Caucasus Business Week #130

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BUSINESS WEEK January 25, 2016 #130

January 25, 2016, Issue 130


caucasus business week




Georgia Attracts World’s Giant Business Companies and Starts Huge Political Negotiations

Pg. 4-5

Other Side of Business Pg. 8



The GEL exchange rate is decreasing again. The devaluation paces are lower compared to the end of 2014 and 2015, but the Georgian national currency cannot maintain stability anyway. As a result, the public trust to the national currency falls.

Perhaps it will be difficult for me to put an article all information about Dubai’s advantages,which makes it an attractive environment for doing business. The aim of this article is, to show Georgian people this very successful place in the world.



Pg. 6


Global oil prices are seeing new bottoms every day. The prices have already collapsed beneath the psychological verge of 30 USD. This tendency would be fully acceptable for the Georgian consumers, but there is one detail: two our neighboring countries (one friendly and one hostile) largely depend on resources of these hydrocarbons. Pg. 11

Pg. 10

Online credits in Georgia yield annual efficient interest rates from 500% to 1100%. However, these credit organizations do not lack for clients and borrowers, anyway. The fact points to financial ignorance of the population and the fact extremely impoverished residents do not care for outcomes while trying to gain today’s piece of bread. Pg. 9

NARESH TELGU: The Shuakhevi HPP is One of the Fastest Developed Hydro Projects in the World and Adheres to International Standards of Quality

Pg. 7



EUROPEAN PARLIAMENT WELCOMES GEORGIA’S EU PROGRESS the idea of sending an EU expert mission to oversee the case, which was still continuing. In the resolution the EU officials criticized the “blurred criteria” for appointing prosecutors and investigators and also the pressure exerted on judges at the Constitutional Court of Georgia. Responding to the resolution Georgia’s Minister for European and Euro-Atlantic Integration Davit Bakradze stressed Georgia had “gained the highest scores in the resolution.” This was the first time when the AA implementation process for Georgia, Ukraine and Moldova was discussed by the European Parliament.


e have agreed with the business, that all their initiatives will be discussed and the government should be returned with decisions in the upcoming future”, - Dimitri Kumsishvili, Vice Premier and minister of Economy and Sustainable Development has declared after the meeting held with the Business Associations. According to him, one of the initiatives announced by the business – was not to be levied and freeze the accounts. Minister noted, that the important reform, which has been announced today is related to the tax administration direction. “We have numerously heard from the business that it important to start administration checks faster, finish them rapidly and to make transparent decisions. Our government maximally has been implementing these reforms, but improvement is always necessary. We should agree on business, that there is no a limit of improvement”, - Dimitri Kumsishvili.



he National Tourism Administration will assist the companies in the development of business tourism in Georgia. The head of the Administration says in his interview with “Commersant” that a special office will start operating in the near future to provide local tourism companies with orders. In Giorgi Chogovadze’s words, May- tourism or business travel is one of the most stable working and highly profitable part of world tourism, as business tourists spend more money in this or that country. According to him, the Convention Bureau will soon be opened at the National Tourism Administration and will be aimed at development of the business tourism in the country.



eorgia has already received the first container train from Ukraine and the train takes a rout to Azerbaijan, - Andrei Pivovarsky, the Minister of Ukrainian Infrastructure has declared on Thursday. According to him, train moves without technical interruptions. The whole logistic will be processed until the end of the month and the train should be returned to China with the same rout. To remind, the test train has left Ilichevsk on January 15. It will arrive in China via the Black Sea, Georgia, Azerbaijan, Caspian Sea and Kazakstan. However the train should be returned in China by the same rout. The sides engaged in the project plan to set the competitive prices in the corridor.



he Georgian central bank sold USD 20 million as the national currency, lari, hit a record low against U.S. dollar on January 22. GEL fell 1% over the previous day to 2.4694 per U.S. dollar. The Georgian national currency has lost 3% of its value against dollar since the beginning of this year and 26.4% since January, 2015. GEL started depreciation in November, 2014 falling by about 40% against dollar since then.

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he European Parliament has adopted a resolution for Georgia, Ukraine and Moldova on how the nations fulfilled their obligations drafted in their respective Association Agreements (AA) with the European Union (EU). The resolution was adopted last night and welcomed the progress of Georgia, Moldova and Ukraine on their “chosen path of closer political and economic integration with the EU”. Alongside the document, Members of the European Parliament (MEPs) called on Russia to end its direct and/or indirect involvement in conflicts in the territories. The resolution stated since Georgia and the

EU signed an AA deal, which included a Deep and Comprehensive Free Trade Area (DCFTA) agreement, Georgia’s exports to EU nations rose 15 percent. The MEPs also pointed out that financial support offered by the EU must be matched by concrete progress on reforms in Georgia, Moldova and Ukraine. As well as praising Georgia for its largescaled and successful reforms, MEPs expressed their concern about the independence of the judiciary and possible threats to media pluralism in Georgia, and referred to a lawsuit about the ownership of the Rustavi 2 television broadcaster. The European Parliament Members backed

We can say that Georgia received very high assessments in terms of fulfilling its obligations stated in the AA and DCFTA deals,” the Minister said. When speaking about the Rustavi 2 case, Minister Bakradze stressed the current Government of Georgian planned to invite a group of foreign experts to Georgia to learn about the case and offer recommendations. Last night’s adoption of the resolution was preceded by debates in the European Parliament, where the EU Commissioner for Neighbourhood Policy and Enlargement Negotiations Johannes Hahn said Georgia had carried out “impressive reforms” to meet its EU obligations.



he Georgian Government is working on introducing the Estonian taxation model in Georgia. The initiative was put forward by Prime Minister Giorgi Kvirikashvili. The new PM with economic education seems to be fully realizing how much profits the country will receive from maximal liberalization of the taxation system. The new government has shifted the focus onto this aspect. As a rule, efficient taxation system ensures a formation of the main part of the budget and, on the other hand, the taxation system should stimulate the entrepreneurship, so as the developed business sector ensure the taxation basis enlargement. To put simply, the taxation system should be a stimulus mechanism for the economic development and promotion. The world practice knows various taxation systems. At the same time, scientists, politicians and economists permanently argue about the most optimal taxation models. In reality, there is no unconditionally accepted and approved taxation system somewhere, but the Estonian taxation model is considered to be the smartest and most efficient system. Therefore, the Georgian government plans to embody certain elements of the Estonian taxation system into the Georgian reality to maximally alleviate the business sector performance in the country. The taxation system reformation calls for introducing the Estonian model in Georgia and completely removing the profits tax on undivided profits. The revenue tax will be charged on the amount that the business founder will withdraw in the form of dividends, Deputy Finance Minister Lasha Khutsishvili said.


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“This signifies the reinvested profits will not be charged by profits tax. In general, there are two sorts of exemption of reinvestments. One form is limited for a certain period, but the second one, i.e. the Estonian model, liberates the business to confirm in what it has made reinvestments and the business is given freedom in its decisionmaking process. We plan to establish this model in Georgia. This reform will accelerate the economic growth and the small and medium business sectors will have easier access to financial resources. In general, new opportunities will open before the business sector for development. Consequently, the business will be more stable in the crisis periods and this is a very good tendency in the whole economy. Alleviation of the tax administration and accountancy is also very important. In the existing applicable model the tax administration is also very easy, but this process will be further alleviated for both the business sector and the state. This decision will spare funds in the business and cut expenditures in the state sector”, Khutsishvili noted.

The Estonian Model Advantages. What does the system imply? According to the 2015 International Tax Competitiveness Index, Estonia ranks first. In the developed world, the Estonian model is the most competitive one. The model embraces comparatively lower corporate tax rate totaling 21% and it does not charge dividend revenues by double tax. This

model also implies a nearly 21% revenue tax on apartments, property tax that only charges the land plot price and not the facilities on the land plot; and the territorial tax system that fully exempts the foreign profits by 100%. The Estonian model implies not only low rates. It also ensures neutrally structured tax system with equal approach to savings and investments. Estonia taxes only divided profits by 21%. This signifies if the business earns 100USD and this earning is fully paid to the shareholders, the business must pay 21% of this divided profits. On the contrary, if the business decides to reinvest all 100 USD, this amount will not be taxed. This does not signify revenues will not be taxed at all. The revenues are potentially taxed by 21% of the capital profits indicator. If the business reinvests all 100 USD profits, naturally, the business value will increase and the shareholders’ profits will also grow. If they had sold their share, they would be taxed by 21%. Estonia also exempts all revenues from foreign countries by 100%. The country is OECD member and it has determined the property tax most correctly. The profits tax in Estonia is based on only the land plot price. This is very important, because in many countries the property tax includes the value of a land plot and facilities on it. This signifies if the business constructs a building on its own land plot, it will have to pay high-rate tax. However, in Estonia the taxation system is neutral for both land plots and the business development. Moreover, Estonia has abolished a tax for transmitting property by the last will. The transfers are also exempted from taxes, as well as financial transactions.

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


PUBLICITY January 25, 2016 #130

caucasus business week





January 25, 2016 #130

caucasus business week

Georgia Attracts World’s Giant Business Companies and Starts Huge Political Negotiations



he Prime Minister of Georgia and former Prime Minister of United KingdomTony Blair agreed on future cooperation. The meeting between Giorgi Kvirikashvili and Tony Blair was held within the frames of Da-

vos World Economic Forum. The main topics of the meeting encompassed ongoing democratic reforms in Georgia. Former Prime Minister was interested in the reform of the educational system and the processes related to the Open Governance Partnership (the OGP),

which aims at increasing of transparency, accountability and effectiveness of the governments across the world. Discussions also touched upon the issue of successful finalization of the Visa Liberalization process. Tony Blair expressed readiness to coun-

sel Georgian government on that issue as well. Giorgi Kvirikashvili and Tony Blair also discussed developments in the region. During the course of the meeting it was decided that Tony Blair will visit Georgia in the nearest future.





he meeting was held between the Prime Minister Giorgi Kvirikashvili and the chairman of TATA SONS LTD, Cyrus P. Mistry. During the meeting it was decided that Cyrus Mistry will visit Georgia with the working group of the networks of Indian hotels to study investment environment on the spot. The TATA group has already launched several major projects in Georgia. Currently the total amount of the investments made by the respective company in Georgia is 33.4 mln U.S. Dollars. The Tata group comprises over 100 independent operating companies in 7 industries: communications and information technologies, engineering services, supplies, services, technologies, power, consumer products and chemicals.

The group operates in more than 100 countries across six continents. In 2015, the revenue of Tata companies, taken together, was $109 bln U.S. Dollars. These companies collectively employ over 600,000 people.

s part of the New Silk Road development project, which encompasses an area that produces about 55 percent of global GDP and has about 75 percent of known energy reserves, what are the prospects for regional development in Eurasia? Georgia’s Prime Minister is discussed the issue and Georgia’s role in the Modern Silk Road with other international panelists. Alongside Kvirikashvili, other panel speakers include the chairman of Dubai World Sultan Ahmed bin Sulayem, dean of the National University of Singapore Kishore Mahbubani, president and chairman of VTB Bank Management

Board Andrey Kostin and chairman of the Board of Directors of Eurasian Resources Group Sàrl Alexander Machkevitch.



or the purpose of modernization of the certain parts of Baku-Supsa Pipeline and improvement of the ecological standards – details of the project were discussed by executive director Robert Dudley and Prime Minister Giorgi Kvirikashvili. The meeting was held within the frames of Davos World Economic Forum. Robert Dudley provided Georgian party with detailed information regarding projects that are being carried out in Georgia by BP. Pursuant to the executive director of the company, notwithstanding the oil price movements, the project of construction of the South Caucasus

Gas Pipeline is being implemented in line with the schedule and will be finalized by 2018. 2000 people are employed in the process of implementation of the project.


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toltenberg: “It was an excellent meeting with Georgia’s PM” Georgia’s Prime Minister Giorgi Kvirikashvili and NATO Secretary

General Jens Stoltenberg have enjoyed a faceto-face meeting and discussed Georgia’s integration process into NATO in Davos, Switzerland. The meeting was part of the Georgian PM’s two-day visit to Davos in connection with the World Economic Forum. The NATO Secretary General said in recent years Georgia had taken important steps to get closer to NATO and its standards. Kvirikashvili thanked Stoltenberg for supporting Georgia’s territorial integrity and sovereignty. Kvirikashvili expressed hope that Georgia-NATO relations would deepen further.



ithin the frames of Davos World Economic Forum, Prime Minister of Georgia Giorgi Kvirikashvili met Assistant Secretary of State,

Victoria Nuland. Victoria Nuland personally congratulated Giorgi Kvirikashvili on appointment to the Prime Minister’s post and wished all the success in his future endeavors. Throughout the meeting important issues of the US-Georgian bilateral cooperation were discussed. The discussions also included domestic and regional political processes. Democratic reforms conducted in Georgia were emphasized. Victoria Nuland expressed her full support to Georgia in that regard.



he EBRD will continue close cooperation with Georgia in the future. The volume of investment and financial aid will be increased in 2016 – respective information was provided by the President of the EBRD, Suma Chakrabarti to Giorgi Kvirikashvili. Their meeting took place within the frames of Davos World Economic Forum.

The parties discussed prospects of growth of investments, stimulating private sector and developing business environment in Georgia. The President of EBRD congratulated the Prime Minister on his appointment and wished him success in his future endeavors. Giorgi Kvirikashvili thanked Sir Suma Chakrabarti for his declaration of trust to Georgia and for the investments executed by the EBRD in the country.



he Prime Minister of Georgia met the President of the Swiss Confederation, Johann Schneider-Ammann within the frames of Davos World Economic Forum. Particular attention was paid to the perspectives of deepening of bilateral cooperation, name-

ly, in the economic and investment areas. The Prime Minister of Georgia thanked the President for supporting Georgian territorial integrity and the President emphasized that Switzerland considers Georgia as one of its distinguished partners.

MAJID AL FUTTAIM GROUP INTENDS PM MEETS PRESIDENT OF EUROPEAN INVESTMENT BANK TO INCREASE THE VOLUME OF he Prime Minister of Georgia and President of the Bank, Georgia enters in the list of President of the European Invest- three non-EU countries that implements operations INVESTMENTS IN GEORGIA ment Bank (the EIB) Werner Hoyer of the EIB efficiently. Pursuant to the head of the


ajid Al Futtaim Group intends to increase the volume of investments in Georgia. The meeting was held between the heads of the company and Prime Minister of Georgia within the frames

of Davos World Economic Forum. Majid Al Futtaim is interested in construction of hotels and trade centers in Georgia. The details will be discussed with the leaders of Georgian Co-Investment Fund during the working meetings.

Washington Based Investment Company is Interested in Georgia

Giorgi Kvirikashvili Meets Ilham Aliyev


he Working Group of the Washington State Investment Board (the WSIB) will visit Georgia. Respective decision was made during the meeting held between the Prime Minister of Georgia and the Executive Director of the WSIB, Theresa J. Whitmarsh. The business environment in Georgia was discussed throughout the meeting. Particular attention was paid to the projects related to the energy and real estate sectors.


he face-to-face meeting of Giorgi Kvirikashvili and Ilham Aliyev was held within the frames of Davos World Economic Forum. Parties discussed good neighborly relations and plans concerning strategic cooperation between their respective countries. The Prime Minister of Georgia and the President of Azerbaijan emphasized once again their strong desire to deepen their cooperation in political, economic and energy sector-related areas.


discussed progress of the infrastructural projects in Georgia financed by the EIB and the next stages of cooperation. Their meeting took place within the frames of Davos World Economic Forum. As stated by the

EIB, the Bank is still interested in execution of the projects, which will empower small and middle business in Georgia. The amount of funds allocated by the EIB to Georgia equals 480 mln Euros in public sector and 165 mln Euros in private sector.

PM Meets with the Prime Minister of Kazakhstan Karim Massimov

Georgia Deepens The Cooperation With Netherlands


ithin the frames of Davos World Economic Forum, the Prime Minister of Georgia met Prime Minister of Kazakhstan Karim

Massimov. The Prime Ministers discussed multifaceted relations between their respective countries and emphasized the need for deepening cooperation in the economic area. During the meeting Giorgi Kvirikashvili and Karim Massimov paid particular attention to the importance of the Silk Road.


hile visiting Switzerland, the Prime Minister (the PM) of Georgia met the PM of Kingdom of the Netherlands. Throughout the meeting Giorgi Kvirikashvili and Mark Rutte emphasized the prospects of deepening the cooperation between their respective countries. The head of the Government of Georgia extended his gratitude to Mark Rutte for supporting territorial integrity and state sovereignty of Georgia. The Parties agreed to exchange highlevel visits.



ough international sanctions imposed on Iran in 2005 due to Tehran’s nuclear program have been removed. What will Georgia benefit from the lifting of sanctions and whether we should expect a growth of Iranian investments in the nearest future? According to the Vice-president of the GeorgianIranian Chamber of Commerce Vano Mtvralashvili, in general the lifting of sanctions against Iran is a very important fact for the global economy and in particular, for Georgia. “After the lifting of sanctions, it will be much easier for the Iranian side to invest capital into the economy of Georgia, including for those companies that are related to the official Tehran as they could not work in Georgia. Among them were banks, which could not carry out direct transactions. The situation will change and the interest of the Iranian investors to Georgia will grow, “- he stresses. Agreement on lifting sanctions against Iran was reached in 2015 during the negotiations between the leadership of the country and the “six”. Tehran has refused to continue the nuclear program in exchange for the lifting of sanctions. The procedure began in the autumn of 2015, after the Iranian parliament ratified the international agreement on the terms of the lifting of sanctions from the country.



eorgia’s foreign trade turnover has amounted to 3,165 billion USD with the EU countries in 2015, which exceeds by 6% comparing to the index of the previous year. According to preliminary data of Sakstat, export in European countries is grown by 4% and the figure has made up 646 million USD, while import – by 6% and amounts to 2,518 billion USD. The share of these countries has made up 32 percent in foreign trade turnover, at that 29% in export and 33 % in import (2014, respectively 26, 22 and 28 percent). Trade deficit of 34 percent has accounted for the EU countries (30 percent in 2014). As for the CIS countries, foreign trade turnover has made up 2,808 billion USD in 2015 (2014 – less by 22% comparing to 2014). At that, export is 840 million USD ( less by 43%), while import has been 1968 million USD (less by 7%). According to official statistics, Georgia’s foreign trade turnover with the CIS countries has been 28%, at that export – 38% and import – 25% (2014, respectively 31,51 and 25 percent). To note, trade deficit of 20 percent has accounted to CIS countries in 2015 (2014 – 11 percent).



eorgian exporters have already felt the effects of the ruble devaluation - a decrease in demand for their products and the problems with the payment of the already sent to Russia goods. According to Lasha Revazishvili, Director of the wine company “Berika”, the company’s export to Russia decreased by 50%. “Demand in Russia has decreased. People do not have money to buy wine that automatically hit our revenues. We were forced to reduce prices by 20-25% to maintain our niche in Russia and do not lose business partners there. We hope that the situation will stabilize, although it’s very difficult to make any predictions , “- the businessman notes. In his words, the company had diversified to start exports to China and the most important thing at this stage is to increase sales of Georgian wine there and to balance the company’s losses in Russia. They say in “Tbilvino” company that export to Russia has not decreased, but they have problems with transfer of payment for the already delivered in Russia wine. According to the company’s CEO George Margvelashvili, the Russian partners violate all terms of payments were agreed in the contract.

ECONO-MIX caucasus business week

January 25, 2016 #130

NATIONAL BANK’S PRIORITY OF LARIZATION FAILS Dollarization Index Grows by 10% to 70%



ccording to the National Bank of Georgia (NBG), the volume of deposits in the bank sector accounts for 15.182 billion GEL in the January to November period. Including, GEL denominated deposits marked 4.605 billion GEL, that is 30.4% of total deposits, while foreign currency denominated loans amounted to 10.577 billion (69.6%). Averaged interest rate on GEL-denominated deposits is 8.4%, while the yield on foreign currency denominated loans makes up 3.8% as of December 2015. Nevertheless, Georgian citizens and the business sector prefer to save deposits in foreign currency.

The high dollarization coefficient in the Georgian bank sector is not a new tendency. This problem exists for many years, but no real decisions are taken to improve the situation, despite a lot of discussions. In 2010, the NBG new president Giorgi Kadagidze announced that the national bank would make focus on lowering the dollarization coefficient. Kadagidze has even established a new term – Larization meaning a development of the national currency money market and contraction in the dollarization ratio. Kadagidze asserted 6 years ago that the Larization would protect the population and the business from currency risks: “Larization is our major priority. This signifies deposits and loans should be converted into GEL. The companies that receive revenues in GEL should have an access to GEL denominated loans to be protected from currency risks”, the NBG President noted in that period. To lower the dollarization coefficient, even the European Bank for Reconstruction and Development (EBRD), decided to issue GEL denominated credits to Georgia. The European Bank had backed the initiative for issuing GELdenominated credits to Georgia previously too. But the new program of the so-called Larization implies new scales. The EBRD’s chief banker in Georgia Irakli Mekvabishvili said. Besides commercial banks, microfinance organizations, insurance and private companies will participate in the program and they will be able to receive long-term credits resources in GEL from EBRD, Mekvabishvili added then. To put simply, the NBG President announced the dollarization coefficient contraction as a main priority for 2010. He was talking about this priority in various international organizations and media outlets. Six years have passed since then. Giorgi Kadagidze will complete his term on the NBG president’s position in February, while the dollarization coefficient remains the sharpest problem in the Georgian economy. Last period the prob-

The GEL exchange rate is decreasing again. The devaluation paces are lower compared to the end of 2014 and 2015, but the Georgian national currency cannot maintain stability anyway. As a result, the public trust to the national currency falls. The high index of dollarization in the bank sector confirms this assertion. Namely, the dollarization index currently makes up 69% (January to November 2015). This signifies almost ¾ part of deposits placed in commercial banks are denominated in foreign currencies. lem was deepened because of the GEL exchange rate devaluation. It should be also noted in spring 2010, when the NBG President announced the Larization plans, the dollarization coefficient in the Georgian bank sector was 68%-69%. The ratio increased to 70% by the end of 2010. After slight changes, the ratio even fell to 60% by autumn 2014, but the GEL exchange rate’s extreme depreciation increased the dollarization ratio again and the figure reached 69% by the end of 2015. In 2010, economic experts and the bank sector specialists urged Giorgi Kadagidze that the GEL exchange rate stability was a main precondition for reduction in dollarization coefficient. All leverages are useless without the national currency stability. The past period proves this consideration, as six years have passed since the announced Larization program and the dollarization coefficient remains the same in Georgia. To be simply, the efficiency of one of the main priorities of the NBG is equal to zero. Today economic experts make almost the same appraisals and recommendations as six years ago, when the NBG announced plans for reducing the Dollarization coefficient. In her interview with the Rezonansi newspaper Doctor in Economics and the bank sector specialist Lia Eliava noted that in 2014 the dollarization coefficient was 60% before the currency crisis. “Every year the international monetary fund (IMF) mission arrives in Georgia and makes a report, where it instructs the NBG to lower the dollarization coefficient in the economy. These reports also prove that the NBG promises to fulfill these instructions. This continues for 7 years, but the NBG cannot or does not fulfill them.

The dollarization process is a negative tendency, because the state economy and GEL become extremely sensitive to external shocks and they largely depend on the economic developments in other countries. In practice, the GEL is not a valuable currency, because it lacks for one of the major functions of a currency – the function of saving. Our people prefer to save money in foreign currencies.

The high dollarization coefficient is one of the main ballasts in the state economy. This index has surged by 10% in a year and this is a big leap backward. The GEL has lost creditworthiness”, Lia Eliava noted. The bank sector expert Gocha Tutberidze also considers the NBG has failed to reduce the dollarization coefficient in the economy. “The GEL devaluation and excessive ratio of the USD-denominated loans make people change their priorities and make more accents on foreign currency. This factor grows the dollarization coefficient in both loans and deposits portfolios. The dollarization coefficient cannot be lowered amid the currency volatility period. The GEL exchange rate should be stabilized and the NBG should take due steps in this respect”, Tutberidze said.

„Such a high dollarization coefficient signifies that the National Bank is inefficient. I cannot understand who owns our National Bank – is it the extension of the US Federal System or it is an independent moneycredit policymaker of Georgia? The NBG is directly responsible for reducing the dollarization coefficient. And what does it make for this? Nothing”, economic expert Vazha Kapanadze noted. Thus, the Larization plans outlined by the NBG President Giorgi Kadagidze six years ago have failed. And this outcome was foreseeable because of the GEL exchange rate volatility for the past years. In November 2008, the GEL exchange rate against USD slipped by 16% to 1.65 point from 1.42. In 2010 the national currency depreciated to 1.88 from 1.69, but later strengthened again to 1.63 point. In 2014-2015 the GEL depreciated by about 40% to 2.43 point from 1.75; The January of 2016 – the Georgian National Currency Keeps Sinking…

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NARESH TELGU: THE SHUAKHEVI HPP IS ONE OF THE FASTEST DEVELOPED HYDRO PROJECTS IN THE WORLD AND ADHERES TO INTERNATIONAL STANDARDS OF QUALITY The Shuakhevi HPP has a new COO – Naresh Telgu. He has 18 years of international experience in various fields of the power sector including the construction and development of power projects, the operation and maintenance of power plants, the transmission and distribution of power, and business development. He obtained his Bachelors Degree in Electrical Engineering and his Masters in Business Administration (Finance). - The construction of the Shuakhevi HPP is entering its final phase. What is the current stage of construction and what is the progress of the project? - The 187 MW Shuakhevi hydro project is one of the fastest developed hydro projects in the world with tunnels this long (37km) developed within five years. Our team at the project site consists of ourselves and the experienced contractors and consultants who have collaborated with us. We strive to build the project to international standards of quality.

Currently, the project is around 65% complete. But let me mention here that the majority of underground geological risks associated with underground works have been reduced since we have already completed 29.3 km of tunnels out of total 37 km.

- How many people were employed in the project implementation? - During the construction phase there were around 1200 personnel employed. I would like to thank the people who have worked so hard to bring the project to this stage. Our employees from Georgia, Turkey and a various other countries developed their skills and learned new ones. They also had to adapt to standards and procedures that ensure safe working conditions for all. - In addition to constructing the Shuakhevi HPP, your company implements various social projects. What important projects are you currently funding in Adjara? - Corporate social responsibility is one of key focus areas of the company. AGL’s three main community support priorities are awareness-raising and education, community development and infrastructure development. AGL has been active in improving the living standards and general infrastructure of local communities through its CSR initiatives. Part of these activities includes “restoration” obligations such as road and bridge rehabilitation, water system development and vocational training related to these activities. AGL undertakes these projects in cooperation with local municipal governments. Our main Initiatives (2014 – 2015) included the following: Awareness Raising & Education: financial

management seminars, road and traffic safety trainings, sustainable firewood use awareness training, healthcare awareness seminars, AGL scholarships for local students from affected communities, agricultural seminars and pedagogical skills training for local English teachers, and English language enrichment activities for local students such as after-school programs and contests. Community Development: small business development and agricultural development (beekeeping programs, nuts cultivation). Regional Development: rehabilitation and gravelling of village roads, rehabilitation of potable water supplies and drainage systems, rehabilitation of school libraries and supplying schools with equipment, refurbishment of school yards and sport halls and construction of gabions. - Mr. Naresh, before arriving in Georgia you took part in implementing a variety of important projects in many countries. What social responsibility practices are implemented in other countries? Are social projects done with projects in every country? - I have been associated with the development and implementation of power projects including thermal, hydro, wind and geothermal projects. These projects were implemented or are being implemented in many different locations around the world including India, Vietnam, Indonesia, Zambia, Bhutan and Nepal. The sponsors of this

company have a strong focus on social projects and have created an atmosphere that promotes being a good neighbour. We are working with local communities to create a better life for everyone. - The Shuakhevi HPP will be completed in one year and hydro power plant will start operating. We have learned that the process of staff selection has already started. What challenges are you facing with this process? - The Shuakhevi power plant will be commissioned in December 2016. Planning for operations phase is already in progress. We need to create a world class organisation for this phase. The resource identification process for mainly technical positions has already started and we would be developing our human resources to standards that match the best in the world. I think we need to create a balance between experience and youth to create a team that is technically competent, with excellent practical knowledge, to operate the Shuakhevi power house at an optimum efficiency level. - In your opinion, what is the main thing the country will gain after completion of Shuakhevi HPP? - The 187 MW Shuakhevi Project is the first project in Georgia with debt financed by three large multilateral agencies: the IFC, ADB and EBRD, with a project budget of around 416 million USD.

It is a benchmark project for Georgia, to show case to the world how a largescale project can be implemented in this country in record time and with world class quality. It will be the largest hydro project to be commissioned in 2016 or 2017. Georgia will also benefit from the domestic sale of electricity to in the winter when the country faces a power deficit. We are thankful for the support of the Government of Georgia and Adjara as well as the municipal governments of Shuakhevi and Khulo during this critical construction phase.


OTHER SIDE OF BUSINESS caucasus business week

January 25, 2016 #130

Temur Chkonia: I HAVE JUST ONCE TASTED PEPSI Businessman, a President of Coca-Cola Bottlers Georgia MY FIRST JOB - I started working at a bakery laboratory. I stayed there for a year. The job was very primitive. Very young people are employed on similar positions, as s rule. I was 18 years old in that period. I used to work and go to university then. FIRST SALARY – I do not remember how much it was. This was in the remote past. There was different political system and different money. I just know the salary was very little and I do not think I would be content with it. I FIRST TASTED COCA-COLA AT THE AGE OF 20. I was very young. In that period Coca-Cola was not imported to Georgia. According to my memories, dancers of the Sukhishvilis’ ensemble brought one tin of Coca-Cola from abroad and I managed to taste a small volume form the same tin. ON WATCHING THAT TIN, my thoughts got dual, because I could not imagine I would have ever imported Coca-Cola to Georgia. The Communist Regime had closed the whole space and I could not imagine that system would have been destroyed ever. In that period it was imaginable to fly to foreign countries by airplane. I HAVE JUST ONCE TASTED PEPSI. I tasted it to recognize and perceive its essence and core. You like what you have accustomed to. I DRINK TWO BOTTLES OF COCACOLA A DAY, but only Zero Coca-Cola, not because of dietary regime. I just like it very much. Press a small piece of lemon into it, add ice and that’s all. IF I WERE A HIGH SCHOOL GRADUATE, I would study two disciplines. I would study law and business-economics. Today both professions are the must. I GO TO OFFICE EVERY DAY, in different time and for different missions. I do not wake up in the specific time. For example, I do not wake up at 6 o’clock every morning to go to office, meet the workers, the management members and blame them for delay. I go to office at 7 o’clock or at 10 o’clock, depending on specific situations. Everything depends on specific situations at the office. I START MY WORKING DAY WITH GREETINGS, then I receive information from subsidiaries – McDonald’s, breweries, Coca-Cola and so on. My assistant puts all these materials on my table. I check finances, examine the budget and the whereabouts of the expenditures. I CANNOT IMAGINE MYSELF RETIRED. I do not know whether I am due to take a pension. I do not know in advance what I will do when I get older and appoint a new manager. Maybe I will get ready to move to other life. MOST OF ALL I CARE FOR MY RELATIVES and friends and for their safety and wellbeing. These aspects concern me very much. MOST OF ALL I WANTED TO ORGANIZE THE HUGE PRODUCTION. I dream of this even today. I admire huge advertisements. We installed big AD billboard at the entrance of

Zugdidi. This billboard makes you fee that you enter a different world. I have not still realized that Coca-Cola is a success in Georgia and I have made it a people’s beverage. I have many other dreams in relation to this brand. My second major dream was to see Georgian children snacking at McDonald’s. I think I have managed this and I have created the American environment for them. For example, yesterday I visited McDonald’s and I liked it very much. Young people visit it, get entertained there. I want to do more and make more achievements. In 2016 I will add 11 restaurants. I am constructing a big and huge McDonald’s restaurant in Rustavi. I think I have not finished the projects that I have launched. Therefore, I have to still perform much job. AS TO MAKING A CAREER, various people apply various methods. Some of them resort to flattery and roguery to make career. Some people prefer to work hard and achieve a success by zealous job. However, many professionally are not appreciated in our country. There are many professionals at state offices, but the most part of them are assistants and deputy heads, while they bear major responsibility and perform main job. Inappropriate people frequently occupy undeserved positions and this category frequently achieves the highest success. They do not deserve to occupy those positions, because they have come from the street. I do not approve revolutionary pathos. I HAVE NO FAVORITE TOAST. In general, I do not drink much. I believe these toasts are banal ones. I do not like when they hail each other and when they stand up to drink toasts. I think this is much tragedy when the Chief of the Table says a toast and 50 persons stand up. I get confused in this situation. What is this? I RECEIVE INFORMATION FROM ALL SOURCES, television. For example, I listen to radio stations in automobile, read information in the internet. In general, I like reading. CURRENTLY, I AM READING THE WHOLE CYCLE OF MAPHET. I am not good in reading in English. Some places are translated for me. I worry in this way, but anyway. I like the life of this person very much. He has lived very deep and reasonable life. Moreover, I read much in economics, books about new achievements, management systems. Very good books have been published. THE COUNTRY WHERE I WOULD LIVE with much pleasure is Germany, namely Munich. I like this city very much. I FEEL MYSELF MOST COMFORTABLY at home. MY FAVORITE SPORTS ARE BOXING, football, basketball. I like all sports. FAVORITE ATHLETE is Muhammad Ali. In football: Vladimer Gutsaev, Aleksandre Chivadze, Murtaz Khurtislava, Misha Meskhi. Today the world lacks for similar footballers. FAVORITE FOOTBALL club is the Manchester United.

January 25, 2016 #130



caucasus business week




anker of Credit Suisse caused losses of 100 million franc (91,3 million EUR) to Bidzina Ivnanishvili – the news is disseminated by Swiss publication Le Temps. According to the publication, the banker was investing money in American pharmaceutical company Raptor. The banker is already arrested, while his identity is not revealed. To note, Georgian billionaire had a deposit of 1 billion franc (900 million EUR) in Credit Suisse. As of the publication, the act of the banker caused losses of two other clients. They have totally lost 70 million franc (64 million EUR). The lawyer of the detainee declares, that it was not a fraud, but an investment that has lost the value. According to Forbes, Georgian Ex-Premier holds net worth of 5,2 billion USD.

Government and National Bank Turn Blind Eye to this Savage Market



Online credits in Georgia yield annual efficient interest rates from 500% to 1100%. However, these credit organizations do not lack for clients and borrowers, anyway. The fact points to financial ignorance of the population and the fact extremely impoverished residents do not care for outcomes while trying to gain today’s piece of bread. Meanwhile, both the Government and the National Bank of Georgia (NBG) show indifference to the savage game by credit organizations in the country.


ccording to the report of the Social Agency of the Georgian Health Ministry, more than 1 million residents in Georgia consider themselves to be extremely impoverished. This category is waiting for social allowances. It is difficult to expect this category to demonstrate knowledge and reasonable perception of the processes, when these people face real problems with sustenance. However, the NBG stubbornly underlines financial ignorance of the population. Credit organizations issue loans to the Georgian citizens, who have turned 19. Even this aspect signifies these organizations pay less attention to the borrower’s income source. Citizens of this age category mainly borrow loans for gambling games and this is the main factor for increased suicides among young people. This uncontrolled wild market have set insanely huge interest rates. The website of, which introduces conditions of various online companies, shows that:

The annualized efficient interest rate is 708% in CCLoan, 435% in ELoan, 730% in NetCredit, 435% in Vivus, 1174% in EmmasCredit (EmmasCredit has indicated 365% annual efficient interest rate on its own website), 800% in Moneyman, 850% in CreditOn and 558% in Credium. For instance, NetCredit issues 50-1000 GEL online loans with a maturity period of 1-30 days and the monthly interest rate is 19%, while the annual efficient interest rate makes up 730%. The fine for every overdue day constitutes 1%, i.e. 1 GEL will be charged a day if the client has borrowed 100 GEL.

Online Credit issues loans from 50 GEL to 2000 GEL to citizens having turned 19. The annual efficient interest rate for 50-700 loans makes up 1132%-384%, because the consumer status changes while taking a repeated loan. Consequently, the commission fee rate also changes. Tens of other credit organizations offer almost the same conditions. The quantity of these online credit organizations has extremely multiplied for the past two years. Our respondent Mariam Chelia with heavy experience of her relations with online credit organizations says her financial problems deepened after she first applied to such an organization. “Every day I receive tempting proposals from various credit organizations in the form of SMS messages. I took the first loan of 200 GEL in August. I wanted to buy clothes for my child for secondary school. The initial month was interest free. I was going to cover the loan after taking my salary, but my salary is so small that I failed to cover the loan. To prevent charging interest rates, I applied to other organization for loan covering. Currently, I have taken loans from almost all organizations.

Now I regret to have taken such a step, but it is too late. I borrowed 300 GEL loan several months ago. The monthly payment exceeds 70 GEL. I have to pay 20 GEL for overdue 10 days”, Mariam Chelia said. Online credit organizations do not issue loans under annual interest rates. They receive profits through huge fines and commission fees, banking expert Lia Eliava said. “This inappropriate business that contradicts the world practice must be eradicated. Loans must not be issued under only commission fees, because the commission fee is paid on monthly basis, but a major part of online organizations follows this practice anyway. Moreover, the most

important thing is that the efficient interest rate is not calculated by only a commission fee. This method is strange in all normal countries. Similar abnormality happens in only Georgia. Loans are issued under unclear schemes”, Lia Eliava said and noted that like the Baltic Countries, where there are a lot of online credit organizations, the National Bank of Georgia (NBG) should set supervision over the sector. As to the loan issuing procedures, a special law should be adopted to regulate crediting business. This law should ban issuing loans under only commission fees and should introduce a fixed annual interest rate.

“All these aspects should be integrated into a joint legislative norm. By the way, this savage market involves online credit organizations and microfinance organizations, pawnshops – all these directions should be regulated. Central banks regulate similar issues in other countries. The national bank operates in Georgia and this body must supervise the finance sector activity. However, I do not expect the current administrationo of the National Bank to take efficient steps in this respect, because they have done nothing for the past 7 years. Let’s see what the new administration will do”, Lia Eliava noted. Besides the NBG, both the Parliament and Government of Georgia show indifference to this wild market. Therefore, there is no party in the country that would put forweard due legislative initiatives.

usiness sector expects effective steps, including tax liberalization. Businessmen have declared about the expectations at the meeting held on Monday with an initiative of the Premier. Fadi Asli, President of the International Chamber of Commerce noted, that optimism had been ignited for the first time through the last 3 years, which was related to the possible changes caused by Kvirikashvili’s becoming as the Prime Minister. He hoped to hold productive meeting. The submission issues also include restoration of Police Eviction, which violates fundamental rights of ownership. Zurab Gvasalia, president of Georgian Banking Association noted, that banking sector has many protecting mechanisms towards it, but reputational risk still remains until the true or guilty should be elucidated. The insolent statements made towards the finical sector damages business environment. It should be noted, that banks rarely use this measure. He named TBC Bank as one of the examples, where facts on evocation have not been fixed through the last 5 years. Businessmen, who have come to Kvirikashvili, expect compromises from the Premier and regards, that it is more clear for the manger, who has worked as a manager in the bank.



rude oil shipment is started from Black Sea Terminal, owned by SOCAR Kulevi Oil According to the administration of Terminal, the first parcel of naphtha was successfully loaded onto the oil tanker Riroil 2, without any loss of time, quality or quantity. Terminal is capable to transship a variety of hydrocarbons including crude oil, fuel oil, vacuum gasoil, gasoline, gasoil, aviation kerosene, ULSD, methanol, and LPG.



oon, Geocell – the first mobile operator to present iPhone in Georgia Geocell is the only mobile operator in Georgia introducing iPhone 6s and iPhone 6s Plus - the most advanced iPhones ever - in its shops.



5-star hotel project carried out in Tbilisi has been delayed. “Commersant” was told by Director of “Aghma” company involved in the project. According to Gogi Ugrekhelidze, the preparation works are underway on the territory of the so-called Mikhailov Hospital but the construction cannot be started as the company has a problem with the owner of a garage located on the abovementioned territory.



caucasus business week

January 25, 2016 #130


Natia Kereselidze,

Evergreen Businessmen Services Representative in Georgia

Perhaps it will be difficult for me to put an article all information about Dubai’s advantages,which makes it an attractive environment for doing business. The aim of this article is, to show Georgian people this very successful place in the world , for doing business.Power of Dubai’s , and give them chance to have member of this amazing place , where word connect each other. This is for sme of Georgia, to use this opportunities.


ubai is part of the United Arab Emirates (UAE) which is a safe, politically stable country, with a good education system, up-to-date healthcare facilities and modern infrastructure. Read any article about Dubai and you’re almost certain to see the words ‘ambitious’, ‘record-breaking’ and ‘staggering’, and with famous attractions such as the Burj Khalifa, the Burj Al Arab, The Palm Jumeirah and the world’s largest shopping malls, the city has become a must see destination for the 21st century. Dubai’s impressive growth has not gone un-noticed, and each year thousands of people move to the city to claim a piece of the action. The current population is made up of over 2.2 million people from more than 210 nationalities, all creating a dynamic, cosmopolitan vibe that can be felt running throughout the city. The past 10 years have witnessed incredible growth throughout all sectors of the Dubai economy. The emirate’s government is constantly working to improve its commercial transparency and introduce dynamic regulations that aid the formation of small and medium enterprises (SMEs) and have the ability to react to global financial challenges. Dubai’s economy is no longer reliant on oil, but is more diversified, relying heavily on trade, services and finance sectors With its central geographic location between Asian and European markets, Dubai has worked hard to establish itself as an integral part of the global trade mechanism. Its central location has also allowed Dubai to become a popular and accessible tourist destination

Why Choose Dubai As An Investment Location? Dubai, with its ancient commercial and seafaring traditions, has long been recognized as the

Middle East region’s leading trading hub and has emerged as its key re-export center. In more recent years, the Emirate has become a major venue for a number of growing, profitable industries and activities: • Meetings, conferences, exhibitions • Tourism • Corporate regional headquarters • Regional transport, distribution and logistics center • Banking, finance and insurance • Business and industrial consulting • Information and Communications Technology • Light and medium manufacturing

What are the best business opportunities in dubai? More than 20000 business activities operate in dubai.the segment is not expired.any segment is open to new business.The dubai economic report has showed ,the following directions are the most requested and successful business sectors. Dubai’s economic is not only OIL ,but its well diversified across 6 major sectors • WHOLESALE-RETAIL TRADE 25,2% • TRANSPORT 13,9% • REAL ESTATE 12,9% • MANUFACTURING 12,5% • FINANCIAL SERVICE 11.6% • CONSTRUCTION SECTOR 7,7% Total trade (2013)=$357,6bn • Imports(2013)=$217.1bn • Total exports (2013)=$140,5bn In previous article, we have already talked

about Dubai expo 2020,This is a very best chance to present your business to millions of vizitors from around the world World Expos have continued to be one of the largest and most enduring global mega-events. Lasting six months, World Expos attract millions of visitors who explore and discover pavilions, exhibits and cultural events staged by hundreds of participants including nations, international organisations and businesses. Dubai’s World Expo is held under the theme of Connecting Minds, Creating the Future, echoing the powerful spirit of partnership and cooperation that has driven the UAE’s success in pioneering new paths of development and innovation. Through this theme, Expo 2020 Dubai will serve as a catalyst, connecting minds from around the world and inspiring participants to mobilise around shared challenges, during a World Expo of unprecedented global scope, under the sub-themes of: Mobility, Sustainability & Opportunity. Expo 2020 Dubai is expected to attract 25 million visits, 70 per cent of which will be from overseas. This will be the first Expo in which the majority of visitors stem from beyond a nation’s borders. All of these factors contribute to the development of business in Dubai.Why not Georgian use this chance, for their successful business. When a company named “Evergreen Businessmen Services arrived from dubai to help and guide u how to setup business in the most attractive place in world Dubai. For more free reports contact us Adress: g.saakadze descent 11 business center “Panorama” Tel: 577433366

January 25, 2016 #130

ANALITYCS caucasus business week




lobal oil prices are seeing new bottoms every day. The prices have already collapsed beneath the psychological verge of 30 USD. This tendency would be fully acceptable for the Georgian consumers, but there is one detail: two our neighboring countries (one friendly and one hostile) largely depend on resources of these hydrocarbons. Namely, the ratio of Azerbaijan in Georgia’s total FDI inflows in 2014 marked 20%. The ratio reached 40% in the January to September 2015. Azerbaijan is Georgia’s leading exports market. Namely, in 2014 Georgia’s exports to Azerbaijan constituted 544 million USD, i.e. 19% in Georgia’s total experts. In the January to November period of 2015, the ratio exceeded 11%. Moreover, Azerbaijan is Georgia’s strategic partner country as part of many regional projects that are designated for long-term perspectives. For example, the Baku-Tbilisi-Karsi railroad, the Black Sea terminal, preferential gas tariffs for Georgia and so on. The Russian economic contribution to the Georgian economy is also considerable, despite the losses the Russian hostile policy has inflicted to our country. Namely, Georgian emigrants are mainly employed in the Russian Federation and this category of Georgian citizens transfers considerable funds to Georgia every year. These transfers account for about 1 billion USD and consequently, these funds previously equalized to total FDI inflows. Moreover, despite the difficulties in the Russian market, Russia still remains a leader in terms of money transfers to Georgia. According to the last reports, money transfers from Russia to Georgia slipped by 276 million USD in 2015 compared to 2014 (-39%). At the same time, the total money transfers to Georgia in 2015 marked 1.08 billion USD, down 25% from 1.44 billion USD in 2014. This signifies the contraction in money transfers is by ¾ dependent on the Russian factor (in this case, contraction in oil prices and the Russian Ruble devaluation directly make negative impact on money transfers to Georgia). As to other countries, it is interesting that money transfers have also slipped from Italy (to 109 million USD from 121 million USD). Nevertheless, the country’s ratio in total money transfers to Georgia has increased to 10% from 8%. Money transfers to Georgia have increased by 22% (+18 million USD) from the USA. Money transfers have halved from Greece to 117 million USD from 205 million USD. As to Turkey, money transfers to Georgia from Turkey have increased by 1% to 69 million USD.

Moreover, the problems with the national currencies of Russia and Azerbaijan, along with the above-mentioned developments, outline unfavorable perspectives for the Georgian economy. The country needs maximum concentration to curb the national currency exchange rate. The Authorities should neutralize al the above-mentioned factors to prevent the GEL devaluation and to draw more foreign currency to the country or to reduce the demand for it by making accent on the national currency as the sole legal payment instrument. The depreciation of the national currencies of Azerbaijan and Russia is expected to bring unfavorable results for the Georgian economy. Even more so, the statement released by the Russian Finance Ministry on expected default is in direct relation to the welfare of the whole region and these tendencies will make direct and indirect negative impacts on Georgia’s economic indicators. Amid the economic slowdown in Armenia, Turkey and Ukraine, Georgia should try to enhance economic ties with comparatively stronger and flexible economies such as EU and USA. In other case, the Georgian economy will enter serious turbulent zone. We should make maximum benefit from the EU association agreement. It should be noted that the Russian economy slowdown that causes both regretful and happy moods in Georgia, will make negative impact on the Georgian economy. The same forecasts are made in relation to Azerbaijan. However, Georgia has many partner countries. Enhancement and development of the economic relations with these countries may maximally alleviate negative impacts from the declining economies. First of all, the EU association agreement should be mentioned as a main source for Georgia’s economic stabilization. It is the Georgian government ‘s responsibility to successfully fulfill the EU association agreement requirements. In any case the imports must be replaced by domestic products and the exports should be stimulated through government support programs. The Authorities should ensure drawing more foreign investments and money resources, accumulating more tourism revenues and reducing external debts, budget expenditures should be balanced and the National Bank should carry out strict monetary policy. Moreover, the Government should develop a long-term state economic policy and carry out this policy at various Ministries. It is also of crucial importance to carry out constitutive policy and promote perspective directions on the domestic level.


PUBLICITY caucasus business week

January 25, 2016 #130

January 25, 2016 #130

HEALTHCARE caucasus business week




eorgian Health Minister David Sergeenko and Global Alliance president Jean-Elie Malkin have held a joint news conference and introduced a joint social project – “What do you worry about?” The Georgian Health Minister and the Global Alliance president overviewed the importance of this project.

The project calls for inquiring Georgian citizens through special questionnaires starting January 25. The new initiative is to assist the Georgian Health Ministry in precise determination of the medical needs in the Georgian society. Starting January 25 questionnaires will be able on the website ( and the Health Ministry regional offices. The sociological research company will process and summarize the inquiry results. The project has been developed to exactly determine the desires, expectations and needs of the Georgian population in terms of healthcare services, Georgian Health Minister David Sergeenko said.

Our country has taken serious steps for improving the Health system for the past several years, but many challenges should be still resolved. Our social initiative calls for creating additional channel of communication with our society. “The fact is the current communication is not sufficient to thoroughly explore the needs of our society. Our current mechanisms cannot fully cover the target groups, while there positions and considerations are very important for us. Our objective is to fix any opinion and position and accumulate them in the resources, where we will simply and efficiently respond to the demands of our citizens to change and revise our plans based on the public opinion. There is no ideal and perfect health system anywhere in the world. We know successful

experience of several countries and interesting practices that Global Alliance is sharing to us as part of our cooperation. However, the attitude and position of our population is also very important and we plan to outline these moods. Therefore, we have backed the proposal of Global Alliance on organizing a joint inquiry”, David Sergeenko said. We should determine the priorities of Georgian citizens, their expectations and demands in the healthcare system, Global Alliance president Jean-Elie Malkin said.

As part of “the What Hurts?” social initiative, we will ask Georgian citizens to answer certain questions. For instance: how much do they spend on health, how much expenses do they consider optimal for health, are they content with the quality of medications, diagnostics and services, prices and so on. The inquiry results will enable us to make our visions and approaches more realistic and valuable for further improvement and development of the healthcare field and to offer more realistic plans to the Ministry around the existing problems”, Jean-Elie Malkin said. The questions may be answered on the website and the Health Ministry official website, as well as at the public reception hall of the Health Ministry, regional and urgent medical assistance centers of the Health Ministry, the social agency service centers. The sociological research company will process and summarize the inquiry results. In April the Georgian Government and the Global Alliance international consulting group signed an agreement with the aim to develop and improve innovative instruments and mechanisms for the health system management. Global Alliance, led by Bernard Kouchner, the ex Foreign Minister and triple Health Minister of France, is staffed by worldwide recognized experts in the health system management issues. The healthcare system improvement documentation has been already developed under the mentioned agreement. These documents call for reorganizing the primary health system, increasing efficiency of spending, expanding accessibility of medical services and medications, integrating with European healthcare norms and legislation and establishing European standards of management. At this stage, the document is being translated into Georgian. The Georgian government has extended the agreement with Global Alliance up to May 1.

Jean-Elie Malkin also talked about the importance of this initiative and made few comments on behalf of H1N1 virus. The Georgian Health Minister also stressed the importance of this new campaign. For the past months the Georgian Health Ministry and Global Alliance have been zealously cooperating for the Georgian Health System improvement in behalf of the Georgian population. This is a very tight and efficient cooperation and this cooperation becomes more and more efficient and valuable and I would like to express my gratitude to the Minister and the Health Ministry personnel for this efficient cooperation in order to ensure affordable and high-quality medical services to Georgian citizens.

This initiative will enable us to check the pulsation of Georgian citizens and to receive precise information on their needs and expectations, because the improved system is to improve the public healthcare issues. Consequently, the Minister stressed the importance of this initiative and the main principles. It is important that Georgian citizens be able to talk about their problems and needs. This is not a sociological research, but this inquiry will enable us to make deep analysis and this research

will be carried out in a simple way – filling out online questionnaires. As a result, we will be able to improve the system and to take useful steps for the Georgian population. This is very important for the Ministry. As noted, Global Alliance tightly cooperates with the Georgian Health Ministry. We will collect information on the most problematic issues in the population, while the Georgian society will be able to unveil their problems and positions to the Health Ministry. I would like to finish my speech and refer to the cases that are relevant in Georgia and are related to the H1N1 virus. The Minister showed very good and efficient reaction to this virus and this reaction first of all responds to the public needs and their expectations. This reaction is an expression of efficient management. This was a very good and valuable reaction to provide valuable response to similar cases and broaden family doctors’ involvement in efficient management of the process.

This fact reaffirms the importance of continuation of the healthcare reforms that is a priority of the joint program of the Minister and me and the priority calls for improvement of the primary healthcare chain.


PUBLICITY caucasus business week

January 25, 2016 #130

January 25, 2016 #130

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

January 25, 2016 #130