Caucasus Business Week #137

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BUSINESS WEEK March 14, 2016 #137

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March 7, 2016, Issue 136

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WHY FOREIGN INVESTORS AVOID MAKING PORTFOLIO INVESTMENTS IN GEORGIA

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nvestment inflows to a country depend on many interconnected factors, including political stability, conflict region, quickly growing and progressive economic indicators, property protection guarantees and one of the most important factors.

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OVERVIEW OF REAL ESTATE MARKET IN 2015

Investments Dip

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Georgia attracted 1.351 billion USD foreign direct investments throughout 2015. According to Geostat, the national statistics service of Georgia, the 2015 indicators are 6% higher compared to the 2014 early report indicators, but 23% lower compared to the

2014 specified indicators. Georgia drew 1.758 billion USD FDI in 2014. Major foreign direct investments in Georgia were attracted from Azerbaijan in 2015. The ratio of Azerbaijan in Georgia’s total FDI inflows marked 40%, Geostat, the national statistics

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aking into consideration the lack of official statistics and detailed info published by the official authorities, we usually assess the market based on the current trends of sales/leasing provided by our in-house brokerage team as well as generally on the market.

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service of Georgia, reports. Azerbaijani investors have put 542 million USD in Georgia in 2015, up 50% compared to 2014. The United Kingdom (UK) ranks second with 198 million USD (15% ratio), up from 108 million USD in 2014.

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EU offers visafree Travel for Georgia

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Nino Subeliani: PPP Benefits are Especially Revealed in Healthcare System in Various Countries Healthcare has become one of the most vital components for Georgian society, Government is actively implementing several reforms to improve and develop the system.

Georgia is about to implement “one of the biggest projects” in the healthcare sector that will see the cost of medicines reduced by 30 percent. The project also envisaged a complete overhaul of three of the country’s hospitals and the pharmaceutical industry to ensure it meets top European standards. Georgia’s state-owned shareholding company, the Partnership Fund (PF), and the country’s Ministry of Labour, Health and Social Affairs discussed future plans with AlphaMedic, an Austrian consortium, to turn this project into reality.

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Why Should More Women be Employed?

IRAKLI IASHVILI: I REFUSED TO PURSUE COMMUNIST PARTY CAREER AND DECIDED TO DO BUSINESS

MADI Handmade Knitwear There are many advantages to buying handmade clothing over ready-made. First is the “uniqueness factor”. Most likely the outfit you purchase will be one of a kind and stand out from what others are wearing. Handmade knitwear designer Mariam Gogua creates garment with her mother Diana Dvalishvili.

She gives us an overview of her activities.

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NEWSROOM March 14, 2016 #137

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MAIN EVENTS KUMSISHVILI OFFERED OPIC TO ENGAGE ANAKLIA SEA PORT IN THE PROJECT

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he U.S. Government agency “Overseas Private Investment Corporation” (OPIC) will continue to make investments in Georgia. It has become obvious after the meeting held between Dimitri Kumsishvili and Elizabeth L. Littlefield, OPIC President & CEO. It has been noted, that as of the successful experience, the organization will still continue investments in various priority sectors of Georgian economy, including, tourism, agriculture, removable energy, education, healthcare and other.

FINANCE MINISTER UPDATES GSMEA MEMBERS WITH LATEST AMENDMENTS ON TAX CODE

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eorgian Finance Minister Nodar Khaduri has met with members of the Georgian Small and Medium Enterprisers Association (GSMEA). The Ministry of Finance of Georgia continues updating the business sector on the coming amendments to the Tax Code. The bill calls for reforming the profits tax and alleviating the tax administration.

INVESTMENT FUND OF IRAQI KURDISTAN REGION IS INTERESTED TO MAKE INVESTMENTS IN GEORGIA

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nvestment Fund of Iraqi Kurdistan Region is interested to make investments in Georgia.

Davit Saganelidze, executive director of “Partnership Fund” has hosted Ajdar Askeri, president of “Azeksim Oil petrol” and “Regan Group”, representative companies of Investment Fund of Kurdistan.

THE ROLE OF AGRICULTURE IS VERY IMPORTANT IN THE EUROPEAN INTEGRATION, GEORGIA’S MINISTER OF AGRICULTURE BELIEVES

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inister of Agriculture expects that after the enactment of a visa-free regime for Georgia, the first visitors will go to the EU without a visa in the summer . Otar Danelia said after the yesterday’s session of the government. The Minister touched on the EU-Georgia visa-related and the role of agriculture which is very important in the European integration.

GEORGIA REACHES VERBAL AGREEMENT WITH RUSSIAN GAZPROM 10% GAS IN RETURN FOR TRANSIT RIGHTS; NO MONETARY COMPENSATION

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eorgia has reached a verbal agreement with Russian energy giant Gazprom to continue cooperating as it did in the past, meaning Georgia will receive 10 percent of the natural gas that transits through the country to Armenia instead of monetary compensation.

Georgia’s Energy Minister Kakha Kaladze said the agreement with Gazprom will be signed in the nearest days, while delivering his speech today at the united session of the economic committee and foreign relations committee in Parliament.

JAPAN ALLOCATES $38M TO GEORGIA’S MAIN HIGHWAY UPGRADE

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apan is supporting Georgia’s transformation into a regional transport and logistics hub by offering the country $38 million USD. This morning high officials from Georgia’s Finance Ministry and the Japan International Cooperation Agency (JICA) signed a financial agreement confirming Japan’s commitment to helping Georgia upgrade its main highway connecting the eastern and western parts of the country.

MARGVELASHVILI: GEORGIA-AZERBAIJAN PARTNERSHIP DETERMINING MANY OTHER COUNTRIES’ FUTURE Trend Agency has had an exclusive interview with the President of Georgia Giorgi Margvelashvili, who earlier arrived in Baku, the capital of Azerbaijan, to take part in the Fourth Global Baku Forum.

The interview with the president touched upon such important topics as the relations between Georgia and Azerbaijan, stability in the South Caucasus, as well as cooperation in economy, tourism, transportation and energy industry.

Priorities of the GeorgianAzerbaijani relations Speaking about the relations between his country and Azerbaijan, President Margvelashvili said he is very happy to be in Baku and see the city develop so rapidly and dramatically.

“I am happy to see our Azerbaijani friends and I am very happy to see once again my good friend [President of Azerbaijan] Ilham Aliyev,” he said.

President Margvelashvili described the relations between Georgia and Azerbaijan as perfect.

“We have a longstanding partnership, which I would call a strategic partnership,” he said.

Margvelashvili noted that this partnership is determining the future of not only Georgia and Azerbaijan, but also the future of many other countries.

He said the Georgia-Azerbaijan partnership has turned into a relationship that is influencing the countries in Europe and Asia.

“The great example that we have shown of the relationships between the neighbors is influencing the future of the Caucasus, influencing the future of Europe, influencing the future of the Caspian Sea, as well as Asia,” added the president.

He also said this relationship has only perfect perspectives in the future, adding that the countries’ leaders have to build a great future on the great past.

Margvelashvili also said the two countries’ joint contribution to strengthening of stability in the region was discussed at his meeting with President Ilham Aliyev.

“President Aliyev and I see the future the same way. We think that we should bring opportunities and we should show the Caucasus as a region of opportunities, because that is the reality that we have to develop,” he said.

He added that the great project of the Silk

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Road shows that the Caucasian and the CaspianBlack sea cooperation is really a crucial part of this very important process, and a very important part of the relations on the Eurasian continent.

“And in this respect what we offer to our partners is the closest and most efficient route for the delivery of not only energy supplies, but there are also the transportation projects, logistical projects,” he added.

“So, by doing so we both believe that we build security and stability,” he said. “It is not only economic benefits that we envision in this process, but it is the security benefits as well.”

He added that in today’s world, it is very important that other countries, and maybe the countries in different regions, are interested in having a stable route of supplies and communications.

Margvelashvili said Georgia and Azerbaijan, by strengthening their relations, by strengthening this part of the Silk Road, are bringing more stability into the region, and are bringing interest of dozes of countries located to both the east and the west of the Caucasus.

“So, that is how we look at this,” he added.

“Of course, both of us understand the complications that are in the region, the complications that have actually become even more complicated during the recent two years.”

“But the complications have to be overcome by the great example of partnership of our two nations,” he said.

Relations in tourism sector Margvelashvili further said he and President Ilham Aliyev have discussed the tourism opportunities.

He described the tourism opportunities between the two countries as very interesting.

“Because people come to Azerbaijan, people come to Caspian Sea, people come to Georgia, and people come to Black Sea, and both of these regions are very interesting,” he said.

“Those regions could be packaged together and we could think about doing packaged programs and packaged projects that could be more

easily advertised and could bring more tourists,” added the president.

He said both Georgia and Azerbaijan have great opportunities for historical tourism, for tourism that is related with resorts and with healthcare.

“And if we package these together, I believe that those projects and those products would be even more interesting,” he added. “So, we agreed today that we would engage our appropriate agencies to cooperate in this direction.”

He also spoke about the Baku-Tbilisi-Kars project and recalled that the project is going to be completed at the end of this year.

“We look at this project not only as an economic project, but also as a great opportunity to share with our Azerbaijani, Turkish and Georgian friends,” added Margvelashvili.

He also said Georgia’s transportation and communication infrastructure is also being developed jointly.

Economic cooperation Further speaking about the economic cooperation between Georgia and Azerbaijan, President Margvelashvili said Azerbaijani partners are actively investing in the country’s development.

“We are actually very thankful for the very active role of SOCAR [State Oil Company of Azerbaijan] in development of Georgia,” said the president.

“We are very excited with opening of opportunities of the free trade agreement that we have with Europe to our Azerbaijani investors,” added the president. “So, there are great opportunities, which we have to utilize.”

“Energy is one of the most interesting areas for investment,” Margvelashvili further said.

He added that Turkey, Azerbaijan and Georgia are in this bridge of energy cooperation and they are very actively developing not only gas and oil cooperation, but also the cooperation in the exchange of electricity.

“Georgia has great opportunities in agriculture, in tourism, by the way also in energy, in hydro-energy production,” he said. “So, all those opportunities are there and we are jointly developing them.”

He also said the Azerbaijan-Georgia-Turkey (AGT) Power Bridge Project is a very interesting project and a very important project for Georgia.

“And it has been discussed for a while and we are much interested in the project. Still we are developing the feasibility study of this, but I believe that the strategic partnership between Georgia and Azerbaijan – the strategic partnership that has been reflected in many projects – will be continued in this project as well,” he said in conclusion. source: trend.az

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

Designer illustrator: Ilia Chrelashvili. Technical Assistant: Giorgi Kheladze

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

PUBLICITY March 14, 2016 #137

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INTERVIEW caucasus business week

March 14, 2016 #137

‘Major Part of Georgian Businessmen Seek Shortterm Effects, not Longterm Perspectives’ To briefly explain the concept of a brand, this is a perception that is formed in the consumer’s brain in relation to this or that product or service, while the branding is the art of managing the consumer’s perception. What is the bran? How is a product transformed into a brand? Have managers in Georgia gained due experience? – LEVAN KOBERIDZE, director of the Branding.ge branding and marketing research company, overviews these and several other issues.

“If the branding becomes relevant, this signifies the economic environment is competitive” - When did the branding concept appear in Georgia and how efficiently do companies employ this direction?

- We have set up Branding.ge company as a brand consulting company in 2006. We are glad this term is widely established by both customers and the field professionals. This term acquires relevance stage by stage. The branding is a technology of competition in its essence. The branding is relevant in the competitive environment. Regretfully, the branding cannot take roots in the monopolistic or limited markets, because the branding means a place in the consumer’s consciousness. We need this perception so as the consumer give preference to this or that product, service, company contrary to others. The branding does not work in uncompetitive environment. The fullness and healthiness of our economy is also greatly determined by extension of this aspect in our business environment.

If the branding becomes relevant, this signifies the economic environment is competitive.

- How flexible and adaptable is our society to innovations?

- The branding is a technology that first of all influences the financial efficiency. In a year or six months they see positive results of our work from both perceptional and financial points of view. Then they seek cooperation with us, but the first steps are always very difficult.

- You have mentioned customers lack for information in this field. Whose prerogative is it to educate them and to develop this field?

- The vision of people who act in the business environment play a decisive role. The people who own capital should be conceptual leaders and they should do business for the long-term perspective. Georgia suffers from deficiency of similar visions and approaches and a major part of our businessmen seek short-term effects.

Today the capital is concentrated in the hands of the people, who have accumulated certain capital in the Soviet Times.

Today there are a few people in this country, who have made a fortune and gained business

experience from their communication with the consumers.

- Have we got rid of the Post-Soviet impact? There are a great number of samples of the countries, which have escaped these impacts, while Georgia, as you have mentioned, has only slightly declined from these influences?

- The real mechanism to unstuck the PostSoviet influences consists in competition. Competitive environment drives everything. The consumer benefits from competitive market. To ensure competitive environment, the country should possess cheap money. We have not developed the capital market. We have developed only the crediting market. If you decide to launch business, you have to apply to a commercial bank and take a high interest rate loan.

- Have the Authorities corrected attitude to the business sector if we compare the current and previous ruling parties?

The current government shows more efficient approaches. They follow more right-wing policy in relation to the business sector.

- Why do they make accents on the major business compared to the small business, while the very small business drives the whole business sector?

- This is the field of vision. I believe the small and medium business is the foundation of any developed country, where small and medium business sectors produce about 70% of GDP. Small and medium business sector employ citizens more reasonably.

- You have stressed a proper vision is required to launch new business. Who can define whether the new business follows proper and correct visions?

- They are conceptual leaders. They may be founders of a company, top figures in the management and marketing chains. There should be somebody with business vision. Then decisions should be taken in team. The team should de-

velop these visions. The technology that we offer in the working process calls for working in team jointly with the company staff. The branding also embraces the HR direction and this signifies all employees realize and understand the direction and strategy that the company follows.

- As to companies operating in the gastronomy field, how the branding has been developed in the segment?

- The gastronomy field is of crucial importance for the whole economy. This is the interconnection of the domestic population with tourists. The situation in this field largely determines very many significant parameters. Currently we have only several cases when facility valuably treats this issue from the position of consumers and cares for the branding, but even the smallest facility should have determined answer to several important questions. First, who is its consumer, for whom has it opened? Second, what does it offer to the consumer? Something different and interesting should be offered so as the consumer prefer a specific product. Third, how content are the consumers with the services? And the fourth, what is their vision, what are their plans in the future, which way they will follow?

- Foreign companies that enter Georgia represent already developed brands. Would you name any Georgia-incorporated company that could be called a brand? If so, what way have they passed?

- There is one management company that manages facilities. There are several other companies that have valuably realized the branding principles. They have attained this goal through answering the questions that we have mentioned above. In Georgia businessmen start thinking after they have undertaken business activities, even when the quantity of their consumers decline.

The brand companies realize very well that the focus should be made on the consumer.

We are not accustomed to consider the consumer as the God. There are several companies in Georgia that have valuably realized this factor and they have reaped very good results. I do not agree with the assertions that Georgians do not know service.

Everything depends on conditions and environment. I do not believe that the service quality of McDonald’s that is a foreign brand differ from the service quality of New York based McDonald’s. When people operate in a proper system, they work respectively.

- The restaurant business and gastronomy field is one of the competitive directions in Georgia. If some companies have managed and created a brand, why do not other companies make the same? Are there any organizations that would care for upgrading knowledge and educational level of managers so as they develop own business companies?

- The competition genuinely exists, but this direction should be more boosted and several fac-

tors should be taken into account. The rotation indicator is very high, because many cafes open in Georgia and then they are closed in a short period. Cafes are very important for the branding of a country and a city in general.

Tbilisi cafes, for example, in the 18th -19th centuries were creating the Tbilisi brand and certain emotions.

As to education, there are certain organizations, where similar knowledge may be received, starting from the Tbilisi Etiquette School ending with Service Plus.

- How can Georgian enterpriser transform own product into a brand?

- When trying to make a product into a brand we should realize that it is easy to replace the product.

If you have decided not to follow the branding policy, finally, a product will remain an ordinary product. One café will be replaced by another nearby. This is a simple process, if your café does not offer something interesting and different, characteristic themes. The brand is a way to protect the business from competition in the future.

- What is sold - Brand or Product?

- It is important that we know difference between these two concepts. Both of them pay, but there are a great number of products that do not represent a brand, but they pay anyway. In the course of time they face problems amid mounting competition. You should have a perception what additional values make this product sellable. For example, a café offers a yummy dish and attracts many clients. And the café mangers ask us why they need rebranding? But problems arise when competitors appear.

- How developed is the wine branding in Georgia?

- There are a few companies in Georgia that try to become brand companies. The branding is very important in the winemaking field too.

- What makes one wine variety different from another?

Why should I buy Saperavi of this company and not Saperavi of another company? A major part of companies and the consumer have no answer to these questions.

A major part of the companies is hung on the Georgian wine category. The Georgian wine is a sellable category and I am one of the players – similar companies cannot do favor to the Georgian winemaking. They just exploit the sector to receive profits. The more companies add value to this field, the stronger the Georgian wine category will be.

ECONO-MIX

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CMEC GOT INTERESTED IN MAKING INVESTMENTS IN GEORGIA

hina’s biggest corporation CMEC (China Machinery Engineering Corporation) got interested in making investments in Georgia. Currently, the company’s delegation is visiting and holding meetings in Tbilisi. A meeting with the Partnership Fund already took place.

The Fund introduced its mandate, functions and priorities. According to the management of China Machinery Engineering Corporation, their interest towards the Fund is great.

MERAB JANIASHVILI Economic Analyst

GEORGIA AND AZERBAIJAN AGREE ON CARGO TRANSPORTATION SINGLE TARIFF

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zerbaijan intends to set single tariff for cargo transportation with the countries through which the Trans-Caspian transport corridor runs, Azerbaijan’s Deputy Economy Minister Sahil Babayev told reporters.

He noted that the country has already reached a preliminary agreement with Georgia on the issue.

The single tariff negotiations are also underway with Kazakhstan, Turkmenistan and Turkey, said Babayev.

BTK PROJECT IMPORTANT FOR EUROPE: TURKISH MINISTER

2015 Investment Inflows Drop 23% Year on Year

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eorgia attracted 1.351 billion USD foreign direct investments throughout 2015. According to Geostat, the national statistics service of Georgia, the 2015 indicators are 6% higher compared to the 2014 early report indicators, but 23% lower compared to the 2014 specified indicators. Georgia drew 1.758 billion USD FDI in 2014.

Major foreign direct investments in Georgia were attracted from Azerbaijan in 2015. The ratio of Azerbaijan in Georgia’s total FDI inflows marked 40%, Geostat, the national statistics service of Georgia, reports.

Azerbaijani investors have put 542 million USD in Georgia in 2015, up 50% compared to 2014. The United Kingdom (UK) ranks second with 198 million USD (15% ratio), up from 108 million USD in 2014.

The Netherlands ranks third with 111 million USD (8% ratio), down from 374 million USD of 2014.

According to the official statistics, the volume of investments in the stock capitals made up 1.004billion USD, reinvestment made up 298 million USD (22% in total FDI), while debt obligations marked 50million USD. (See Infographics) Direct investor countries in 2015: • Azerbaijan – 542 million USD • The UK – 198 million USD • The Netherlands – 111 million USD • Luxemburg – 87 million USD • Turkey – 77 million USD • China – 58 million USD • Russia – 49 million USD • International Organizations – 39 mln USD • Other Countries – 35 million USD As of economic sectors, major investment portfolio of 594 million USD was recorded in the transport and communications sector, the finance sector drew 191 million USD and the housing sector attracted 129 million USD. It is worth noting the power sector was one of the most attractive fields for making investments in 2011-2013, but in 2015 the sector failed to draw new major foreign investments.

“Investments slowdown is recorded in such fields as power sector (-52%), processing industry (-55%), the housing sector (-59%) and real estate, where 65% slowdown was recorded compared to 2014.

Investment inflows increased in such sectors as transport and communications (+27%), the finance sector (+40%), agriculture (+59%) and the health sector (+80%).

It is worth noting the new Authorities have been actively working on popularizing and developing these directions over the past 2 years”, Paata Bairakhtari, analyst for the Association of Young

Financiers and Businessmen (AYFB) noted.

The top ten companies in terms of FDI made in Georgia in 2015 are as follows: 1. BP Group; 2. JSC Georgian Healthcare Group; 3. JSC BGEO Group; 4. LLC CBD Development; 5. IDS Borjomi - Georgian branch of LLC IDS Borjomi Beverages Company 6. LLC Adjaristsqali Georgia; 7. LLC TAV Urban Georgia; 8. JSC Nenskra Hydro; 9. LLC Rustavi Azot; 10. LLC Batumi Tower; At the same time, the 2015 FDI inflows are lower compared to 2014 indicators, but are much higher compared to the previous years. Over the past 10 years higher annual FDI inflows was recorded in 2007 (2 billion USD), 2008 (1.56 billion USD) and 2014 (1.75 billion USD). ”Despite global shocks, Georgia’s FDI indi-

cators in 2015 are one of the best ones over the past 7 years and the figure comes behind only 2014 indicators. It is the third year the FDI cash inflows exceed 2 billion USD. Active phase of covering foreign debts and liabilities taken in 2008-2012 started in 2013. The volume of the FDI cash inflows is a parameter to measure the government’s performance for the 3 years in terms of attracted investments. The situation is the following: in 2013-2015 the FDI cash inflows marked 7.594 billion USD, up 75% compared to 2010-2012 and up 40% compared to the 4-year period of 2009-2012”, Mikheil Dundua, member of the 2030 society noted.

As to the specified indicator of the 2015 FDI, the final report will be published on August 15, 2016. Based on the fact the 2014 specified indicators were much higher compared to the early report, we should expect that the 2015 final FDI inflow indicators will considerably exceed the early indicators of 1.3 billion USD.

Direct investor countries in 2015

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he project for constructing the BakuTbilisi-Kars (BTK) railway is of great importance in cargo transportation not only for Azerbaijan, Georgia and Turkey, but for the whole Europe, Turkish Minister of Transport, Maritime and Communication, Binali Yildirim, said. He noted that after being commissioned in 2016, the BTK railway will transport cargo and the passenger transportation will begin later.

GEORGIA REAPS THE BENEFITS OF $20 MILLION USD

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ccording to the data provided by National Wine Agency, in the first two month of 2016 Georgia exported 4,531,556 bottles of wine to 21 countries, which generated $10.75 million USD income for Georgia. Wine exports and brandy to markets all over the world increased the total revenues significantly in Georgia and overall export revenues for the reporting period amounted to 20 million US dollars.

GEORGIA RANKED 29 AMONG CHEAPEST COUNTRIES TO LIVE

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eorgia has been named among the 50 cheapest countries to live by famous website TIME.com. According to writer people need to live in these countries after retirement to enjoy more with less money. As the article says to find the cheapest countries to live in, GoBankingRates ranked nations by four key affordability metrics provided by online pricing database Numbeo and lists four components.

NBG MAINTAINS MONETARY POLICY RATE UNCHANGED AT 8.0%

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he Monetary Policy Committee (MPC) of the National Bank of Georgia (NBG) met on March 09, 2016 and decided to keep the refinancing rate unchanged at 8.0 percent.

The monetary policy decision is based on the macroeconomic forecast, according to which the tightening of the monetary policy will be reflected positively on the gradual decrease in inflation expectations.

COMMERCIAL BANKS BUY 25 MLN GEL SECURITIES AT T-BILL AUCTION

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ecurities worth 25 million GEL with a two-year maturity period were sold at the Finance Ministry T-bill auction, National Bank of Georgia reveals. Five commercial banks have taken part in the auction. Their initial demand marked 55 050 000 GEL. The bottom interest rate amounted to 6.670%, while the top interest rate marked 7.250% and the averaged weighed interest rate made up 7.124%.

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BUSINESS ANAKLIA SEAPORT PROJECT WINS THE YEAR’S STRATEGIC PROJECT AWARD IN WASHINGTON

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ccording to the information spread by the Voice of America, the Anaklia Seaport project has won an award as the Year’s Strategic Project at the Global Infrastructure Leadership Forum in Washington, D.C. Anaklia Development Consortium won the tender for Anaklia Deepwater Seaport Construction and Operation on February 8. The consortium was jointly founded by TBC Holding and Conti International US company.

PRICE OF MUSHROOM DECLINES 3.5 TIMES IN GEORGIA

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he price of mushroom gets 3,5 times cheaper than it was in previous years.

“The mushroom needs to take care as a newborn; even the air coming inside the greenhouse might significantly damage them”. This is sufficient for the mushroom to get dry. That is why greenhouses are built in a way the air flows to pass through from the top and not directly to attack them.

WORLDWIDE MILK PRICE IS ONE OF THE MOST EXPENSIVE IN GEORGIA

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orldwide the price of milk is one of the most expensive in Georgia. This information was stated at “Radio Palitra” by Catherine Poberezhna, who is the representative of Food and Agricultural Organization of the United Nations. According to her, there is a shortage of raw milk in Georgia, due to this the local market demand is not satisfied.

INVESTOR TO BUILD 26-SUITE HOTEL AT SHAORI LAKE

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eoTechInvest company plans to build a hotel with 26 suites near the Shaori Lake. The construction works will start in May 2016 and end in October 2016. The hotel will be located nearby the lake Shaori. Currently, no hotel operates around the lake Shaori.

UPSCALE HOTEL CROWNE PLAZA OPENS IN BORJOMI

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ne of the world largest hotel companies, InterContinental Hotels Group has entered in Borjomi with its famous brand – Crowne Plaza. Five-star hotel “Crowne Plaza Borjomi” has been officially opened.

32 million US dollars have been invested in the hotel construction, it employs 250 people of which over 150 were local residents. The hotel management involved 150 people.

NEW WINE FESTIVAL 2016 WILL BE HELD AT MTATSMINDA PARK

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ew Wine Festival 2016 will take place at Mtatsminda Park, on May 13-14 of this year. The new location was selected by Georgian Wine Club because of the enormous number of participants.

On the first day of festival, on May 13, Closed degustation will take place. The subject of the first day will concern pitcher wines from abroad.

Accordingly, there will be presented unique pitcher wines from France, Italy, Slovenia, Germany and Austria.

EU SUPPORTS FIRST BEEKEEPING COOPERATIVES’ FORUM IN GEORGIA

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he EU-funded Programme for Agriculture and Rural Development, ENPARD, is organising the first Apiculture (beekeeping) Cooperatives’ Forum in Tbilisi, Georgia.

As a coordination platform for apiculture cooperatives and various stakeholders, the forum will provide space for a discussion of solutions to the current challenges in the apiculture sector, the country’s current and planned state programmes and initiatives supporting it as well as relevant legislation.

Why Foreign Investors Avoid Making Portfolio Investments in Georgia Investment inflows to a country depend on many interconnected factors, including political stability, conflict region, quickly growing and progressive economic indicators, property protection guarantees and one of the most important factors – valuable financial markets with alternative and diversified sources of drawing capital.

Portfolio Investments Portfolio investments encompass a set of external demands and liabilities in securities of own and borrowed capital. The volume of a portfolio investment does not exceed 10% in a company’s authorized capital and consequently, it does not entitle the investor to manage the company, but it embraces a number of advantages too for both its issuer and its owner.

The nature of the portfolio investment implies that an investor is trying to create a portfolio of securities of various successful and quicklygrowing companies and to receive maximal profits through efficient management.

Similar investments are quite unpopular in Georgia and the international investment positions prove this consideration, where, according to the three quarters of 2015, portfolio investments account for 17% in total foreign direct investments that mainly represent investments in bank-issued securities that have more or less liquidity in Georgia.

To raise the investor’s interest in making portfolio investments in Georgia, i.e. one of the transparent and uncorrupted way of making in-

vestments, it is necessary, first of all, to strengthen the liquidity of the securities in the turnover. This is not a one-time process and it is directly related to growth in capitalization of an enterprise or a company and this is achieved through resolving a number of problems in the state economy. In this case we will make focus on one of the most important components – reasons of undeveloped stock exchange:

Georgian Stock Exchange Today the lack of portfolio investments is mostly preconditioned by the current situation around the Georgian stock exchange (GSE).

In the contemporary world, stock exchanges drive the economies of developed countries. For example, the capitalization of the companies admitted to the Hong Kong stock exchange accounts for 420% of the GDP, the figure makes up 115% in the USA, 160% in Switzerland, 143% in Singapore and so on. Meanwhile, the figure constitutes only 3% in Georgia.

The volume of deals on the Georgian Stock Exchange (GSE) was growing before 2008, but in the following period the GSE development paces dropped as a result of amendments to the Law on Securities, because exchange deals moved into off-exchange format and 95% of the deals turned out in opaque environment. As a result, corruption risks increased and, on the other hand, the strong bank sector took control on the whole infrastructure of the competitor securities market.

Artificial obstacles are aggravated by a lack of joint stock companies in Georgia.

As of March 1, 2016 the trading system of the stock exchanges enlists securities of 128 companies and its total market capitalization marks 0.653 bln USD, while the daily turnover amounted to 35.20 GEL. This is a very small and miserly sum.

The culture of trades in securities is also very low in Georgia. Both business companies and ordinary citizens prefer to save money as bank deposits than to make investments in securities.

This is an erroneous approach and this approach cannot ensure public welfare. It is very difficult to persuade companies to take part in the operations, when the country lacks for due legislative environment and the economic situation is also very fragile. It is also difficult to persuade foreign investors to make portfolio investments, because diversified and profitable portfolios on the market are created through securities issued by various issuers, not to say about the bank sector that controls 93% of the total finance sector and does not enable competitive fields to develop. It is worth noting that the Authorities are able to play a crucial role in regulating these processes through proper legislative regulations, increasing financial knowledge in the population, introducing tax preferences to companies, for example, through exemption of reinvested profits from taxation, placing securities issued by major state-owned companies at the Georgian Stock Exchange (GSE) that will prevent capital outflows from the country and will drive the domestic economy development.

VISA LIBERALIZATION March 14, 2016 #137

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‘THIS IS A GREAT SUCCESS OF OUR COUNTRY AND NATION’

T EU OFFERS VISA-FREE TRAVEL FOR GEORGIA

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he European Commission Submits Bill on Introduction of Visa-Free Regime with Georgia.

The European Commission has officially submitted a bill on making amendments to regulation 539/2001 to the European Parliament and the Council of European Union. The European Commission came up with a legislative initiative concerning introduction of visa-free re-

gime. This is a major step forward and a great success for our country and people. The bill calls for introducing short-term visa-free regime for Georgian citizens within the Schengen Space, after completion of the respective procedures.

Georgia has successfully fulfilled the visa liberalization action plan and the country satisfies all criteria to remove the visa regime for Georgian citizens, the document reads.

his is the result of endeavors and labor of our executive and legislative authorities; this is the result of the support of our citizens, – Prime Minister declared while commenting the initiative of European Commission regarding introduction of visa free regime for citizens of Georgia.

The Prime Minister thanked the European Commission, country’s friends and partners for support and fruitful cooperation. He also expressed the hope that the process will be carried out expeditiously and the visa-free regime will be launched in a few months.

The European Commission came up with a legislative initiative concerning introduction of visa-free regime. This is a major step forward and a great success for our country and people.

“I want to thank our friends, our partners, to all those who contributed to this important process in such a positive manner. This initiative will be followed by a discussion in both the Council and the European Parliament,” PM said.

EU COMMISSIONER SPEAKS ON PROPOSAL TO LIFT VISAS FOR GEORGIA

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t may take about “three or four months” before the European Parliament and the EU member states decide on the European Commission’s proposalto lift visa requirement for Georgian citizens, EU Commissioner for Migration and Home Affairs, Dimitris Avramopoulos, said.

The European Commission put forth a legislative proposal to allow visa-free travel to the Schengen area for Georgian citizens on March 9.

Before it can go into force, the proposal has to be approved by the European Parliament and the Council of European Union, a body representing the executive governments of the EU member states.

Speaking at a news conference in Brussels, Commissioner Avramopoulos expressed hope that the European Parliament and Council of the EU will adopt the proposal “soon.”

Asked when the process is expected to be finalized, Avramopoulos said: “Hopefully everything will be ready in the beginning of the summer.”

He said that “it takes approximately three or four months” for the European Parliament and the Council of the EU to decide.

“We’ve just launched the procedure and I believe that within this timeline we shall be ready,” Avramopoulos added.

He also said that announcement on putting

forth the legislative proposal “is not a surprise as we already gave our positive assessment in Decemberwhen we confirmed that Georgia met all the benchmarks under the visa liberalisation action plan.”

“We are able to take this step thanks to the real strong efforts made by the government of Georgia to arrive at this point,” the Commissioner said.

“Visa free travel will further facilitate people-to-people contacts and strengthen business, social and cultural ties between the European Union and Georgia – it is an important achievement for the citizens of Georgia,” he said.

Welcoming the announcement by the European Commission, Georgia’s Foreign Minister Mikheil Janelidze said he hopes the legislative proposal will be adopted by the European Parliament and the EU member states “very soon.”

Like in respect of Georgia, the European Commission said in December that it was going to put forth a similar legislative proposal for Ukraine in early 2016, but it appears to be delaying.

Asked about Ukraine, Commissioner Avramopoulos responded: “Ukraine is working very hard on all these issues in order to meet all the benchmarks. We [are] still working in a positive way in order to put also Ukraine in the list [of countries eligible to visa waiver in the Schengen area] within next months.”

He also said that Ukraine is committed to meet all the criteria and “it is a question of some time to fulfill all these benchmarks.”

After approval from the European Parliament and Council of the EU, Georgian citizens, holding biometric passports, will be able to enter the Schengen area without visa more than one time during 90 days in any 180-day period.

According to the Justice Ministry’s Public Service Development Agency about 776,000 Georgian citizens held biometric passports as of end-2015.

The visa-free regime will apply to travels to all EU-member states, except for the United Kingdom and Ireland.

The visa exemption will apply the following EU-members, which are part of the Schengen area: Portugal, Spain, France, Germany, Belgium, Luxembourg, Netherlands, Italy, Denmark, Sweden, Finland, Austria, Greece, Poland, Slovakia, Slovenia, Hungary, the Czech Republic, Latvia, Lithuania, Estonia and Malta.

It will also apply to those EU-member states, which are not yet part of the Schengen zone: Cyprus, Croatia, Romania and Bulgaria, as well as to following non-EU member states: Iceland, Liechtenstein, Norway and Switzerland. civil.ge

Georgia’s PM Giorgi Kvirikashvili tweeted:

European Commissioner for Neighbourhood Policy Johannes Hahn said in series of tweets:

8 COMPANY NEWS THE FIRST PROVINCIAL RESTAURANT LAUNCHED IN TBILISI

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he American businessman John H Wurdeman had strong wish to open up his own restaurant. Finally, his wish came true and he launched the first provincial restaurant in Tbilisi with his Georgian partner Luarsab Togonidze.

The name of the restaurant is “Pilpili”.

UKRAINIAN AIRLINE TO RESUME FLIGHTS TO BATUMI IN MAY

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niproavia airline will resume flights from Ukraine to Batumi, the Ajara Region, in summer period.

The airline will resume flights from Dnepropetrovsk and Odesssa to the Ajara Region, the Ajara Tourism Department reports. Dnepropetrovsk-Batumi regular flights will be fulfilled once a week starting May 1, while two weekly frequencies will be added in the summer period.

LIBERTY BANK INTRODUCES SPRING CAMPAIGN ON PAWN LOANS

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iberty Bank has announced the inauguration of a spring campaign. Namely, the bank enables clients to take a pawn loan under preferential conditions. The grace period will run up to April 1. The borrower is exempted from the commission fee in the first month. The loan approval commission fee also makes up 0%.

FIRST GEORGIAN QVEVRI-WHISKEY TO BE LAUNCHED UNDER THE NAME “PROLOGUE”

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eorgian whiskey made in qvevri (a pitcher) will be released to the local market in the near future. According to Alexander Kvernadze, Director of the whiskey producer “Alexander Distillery”, the company interested in distillation of the whiskey in qvevri two years ago.

SOCAR GIVES CHANCE TO THE CUSTOMERS TO ATTEND EURO-2016

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OCAR Georgia Petroleum” gives chance to the customers to attend Euro-2016.

The company started a drawing – the customers, who acquire fuel in the chain of SOCAR have a chance to go to Paris and attend opening and final games of European Championship 2016.

AIR ARABIA TO PERFORM FLIGHTS FROM BATUMI

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fter Tbilisi, Air Arabia airline plans to perform flights from Batumi International Airport too.

Air Arabia will perform flights to Sharjah from Batumi, GASA, the airline’s general commercial agent in Georgia, noted. According to preliminary information, Air Arabia will perform Batumi-Sharjah flights three times a week, starting July 2.

ENERGO-PRO GEORGIA WILL INCREASE EMPLOYEE’S NUMBER IN THE CALL CENTRE

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new software program was introduced in the call centre of Energo-pro Georgia in order to improve customer service and increase efficiency. According to the company, the program is fully customized with company’s business processes, it will make more efficient processing of incoming calls and responses.

SILK ROAD BANK RESUMED NEGOTIATIONS WITH THE INVESTORS

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ilk Road Bank should decided jointly with new partner whether the bank will return to the universal model or remain at the corporate market. According to the bank, negotiations are held with three different investors by this time and bank’s future strategy should be determined after the signing of investment agreement.

INFOGRAPHICS caucasus business week

Why Should More Women be Employed?

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March 14, 2016 #137

Organization: JumpStart Georgia Reporter: Nino Macharashvili (JumpStart Georgia) Designer: Mariam Kobuladze (JumpStart Georgia)

n Georgia, women’s economic activity is 20% lower than that of men’s. Studies show that women’s economic empowerment is directly linked to economic growth, business success, and increased investment in children’s health and education. Unfortunately, there are no programs in Georgia that support women’s economic empowerment.

In collaboration with UNDP Georgia, JumpStart studied and visualized why more women should be employed in Georgia.

START-UP March 14, 2016 #137

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MADI Handmade Knitwear There are many advantages to buying handmade clothing over ready-made.

First is the “uniqueness factor”. Most likely the outfit you purchase will be one of a kind and stand out from what others are wearing. Handmade knitwear designer Mariam Gogua creates garment with her mother Diana Dvalishvili. She gives us an overview of her activities.

- Tell us about MADI handmade knitwear, your handmade clothing business.

- MADI handmade knitwear is hand knitted clothing brand, which was established in January 2015 and it soon gained popularity and recognition from society.

Our production includes hand knitted cardigans, on which I (Mary Gogua) work jointly with my mother (Diana Dvalishvili).

We do our best to create comfortable and must-have garment for women which will be available to everybody.

- How long you are into this business?

- I am in this business since January 2015.

- What inspired you to start up your own business? Who was the author of this idea?

- I was the first who approached and generated such idea. It started from that day when my mother knitted the cardigan for me and it gained popularity among my friends and relatives. Everybody liked my cardigan very much. As a result, without much thinking I have decided to create a facebook page and our success started from that moment.

- As I guess you are mainly busy with the creation of knitted cardigans. What else do you offer your customers?

- We also offer our clients other types of knitted clothes besides the cardigans; for instance, dresses, tops, and thin blazers. One month ago we created a new brand Madi Jeans, which includes hand-painted jeans, shirts and jackets.

- What is your education? Is this your specialization or just a hoppy?

- I graduated in Business Administration in this year. Although I did not have any experience in the field of clothing design I anyway feel very comfortable and familiar in this area.

- How was your brand name selected?

- The brand was named by combining the first two letters of the names of me (Mariam) and my mother (Diana).

- What about public’s interest towards your production?

- Since creation of the Facebook page the interest increased meaningfully towards our production. We even did not expect such reaction from society. A lot of people were ordering; thus demand on our brand grew and it still keeps growing. As a result, we try to increase the loyalty of customers and we do our best to offer them high quality at lower price.

- What is the main target market of your business?

- Our products are designed for women at age 18 – 50.

- Mostly you take orders or you create garment on your desire?

First of all we design our own clothes by using our inspiration and after that we receive orders based on these models.

- Who are in your team?

- At the beginning only me and my mother were in the team, however after the demand increase we needed to add few knitters more in our team.

- Where is it possible to purchase your production?

- The customers are able either buy or order our garment through the Facebook page of “MADI handmade knitwear”, also they may contact us via Viber/Watsupp.

- How is the price determined?

- Prices are determined according to the quality and quantity of textile and complexity of the work as well.

- How much time does it take the creation process of the ordered item?

- We need approximately 10 days in order to finish up an order.

- What are your plans for the future?

- In future I have a big desire to open up my own store, where the customers will be

able to purchase not only our products but also knitting yarns, textile, and other accessories.

- Finally, what is the maximum you would like to achieve in your business?

- I wished our creations, Georgian product to go beyond the borders of Georgia and acquire popularity on International market. In order to achieve this goal I will do all my best.

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OTHER SIDE OF BUSINESS caucasus business week

March 14, 2016 #137

IRAKLI IASHVILI I REFUSED TO PURSUE COMMUNIST PARTY CAREER AND DECIDED TO DO BUSINESS Head of the supervisory board of East Gate Group shipping company and founder of Vaziani winemaking company

I AM AN ECONOMIST by profession.

I FACED NO PROBLEMS WITH FINDING A JOB PLACE. I graduated the university in Moscow. Then I arrived in Tbilisi and had business practice. In 1984 I was an engineer in the textile factory shift. In that period, a man had to either pursue a political party line or work in the production sector. I gave preference to the production sector. I did not want party career.

This was in the Soviet Period.

MY FIRST SALARY WAS ABOUT 360 RUBLES, of which 35 Rubles was a base salary and the remaining part was a bonus. The enterprise where I was working was located in the Africa settlement. Therefore, I had to fully spend my earnings on the transport.

I HAVE BEEN IN THE BUSINESS SECTOR FROM THE VERY BEGINNING. I was in business even in the Soviet Period. Having graduated from a university, I launched business activities in Russia and then I started political life.

I GO TO OFFICE EVERY MORNING BEFORE 09:30. I stay there by about 15 o’clock and then I go to gym complex.

HAVING GOT TO THE JOB PLACE, I first receive information about developments in the country, in the company. Our group unites several companies. I receive information from all companies separately. Then I work on new projects in everyday routine. I am not in the management chain. Therefore, I mainly receive information and give instructions to the staff.

WHY HAVE I CHOSEN THIS BUSINESS? Because I had to either pursue the Communist Party line or work in the production field.

I did want to become a party official and I gave preference to the business activities. I made a very simple choice. In that period a man had to be either a businessman or a party figure or artist or doctor. I preferred to be a businessman, because I had no interest in other professions.

I WOULD NEVER WORK IN MEDICAL INDUSTRY. I have frequently heard from businesspersons that they would never work in the commerce sector. This is a lie, despite their assertions. Everybody has started from commerce. In early 1990s, everybody who has made a fortune today started business with exports and imports, by commerce. After the Soviet Union collapse and after the so-called

Perestroika, everybody was engaged in the mentioned activities. At the next stage, some to them went to the production sector, some of them continued activities in the commerce sector, some of them went to the finance sector and so on. All of them have started with commerce, including me.

THERE ARE SEVERAL MAIN THINGS IN THIS LIFE. Career occupies its own place, and personal life has its own place.

There are various directions that are important in this life and I would not emphasize any of them.

I DO NOT THINK PEOPLE SHOULD BE READY TO DO ANYTHING FOR CAREER PROMOTION. I withdrew from the politics because I could not do anything. The New Rights political party failed because we could not do anything for success. If we could, we would be in the Authorities today.

proaches and educated people. This is difficult without the mentioned skills, but if you know what to do, then it is easy. Despite the age, the space is empty.

I HAVE TO FREQUENTLY TRAVEL. Anyway, I am interconnected with my homeland, despite disordered situation. I cannot stay in foreign countries for more than 1 week.

I WOULD NOT EMPHASIZE ANY FAVORITE DISH. I like French cuisine in France, Italian cuisine in Italy and Georgian cuisine in Georgia and so on. I like Asian cuisine very much. I like gastronomy very much.

FAVORITE SPORTS – I have been following two sport directions for 40 years – skiing and horse riding. I am devoted to these sports.

I APPRECIATE SEVERAL SUCCESSFUL ATHLETES IN SKIING, including French, Swedish athletes.

IT IS NOT DIFFICULT TO ACHIEVE CAREER PROMOTION and success in Georgia today. Everything depends on us, knowledge, experience, skills, the public space is absolutely empty. The space is free for new ideas, new ap-

NUMISMATIC TREASURY EXHIBITION OPENS WITH SUPPORT OF LIBERTY BANK

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he Numismatic Treasury standing exhibition was unveiled at Simon Janashia Museum of Georgia at 19 o’clock on March 9. The event was organized with the support of Liberty Bank.

The exhibition was unveiled by David Lortkipanidze, director general of the Georgian National Museum, Mikheil Giorgadze, Minister of Culture and Monuments Protection of Georgia, Education Minister Tamar Sanikidze and Liberty Bank financial director David Melikidze.

The Numismatic Treasury exhibition enables visitors to receive information about the money currency on the territory of Georgia from VI century BC up to 1834 AC. The exhibition was unveiled by introduction of pre-monetary things with bronze massive rings of various sizes and weights (II-I millennia BC), kauri (shellfish shell spread in the India Ocean) and various tools that were applied in the ancient times for calculating the cattle price.

Rare samples of the Kolkh Tetri, stater of Kolkh King Aki, domestic copies of staters of Alexander the Great and Lysimachus, dinars of the Rome’s first Emperor Octavian and Iberian imitations of roman emperor aureus were also exposed.

Rare Georgia-Sassanid dramas, Tiflis Dirham of the Japarians, the Bagrations’ silver subjects with Byzantine Titles, David Aghmashenebeli’s silver coin, unique Drachma of Queen Rusudan, unique copper coin of Giorgi IV, coins of Kvarkvare Atabagi, Kings of Imereti and Kartl-Kakheti were also exposed at the event.

The coins with 27century history discovered on the territory of Georgia precisely reflect the cultural, political and economic situation of that times and this is an important historical source for our state.

Naturally, JSC Liberty Bank is always ready to take part in any event related to the cultural heritage of Georgia”, Liberty Bank financial director David Melikidze said.

The numismatics chamber was first opened at the Svaneti Museum under the aegis of the Georgian National Museum. Such a major exposition of all samples was organized for the first time.

HEALTHCARE March 14, 2016 #137

caucasus business week

Nino Subeliani: PPP Benefits are Especially Revealed in Healthcare System in Various Countries

Healthcare has become one of the most vital components for Georgian society, Government is actively implementing several reforms to improve and develop the system.

Georgia is about to implement “one of the biggest projects” in the healthcare sector that will see the cost of medicines reduced by 30 percent. The project also envisaged a complete overhaul of three of the country’s hospitals and the pharmaceutical industry to ensure it meets top European standards.

Georgia’s state-owned shareholding company, the Partnership Fund (PF), and the country’s Ministry of Labour, Health and Social Affairs discussed future plans with AlphaMedic, an Austrian consortium, to turn this project into reality.

Nino Subeliani a healthcare communications consultant answered to our questions in this regard.

- Nino, what is the informational environment in the healthcare system now in Georgia?

- Situation has drastically changed now if we compare 2014-2015 to the previous years. Activities in the healthcare system are rapidly intensifying in positive way, based on what I see, but there is also much interest to get more and more information about the healthcare projects. Publicity of healthcare projects is high, but the finding is the following: there is a lack of knowledge in some directions and, seemingly, some projects need not only PR, but also educational campaigns before launching. In this case the communication process will bring its positive outcome.

- Which directions would you emphasize for educational campaigns?

- I would say, all directions are required, but the PPP model is of crucial importance, especially in the healthcare sector – this model has become a topic of discussions in the light of cooperation between AlphaMedic Consortium and the Partnership Fund. I monitor all the information in media related to this topic and the findings are that the model should be explained to different groups – doctors, business sector, media, and even to ordinary citizens, because the PPP model is beneficial for the whole society, each citizen. If you ask 10 persons in the street – what is the PPP, answers will be different and 90% of them will be wrong, but the problem is that answers might be wrong even if you ask employees of different industries, as well. It’s more important to make focus on the media that delivers information to the general public. PPP – as the Public Private Partnership format, is not something new even for Georgia and if we speak about this model, we should analyze its benefits on a local and international level – and the government and private sector should provide good and valuable informational campaigns in this respect.

- What about your experience in PPP? Not big, but during years I have worked in a German concern – cement business that is international company operating in more than 40 countries, thus, more or less I have sufficient experience to know the best practices of business models on an international level, including the so-called PPP. I have personally participated in the Public Private Partner-

ship project for “promotion and protection of biodiversity at quarries” and I can analyze this model as the best one to avoid any financial or on time delivery risks, because the private sector bears significant risks and management responsibility, and remuneration is related to performance.

- Have you examined the international practice of PPP projects?

- I would say – yes, but process still continues. I plan to attend the international healthcare PPP summit in Istanbul in April for a knowledge sharing that will be important for the proper communication process in Georgia. As to the worldwide practice: Like in environment protection, that I mentioned, PPP is well practiced in different directions such as infrastructure, education, and healthcare.

In PPP benefits I would emphasize – Long-term value-for-money created through appropriate risk sharing throughout the whole life of the project and benefit for the public that is especially revealed in healthcare system in various countries like Great Britain– that is a leading country in this direction. In the developed countries, PPPs are used to develop and maintain healthcare infrastructure, mostly leaving service provision in the public domain.

This mechanism, also known as a “private finance initiative” (PFI), introduces predictability into government payments for creating and operating healthcare facilities as a result of bundling the design, construction and maintenance of the facility into the same contract. Doing this incentivizes the private operator in ways that can lead to better quality and more efficient hospital design, management and maintenance.

As healthcare is directly related to wellbeing of each person in population, information on any healthcare program and its business models, should be delivered in affective way to the public and why: that is something that significantly changes our lives!

- According your desk research, what is the statistics of the PPP projects in healthcare of the developed countries?

- The leaders in PPP projects

in healthcare are Great Britain, Canada, France, Germany and the USA that have developed more than 1000 projects under the PPP model especially in healthcare. This is the signal that we should go on this way!

This is the signal that we should trust this model.

- Finally, once you are concentrated on healthcare communications, what are your future plans? Seems healthcare became the most interesting direction for you.

- True! Healthcare is in my mind because of many reasons: I am from doctor’s family, so I always was interested in this sphere – from my childhood.

Once I am communication consultant that I like very much it’s interesting to merge these 2 interests in my career. Other point of my enthusiasm is my social responsibility – it’s clear – healthcare is important for any citizen – and it’s clear – each person should know what is going on in this direction. When I visited one of the biggest hospital in Istanbul because of the personal reasons, I dreamed to have the same in Georgia… By the way – hospitals development is rather related to medical tourism that is important for country and my personal objective is to support these important healthcare projects.

Moreover, concentration on communication process is important for industry that needs international relationships to be well organized.

I personally trust international standards and would like to follow experience of the developed countries.

About future plans: healthcare is a specific direction, and the international experience shows that communication process in this field has more effect if there is an independent competence center that works only for healthcare programs.

It might happen in the nearest future that I create a special company. I think this is realistic plan from my side, based on my previous or current work experience and local and international contacts. Industry really needs a competent group that will be focused only on healthcare. I already have negotiations on partnership with local and international associations and international healthcare PR companies that will help me make steps forward.

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New Pharmaceutical Plant will Drive Lowering Medication Prices In his interview with the Business Contact TV program the Partnership Fund chairman DAVID SAGANELIDZE stressed the importance of Humanity Georgia’s efforts to lower medication prices in Georgia.

As reported, this pharmaceutical company has recently appeared in the Georgian market and introduced medications at 30% lower prices. Skeptic people and opposition political parties will always pose the questions that currently circulate in relation to the recently appeared company, because they ignore the outcomes and results that are widely recognized everywhere today and they are trying to somehow escape this reality, David Saganelidze said.

Import of mediations was an additional phase of the project that calls for constructing a pharmaceutical plant in Georgia. The construction works will start in the near future, he added.

“The pharmaceutical plant will start operation by 2018 and the basic affect will be reflected on the market after plant inauguration, because medication prices will be further lowered. Not to lose these two years in vain, Humanity Georgia has started medication imports to Georgia and this decision have lowered drug prices by 30%. As to long-term perspectives, the pharmaceutical plant operation will further lower prices”, David Saganelidze noted.

Partnership between State and Private Sectors Boosts Healthcare Development The Georgian Authorities plan to carry out management of three hospitals in Tbilisi as part of the partnership model between the state and private sectors.

Economic expert LEVAN KALANDADZE overviewed the issue.

This is a conceptually new vision and approach in the Georgian health management, on which the Georgian Health system, especially, the hospital sector development strategy will be based. I mean the PPP model, i.e. the model of partnership between the private and state sectors. This model does not have an alternative, in practice, in terms of current challenges. Investments and involvement promotes the private sector and develops the field. This model enables to maximally meet the public and state interests and implement the components of this policy in terms of hospital sector development.

The western experience in terms of PPP model application proves that currently the Georgian Authorities have valuably and efficiently determined all priorities from the conceptual point of view. Maximal involvement of public and state interests, on the one hand, and the private sector’s co-participation, on the other hand, along with a high degree of self-control provides excellent opportunity for valuable development of the field.

We will receive the so-called cost-efficient model that will guarantee high-quality services for comparatively lower prices. I think the state-announced startups in the form of the mentioned three clinics will be the first step for the state involvement and drawing the private sector’s interest in this field. I believe we follow the proper way. Anything else depends on efficient operation of the Health Ministry and the Government’s economic team, in general.

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REAL ESTATE March 14, 2016 #137

caucasus business week

Overview of Real Estate Market in 2015 LEAH RUSIA BESELIDZE a director of Consultancy Services at Cushman & Wakefield | Veritas Brown in her interview with CBW had overviewed the real estate market in 2015 and talked about retail and development trends in Georgia.

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aking into consideration the lack of official statistics and detailed info published by the official authorities, we usually assess the market based on the current trends of sales/leasing provided by our in-house brokerage team as well as generally on the market. According to NAPR the number of property transactions registered in 2015 has increased by 5.2% year-on-year. The breakdown of primary and secondary registrations being 19% and 81%. These figures however do not differentiate the type of property, whether it’s residential, commercial or industrial.

As we have been reporting in our quarterly publications of Market Snapshots (Marketbeats), the commercial property transactions and investments during 2015 have been limited to the acquisition of the former

“Tbilisi Univermaghi” building on Freedom Square by the Georgian Coinvestment Fund in Q2. The deal ensures total investment of $70m in the reconstruction of the 22,000 m2 shopping center, which has been on hold for years. This showed that the only parties still active in the retail development market in Tbilisi are local investment funds and developers. There were some more proposed deals in the pipeline, but the negotiation period took longer and none of these were finalised by the year-end. Office market showed restrained activity throughout 2015 as investors remain apprehensive about the risks for currency and economic stability. Although the chances of a wider market recovery remain hindered by both the lack of available credit and investment stock being overpriced, demand for well-let, prime

office assets was evident through Q4, 2015 and several deals that are currently on the negotiation stage should materialize in 2016.

As for the rental market from the occupier’s point of view (both retail and office), the overall tone is one of caution, with occupiers and developers still wary due to the decline in consumer confidence, which occurred throughout 2015. Meanwhile, landlords maintained realistic rental expectations and a flexible stance during lease negotiations in Q4 2015, with tenant retention and attraction being key priorities. This took into consideration tenants’ continued cost sensitivity, the stiff competition for qualifying tenants. Occupier demand for Offices has largely held firm over the past year, and, as 2015 came to a close, conditions were unchanged. Tenants remain focused on modern, efficient and flexible office spaces, usually at the expense of older office buildings or those in secondary locations. These areas have been affected by falling demand and prime rents, and as a result occupiers can often negotiate good incentives before agreeing a lease. Take-

up in Q4 was largely characterized by small local companies relocating to newly-built business centers. There were a few significant deals including AVON cosmetics leasing 250 m2 in Grato, BDO Georgia relocating to Tarkhnishvili Business Center in December, and Pixel renting out 150 m2 to Ericsson.

On the supply side, the retail market has seen the biggest increase in 2015 with the opening of one major retail development, East Point Mall, corresponding to 72,000 m2 of new modern quality space added to the capital’s retail offering. With this new all time high stock flooding the market, average occupancy levels of retail centers has increased significantly, notwithstanding a relatively successful pre-leasing of the East Point. The supply levels for offices were largely unchanged with less new developments, caused mostly by delays in construction. However with nearly 25,000 m2 of office supply due to be delivered in 2016, vacancy levels are expected to increase, despite again the active pre-leasing activities.

Georgia’s real estate market

wrapped up 2015 on a muted note.

Notwithstanding the traditional yearend holiday boom period for the commercial and residential properties the market sentiment was dented by local currency instability, rising interest rates and overall the regional macroeconomic uncertainties.

The high interest rates on credits from commercial banks and the overpriced investment stock has also been hindering the investments in commercial real estate. However increased activity was noticed in hotel sector in Tbilisi and throughout the country, supported by the government’s and the governmental agencies’ newly developed programs. CW|VB has conduced numerous feasibility and Highest and Best Use studies for both local and international investors searching for opportunities on the hospitality market of the country, most of these showcased the positive IRR outcomes and were recommended for further development. A shift of investor interest from office and retail property sector, towards hotel and hospitality industry is expected to be continued in 2016.

ANZOR ERKOMAISHVILI TRANSMITS GEORGIAN FOLKSONG MUSIC SHEET COLLECTION AND GEORGIAN CHOIRMASTERS’ MONOGRAPHS TO FOLKLORE STATE CENTER

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he International Center of Georgian Folk Song and the Folklore State Center of Georgia have signed a memorandum on cooperation with the aim to promote the choirmasters’ schools of the Folklore State Center, enhance bilateral cooperation, take efforts for preserving and developing folklore traditions in the regions of Georgia.

At the first stage, Anzor Erkomaishvili handed over Georgian folksongs music sheet collection and Georgian choirmasters’ monographs to the choirmasters’ schools in the Samegrelo and Guria regions.

Giorgi Donadze, executive director of the Folklore State Center, other representatives of the center and invited choirmasters from the choirmasters’ schools have also attended the meeting.

It is of vital importance to save and preserve Georgian songs and traditional chants, Giorgi Donadze, executive director of the Folklore State Center, noted. Based on this unique material, the choirmasters’ schools that have been unveiled in 15 regions enable young people to get closer acquaintance with our ancestors, choirmasters and songs of the people who are not alive, regretfully.

It is also important that under the memorandum the parties plan to exchange unique records and monographs that are preserved at the holdings.

“It is of vital importance to save and preserve Georgian songs and traditional chants in the regions of Georgia. To this end we have under-

taken a project that calls for opening choirmasters’ schools in the regions. The Folklore State Center cares for upgrading the professional level of young choirmasters. Similar support is very important to encourage them. The International Center of Georgian Folk Song permanently cares and supports us with unique editions and audio educational discs that will be handed over to the choirmasters’ schools free of charge”, Giorgi Donadze said.

Thanks to the Folklore State Center, anybody is able to learn ancient Georgian songs and traditional chants.

Gifted young people, after graduation from the choirmasters’ schools, are able to continue free of charge studies at Giorgi Mtatsmindeli Higher School for Church Chants.

Having gained professional knowledge, they will return to the regions and will transmit the tradition to the new generations. Their support is very important. The International Center of Georgian Folk Song has published Georgian folksong music sheet collections and Georgian choirmasters’ monographs, as well as audio records of folksongs on CDs that are fragmented due to voices to alleviate the learning process”, Anzor Erkomaishvili said.

Anzor Erkomaishvili will hand over all editions of the center, namely, monographs, biographies of singers, research works on Georgian folksongs, unique records to the Folklore State Center free of charge and this material will be transmitted to the folksong schools, where children will be able to learn songs and chants from distinguished ancestors.

By the Georgian government’s initiative and by support of the Culture Ministry, with the aim of saving, protecting and popularizing the Georgian chant and song, in 2015, the Folklore State Center of Georgia started opening choirmaster schools at all municipal centers and self-governed cities in all regions. According to the information of the Folklore State Center, currently 14 choirmaster schools operate all over Georgia. Their quantity will increase to 20 ones throughout 2016. Namely, new schools will open in Baghdati, Oni and Tsageri Districts too.

Representatives of the local self-governments promote and assist the center in implementing the mentioned project. It is also important that in choirmaster schools young people will are able to take part in various festivals and events and this experience will liven up the cultural and tourism life in the regions.

PUBLICITY March 14, 2016 #137

caucasus business week

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PUBLICITY caucasus business week

GEORGIAN RAILWAY URGES YOU TO CROSS THE RAILWAY TRACK IN ONLY SPECIALLY ALLOTED ZONES AND TAKE CARE OF YOUR LIFE! Crossing the railway track in the unpermitted places violates article 106 of the Georgian Code of Administrative Offences and this lawbreaking results in due sanctions.

March 14, 2016 #137

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TBILISI GUIDE March 14, 2016 #137

Embassy United States of America Embassy 11 Balanchivadze St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 53-23-34 E-mail: tbilisivisa@state.gov; askconsultbilisi@state.gov United Kingdom of Great Britain and Northern Ireland Embassy 51 Krtsanisi Str., Tbilisi, Tel: 227-47-47 E-mail: british.embassy.tbilisi@fco.gov.uk Republic of France Embassy 49, Krtsanisi Str. Tbilisi, Tel: 272 14 90 E-mail: ambafrance@access.sanet.ge Web-site: www.ambafrance-ge.org Federal Republic of Germany Embassy 20 Telavi St. Tbilisi Tel: 44 73 00, Fax: 44 73 64 Italian RepublicEmbassy 3a Chitadze St, Tbilisi, Tel: 299-64-18, 292-14-62, 292-18-54 E-mail: embassy.tbilisi@esteri.it Republic of Estonia Embassy 4 Likhauri St., Tbilisi, Tel: 236-51-40 E-mail: tbilisisaatkond@mfa.ee Republic of Lithuania Embassy 25 Tengiz Abuladze St, Tbilisi Tel: 291-29-33 E-mail: amb.ge@urm.lt Republic of Latvia Embassy 16 Akhmeta Str., Avlabari, 0144 Tbilisi.

E-mail: embassy.georgia@mfa.gov.lv Greece Republic Embassy 37. Tabidze St. Tbilisi Tel: 91 49 70, 91 49 71, 91 49 72 Czech RepublicEmbassy 37 Chavchavadze St. Tbilisi ;Tel: 291-67-40/41/42 E-mail: czechembassy@gol.ge Web-sait: www.mzv.cz Japan Embassy 7 Krtsanisi St. Tbilisi Tel: +995 32 2 75 21 11, Fax: +995 32 2 75 21 20 Kingdom of Sweden Embassy 15 Kipshidze St. Tbilisi Tel: +995 32 2 55 03 20 , Fax: +995 32 2 22 48 90 Kingdom of the Netherlands Embassy 20 Telavi St. Tbilisi Tel: 27 62 00, Fax: 27 62 32 People’s Republic of China Embassy 52 Barnov St. Tbilisi Tel: 225-22-86, 225-21-75, 225-26-70 E-mail: zhangling@access.sanet.ge Republic of Bulgaria Embassy 15 Gorgasali Exit, 0105 Tbilisi, Georgia Tel: +995 32 291 01 94; +995 32 291 01 95 Fax: +99 532 291 02 70 Republic of Hungary Embassy 83 Lvovi Street, Tbilisi Tel: 39 90 08; E-mail: hunembtbs@gmail.com State of Israel Embassy 61 Agmashenebeli Ave. Tbilisi Tel: 95 17 09, 94 27 05 Embassy of Swiss Confederation’s Russian Federation Interests Section Embassy 51 Chavchavadze Av., Tbilisi Tel: 291-26-45, 291-24-06, 225-28-03 E-mail: RussianEmbassy@Caucasus.net Ukraine Embassy 75, Oniashvili St., Tbilisi Tel: 231-11-61, 231-12-02, 231-14-54 E-mail: ukraina_pu@wanex.net; emb_ge@mfa.gov.ua Consular Agency: 71, Melikishvili St., Batumi Tel: (8-88-222) 3-16-00/ 3-14-78 Republic of Turkey Embassy 35 Chavchavadze Ave., Tbilisi Tel: 225-20-72/73/74/76 embassy.tbilisi@mfa.gov.tr Consulate General in Batumi 9 Ninoshvili Street, Batumi Tel: 422 25 58 00 consulate.batumi@mfa.gov.tr Republic of Azerbaijan Embassy Kipshidze II-bl . N1., Tbilisi Tel: 225-26-39, 225-35-26/27/28 E-mail: tbilisi@mission.mfa.gov.az Address: Dumbadze str. 14, Batumi Tel: 222-7-67-00; Fax: 222-7-34-43 Republic of Armenia Embassy 4 Tetelashvili St. Tbilisi Tel: 95-94-43, 95-17-23, 95-44-08 E-mail: armemb@caucasus.net Web: www.armenianembassy.ge Consulate General, Batumi Address: Batumi, Gogebashvili str. 32, Apt. 16 Kingdom of Spain Embassy Rustaveli Ave. 24, I floor, Tbilisi Tel: 230-54-64 E-mail: emb.tiflis@maec.esRomania Embassy

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

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

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

Restaurants CORNER HOUSE Tbilisi, I. Chavchavadze ave. 10, Tel: 0322 47 00 49; Email: contact@cornerhouse.ge RESTAURANT BARAKONI Restaurant with healthy food.

Georgian-European Cuisine Agmashenebeli Alley 13th Phone: 555 77 33 77 www.barakoni.com CHARDIN 12 Tbilisi , 12 Chardin St. , Tel: 92 32 38 CAFE 78 Best of the East and the West Lado Asatiani 33, SOLOLAKI 032 2305785; 574736290 BREAD HOUSE Tbilisi , 7 Gorgasali St. , Tel: 30 30 30 BUFETTI - ITALIAN RESTAURANT Tbilisi , 31 I. Abashidze St. , Tel: 22 49 61 DZVELI SAKHLI Tbilisi , 3 Right embankment , Tel: 92 34 97, 36 53 65, Fax: 98 27 81 IN THE SHADOW OF METEKHI Tbilisi , 29a Tsamebuli Ave. , Tel: 77 93 83, Fax: 77 93 83 SAKURA - JAPANESE RESTAURANT Tbilisi , 29 I. Abashidze St. , Tel: 29 31 08, Fax: 29 31 08 SIANGAN - CHINESE RESTAURANT Tbilisi , 41 Peking St , Tel: 37 96 88 VERA STEAK HOUSE Tbilisi , 37a Kostava St , Tel: 98 37 67 BELLE DE JOUR 29 I. Abashidze str, Tbilisi; Tel: (+995 32) 230 30 30 VONG 31 I. Abashidze str, Tbilisi Tel: (+995 32) 230 30 30 BRASSERIE L’EXPRESS 14 Chardin str, Tbilisi Tel: (+995 32) 230 30 30 TWO SIDE PARTY CLUB 7 Bambis Rigi, Tbilisi Tel: (+995 32) 230 30 30

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

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

Galleries ART GALLERY LINE Tbilisi. 44 Leselidze St. BAIA GALLERY Tbilisi. 10 Chardin St. Tel: 75 45 10 GALLERY Tbilisi. 12 Erekle II St. Tel: 93 12 89

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

GSS Car rental offers a convenient service for those who are interested in renting car in Georgia. Rental fleet mainly consist of Japanese made SUV’s, the company has various models of cars including sedans and minivans which are in good technical condition.

Contact information: Email: info@gsservices.ge.

Address: Shalva Dadiani 10

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

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

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

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PUBLICITY caucasus business week

March 14, 2016 #137