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November 21, 2016 #170
November 21, 2016, Issue 170 - www.cbw.ge
PR “Doing My Favorite Business Makes Me Happy Person”
Business 2016 Business Award Ceremony Held In Tbilisi Pg. 8
Agriculture “Let’s produce what’s more profitable, rather then what we love”
GEL VS GOVERNMENT
USA, World and Georgia Waiting for Trump’s Decisions
Economic Team Cannot Be Recognized Successful amid Averaged 3.33% Economic Growth for 4 Years Last week Government of Georgia released a special statement regarding the GEL exchange rate. The statement names GEL depreciation reasons and unveils plans for introducing a GEL strengthening action plan. According to the government’s statement, the national currency floating exchange rate preconditions the following internal and external macroeconomic factors: 1. Significant devaluation of domestic currencies in neighboring trade partner countries; 2. Over past months currency outflows enlarged because of imports, while exports failed to balance it because of declination in prices on exports markets. 3. Creating negative expectations in relation to GEL exchange rate, which, regretfully, is bolstered by speculations from various groups. Analysis of the government’s statement due to its paragraphs outlines quite unfavorable picture.
Georgia – Country with 103 Unique Resorts Public welfare in all countries is mainly based on their economic might and potential. Valuable and profitable national economy reduces the poverty level and enables the state sector to care for public welfare in forms such as: high-budget healthcare system, growth in the level of education, strengthening army and police for state security, etc. An eﬀectively developed tourism sector can provide the state with substantial profit. Currently, this sector is one of the fastest growing and most profitable industries. In a small country like Georgia, it is crucial to meticulously develop the tourism sector. Georgia lies in a very beneficial climate zone where all four seasons create preconditions for developing suitable tourism products. Moreover, the authentic culture, traditions, history, ancient civilizations of Georgia are rarely met in other countries of the world. Recreation, tourism and resorts occupy a special place in Georgia’s natural resources. The total number of health resorts amounts to 103, while potential health resorts Pg. 6 account for 304.
NEWSROOM IMF Mission Holds Meetings in Tbilisi Oﬃcials had discussed Georgian fiscal condition, basic parameters of the budget and talked about the government’s vision on budget deficit. They had focused on budget policy for a mid-term period as well.
Number of International Visitors to Exceed 6 million in 2016 Active campaign is underway for winter tourism season, namely, television marketing campaigns proceed in 4 countries. Various campaigns are being carried out in 10 countries jointly with TripAdvisor.
150 Trains to Pass Georgia in 2017 via Trans Caspian Transport Corridor This plan of Georgian railways seems skeptical for logistics experts. They say that this year, they carried few containerized cargo by this railway.
Romania Appears Georgia’s Major Importer of Oil Products in Georgia Georgia has imported 25.6 thousand tons of diesel and petrol from Romania and this volume constitutes 22% in total imports of oil products.
TBC Bank to appeal illegal appropriation by local businessman to Supreme Court In an oﬃcial statement released today TBC Bank explained Chkhartishvili owed “several million debt” to the Bank and the companies related to him had not paid the debt for many years.
Georgia Borrowed More by $484 mln in 6 Months than Paid Georgia paid 702 mln USD for debt pay/ service in the H1 of the year, but borrowed more by 484, 3 mln. As for intercompany loans, i.e. loans between the direct re-investors and own companies, 144, 3 mln USD has been borrowed in H1, 2016.
Georgia exports more wine to China, takes new markets This is the third-largest shopping center in China where Georgian wine is also represented. Hunan province oﬃcials are interested in Georgian wine import and they are going to visit Georgia in the beginning of the next year.
The Most Proﬁtable Banks in Georgia According to the third quarter data, TBC bank has the highest profit which amounts to 183 million. Then it is followed with Georgian Bank with 150 542 000 GEL. The profit of BASISBANK was 18 589 079 million GEL, Liberty Bank had 21 787 69 GEL profit.
November 21, 2016 #170
Yanair Airline to Perform Flights to Odessa Yanair airline plans to perform Odessa-Tbilisi regular flights starting December 22, 2016 up to January 12, 2017, The flights will be performed Thursdays by Boeing 737 airplane, Odessa international airport management said.
US commits $67 million to finance two major projects in Georgia
he United States (US) has committed $67 million in Overseas Private Investment Corporation (OPIC) financing for two major development projects in Georgia. A delegation from the OPIC - the US government’s development finance institution - is in Georgia to negotiate terms of its latest $67 million support package for Georgia. The OPICcsupports US private investment in more than 160 developing and post-conflict countries around the world. The OPIC delegation is in Georgia’s capital Tbilisi to meet with local authorities and discuss two new development projects, for which the OPIC will contribute $67 million. The first project was about opening a 120-bed Mother and
Child Medical Centre in Tbilisi, while the second project related to the construction of new dock complex in Georgia’s Black Sea port city Poti. The OPIC director general Kenneth Angel met Georgia’s Minister of Economy Dimitry Kumsishvili in Tbilisi. The Mother and Child Medical Centre in Tbilisi would be built to meet top US standards and would serve local as well as foreign patients from Georgia’s neighbouring countries. It will cost $27 million to built and equip the new medical centre, to which the OPIC will contribute $17 million in cofinancing. When complete this will be the first pediatric hospital in Georgia to have Joint Commission International (JCI) accreditation, announced Georgia’s
Ministry of Economy. The second project related to a new dock complex at a new port in Poti. Authorities estimated the cost of this project would reach $100.5 million. Yesterday’s meeting confirmed OPIC will allocate $50 million to co-finance the project. Georgia’s Economy Minister hoped these two projects would support the continuation of Georgia’s long, successful partnership with OPIC. The OPIC has been investing in Georgia since 1993. Since then the US government’s development finance institution has invested more than $500 million in about 50 projects in the country. Currently the OPIC was involved in more than 20 projects in Georgia.
Georgia-FAO sign new four-year agricultural development deal
eorgia and the Food and Agriculture Organisation of the United Nations (FAO) are joining forces to further develop the country’s agricultural industry in 2016-2020 by signing a new four-year agreement. The country’s Agriculture Minister Levan Davitashvili and FAO Representative for Georgia Raimund Jehle signed a deal on starting a four-year program that supports the promising industry. Georgia and FAO have agreed to expand cooperation in several areas of agriculture, particularly development of Georgia’s agriculture sector in general, transform and reorientate agricultural development under the new realities of climate change, ensure food safety, veterinary services and plant protection. During the next four years
BUSINESS WEEK caucasus
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Georgia and FAO will join forces to strengthen farmers in Georgia and help them enjoy the best agricultural practices. Also, the four-year agreement will focus on conservation of Georgia’s unique biodiversity, wildlife and protected area management and eﬃcient use of the system. Launching climate-smart policies will be another priority within the Georgia-FAO agreement which aims to develop agriculture and achieve food safety in a way to respond the climate change at the same time. Animal health was another main topic of the four-year agreement; however in order to better solve the critical problems contributing to low livestock productivity and limited animal movement control Georgia and FAO signed
another agreement that also involved the Swiss Cooperation Oﬃce in Georgia. The $5 million project will include four main directions: Livestock identification across the country. Issuing the special documentpassport for the identified livestock. The unique identification code will be given to the farms, markets, butcheries. A single electronic data base will be crated, where all information about livestock farms and animals will be accumulated. Georgia became the member of FAO in 1995. Since then FAO has been focued on developing Georgia’s agriculture sector with the aim of improving rural livelihoods, increasing productivity and contributing to sustainable growth of the economy.
Editor: Nutsa Galumashvili. Mobile phone: 595 380382 Reporters: Medea Samkharadze; Mariam Kopaliani; Merab Janiashvili; Maria Bakh. Designer illustrator: Ilia Chrelashvili. Technical Assistant: Giorgi Kheladze
Source: www.commersant.ge, www.bpi.ge, www.gbc.ge, www.agenda.ge, www.civil.ge
November 21, 2016 #170
Anti-Stigma Events under Tuberculosis Information Campaign
n November 17 the first anti-stigma event was held on the territory of Kutaisi No 32 secondary school, as part of Tuberculosis Educational Campaign. The campaign calls for holding 5 anti-stigma events in Tbilisi and regions. Trainers selected in the project implementation period will take part in the campaign activities. At the meetings participants will introduce various materials on tuberculosis issues. Various discussions and conferences will be also organized. Project implementation started in July 2016 for carrying out information-educational campaign with focus on young generation of Georgia. In the campaign implementation period, the project experts conducted workshops in Tbilisi and regions at 25 secondary schools and 6 universities. About 300 students, about 4o teachers and about 1000 pupils were involved in the process. Workshops were also held for reporters, in various cities of Georgia and they have received comprehensive information on diseases, tuberculosis stigma and discrimination issues. Objective of the project is to upgrade public awareness in various regions of Georgia in relation to tuberculosis issues.
November 21, 2016 #170
GEL vs Government Economic Team Cannot Be Recognized Successful amid Averaged 3.33% Economic Growth for 4 Years
Merab Janiashvili Economic Analyst
It is interesting whether, without GEL exchange rate depreciation, the government would plan quick economic growth in the budget of the next years?! And whether the economic team of our country had any other objectives previously.
eorgian government disseminates the statement on recent drop of GEL exchange rate. The statement notes on the floating rate of national currency in Georgia, which change is impacted by internal and external macro economic factors and expectations. According to them, temporary changes in the exchange rate are caused by the following factors: Significant devaluation of local currency in neighboring trade partner countries; Increased currency outflow in the recent months due the import, which has not been stabilized on the export markets because of price growth; Due to the creation of negative expectations linked to GEL rate, which is supported by attempt of speculative themes from various groups; The government announces acting steps which is directed towards reduction of surplus dollarization. However, complex arrangements are planned as a result of consultations held by the government and NBG with International Monetary Fund (IMF). “However, the focus should be made on acceleration of economic growth in the budget of the next year – portfolio of infrastructural projects will be grown. In addition, administrative costs will be significantly reduced and 2017 budget will be focused on strengthening of sustainable and stabile fiscal environment. The same approach should be made on the budget of next years. The joint acting plan will be announced in the nearest days, which envisages taking concrete steps based on market – mechanisms in direction of consistent reduction of dollarization “, – the statement reads and notes, that the arrangements envisaged by the plan will support establishment of positive expectations and stabilization of GEL rate.
Georgian Government Explains the Reason of GEL rate Drop
ast week Government of Georgia released a special statement regarding the GEL exchange rate. The statement names GEL depreciation reasons and unveils plans for introducing a GEL strengthening action plan. According to the government’s statement, the national currency floating exchange rate preconditions the following internal and external macroeconomic factors: 1. Significant devaluation of domestic currencies in neighboring trade partner countries; 2. Over past months currency outflows enlarged because of imports, while exports failed to balance it because of declination in prices on exports markets. 3. Creating negative expectations in relation to GEL exchange rate, which, regretfully, is bolstered by speculations from various groups. Analysis of the government’s statement due to its paragraphs outlines quite unfavorable picture. For example, according to Geostat, national statistics service of Georgia, in JanuarySeptember 2016 imports made up 5.194 million USD (excluding imports of medications for Hepatitis C) and exports totaled 1.512 million USD. This signifies that trade balance is 3 682 million USD, while the figure was 4 039 million USD in the previous year. This signifies that, due to foreign trade turnover factor, compared to the previous year period, the currency outflow decreased by 357 million USD and this fact comes in collision with the government’s statement. At the same time, it is abnormal when the country has problems with national currency exchange rate for 2 years and the government seeks reasons abroad to justify currency devaluation by exogenous factors. It is also worth noting that responsibility for negative expectations is shifted onto various groups. Experts and opposition have also played certain role in creating incorrect expectations, but government oﬃcials are, who provoke fault expectations mainly. For example, Deputy Minister of Economy Nikoloz Gagua noted that at the end of 2016 the GEL exchange rate would be around 2.20-2.25 point, but it is unclear from where he has made such specific conclusions. Regretfully, the government does not promise to stabilize GEL exchange rate (and this is very important), but they say pledge to strengthen the national currency. However, they have promised to strengthen GEL exchange rate many times and all these promises were not justified. Therefore, similar statements have been also devaluated and our society does not trust similar promises any more.
As a result, the Authorities have named those paragraphs for depreciation reasons that had less influence on processes, while kept silent on such important components as unfulfilled plan for serving external liabilities and failure in attracting grants. Anyway, the fact is that this year in January to September period the state budget failed to mobilize about 400 million GEL foreign currency, due to plan, and the currency market of our country suﬀers from deficiency of this sum. At the same time, Minister of Finances took triple more internal debts than planned and internal debt fulfillment in January to September period made up 310%. Besides devaluation reasons, Government has also named measures for curbing the current processes. After consultations with International Monetary Fund (IMF), Government of Georgia and National Bank plan to carry out several complex measures, including: 1. The 2017 state budget will make focus on economic growth intensification – infrastructural projects portfolio will be expanded. Moreover, administrative costs will be considerably cut and the 2017 budget will be oriented on stable and steady fiscal environment strengthening. Analogical approaches will be maintained towards the next years’ budgets. 2. In several days a joint action plan will be announced that, jointly with other measures, also implies taking specific steps for consecutive reduction of dollarization”, the government’s statement reads. It is interesting whether, without GEL exchange rate depreciation, the government would plan quick economic growth in the budget of the next years?! And whether the economic team of our country had any other objectives previously. Quick economic development should be a main objective for our country and this is an ordinary thing, nothing special. Georgian Dream has named quick economic growth as one of the key directions in its pre-election program. As to dedollarization plans, it will not be reduced in 1-2 years and 10-15 year period is required to yield touchable results thanks to correct and consecutive economic policy. Finally, it should be noted that not everything is fluent in state economy. This was evident previously too. GEL exchange rate turned out in catastrophic condition. Therefore, the time has come that someone take responsibility for economic failure over the past 4 years and file resignation. Economic team cannot be recognized successful with averaged 3.3% economic growth indicator for 4 years on. We hope the new team will be more successful compared to the previous one.
“The government has developed a 10-point action plan to de-dollarize the Georgian economy and develop larization. Today our citizens are most concerned about interest on loans in dollars. Our task is to remove such attitude of our population and for this we will take significant steps”.
Dmitry Kumsishvili Minister of Economy and Sustainable Development
November 21, 2016 #170
November 21, 2016 #170
GEORGIA – COUNTRY WITH 103 UNIQUE RESORTS Public welfare in all countries is mainly based on their economic might and potential. Valuable and profitable national economy reduces the poverty level and enables the state sector to care for public welfare in forms such as: high-budget healthcare system, growth in the level of education, strengthening army and police for state security, etc. GIORGI KVEZERELI Tourism Development Initiative Community – Travel in Georgia
An eﬀectively developed tourism sector can provide the state with substantial profit. Currently, this sector is one of the fastest growing and most profitable industries. In a small country like Georgia, it is crucial to meticulously develop the tourism sector. Georgia lies in a very beneficial climate zone where all four seasons create preconditions for developing suitable tourism products. Moreover, the authentic culture, traditions, history, ancient civilizations of Georgia are rarely met in other countries of the world. Recreation, tourism and resorts occupy a special place in Georgia’s natural resources. The total number of health resorts amounts to 103, while potential health resorts account for 304. Moreover, Georgia has vast resources of mineral and thermal water (more than 2000), various climate zones, landscapes, karstic caves, healing mud, and many other resources that create unlimited opportunities. On the world tourism map, Georgia is the leading country in the field of recreational tourism. In Georgia, there are unique resorts with no analogues elsewhere. This gives Georgia significant potential that it must appraise, invest into and popularize. Most countries around the world possess no special resources. However, they manage to artificially create valuable products from poor resources to attract customers. Let’s analyze several resorts, their development level and potential.
An effectively developed tourism sector can provide the state with substantial proﬁt. Currently, this sector is one of the fastest growing and most proﬁtable industriesi in georgia
Tbilisi It is important to start our analysis in Tbilisi at the Tbilisi Balneological Resort as there are only 2 capital city resorts in Europe- Budapest and Tbilisi. Surely, in terms of infrastructure, the Tbilisi Balneological Resort cannot be compared to Budapest. However, the zone of the sulfur baths reaching Teleti Valley is very important. Apart from sulfur waters, there is a unique micro climate created by the subtropical climate, botanical garden and flow of underground thermal waters. Mtkvari and the entire Teleti Gorge is united into a single complex. This merge gives creates a fantastic climate that, as per my opinion, does not exist in Hungary. We will also remind you of a historical fact: Indira Gandhi has stayed at these resorts. This is a very important fact for tourism development. The key focus of the Tbilisi Balneological resort is the osteoarticular system and musculoskeletal system. Today, it is said that osteochondritis is more frequent in younger people, as well as osteoporosis, arthritis, arthrosis and various other diseases. In addition to the mentioned diseases, customers of the Tbilisi Balneological resort may recover from periphery nervous system diseases, neurosis, skin diseases – neurodermitis, psoriasis, etc. The Balneological Resort uses underwater massage, rain shower and circular shower. The complex also comprises of sulfur-pearl baths – a fantastic combination of sulfur water and oxygen injected through special equipment. This combination gives an extraordinary eﬀect. Tbilisi Balneological Resort – this is a medical recovery and rehabilitation facility in which people of all health statuses can relax and undergo preventive procedures. Besides resorts, mineral water is also of crucial importance, such as Borjomi. In addition to treating hangovers, Borjomi water is useful for washing out gall bladders and fighting diseases of the digestive system. And now we should overview other resorts too: Kojori Tbilisi group resorts – Kojori (1350 meters above the sea level) is located 18 km away from Tbilisi. The open fields rich with various plants, moderate air humidity, long periods of sunny weathers, and refreshing air add special value to the place. Kojori is especially wonderful during the summers.
The air temperature drops 6-7 degrees. Kojori is a children’s resort (Aspindza, Biisi, Tetri Tsklebi, Kodibini, Nagutni, Sadgeri) useful for healing lymphadenitis, chronic bronchitis, pleurites, secondary anemia, rachitic, bronchial asthma, malaria, etc. The grand complex of resorts on 700-2200 meters above the sea level has no analogue in either Georgia or abroad. The most important resorts and recreational places of this region are: Borjomi (jointly with Likani), Big and Small Tsemi, Libani, Tba, Tsikhisjvari, Bakuriani, Daba, Didi and Patara Mitarbi, Mzetamze, Machartskali, Akhaldaba; along with the wonderful Timotesubani, Flate, Dzughuri. Bakuriani Bakuriani (1750-1950m) is a highland climate resort with dry air and an even temperature, plenty of sun exposure and a moderate volume of precipitation. In Bakuriani (Beshumi, Gomis Mta, Bakhmaro) is useful for non-tuberculosis diseases of respiratory channels, lymphadenitis, chronic bronchitis, pleurites, secondary anemia, rachitic, bronchial asthma light and average forms. Shovi Shovi (Akhalchala, Nedzvi, Utsera, Tsinubani) is in Oni District, in the river Chanchakhi gorge and 1600 meters above sea level. Shovi is rich in healing waters full of iron, hydrocarbons, natrium, calcium, carbon dioxide. Currently, Shovi mineral waters are used for healing the digesting system and urinary system diseases. Abastumani Abastumani (1250-1500m) is famous for its recreational air and hyperthermal (48 degree) sulfur mineral waters. These create additional factors for treating diseases, such as chronic polyarthritis, nervous, gynecological, skin diseases and tuberculosis. We are happy that our country is genuinely rich with so many unique resorts and opportunities for treating complex diseases. I believe these opportunities to be of great interest for investors who can implement their rational approaches to eﬃciently utilize these resources. In the upcoming issues, we will jointly analyze each resort’s weak and strong aspects along with their development potential and places set out for privatization.
November 21, 2016 #170
USA, WORLD AND GEORGIA WAITING FOR TRUMP’S DECISIONS
onald Trump has become the US President. Political experts and economists unanimously agree that his policy will aﬀect the US and global economies. Foreign media agencies report that in autumn 2016 US electors were complaining about economic problems most of all, because Barack Obama could not return living conditions of ordinary US citizens to the 2008 pre-crisis period indicators, while in his economic program Donald Trump was persuading electors that their economic conditions would be improved. Trump plans to abolish inheritance tax, introduce tax preferences for children growth, reduce tax burden on physical bodies to 33% from 39.6%. Trump plans to lower tax burden on business from 35% to 15%. He thinks these measures will assist the USA to compete with Ireland and Britain, where a part of major American companies have departed for. Key direction of Trump’s economic policy is to create new job places. Under ruling of Barack Obama, unemployment level increased in the USA and 14 million citizens lost jobs in the USA, Donald Trump said. The billionaire is sure that he will change the situation and sets the struggle against illegal migrants as one of mechanisms to achieve this goal. Trump has pledged to expel 11 million illegal immigrants from the country. Moreover, cancellation of various trade-economic agreements, first of all, with China and Mexico, will create new job places, he supposes and expects these measures to return withdrawn factories to the USA again. The Caucasus Business Week (CBW) was interested in how the US economic policy may change under the New President and how this policy may be reflected on Georgia? On the US president election day, the USD exchange rate fell and stock market indices started declining. This fact brought expectations that president-elect Trump would revise both US and global economic realities. As known, the USA is one of the major trade partners of Georgia with 5-6% ratio in total trade turnover. Various programs and infrastructural projects are financed thanks to American money, grants and credits. According to unspecified information, about 100 000 Georgian immigrants live in the USA, including a part of them have the status of an illegal immigrant. Therefore, if Donald Trump keeps the preelection promises, consequences may touch even Georgia. Irakli Berdzenadze, the Personal Banker executive director Irakli Berdzenadze, the Personal Banker executive director, explains that Trump’s victory signifies more economic stimulus, less interference in international relations and less «American Democratic» processes in countries. Idle and dependent countries like Georgia will realize that they should earn their living themselves, he said. ‘And Trump is an additional major and good eﬀect for stock exchange», Berdzenadze noted. Trump’s presidency will not make real influence on Georgian economy. First of all, Georgia and USA have tight political relations, but not economic. “The USA has made much contribution to economic recovery of Georgia. Therefore, Trump’s plans to cut external assistance may create certain risks to Georgia. What should Georgia expect from Trump’s presidency? In reality, we could not receive even Trump Tower and consequently, we should not expect something special in this case either. I hope the current assistance will not decrease, I mean grants. American do not like radical changes. Therefore, we expect current trade relations between two countries to develop dynamically”, Berdzenadze noted. Rati Abuladze, Initiative Group of Scientists, doctor of economics, professor Doctor of economics, professor Rati Abuladze stated that in the USA Trump’s victory in the US presidential elections has given birth to new political epoch. Trump’s victory changes political space and makes influence on old policy, political systems run out of resources, global economic policy and trade relations. New President of USA Donald Trump considers the USA prosperity as the best mechanism in tackling global problems with focus on national interests and correct economic trajectory, Abuladze said. «It is indisputable that Trump’s presidency will change global political outlines. At the same time, his any step in Asia, Europe and Near East will bring essential economic effect. It is worth noting Barack Obama has persuaded allies that Donald Trump backs US strategic relations worldwide. As to specific risks spread by media agencies amid expectations of electing Donald Trump as a president, they come from fears of changes. But according to Obama’s words, the US President’s institute is more than any other person», Abuladze said. Before his victory in elections, Donald Trump’s election platform was paying much attention to domestic economic interests, revision of trade agreements. It was oriented on protection of international imports and other processes.
But protectionism moods turned out not very positive and influence of its statements was assessed painfully, he said. Trump intends to carry out general repairs of social-economic and political environment through rigid economic policy, Abuladze said. It is early to talk about deportation of illegal immigrants to. Surveys prove that the USA will have to take serious costs for deportation of immigrants. Today, there are 11.3 million immigrants in the USA. Averaged cost on deporting an illegal migrant is estimated by 10.070 USD (arrest, keeping in prison, legal proceedings, deportation). Total costs will hit 114 billion USD. At the same time, Deportation program may last 20 years and costs range from 420 to 620 billion USD. As a result of deportation program, the US economy may shrink by 1.6 trillion USD (down 6% in 20 years; BBC.com). Trump’s presidency will bring positive eﬀect to Georgian economy in midterm and long-term perspectives, Abuladze noted. “Trump’s political platform sets modern requirements for politics, old political establishment, trade-economic relations, visions and approaches of political experts. Similar approaches foster formation of new political environment, finding new markets, professionalizing some sectors of economy that, in whole, takes international competition to a higher level. As a result, Trump’s presidency and US political support will set a foundation of a new economic and political ecosystem. In whole, it will be good if Georgia takes into account lessons of US politics”, Abuladze said. Gia Khukhashvili, Economic Expert These processes are not expected to make decisive influence on Georgia, however, expected dividends from EU integration may seem less interesting, economic expert Gia Khukhashvili said. If the US market shows closing tendencies, this will be serious blow to Europe, tense USA-China relations that may provoke serious shocks in economic system of the past decades, he said. “Over the past decades major soap bubbles were created in the USA, while real sector was moving to other countries. This tendency created problems with employment. Depressive regions appeared. Introduction of 45% tax on Chinese goods is one of the pre-election promises by Trump. Today, economy is globalized. Changes of such major market and redirection to national economy sector will revise global economic structure too. I would say one thing – all these tendencies will make less eﬀect on our country compared to Europe. However, naturally, we should expect certain shocks”, Khukhashvili said.
Association of Young Financiers and Businessmen Zurab Kukuladze, analyst for Association of Young Financiers and Businessmen (AYFB), noted that Georgia first should realize very well why the US society has elected Donald Trump. This result was motivated by economic factors, he said. «Trump’s economic policy signifies that the US community today worries about job places, because employment level is declining because of several key reasons, including migration is a basic one, as well as economic de-industrialization of the country (massive translocation of factories from USA to foreign countries). Another direction in Trump’s policy makes focus on foreign trade restriction under pretext of US market protection. Foreign trade issues should be considered in this context. Both moments may make influence on Georgia, and, to a certain degree, return Trump-preached tendencies in economic development trends», Kukuladze noted. Trump’s presidency will make two types of eﬀect on Georgia, Kukuladze added. First, Georgian Authorities will start thinking of carrying out industrial policy. As to direct influence, this cannot be expressed by foreign trade restriction, Kukuladze noted. In this case Georgia’s future is unclear, because, according to Trump-
TRUMP’S ECONOMIC POLICY SIGNIFIES THAT THE US COMMUNITY TODAY WORRIES ABOUT JOB PLACES, BECAUSE EMPLOYMENT LEVEL IS DECLINING BECAUSE OF SEVERAL KEY REASONS, INCLUDING MIGRATION IS A BASIC ONE, AS WELL AS ECONOMIC DE-INDUSTRIALIZATION OF THE COUNTRY
In pre-election period nobody expected Donald Trump would carry the presidential elections. Even in December 2015 the Bloomberg appraised probability of Trump’s victory as Black Swan (negative event that is hard to forecast). All these evaluations and expectations remain in the past now.
announced policy, trade relations with the USA may change, but Georgia-USA trade relations are not large-scale and these changes cannot create problems to American production, Kukuladze pointed out. “I think Georgia-USA trade relations represent a subject of political discussions rather than something to bring any results to this or that party”, Kukuladze said. Donald Trump – Road to White House Donald Trump was born on June 14, 1946 in New York. He has graduated from NYC military academy private boarding school, where parents sent him for his stubborn character. In 1968 Trump obtained BA degree in economics at Business School of Pennsylvania University. Later, he started working for development company of his father Fred Trump. Donald Trump made his first success on development market after his project won tender for restoration of hotel Commodore (currently Grant Hyatt New York). In early 1990s Trump faced serious financial problems with covering credit that he had taken for constructing Taj Mahal casino. He managed to restructure debts by transmitting 49-50% of his assets to the creditor. In 1994-198 Trump also sold a part of his assets in Trump Shuttle airline and land plots in New York. Besides
real estate, Donald Trump is also interested in beauty salons (miss world, miss USA), sports (wrestling, olf and American football) and sales of vitamins (Trump Network). In 1982 the Forbes for the first time published the rating of US 400 richest persons and Trump’s assets were evaluated by 200 million USD. In 1988 Trump’s assets rose to 1 billion USD, while Trump himself appraised his assets by 3.7 billion USD. Trump married three times. His first spouse was Czech iceskater Ivana Zelchikova. He has three children from the first marriage. In 1993 he married model Marla Maples, who gave birth to daughter Tiﬀani. In 2005 Trump married model Melania Knauss. Trump has one son from the third marriage. In 1999 Donald Trump tried to become a US president from Reforms Party, but he withdrew from election campaign because of personal reasons. On June 16, 2015 Trump oﬃcially announced that he would take part in the presidential election from Republican Party. Initially, he was not perceived seriously, but he proved the opposite and won inner party primaries. Trump’s election campaign was accompanied by various scandals because of his anti-migration moods, anti-Islam expressions, and so on.
November 21, 2016 #170
“Both small and big success makes me happy. I treat both small and big projects with equal inspiration and responsibility. I like achieving success very much and this inspiration strengthens me”
Doing My Favorite Business Makes Me Happy Person Interview with Natalia Zueva, founder and director of PR Oﬃce GE PR and Events Agency.
- Who are you by profession? - I am a journalist by profession and I hold a MA degree in journalism. Initially, I was interested in this field, but in the course of time I realized I had done my best in this field and moved to PR field. However, I keep close ties with media field, I appreciate my former colleagues, but I do not regret about this decision. - Your first job place. - I started my first job at Caucasus Press news agency. Later, I worked for many other media agencies – radio stations, TV stations and so on. In whole, I have worked in journalism field for 9 years. - Current job place and position. - After journalism field I have worked for several companies in PR direction. Before opening my agency, I was working jointly with professional PR manager Tornike Guruli at Sarke advertising holding. Seven years ago Sarke suspended operation and I founded PR Oﬃce GE PR agency. I have been leading this company since then. However, our company is not confined by only PR field. We also organize events, we fully provide branding job, technical support, content packing, fourchette. We also own suitable equipment. We have numerous promo staﬀ and so on. - Your first success. - Both small and big success makes me happy. I treat both small and big projects with equal inspiration and responsibility. I like achieving success very much and this inspiration strengthens me. The more business, the more I do and I never get tired. - Project that you are proud of even today. - I have been and will be always laborholic. Before birth of my son, I treated my projects like children: I used to care for them and gave much importance to them and was proud of them and I
maintain this attitude even today. It was very interesting and glorious to work with British Burberry. It is not easy to satisfy their standards. They care for each detail. When they entered the market and we were getting ready for the store opening ceremony, we showed to them DJ equipment two weeks earlier, even USB connectors, organized test panel of fourchette, determined exact distance between canapes, serving platters, the color, shapes, structure of boxes for speakers. Cables were to be invisible everywhere and we put them into special panels and hid on the whole territory of the store. They have their standards in PR field too and we have followed and satisfied these standards. - Field, where you would never work. - I do not work on PR of political parties consciously. For many years I and my team have been assisting only business companies to promote their activities and in this case it does not matter whether this is famous European clothes brand that we inaugurate with solemn ceremonies and events or corn and grain field (where, we had presentations in rainy, muddy and burning sunny weather), or organize stages and podiums on mountains. We are able to implement projects and PR campaign in any region of the country. - What makes a person successful in PR field? Besides knowledge, what special features are required. - You should be in order every time – think and work hard days and nights tirelessly without complaining, and overcome all diﬃculties. Intuition and instinct are also very important. You should be resistant to stress. You may be an educated person, but it is impossible to treat various projects and brands in the same way. It is always necessary to demonstrate new
vision and communication channels. Old regulations and traditions have lost importance lately. Internet and social networks have made revolution in this field and the process of changes continues in intense regime. - Is it possible today in Georgia to valuably study PR, or international knowledge and experience is necessary? - We have very good specialist and trainer in Georgia Tornike Guruli. I have mentioned him above too. He is a very successful PR manager with European education. He permanently works on his personal growth and his lectures are very popular. Therefore, I believe interested bodies in this field can receive serious knowledge and experience from Tornike Guruli. - Is PR field perceived and understood in Georgia in its classical form? - Classical form of PR has changed in essential way – digital platform has made a major part of old tendencies arguable. Technologies are being developed quickly. Previously, it was suﬃcient to be in only media, but now if you ignore Internet space, this signifies you do not exist in business (Bil Gates). Today, innovations are spread every second and the working process has been accelerated, while, even several years ago, news information was sent by fax. The field is developed and changed dynamically and quickly. Therefore, even leading PR specialists find it diﬃcult to make forecasts about the form and future of PR field. Part of them say that PR field is disappearing, others look more optimistic and say that PR has future, while everything changes its shape, including communication with reporters, selection of communication channels, form of a press release (that is to be balanced by visual communication). It should be noted definitely that one thing will not change: interests and visions of clients should be represented in the best way. Grey mouse wishing to become Micky Mouse will always exist and only PR makes diﬀerence between them. - How easily do you manage to settle crisis situations and take decisions and does similar cases make influence on quality of working process? - Crisis situation – is a norm of company life. You should be always ready for crisis situations. The most interesting example from our experience was the
fact of restriction of Askaneli Brothers brandy in Russia. We promptly organized a news conference, invited specialists, competent bodies and arranged media tour to the plant for emphasizing quality of beverages. We showed laboratory, production process and explained how strict and multilevel control our products pass. We also wrote about obtained awards. Thus, timely reaction is required in crisis periods and correct messages should be spread, clear plans should be submitted. Frequently, crisis situation creates opportunity to direct wind flow to desirable direction and stress main values of the company or product. - Interesting episode from your life (business) that has changed your lifestyle. - This may be strange, but negative periods in my life were very interesting. I thought everything was over, but something good was starting. I had such period 7 years ago, before I established a PR oﬃce. I was working for two companies on high-paid positions and one day everything changed – I get into road accident in late August and I lost both job places in 3 weeks. Enormous problems erupted suddenly. Therefore, I founded a new company in two weeks and became VAT payer in two months. I has also very negative experience when fourchette company was late for one of the events. Therefore, I decided to organize this service too and currently, our company is able to organize a fourchette for 400 persons. I also had very interesting private case, when my one-month son had to spend the whole day at the event. We organized a visit of oﬃcial delegation of Egyptian company interested in tourism sector development in Georgia, we also arranged a news conference, then meeting with travel agencies and a gala supper at one of the hotels. My baby also was there the whole day, at one of the suites (naturally, I had not left him alone). I was leaving news conference and meetings secretly to fee him and care for him. It turned out similar combination was also possible. - If not this profession, where would you work? - I would be somewhere close to this field. I would communicate with people, would be in the center of events with focus on positive events. - What are your strong sides, as a a businesswoman?
You should be in order every time – think and work hard days and nights tirelessly without complaining, and overcome all difﬁculties. Intuition and instinct are also very important. You should be resistant to stress. You may be an educated person, but it is impossible to treat various projects and brands in the same way - It does not matter whether your are man or woman – both of them must do things very well if they love business and want to be successful. -What benefits do you receive from your company? What makes it interesting for you? -I am a very happy person, because I do my favorite business. I like it and I never get bored, because all projects are diﬀerent. I appreciate this very much. - What makes major discomfort in your job? - Companies that do not know clearly what they want in reality and at the same time, do not trust you and make you lose time make major discomfort. - Where do you see yourself after 20 years? - It is clear that the agency will not exist in this form. Communications are developed so quickly, but I know definitely that I will be very active all my life and will do what makes me happy and brings benefits.
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LET’S PRODUCE WHAT’S MORE PROFITABLE, RATHER THEN WHAT WE LOVE “Agro Solutions” is the only consulting company that specializes in agriculture. “Agro Solutions” supports businesspeople and farmers to make correct agricultural decisions. We contacted the commercial director of “Agro Solutions”, Irakli Chikava. - Mr. Irakli, how long have you been operating on the market and what is the focus of Agro Solutions? - It is already the second year since the company “Agro Solutions” has been successfully operating on the market. We provide full agricultural consulting services to interested parties. Consulting begins with the generation of the ideas all the way to “turn-key project solutions”. There are cases where a client owning lands, buildings and certain infrastructure is unaware of the best ways to utilize those assets. In such case, we conduct market research and provide business ideas. We develop a business plan and support them in raising funds. We provide full legal and financial consultation. With the client’s permission and will, we implement Turn Key project solutions and provide complete project management. - Is there interest and demand for your services on the Georgian market? - During the latest period, there is rise in number of people interested in the agricultural sector. Accordingly, provision of the right and professional consultation is crucial. Agriculture is a very specific sphere. Therefore, precise risk analysis is crucial. One mistake or wrong decision can hinder the development of a business and create a high chance of failure. Accordingly, we are very happy that the many people interested in agriculture apply to receive the services of “Agro Solution”. Before reaching the final decision, they contact our company to get professional advice. Then, with the right analysis, estimations and strategies, they begin their activities. - Are foreign investors interested in the Georgian agricultural sector and are you
involved in any international projects? - The activities of the state and the projects of the Agricultural Project’s Management Agency (APMA) resulted in foreign investors discovering Georgia’s agricultural potential. In addition to good climate and soil conditions, our taxation system is attractive for investors. Our company is the member of several international organizations and, therefore, we regularly communicate with investors. Currently, we are implementing three international projects in Georgia. The investors are from Europe, America and Saudi Arabia. Unfortunately, at this stage, we are unable to publicize the names of the companies and projects as the concluded agreement prohibits us from doing so. Hopefully, everyone will soon be able to hear about those projects. - What are the common problems found in the sector? - That is a good question. The major problem is the lack of knowledge and the limited amount of experience and professionals. The decisions made due to the lack of professional expertise leads to very poor results. Agro Solutions gathered Georgian professionals in the field who have up-to-date knowledge. However, we have learned that for certain fields we lack qualified local resources. Therefore, we had to involve foreign experts and use their services. - What would you advise farmers starting agribusinesses? - First, I would advise them to farm products that are more profitable rather then what they love. It is important to make accurate estimations, to assess risks correctly and to develop a business plan based on a pessimistic scenario. It will aid them identifying long-term perspectives of their businesses. It is also necessary to focus production based on their latest and best achievements and to hire professional staﬀ. The company “Agro Solutions” wishes success to all the current and future farmers.
Lately, the agricultural projects announced by the government stimulated the development of the agricultural sector. Consequently, it raised the interests of many local and foreign businesspeople in the agricultural business sectors. When stepping into a new sphere, it is necessary to get support from professional consultants for making correct estimations.
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My Name is Freedom! – New Brand from Georgia On November 8 CROSTY company introduced a new collection of tens of male and females footwear. Top-quality materials manufactured by best Italian factories create a key value of CROSTY company. History of the brand started in Georgia, where young brothers Giorgi and Shota Mikaias decided to implement their dream and create ideal canvas sneakers. We decided to work for successful young people, who always seek new adventures, aspire for development, seek perfection and freedom. We decided to create minimalist and at the same tome top-class brand. And CROSTY was born in this way. My Name is Freedom – we believe freedom is a fundamental value of all persons not depending on age, gender, religion…. Freedom is for everybody and freedom is main value and message from our brand. We want to express our feeling of freedom and inspire young people to strive for freedom and move forward without hesitation, the company founders noted.
Business Awards 2016 reveals 7 best small companies in Georgia 7.
One of Georgia’s largest banks, TBC Bank and telecommunication company, Geocell revealed seven winner small companies out of 523 competitors at the joint business award ceremony held in Tbilisi. Winners of the Business Awards 2016 revealed in the following nominations: 1. Small Business of the
3. 4. 5.
Year – White Studio Innovative business of the year Biokhimpharma Touristic business of the year - Barbarestan Georgian product of the year - Badagi Agro business of the year – BPC, producing a wild Rosehip Juice Business of the year – Zeta Camping
People’s choice – Educational organisation Kings TBC Bank and Geocell aimed to promote and support the development of small and medium businesses in Georgia. For this purpose they invited small companies that had been registered in Georgia before 2016 with the yearly turnover below 10 million GEL (about $4 million/€ 3.80 million*) to compete for winning seven major nominations. Registration of applications began on June 21 where 523 companies applied for the competition, while yesterday the seven winners were revealed. Georgia’s Economy Minister Dimitry Kumsishvili who attended the business award ceremony believed the event would further
Orbi Group” Plans on Increasing Representative Oﬃces up to 200
H&M to Make a Diﬀerence in Georgia’s Retail Market
The company opened representative oﬃce in New York, which was followed with opening other oﬃces in different countries like Ukraine, Russia and Germany. “Today, the company owns 50 oﬃces abroad. It is planning to open oﬃces in Khazakhistan, Poland, and Yerevan and it will be followed by opening other branches in the whole post-soviet countries.- declared general director of “Orbi Group”, Irakli Kvergelidze.
H&M, one of the world’s largest fashion retailers famous for oﬀering fashion-forward apparel at aﬀordable prices in a sustainable way, will open a store in Galleria Tbilisi mall in 2017, according to an agreement signed between Georgian Co-Investment Fund’s (GCF) subsidiary Tbilisi Plaza LLC and H&M (Hennes & Mauritz AB). “The arrival of H&M in Georgia has been long awaited. In a Tbilisi consumer survey from 2013, H&M was most mentioned among desired retailers and combined with its reputation as a footfall driver in malls and highstreets around the world, there can be little doubt about its success in Georgia,” Martijn Kanters – Urban Development & Real Estate Strategy Consultant, told Property Georgia. According to him, with limited competition in its segment, H&M’s impact on Tbilisi’s retail market structure and hierarchy will be considerable as existing malls and highstreets that will not manage to attract H&M will likely suﬀer. Another reason for concern, as Martijn says is increased traﬃc congestion on Freedom Square: “It can be expected however, that H&M will open multiple outlets to serve other catchment areas and reach an optimal coverage of the market.” Galleria Tbilisi is one of Georgian Co-Investment Fund’s (“GCF”) ongoing investment projects in hospitality and real estate sector, with a total investment size of US$80 M. The main construction works are underway and the grand opening of the mall is scheduled for September 2017. H&M is the first retailer with which the agreement was reached. In order to make Galleria Tbilisi the most attractive shopping destination for the visitors, GCF and Tbilisi Plaza LLC will continue working on attracting more new retailers to Georgian market, oﬀering them an opportunity to establish presence in one of the city’s most exclusive shopping districts. With this aim, Galleria Tbilisi will be presented at the world’s most prestigious international retail property annual exhibition MAPIC 2016 in Cannes for the second consecutive year.
Lebek Coats Made in Georgia Are Sold in the EU Sewing business has always been very successful in Georgia during the centuries, however after Soviet Union fell apart, it decreased but now, there are tendencies of growing. Most of production produced in Georgia is exported to many diﬀerent countries in the world. One of the first sewing companies “Imeri” was established in 1928. Since 1996, the company “Imeri” has been creating products for “Lebek”.
motivate successful business for more achievements. For developing our country’s economy it is important to increase the number of the small and medium businesses in the country. Today the share of small and medium businesses in the Gross Domestic Product (GDP) is only 21 percent while in the developed European countries it is over 70 percent,” said Kumsishvili. The Minister highlighted the Government’s activities in order to encourage the new and small businesses in Georgia. As an example he named the Start-up Georgia state program which will help about more than 4,000 small entrepreneurs to receive the financing.
Business Hub – at Terabank Head Oﬃce Representatives of small and medium business sectors will be able to gather at Ketevan Tsamebuli Avenue N3, where Terabank head oﬃce is located. A special business hub has been organized there. After rebranding, the bank has arranged a special environment for business sector representativeness and main accent is made on providing top-standard bank services. At Terabank business hub SME bankers and SME analysts care for providing optimal and profitable banking ways, assist them in taking decision and give recommendations in direction that will be beneficial for their business activities. Priority is given to business and related physical bodies. Therefore, business hub shows diﬀerent attitude to clients – promptness, flexibility and individual approach to issues. These advantages make Terabank business hub diﬀerent from services of other banks. Currently, the business hub clients are able to enjoy special oﬀers of Terabank and receive all operational tariﬀs free of charge throughout the year. Terabank business clients are able to use cozy and warm meeting rooms at Avlabari oﬃce for personal activities, book and hold negotiations at comfortable environment of financial house at any desirable time. Providing top-quality services and creating pleasant environment for business hub guests is a key goal of Terabank. The bank employees care for popularizing activities of businessmen. Therefore, they prepare and spread information materials about their businesses, shoot videos and record interviews. Terabank businessmen cover various field and they perform useful and important job for the country.
Daphna – a Bay Leaf Nymph Everybody saw a bay leaf (or laurel) in his dish. But not everybody knows that a bay leaf in Georgian is “Daphne”. It was a nymph in Ancient Greece who met serious personal problems with Apollo. This story was colorfully described by a Roman poet Ovid in “Metamorphoses” poem: Apollo god, once meeting Erot, young god of love, armed with arch and arrows, mocked at his small height.
Dr. Andrei Maximov Maximov&Partners LLC email@example.com www.maximov.ge
he latter decided to revenge and hit Apollo with arrow of love, but Daphne, on the contrary, with arrow of antipathy killing love and provoking disgust. Daphne, having been tired of arduous Apollo love, asked her father Peneus and mother Earth for the help. The parents didn’t find anything better how to turn the unfortunate daughter into a laurel bush. Since then Apollo, mourning the beloved, began to carry an evergreen laurels wreath on his head. Let’s remark that “Daphna” means laurel not only in Georgian, but in Greek language as well. Therefore we could be brave enough to suppose that Colchis or Kolkhida (modern Black sea coast of Georgia) is a place of bay leaf historical origin. May be, when a famous Jason together with other Argonauts had stolen a Golden Fleece from King Aeetes of Colchis, they did the same with Daphna. Subsequently the bay leaf became popular in ancient Greece, later in Rome and conquered all Mediterranean. Of course, such an idea isn’t supported by any solid proofs, but it doesn’t matter – the same story with any myth or legend. During ancient world times a bay leaf became a symbol of both a continuous grief and a sign of a victory. The heads of prominent poets and musicians had been crowned with laureal wreaths. You could see at ancient Greek frescos how Nika, the goddess of victory, assigned them to the heads of heroes and winners of sports and arts competitions. In modern times it became tradition worldwide. A “Laureatus” word (winner or topped with laurel) had originated from the Latin word “Laurus” (laurel). Nowadays the dried bay leaf became one of the most popular spice and food condiment of the world to be used in house cookery and conservation, as well as in the food and chemical industries. It also became an important ingredient of traditional medicine, cosmetology and aromatherapy. At the USSR times Georgia provided the whole Soviet Union with the spice, producing 7-8 thousand tons of the dried bay leaf a year. But in 90-s due to the USSR collapse the local production came to zero with cultural plantations in the Western Georgia to become completely deserted. But simultaneously numerous wild-growing thickets of bay leaf bushes had covered many foothill regions of the Western Georgia. Last decade exports of the Colchis (West Georgian) bay leaf to the traditional (Post-Soviet) markets began to be recovered gradually. Now in average it makes up from 1500 to 2000 tons a year. It’s a very high quality, practically organic spice. On
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the one hand, it is an environmentally friendly product as local laurels – generally wild-growing plant which isn’t exposed to technogenic impact of the environment. Even if the laurels grow on the country site, all the same come to nobody to mind to spend money for its handling by fertilizers, pesticides and other chemicals. On the other hand, the area of its growth and climatic conditions of Colchis give to this spice excellent organoleptic and consumer properties: especially sharp spicy aroma, a strong pleasant smell and higher (in comparison with other growing regions) content of acids, vitamins, micro and the macrocells useful to a human body. But, unfortunately, until recently the bay leaf exports from Western Georgia failed to use its USP (Unique Selling Points) at international markets. On the one hand, most of the harvested bay leaf was bought up by buyers from Turkey as unprocessed raw materials – in the form of dried broken bushes with long branches, with a lot of waste, with a big number of broken, spoiled and over-dried leaves. It was diﬃcult or impossible for local peasants to organize a highly technological process of bay leaf drying, sorting, calibration and pressing. As a result a natural Colchis bay leaf had been sold at scanty prices to be taken away to Turkey for necessary processing and further exports to Europe priced a dozen times higher comparing to initial purchase prices. Of course, this Colchis bay leaf got a Turkish certificate of origin. On the other hand, few Georgian processors had no necessary multi-stage equipment. Therefore bay leaf export from Georgia was almost entirely a mass product of the B-grade category (according to the Soviet GOST standards) at correspondingly low prices and only to the unpretentious PostSoviet markets. Well, one cannot, however, tap the market with the support of only Greek myths… Anyway the situation had changed for the better for the last one-two years. New producers appeared in the Colchis region, first of all, “Laurus” in Senaki and our “Kolkhida Trade” company in Khobi. So, we got into production, and over the span of two years we created an integrated, full-circle production as a combination of traditional Georgian and modern technologies based on up-to-date equipment that we purchased in Turkey (as the saying goes, “one good turn deserves another”). The fully integrated production provided the manufacturing of bay leaves in five quality categories and, most importantly, without any loss of unique consumer qualities of this condiment. Simultaneously we were supporting a specially created Internet site and were actively involved in marketing our product, mostly at the markets in the post-Soviet realm. We could add Kazakhstan to Russia and Ukraine. At the same time, we created a network of commercial representatives in some new markets, including, among others, Germany, Norway and China. As a result, we have a high chance to become in 2016 the largest exporter of the Georgian bay leaf. We could not, however, enter the European markets yet—
which we were anticipating. So, a new export product with USP has been created, but it’s yet a long way to enter European or Asian markets. Georgian exporters need active, as well as highly professional marketing. First of all, it’s necessary to make Colchis bay leaf diﬀerent from other countries spice, to prove its unique consumer properties and deliver this information to a future pretentious buyer. With such a challenge any producer and/or exporter will certainly need the GI (geographical indication) system. It oﬀers two marketing instruments to simultaneously protect and promote unique quality dried bay leaf: PDO (Protected Designation of Origin) and PGI (Protected Geographical Indication) – see for more details “Branding Strategies in Georgia” article (CBW #168, dated November 7, 2016, p.11). But to register these protection signs
Georgian exporters need active, as well as highly professional marketing. First of all, it’s necessary to make Colchis bay leaf different from other countries spice, to prove its unique consumer properties and deliver this information to a future pretentious buyer
it’s necessary, first of all, to found a Georgian (or Colchis) Association of Bay Leaf Producers and Exporters. According to the EU and Georgia legislation only a collective team of producers, cooperative and/or association could pretend for a registration of any product with unique geographical origin. It’s high time for advanced Georgian companies to forget about internal competition for a while and unite their eﬀorts to make Colchis Daphne recognizable at any international market. In conclusion I’d like to mention one more point. As it was above-mentioned, Colchis Daphne raw materials base is limited by wild-growing and peasant sites’ bushes (for a few small exceptions). There is a danger that if/when high-quality Colchis bay leaf enters world markets, the expansion of modern technological capacities will push the demand for raw materials. Under their limited supply it will result in purchase prices rise and a corresponding diminishing of Colchis Daphne competitive advantages. To escape such a danger it’s worth considering to attract investments to restore cultural plantations of the “noble laurel”, but with no use of fertilizers, chemicals and pesticides.
Choosing a reliable construction/development company and project is highly significant if you wish the project to be of high quality and completed on time. Purchasing a flat or a diﬀerent kind of real estate is a major financial transaction for many people, as they conduct that purchase with money saved over many years, or with a bank loan.
TOP TIPS To Finding The Right PROPERTY Developer in GEORGIA You will probably agree that when making such an important decision, one must choose a reliable development company. Unfortunately, the development sector today contains numerous inexperienced companies that are oriented towards shortterm profits, and are failing their customers by completing their projects late and to a low standard. To protect yourself from such risks, I would advise you to spend more time studying the chosen development company/ project, and to put the following questions to the company: - How experienced is the construction/development company? This is the most crucial question that can influence your final decision. How many projects (and which particular ones) has the company completed, and did it keep to the schedule and the promised terms? The choice of a company is acceptable if there is at least one successful project found in its portfolio. How to check a company’s experience: • View the company’s website, read about its history, its management team’s experience, and its past/current projects; • Talk to clients who have already purchased real estate from the said company; • View the company’s ongoing construction projects; check the quality of construction (which building materials have been used, seismic sustainability, whether or not energy-eﬃcient insulation and isolation systems have been used, whether or not the developer pays due attention to the planning of the engineering systems – gas and water supply, sewage, electricity, etc.); carefully study the project plans, building materials and their provenance (if possible), the composition of the residential complex infrastructure (yard, parking, sports and health centres, shops, etc.); which postcompletion services are being oﬀered by the developer, and at what cost? - How financially stable is the company? If there is uncertainty about the company’s financial health, then there are risks of: • The company being unable to complete the project • The company using cheaper building materials of inferior quality To protect yourself from such risks and make sure that the project is financially secure, I would advise you to check which bank the development company is cooperating with, whether or not the bank is financing the construction, whether or not various stages of the construction process are being completed on time, and whether or not the flats are being sold successfully. - How experienced are the team and the companies
Lika Kardava Founder of #1 Georgian Property Guide Portal www.propertygeorgia.ge
working on the development project? As you know, construction is a complex process that requires the involvement of numerous companies. A professional real estate development company ought to be working with a (preferably international) team of top-level consultants, engineers, architects, brokers and lawyers. Such a synergy of professionals is a prerequisite for the success of a project. - Does the company have its legal documentation in order? Check and ensure that the construction/development company has all the necessary construction permits. It would be advisable to consult an independent lawyer to ensure that the legal documentation is complete. - What about the prices? Of course, we all wish to find a company that oﬀers the desired property at a low price. However, if prices are surprisingly low, or if a company is oﬀering unrealistically good payment terms, then you ought to be careful and not be fooled! On the other hand, you must bear in mind that if you are looking for high-quality real estate, high prices alone do not guarantee high standards. It would be advisable to thoroughly discuss the price breakdown and project quality (based on the aforementioned criteria) with the developer. - To what extent does the developer care about the environment? Construction is a prerequisite for the urban development of cities and countries. However, how harmonized the development projects are with the environment, is a sensitive issue. Take care of the environment! Try to choose a company that does not damage the environment, uses energy-eﬃcient materials, and includes the concept of green space in each of its projects. As a result, you and your family will live in a healthier environment! I hope that the above-discussed issues will help you choose a company and project that is reliable and corresponds to your preferences. I wish you a successful investment!
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November 21, 2016 #170
“ “This is as revolutionary as the paper note 300 years ago. What does it mean for monetary policy and financial stability?”
We live in a wonderful world that is full of beauty, charm and adventure. There is no end to the adventures that we can have if only we seek them with our eyes open.
Sweden Could Become the First Major Country to Issue a National Digital Currency
weden aims to decide on whether to issue a digital currency called “ekrona” within two years, according to a Financial Times report. Cecilia Skingsley, deputy governor of Sweden’s central bank Riksbank, told the Financial Times in an interview that the bank is considering the move after a dramatic drop in the usage of cash. The amount of notes and coins in circulation has fallen by 40% since 2009, with a rise in online shopping and card payments. It has spurred the Riksbank to think about new ways of issuing money across Sweden. Skingsley told the FT: “This is as revolutionary as the paper note 300 years ago. What does it mean for monetary policy and financial stability? How do we design this: a rechargeable card, an app or another way?” While banks are currently given access to electronic money by the central bank, if Sweden does choose to introduce the “ekrona” it would be the first time a major country in the world has given consumers direct access to virtual money issued by a central bank. (Riksbank was the first central bank in the world to issue paper notes, way back in the 1660s.) While Sweden may be the first to issue digital currency, it is not the only country considering such a move. The UK Home Oﬃce told the Treasury earlier this year that there “might be a number of advantages of any digital currency for the UK being created and owned by central government.” Citi also told the
government during the same consultation: “The greatest benefits of digital currencies can be realised through the government issuing a digital form of legal tender.” Skingsley says the central bank is in the early stages of exploring the idea and is launching a project to explore various possibilities. Issues such as traceability, delivery method, and interest on e-money will all be examined. She also stressed that any “ekrona” would sit alongside coins and notes, rather than replacing them. Bitcoin, the most famous digital currency, is built upon a database protocol known as blockchain, which has become the technological darling of commercial banks around the world in the last year. The protocol allows strangers to digitally interact with each other directly, rather than working through a trusted intermediary such as a clearing house. This strips out cost and speeds the process up. The World Economic Forum thinks the technology “will fundamentally alter the way financial institutions do business around the world.” However, Skingsley says blockchain is just one of several technologies that Riksbank will look at in relation to the “ekrona.” Andrew Hauser, the Bank of England’s executive director for banking, payments, and financial resilience, told a conference earlier this year that Britain’s central bank is looking closely at the potential applications of blockchain technology in central banking.
New Istanbul Airport is set to Open in 2018
he first section of Istanbul’s third airport is planned to open in 2018, President Recep Tayyip Erdoğan said, underlining the economic importance of the government-backed construction projects. “The construction of our new airport which will be the biggest in the World is going at full speed. We are going to be opening the first stage in the first quarter of 2018,” Erdoğan said in a ceremony of new power-generating ships in Istanbul’s Tuzla on Nov. 13. Turkey’s Karadeniz Holding has sailed four new 200-megawatt (MW) powergenerating ships to Ghana, Indonesia and Myanmar during a ceremony held in Tuzla Sedef Shipyard where also a construction of 14 new power-generating ships have been initiated. Karadeniz Holding, which develops and operates energy-generating ships dubbed “floating power plants,” have
already sent two ships to Ghana and Indonesia in 2015. In his speech during the ceremony, Erdoğan underlined the importance of such projects for Turkey’s economy, addressing the big construction projects which Turkey’s government has launched or is planning to launch. “We will open the Eurasia Tunnel, which will cross under the Bosphorus next month on Dec. 20. From now on, the double-decked cars can cross from Asia to Europe and vice versa. We launched the third neckless on the Bosphorus, the Yavuz Sultan Selim Bridge on Aug. 26. Just before the coup, we have opened an important part of the Istanbul – İzmir highway, Osmangazi Bridge,” he said. Erdoğan also called on the entrepreneurs in Turkey to not hold back their investments, saying that entrepreneurship is essential to Turkey’s economic growth amid the political problems.
“We set the introduction of cashless payments as a top priority task. We believe that this is one of the key strategic directions for developing the Ukrainian banking system”
Ukraine Cashless Summit iQOS will be Sold on Amer- Kicked oﬀ in Kiev ican Market Next Year The biggest tobacco producer company Philip Morris encourages its customers to quit smoking. The company created a tool which will be safer for health. According to Bloomberg, cigarette producer companies refuse using old traditional methods regarding the decreasing of tobacco consumers; therefore “Philip Morris” introduced a new innovative product at the market to increase the number of customers. iQOS will appear on American market next year. In the company, they claim that iQOS taste will be the most similar to traditional taste of the cigarettes but it will be less dangerous for health.
Southern Gas Corridor to get ADB loan until end of 2016? The Board of Directors of the Asian Development Bank (ADB) will discuss allocation of a loan for the Southern Gas Corridor project until late 2016, ADB Vice President Wencai Zhang said. Zhang, who is responsible for operations in the ADB South Asia Department and the Central and West Asia Department, made the remarks Nov. 15 at a press conference in Baku. He said that the total volume of funding will amount to $1 billion. The proposed investment plan will support the Azerbaijani government’s eﬀorts to finance Shah Deniz-2 project, and is aimed at improving the country’s fiscal position by increasing revenues from natural gas exports from the expanded Shah Deniz field and creating additional jobs. The plan will provide a partial credit guarantee (PCG) to support commercial bank financing of government shares in the amount of 16.67 percent of the project’s cost. If the loan is allocated, it will be used by Southern Gas Corridor CJSC. The gas to be produced as part of the Stage 2 of the Shah Deniz field’s development will be exported to Turkey and to the European markets by means of expanding the South Caucasus Pipeline and construction of the Trans-Anatolian Gas Pipeline (TANAP) and the Trans-Adriatic Pipeline (TAP).
ecently Kiev hosted major financial event of the year, Ukraine cashless summit 2016, which gathered representatives of economic and financial education thought leaders, businessmen, young scholars, and media.As we know, digital-revolution is rapidly changing world. Contactless payments, mobile money, and innovative financial services break down traditional borders and stereotypes, opening new opportunities and prospects. It facilitates crime, bribery, and tax evasion – and yet some governments are printing more cash than ever. Other countries, meanwhile, are ditching cash entirely. And if Star Trek is right, we won’t have money of any sort in the 24th century. Cash really is still king in Ukraine and is some parts of the world, but a few countries such as Sweden, which aims to decide on whether to issue a digital currency called “ekrona” within two years, are a step ahead of the rest in toppling its throne. Given that the cost of handling cash is high, it is in the interest of governments, banks and businesses to push for the change towards cashless. In some countries, effective policies have made a difference, whereas in others, it is thanks to consumers being more open to using mobile or plastic payments. The program of the event which was broadcasted online for more than 1000 people including Georgia, involved following panel discussions: - Financial Literacy as a Global Trend - Power of Financial Education in a Cashless Economy - Cashless Economy Revolution The National Bank of Ukraine hopes to cut cash from 14.3% in 2015 to 9.5% of GDP in 2020, NBU Governor Valeriya Gontareva said in a video address at the opening of the Summit. “We set the introduction of cashless payments as a top priority task. We believe that this is one of the key strategic directions for developing the Ukrainian banking system. According to the NBU’s data, last year the public received 58% of income in the cashless form. However, only 18% of expenses were cashless. This is evidence that the majority of population get used to withdraw money from payment cards in cash at ATMs. Our ambitious goal is to cut cash from 14.3% of GDP in 2015 to 9.5% of GDP in 2020,” Gontareva said. Georgia is a flagship market for contactless payments
Earlier this year visa announced that Georgia is one of the top six countries in the region where people use contactless payments, and the country eagerly accepts new technologies. Thereby, Nino Masurashvili Deputy General Director of Georgia’s largest bank TBC bank, was honored to present and share TBC bank’s achievements at Cashless Summit. Masurashvili talked about what TBC bank is doing in terms of Digitization and innovation. “I would like to speak about what we are doing new in terms of innovation, we are focusing on multi channeling, just imagine ordinary people, they are much more on Facebook then they are using internet or mobile bank, we started to think, why do we limit them with only internet or mobile bank? In coming months the bank will oﬀer services via messenger as well,” Masurashvili stated. “TBC bank has already built a digital strategy,” she added, “If you have no digital access you can not be quick”. In addition data management is significantly important as well, TBC has all usefull data, one of which is GEO localization that helps bank to control customer’s transactions, we know what where to oﬀer,” she said. Georgia using digital currency Recently Co Investment Fund has implemented an investment in the first project of Bitfury Group and as a result of this, Bitcoin Technologies processing data center was opened in Gori. The Fund had 20 million USD loan for BitFury Group. Bitcoin Technologies are so rapidly growing industry that, this business started very successfully and BitFury Group paid the loan in a year and a half. (Source BusinessContract) Ukraine Launching Electronic Currency based on Blockchain National Bank of Ukraine is going to release electronic currency based on blockchain. This issue is added into the roadmap for Cashless Economy, a large-scale project on implementing cashless payments. Plans of the National Bank of Ukraine were revealed by Konstantin Yarmolenko, an advisor to the head of the agency for E-government queries. Its main goal is a transition of the banking system to cashless payments, in particular, using the blockchain technology. The goal of the Ukraine Cashless Summit was to bring together important individuals to discuss innovations in electronic payments and how financial literacy can serve to promote a cashless society.
November 21, 2016 #170
UNIVERSITY OF LAUGH Directed by Levan Tsuladze
ENGLISH SUBTITLES IN MARJANISHVILI THEATRE DURING THE WHOLE SEASON!
November 21, 2016 #170
“The project will be implemented in active regime. On the first day, participants will be divided in groups and the process of generation of ideas will start”
15 “All women, who have turned 18 years old, are welcome to participate in the project. There is no upper age limitations”
presentation of their ideas. Moreover, successful businessmen will deliver short speeches. At the end of the day, project participants will be able to get entertained and relax in various forms. It should be noted that the project is implemented in continuous regime and the event organizers will work with project participants during the night to provide maximum assistance to them in the project implementation process.
Tamta Kalandadze Author of the Project
Emphasizing the role of women as an equal and valuable phenomenon in both political and business life is relevant in Georgia and worldwide. This factor has accentuated necessity of developing such project as F-creathon. This project has won the grant competition of Innovations and Technology Agency of Georgia. Promoting entrepreneur women in business sector is a key direction of this project.
The second day will be dedicated to presentations and key principles of startup world, as well as first steps of startup authors. In the second half of the day, the project participants will collaborate with mentors to shape a final variant of their projects and at the and of the day, three groups with best startup projects will be named.
Caucasus Business week talked with Tamta Kalandadze, author and organizer of the idea regarding the project. F-creathon project has not been held yet. Only public presentation was held. The project will be implemented on December3-4. Key objective of the project is to expand involvement of young entrepreneur women in business sector, to transform their ideas in startup projects and to prepare them for acceleration process. We will also contribute to developing startup eco-system in Georgia. - How was the project idea born? - I started developing the project after Innovation and Technology Agency announced grant competition for holding Creathon, MakeAthon and Hakathon. I had this idea previously too, but after announcement of
F-creathon: Project Aiming at Promoting Entrepreneur Women’s Role in Business Sector this competition I found a real way for its implementation. - Who can take part in the project and what are the criteria for selecting entrepreneur women? - All women, who have turned 18 years old, are welcome to participate in the project. There is no upper age limitations. Naturally, we will choose creative and innovative projects, motivated
young women full of enthusiasm, who have potential and ambition to implement their startup ideas in reality and develop the business sector of Georgia. - Who will act as mentors and speakers and what activities will be carried out within 48 hours and in which forms? - Individuals experienced in this field will act as mentors and speakers. We will also
cooperate with successful businesswomen, who will share experience to the project participants. The project will be implemented in active regime. On the first day, participants will be divided in groups and the process of generation of ideas will start. Trainings will be held in marketing, financial and legal issues. At the end of the day, mentors will assist groups in preparing primary
- After completion of Creathon, participants will start implementing ideas. Do you plan to hold intermediary meetings with them and what forms will you choose to communicate with them? - After project completion, we will continue active cooperation with project participants and we will supervise development of their business projects. Moreover, in December I plan to establish a club for young entrepreneur women. This club will gather women with common interests to exchange ideas, develop new startups and I believe participants of this specific project will be active members of the club.
November 21, 2016 #170