculosis. They have rendered huge assistance to us and plan to continue cooperation with us in the future too. - Bernard Kouchner has transmitted many advises and recommendations to the Georgian Health Ministry. What is the most important message? - Bernard Kouchner has left very good and clear messages and we have marked them as a certain action plan.

One of the main messages says that even a world-level consultant cannot help us if we do not start doing real affairs in our country. Recommendations that are given by experts are not of obligatory character for us, because this group is a consulting body and we should only take into account these recommendations and advises. They have given weighty recommendations on the pharmacy law, but I cannot talk about it, as the law should be revised and refined after a long job. We will forward these recommendations to pharmaceutical associations, nongovernmental organizations and all interested bodies and groups. We will accept their consideration and then we will hold a big meeting regarding this issue. When we started working, we were meeting everybody and asking to join the process. We are ready to receive considerations, remarks and so on. - The Health Ministry is actively carrying out the primary healthcare system reformation project. What recommendations have you received in this direction from the Alliance representatives? Does the Georgian Health System follow the correct way?

We always repeat that the universal healthcare program is a unique one, but we also realize and we have received recommendations that we should make this program cost-effective. The job performed by the Global Alliance group of advisors will

enable us to make our universal healthcare system cost-effective. This is of crucial importance for our country. Our opponents stage criticism that all citizens should not have an equal access to the same services and we should introduce the concept of differentiated groups, but our program is called a universal one and this signifies it is to serve all citizens of Georgia. At the same time, this program does not restrict anybody to enjoy services of a private insurance company. For example, before my appointment as a Deputy Health Minister, I was insured at a private insurance company and I have continued this insurance policy. I have saved a small amount in the state budget. It is difficult to set borderlines here. There is a category of our citizens who are not included in the category of socially vulnerable people, but they cannot afford taking cardio surgical operation costs anyway, because this operation costs about 15 000 GEL. Only 1% of Georgian citizen can afford taking similar costs. This is a direct investment. We grow salaries to doctors and they pay taxes. We have constructed many clinics, purchased urgent medical assistance vehicles – all these steps make direct investments in the economy.

We spend 2.1% of GDP on healthcare programs, while all civilized countries spend 6-7%. - The primary health system reformation is considered an important project of the Health Ministry. What innovations are planned in this direction? - We are working on the primary health system reformation very seriously. In about 15 days we will have determined specific places for arranging primary health assistance facilities.

The advancement of this chain will enable us to further cut the expenditures. Today, our citizens have to visit inpatient clinics for even taking blood analysis, where service tariffs are quite high. The primary health assistance facilities will set far lower tariffs. For example, in England the health system is mainly focused on the primary healthcare system, as a cornerstone of the whole healthcare system. We will also set accents on the primary healthcare chain.

Our objective is to arrange second-level inpatient clinics in regions. We are constructing a similar clinic in Zugdidi. Another one will be constructed in Kutaisi. In the near future, we will determine the winner in the tender for rehabilitating three major hospitals in Tbilisi – infectious, oncology and Republican Hospitals. Tbilisi-based healthcare facilities will mainly serve heavy patients, while all other categories will be treated on regional level. This project will enable us to considerably cut the expenditures. All these plans represent the part of our efforts and job. Naturally, Mr. Bernard Kouchner assists us in implementing all these plans. He provides intense consultations and gives recommendations. We keep permanent contact with him and he is ready to provide competent answers to our questions.



tender is announced on management, ownership and operation of three hospitals in Tbilisi – Republican Hospital, Cancer Center and Children’s Infectious Diseases Hospital. So far, the Austrian consortium Alpha Medic deserved the highest interest among the tender participants. Precisely this company has been able to present full documentation in time, reads Ministry of Health press release. The Ministry of Health announced the tender on the management of three major hospitals in Tbilisi by the recommendation and assistance of Global Alliance and Partnership Fund several months ago. Three companies presented their credentials to be considered for the tender, among which one

was the Austrian company, one Georgian and one Canadian company. At this stage, the tender procedures have not been fully completed yet. According to the Partenrship Fund, negotiations and agreement on specific details, including a number of technical issues which are very important for the future of cooperation between the government and the potential investor. Most of the official documentation has not been prepared yet. So the information regarding the volume of the investment, hospitals renovation project and the project timeline will be known only after the end of the tender procedure. “The tender was announced with the assistance of the foreign company invited by the Ministry of Health. Precisely that company [Global

Alliance] designed the tender conditions and conducts its full monitoring. More details will be announced to the winning company in the second stage of the tender. I think this is one of the best ways for the Georgian healthcare and hospital sector development”, Partnership Fund CEO David Saganelidze told CBW. According to the tender requirements, the above mentioned hospitals need to be reconstructed in alliance with the EU standards. The winning consortium has to ensure that the project is done in accordance with JCI accreditation standards. The personnel must be certificated and trained within a special program. The entire project should be carried out according to United Kingdom healthcare model. The winning consor-

tium will be responsible to own and manage the hospital together with the state, according to the PPP principle. “Our vision is global and our intention is to apply our international experience and activities outside Europe, to ensure the public-private partnership (PPP) on the project. This will benefit the level and stability of healthcare in Georgia in the long-term,” say Austrian consortium Alpha Medic representatives. Alpha Medic is a hospitals and healthcare management company based in Austria that has many years of PPP Projects Development (Design, Build, Equip, Operate including Healthcare and Facility Management) experience in CIS and Africa in partnership with leading EU providers of respective services.


PUBLICITY caucasus business week

December 7, 2015 #125

December 7, 2015 #125

WORLD NEWS caucasus business week



World leaders call for action at Paris climate talks Europe is leading the fight against climate change. It is working hard to persuade all the big emitters to get on board and make the UN Climate Change Conference in Paris (COP 21) a success. The EU wants ambitious emissions reduction targets for COP 21: • limit global warming to a global average increase of 2°C • get a commitment to reduce Greenhouse gases by at least 60% by 2050 compared to 2010 • decarbonisation of the world economy by the end of the century • For the first time in over 20 years of UN negotiations, the EU will aim to achieve a legally binding and universal agreement on climate at the COP21 UN Climate Change Conference in Paris (follow the event on the COP21 live webcasts). • Europe is a global leader on climate change. It is the first region with binding targets, and is on track to be the world leader in renewables. • It is possible to act. From 1990 to 2013, EU

Mark Zuckerberg and his wife pledge 99%of their Facebook shares to charity


acebook Inc (FB.O) Chief Executive Officer Mark Zuckerberg and his wife said on Tuesday they will give away 99 percent of their Facebook shares, currently worth about $45 billion, to a new charity in a letter addressed to their daughter, Max, who was born last week. The plan mirrors a move by other highprofile billionaires like Warren Buffett and Bill and Melinda Gates, who have pledged and set up foundations to give away their fortunes to charity. On his Facebook page, Zuckerberg posted a photo of himself, his wife, Priscilla Chan and their new daughter, Max, along with a post entitled ‘A letter to our daughter.’ In the 2,220-word letter, Zuckerberg and Chan touched on issues including health, education, Internet access and learning before announcing the Chan Zuckerberg Initiative, which aims to “advance human potential and promote equality.” Zuckerberg, 31, and Chan said they plan to give away 99 percent of their Facebook shares over their lifetimes to advance the initiative, which was formed as a limited liability company controlled by the two. It will begin by focusing on personalized learning, curing disease, Internet connectivity and community building. Chan and Zuckerberg have so far committed $1.6 billion to their philanthropy.

emissions declined 19% while GDP grew 45%. • Climate change threatens to disrupt livelihoods, destabilise societies, and disrupt development in its tracks. The greatest single impact of climate change could be on human migration with millions of people displaced by shoreline erosion, coastal flooding and agricultural disruption – a crisis in the making. • Continued emission of greenhouse gases will cause further warming and long-lasting changes in all aspects of the climate system. • Greenhouse gas concentrations in the atmosphere will continue to increase unless the billions of tons of our annual emissions decrease substantially. • The time has come for global decisive actions – before average global temperatures move beyond a “tipping point” of no return. If we fail we are letting down young people across the world – in Africa, the US, in China, in Europe. • Acting against climate change is clearly a human and environmental imperative and also an economic opportunity for citizens, businesses.

Turkey may speed up building pipeline for Azerbaijani gas Turkey and Azerbaijan say they may speed up building a new natural gas pipeline, a statement that comes amid Turkey’s bitter rift with Russia. Turkish Prime Minister Ahmet Davutoglu said Thursday after talks in Baku with Azerbaijan’s President Ilham Aliyev that the TANAP gas project could be completed before its original target, 2018. Aliyev said it would also serve to export Azerbaijan’s gas further on to Europe. The announcement came hours after Russia said it halted talks on building a prospective pipeline to Turkey amid tensions over the downing of a Russian warplane. The TANAP pipeline is intended to carry oil from Azerbaijan’s Caspian Sea fields to Turkey. It is expected to have a capacity of 16 billion cubic meters of gas a year and cost about $10 billion.

Russian government ratifies economic sanctions against Turkey

Canadian miner Lydian to invest $480 million in Armenia gold project

Russian Prime Minister Dmitry Medvedev has signed a decree prohibiting the import of food from Turkey and banning charter flights between the two countries. This is in response to Turkey shooting down a Russian warplane in Syria a week ago. he list of embargoed food products includes poultry, tomatoes, cucumbers, onions, oranges, grapes, apples, peaches and other fruit and vegetables. With the ban on charter flights the Russian government said it will control scheduled flights between Russia and Turkey. “To ban air charters between Russia and Turkey, expect for special flights for the return of tourists remaining in the country, as well as to take additional measures aimed at ensuring transport (aviation) safety when conducting regular flights with the Turkish republic,” said a government statement. Russian employers will be prohibited from hiring Turkish nationals starting next year unless they were already employed before December 31 this year. Russia has also cancelled visa-free travel for Turkish citizens starting January 1, 2016.

Canadian miner Lydian International plans to invest up to $480 million in development of its Amulsar gold project in Armenia, the former Soviet state’s economy minister said on Thursday. Lydian International, a gold-focused mineral development company, operates in Armenia through its local subsidiary Geoteam CJSC, which obtained mining right for the Amulsar gold project in 2014. Karen Chshmarityan told a government meeting that construction works at the mine are expected to start next spring and due to be completed within two years. The minister said that Geoteam CJSC raised $325 million from the Orion Mine Finance and Resource Capital Fund VI L.P, a mining-focused private equity firm, and is seeking further funds from the International Financial Corporation and the European Bank for Reconstruction and Development. The Amulsar project located in southern Armenia has estimated gold reserves totaling 1.8 million ounces.


PUBLICITY caucasus business week

December 7, 2015 #125

December 7, 2015 #125

Embassy United States of America Embassy 11 Balanchivadze St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 53-23-34 E-mail:; United Kingdom of Great Britain and Northern Ireland Embassy 51 Krtsanisi Str., Tbilisi, Tel: 227-47-47 E-mail: Republic of France Embassy 49, Krtsanisi Str. Tbilisi, Tel: 272 14 90 E-mail: Web-site: 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: Republic of Estonia Embassy 4 Likhauri St., Tbilisi, Tel: 236-51-40 E-mail: Republic of Lithuania Embassy 25 Tengiz Abuladze St, Tbilisi Tel: 291-29-33 E-mail: Republic of Latvia Embassy 16 Akhmeta Str., Avlabari, 0144 Tbilisi. E-mail: 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: Web-sait: 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: 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: 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: Ukraine Embassy 75, Oniashvili St., Tbilisi Tel: 231-11-61, 231-12-02, 231-14-54 E-mail:; Consular Agency: 71, Melikishvili St., Batumi Tel: (8-88-222) 3-16-00/ 3-14-78 Republic of Turkey Embassy 35 Chavchavadze Ave., Tbilisi Tel: 225-20-72/73/74/76 Consulate General in Batumi 9 Ninoshvili Street, Batumi Tel: 422 25 58 00 Republic of Azerbaijan Embassy Kipshidze II-bl . N1., Tbilisi Tel: 225-26-39, 225-35-26/27/28 E-mail: 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: Web: 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.esRomania Embassy



caucasus business week

7 Kushitashvili St., Tbilisi Tel: 38-53-10; 25-00-98/97 E-mail: Republic of Poland Embassy 19 Brothers Zubalashvili St., Tbilisi Tel: 292-03-98 Web-site: Republic of Iraq Embassy Kobuleti str. 16, Tbilisi Tel: 291 35 96; 229 07 93 E-mail: 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: United Nations Office Address: 9 Eristavi St. Tbilisi Tel: 225-11-26/28, 225-11-29/31 Fax: 225-02-71/72 E-mail: Web-site: International Monetary Fund Office Address : 4 Freedom Sq., GMT Plaza, Tbilisi Tel: 292-04-32/33/34 E-mail: Web-site: Asian Development Bank Georgian Resident Mission Address: 1, G. Tabidze Street

Freedom Square 0114 Tbilisi, Georgia Tel: +995 32 225 06 19 E-mail:; Web-site: World Bank Office Address : 5a Chavchavadze Av., lane-I, Tbilisi, Georgia ; Tel: 291-30-96, 291-26-89/59 Web-site: 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: 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: 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:

Hotels in Georgia TBILISI MARRIOTT Tbilisi , 13 Rustaveli Ave. Tel: 77 92 00, COURTYARD MARRIOTT Tbilisi , 4 Freedom Sq. Tel: 77 91 00 RADISSON BLU HOTEL, TBILISI Rose Revolution Square 1 0108, Tbilisi Tel: +995 32 402200 RADISSON BLU HOTEL, BATUMI Ninoshvili Str. 1, 6000 Bat’umi, Georgia Tel: 8 422255555 SHERATON METECHI PALACE Tbilisi , 20 Telavi St. Tel: 77 20 20, SHERATON BATUMI 28 Rustaveli Street • Batumi Tel: (995)(422) 229000 HOLIDAY INN TBILISI Business hotel Addr: 1, 26 May Square Tel: +995 32 230 00 99 E-mail: Website: 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: Website:

Restaurants CORNER HOUSE Tbilisi, I. Chavchavadze ave. 10, Tel: 0322 47 00 49; Email: RESTAURANT BARAKONI Restaurant with healthy food. Georgian-European Cuisine Agmashenebeli Alley 13th Phone: 555 77 33 77 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:

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: 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



PUBLICITY caucasus business week

December 7, 2015 #125