Caucasus Business Week #186 by Caucasian Business Week

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March 27, 2017 #186

March 27, 2017, Issue 186 - www.cbw.ge

Econo-mix Government Town in Ortachala will Assemble almost All Ministries Pg. 4

Event Schirhofer-From Family Business to Global Brand

PR Person Nino Jibladze: Successful Writer Turned PR Manager Pg. 5

What are the Development Perspectives for Produce in Georgia Beneficiary Companies?

Pg. 8

Anatomy of Georgia’s Labor Market Economists always discuss various statistics to appraise economic state of a country. Besides gross domestic product (GDP) level, the unemployment level is one of the statistical indicators that draws attention of economists and society. Unemployment is a heavy burden on Georgian population and it leads to economic, psychological and social losses. According to various theories, a 1% growth in unemployment level results in about 2% reduction in GDP. Moreover, the Authorities lose revenues as a result of reduction of number of taxpayers. In developed countries and in some developing countries, expenditures grow more, because the Authorities have to pay higher compensations for increased unemployment. There is a diﬀerent situation in Georgia, because the Authorities do not pay any compensation for unemployment and unemployment burden is laid on only unemployed citizens. Their incomes shrink and skills and experience regress in the course of time. Pg. 6

Rural Development Strategy Rural Development Strategy was developed by initiative of Georgian government, by support of EU and UN Development Program (UNDP) and UN Food and Agriculture Organization (FAO), as part of European Neighborhood Program for Agriculture and Rural Development (ENPARD). Action Plan for 2017 Agriculture Development Strategy includes quite ambitions plans. The Government-proposed document determines an action plan that should be implemented in the coming years. We introduce the action plan without changes. “Financial support will be provided to about 110 new and operating enterprises; 500 hectares of agriculture land plots will be insured; New gardens will be arranged on 700 hectares; water supply to irrigated land plots will be improved on about 7500 hectares; about 1600 hectares of spaces will be rehabilitated and dried; irrigation and drainage channels of about 800 kilometers will be cleaned and arranged; about 40 cooperatives will be equipped by Pg. 11 due inventories;

2 GOVERNMENT

NEWSROOM ADB ﬁnances $800m road construction in Georgia This will be the Khevi-UbisaShorapani-Argveti section of the road that will include about 90 bridges and 40 tunnels. The ADB will finance the construction of the new road with a total of $800 million.

Government Town Underway in Ortachala As part of governance reformation program, we have already started design works for a joint service oﬃce. We have decided to implement a government town project beside Business House project with the aim to improve quality of services.

ECONOMY

Nonresidents Could Purchase Corporate Securities From 2018 Starting 2018 nonresidents will be able to purchase corporate securities. Currently, state GEL-denominated securities represent a most-developed segment.

Citizens Will be Able to Calculate Inﬂation According to the Personal Expenses According to Sakstat, program of the personal inflation calculator has been introduced in Georgia, after the world’s leading countries.

BANKING

About 23% of Loans Converted into GEL Currently, 75 million USD has been converted into GEL, Koba Gvenetadze, President of NBG, noted. “Moreover, we have also specified the list of loans that are subject to larization. About 23% of loans were converted into GEL.

Banking Sector’s Revenues Grew in January-February Period According to statistics of NBG, in the reporting period the banking sector’s expenditures totaled 105 million GEL, including staﬀ expanses marked 92 mln GEL, as opposed to 85 million GEL as of March 1, 2016.

BUSINESS

Demand for Georgian Products Grows on Exports Markets, Exports Rise by 27% Exports ratio in total trade turnover constituted 356 million USD, up 27% year on year and imports marked 1.067 billion USD, up 15% year on year.

Georgia’s Trade Turnover Rose by 15% with EU, by 40% – with CIS In January-February 2017 Georgia’s foreign trade turnover with EU countries made up 375 mln USD, up 15% year on year, including exports marked 102 mln USD, up 31% year on year, and imports totaled 274 million USD, up 10%.

COMPANY

Beeline Recommends the Government to Open the Corporate Market It has been prompted to cover 55% of the country’s territory by 3G network. Beeline covers 50% now and the company will overcome the new parameter within 3 months.

March 27, 2017 #186

PM Kvirikashvili encourages citizens to follow visa-free requirements

ew security measures will track the status of Georgian citizens travelling to the Schengen Zone after new legislation lifting visa-requirements for Georgians will enter into force on March 28. Based on the new regulations, Georgian citizens holding biometric passports can travel to the Schengen Zone for a period of 90 days within any 180-day period for purposes other than working. The new measures will trigger an alarm system if a Georgian citizen overstays the 90-day limit and will inform the relevant European authorities. Georgian Prime Minister Giorgi Kvirikashvili said at

today’s Government Meeting that it is important for Georgia to prove itself a responsible partner to the EU and to respect the conditions of the recently-received privileges of visa-free travel. Prime Minister Kvirikashvili said that if a Georgian citizen overstays the 90-day limit, “we will send information to EU-member states...and begin actively searching for this person”, and added that although this process will be funded by the government, the violator will be ultimately responsible for all incurred expenses. Kvirikashvili stresses that Georgian citizens should be aware of the possible consequences before travelling.

The EU-Georgia Visa Liberalisation Dialogue started back in 2012. Since then the country has carried out a number of reforms and adopted and amended a number of laws in order to align certain policy and legislative standards with those of the EU. Prime Minister Kvirikashvili will be among the first to enjoy the right of visa-free movement across the EU. He will lead an unoﬃcial youth delegation to the ancient Greece capital of Athens and later to Belgium’s capital of Brussels in the centre of Europe. The Georgian delegation will celebrate Georgia’s historic achievement with a series of events.

PM meets with young Georgian innovators

inners of the Millennium Innovation Competition will participate in a US National Aeronautics and Space Administration (NASA) Space Center University educational program in May. Smart Kids’ project titled “Geological Threats” oﬀers a very precise messaging system to alert people within landslide zones. Georgian Prime Minister Giorgi Kvirikashvili met with the winners of the competition in Georgia’s western region of Samegrelo. Always think in a non-standard way. Try not to choose an ordinary way”, Prime Minister Kvirikashvili said while addressing Smart Kids at Zugdidi Technology Park. Congratulating the team with the victory Kvirikashvili believes the Technology Park will continue to support

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The Editorial Board Follows Press Freedom Principles Publisher: LLC Caucasian Business Week - CBW Address: Aleksidze Street 3 Director: Levan Beglarishvili; Mob: +995 591 013936 Sales: Mob: +995 558 36 61 07 WWW.CBW.GE Email: caucasianbusiness@gmail.com

young innovators to turn their ideas into reality. Winners of the Millennium Innovation Competition will participate in a US National Aeronautics and Space Administration (NASA) Space Center University educational program in May. Smart Kids’ project titled “Geological Threats” oﬀers a very precise messaging system to alert people within landslide zones. Georgian Prime Minister Giorgi Kvirikashvili met with the winners of the competition in Georgia’s western region of Samegrelo. Always think in a non-standard way. Try not to choose an ordinary way”, Prime Minister Kvirikashvili said while addressing Smart Kids at Zugdidi Technology Park. Congratulating the team with the victory Kvirikashvili believes the Technology Park will continue to support young innovators to turn their ideas into reality.

www.cbw.ge <<

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Government to Spend 13 Million GEL to Protect Nut Trees from Insect Turkish Investors Consider Georgia as One of the Alternative Markets after Russian Embargo International Business Forum in Tbilisi Held with the Support of BIA and King David Residential Georgian Watch Brand UNIQ to Participate in Baselworld Exhibition 2017 Terabank Has Already Revealed the Winner of the First Mid-Lottery Helios Energy Georgia and Alternative Energy Sources in Georgia Why Tbilisi’s One of My Favorite Cities in the World Zugdidi to Enjoy Unlimited Water Supply Starting Next Year

Editor: Nutsa Galumashvili. Mobile phone: 595 380382 Reporters: Medea Samkharadze; Mariam Kopaliani; Merab Janiashvili Designer illustrator: Ilia Chrelashvili. Technical Assistant: Giorgi Kheladze

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

March 27, 2017 #186

PUBLICITY

ECONO-MIX

Government Town to Be Built in Tbilisi

Irakli Lekvinadze TVice-Mayor of Tbilisi

3 000 Market Places are Allocated for Street Vendors

Government Town in Ortachala will Assemble almost All Ministries

‘‘

Merab Janiashvili Economic Analyst

Discussions were held on constructing a cluster, not a town. This signifies we will explore the issue, but I believe this is the most correct decision to optimize expenditures. We are a tourism country. Tbilisi should be a tourism city and there are many Ministries that are located in places, where it would be better to build a 5-star hotel.

t the 23 government meeting the Prime Minster put forward a very interesting initiative. A Government town will be constructed in Ortachala, where almost all Ministries will be assembled, excluding several ones. A quite vast territory has been allocated for the project implementation, Giorgi Kvirikashvili noted. «As part of governance reformation program, the project for creating a joint service space is underway. We have decided to implement a government town project beside Business House Project in Ortachala with the aim to further improve the service quality. We have allocated a quite vast territory for the project implementation and ministries will move there. This process will bring positive results, because many oﬃces and hotel spaces will be freed in the center of Tbilisi. On the other hand, the development sector will be promoted. The extensive space will assemble almost all Ministries, excluding several ones. This factor will upgrade physical services for legal and physical bodies to an essentially new level. This is an important project and I welcome its commencement», Kvirikashvili noted. Minister of Economy and Sustainable Development Giorgi Gakharia welcomed the PM’s initiative. Construction of a government town in Ortachala is the most correct decision for optimization of expenditures. At this stage, the issue is being explored and not specific construction works are being carried out, Giorgi Gakharia said. «Discussions were held on constructing a cluster, not a town. This signifies we will explore the issue, but I believe this is the most correct decision to optimize expenditures. We are a tourism country. Tbilisi should be a tourism city and there are many Ministries that are located in places, where it would be better to build a 5-star hotel. These factors will boost the city economy and grow tourist inflow. I believe optimization of expenditures is the cornerstone on this project. If the space arrangement regulatory plan approves the project, this will be an interesting project in term of both economy and space arrangement aspects. This will be a very serious step for efficiency of expenditures», Gakharia noted. A due territory has been identified on Gulua Street in Ortachala for the project implementation, he said.

‘‘

- Recently, one of the streets in the center of Tbilisi was freed from street trading. What are the further plans of the Tbilisi City Hall in this direction? - At the request of the residents of Tbilisi, especially those who live in areas where there is a lot of street trade, we have begun implementing measures to curb it. Soon summer, various food products are sold in unsanitary conditions and complete absence of any hygiene. Recently, self-made constructions placed on the sidewalks also create a problem. They create great obstacles to the movement of pedestrians, close the aisles in the entrances, and sometimes are even located on the carriageway of roads. Naturally, we, as the city mayor’s office, are simply obliged to do something in this situation. A few weeks ago, we freed from the street trade the old city and several central avenues, then decided to ban trade with cars that occupied parking spaces. The next stage is to free from the vendors the territory adjacent to the metro station on one of the central streets. Of course, all this is done within the law, as street trade is prohibited. Unfortunately, there are a lot of such places in Tbilisi, especially near metro stations in outlying districts. We intend to solve this problem in stages, as today townspeople are very concerned about unorganized trade, especially when it comes to food. - There is a lot of “but” in this problem. What are the alternatives that you offer to street vendors? - We have always stressed that a brutal and inhuman approach to this topic is excluded, since we understand the social factor of street trade and it is very important that people can continue to work. Therefore, we approach to this problem very carefully. Naturally, we are thinking about alternative trade places, we are actively negotiating with representatives of the Association of Markets, which unites 17 markets in various districts of Tbilisi. Most of them expressed their readiness to accept street vendors and give them a preferential, 6-month period when they can work for free. We are ready to meet with every trader, and help them all individually. A corresponding statement has already been done by the Association of Markets, which is ready to register traders who are still working on the street. So it is natural that we are fully aware of the social importance of this issue, and hope that these people will begin registration in places of organized trade. - Were there any contacts between traders and representatives of the Association of Markets, and what do traders think about alternative employment opportunities? - We had preliminary negotiations with the Association, and its representatives repeatedly stated about their readiness to provide jobs. We always contact traders, and warn them that their activities are illegal, and sooner or later they will have to leave the streets. We are actively working to provide these people have the opportunity to get alternative jobs in organized trade, where the conditions are much better. We are also in constant contact with street vendors, and are ready to meet with everyone to convince them that working in a new place will be acceptable for them. - How many places can the Markets Association offer? - According to preliminary data, they can provide about 3000 trading places. We cannot say whether this is enough, since counting street vendors is associated with considerable difficulties, so at this stage we do not have exact figures.

March 27, 2017 #186

«This is a good opinion because it is necessary to optimize expenditures. The Prime Minister would not talk only about idea. If the space arrangement plan is being prepared, this signifies the due territory has been also identified. The plan is being developed on a specific territory, where the project eﬃciency is confirmed in terms of space arrangement and economic eﬃcacy. The complex will be built only after these works», the Minister said. It should be noted that currently the financial part of the project or other details remain unknown. The Prime Minister has not specified expenditures for constructing the government town. The 2017 state budget does not contain the project implementation specifications. It is also unknown which financial resources will be used for the project implementation. The due funds may be mobilized from the state budget, long-term credits of international organizations or in the form of grants. Currently, three Ministries are located in Ortachala: Ministry of Finance, Ministry of Environment Protection and Ministry of Justice. Revenues Service also functions in this zone. Only Ministry of Economy operates in rented space. The Ministry has rented a building in the center of Tbilisi. The old building of Ministry of Economy has been privatized and Hualing Georgia plans to build a hotel there. The idea of constructing a government town is interesting in itself and this project may bring genuine benefits to economy. First of all , it is worth noting that certain financial resources will be optimized such as cleaning, security service, IT services and so on. At the same time this project will be beneficial for the country if huge financial resources are not spent on new buildings and luxury things like Kutaisi Parliament building and President’s Palace. It should be also noted that implementation of similar major infrastructural projects will also make influence economic growth rate and this is necessary for Georgian economy. Privatization of the buildings, where government structures function today, will bring additional investments. Thus, we should wait for detailed assessment of the government town project and economic substantiation that will create more evident picture of pros and cons of tye project.

“Georgia is trying to overcome poverty. As a result, poverty level is reducing. Several years ago the poverty level was 15%. The figure has dropped to 13% now. We hope in 10 years poverty level will be zeroed in Georgia. We do not want to see poor people in Georgia. All ongoing reforms are to leave as much money into citizens’ wallet as possible”

Mercy Tembon WB regional director

EVENT

March 27, 2017 #186

Schirhofer-From Family Business to Global Brand In the center of Tblisi, on Vaja Pshavela Avenue N7, Schirnhofer Brand Shop has been opened for meat products and pastry lovers. The brand is not unfamiliar for Georgians since it was introduced to Georgian market few years ago, however from now on, the customers will be able to buy delicacies and have more diverse choice of cheese and meet products. Apart from that, the shop will sell pastry made with Austrian traditions. MEDEA SAMKHARADZE

Apart from that, the shop will sell pastry made with Austrian traditions. At the opening of the shop, Austrian Ambassador, Arad Benkö declared that being in a Schirhofer shop is an exciting experience for him. “In the center of Tbilisi, I feel like I am at small Austrian island, it feels like home. Austrian Embassy was opened few months ago in Tbilisi and we believe that opening Schirhofer shop in Tbilisi is very important and it is our aim to support business relations between two countries”declared Austrian Embassador. The representative of Schirhofer in Georgia, Lasha Babuadze says that the company has exclusively been presented in Georgian since 2013, but brand shop will enable management to focus on delicacies. The customers will be able to try more than 50 diﬀerent kinds of Austrian meat and cheese

and buy the products. About 20 kinds of pastry made with Austrian methods will be cooked and sold in the shop. With the aim to introduce Austrian pastry to Georgian customers, Georgian cooks learned how to cook Austrian pastry with their traditional methods. Bread technologist, Werner Kubl arrived in Tbilisi to help Georgian bakers to learn Austrian way of cooking pastry. Lasha Babuadze declared that high quality is the priority for the company and they definitely have high quality standards. “Our brand is healthy and doesn’t include additional ingredients. You can buy wheat, rye, potatoes bread. When it comes to quality, we set a high priority. Our production has a high quality and it is well-controlled”- declared Babuadze and he talked about the control mechanism which is established in Austria. Schirnofer collaborates with lo-

cal farmers in Austria to control the quality. On the scale of the country, the company has 630 partner farmers. The strictest control of the quality starts from those farmers, who have ultramodern technologies and laboratories to monitor every stage of meat production. For that reason, it fairly gained the trust and love of customers all over Europe and in Georgia. “The production has laboratory monitoring 3 times and only high quality and real Austrian products are sold to the customers. The company holds a lot of certifications to confirm its quality”- noted manager of Schirnhofer shop, Ekaterine Amonishvili. Schirnhofer gained IFS (International Food Standard) certifica-

tion which constantly controls the food quality. Vier Pfoten, Greenpeace and Kroswang are the partners of the company. The representative of Schirnhofer, Alois Keiser says that the production is made 100% with Austrian meat and the meat is strictly controlled. The production is made only in Austria and afterwards exported to other countries. Therefore, the production is the same everywhere, whether you buy it in Austria, Germany or Georgia. “The company has gained few certifications and we export our production to many countries in the world. We are happy that Georgia is becoming more advanced in tourism and economy, therefore, it is important for us to invest in your market”- ex-

plains Keiser. “Schirnhofer” management invested 500 000 USD in the first brand shop and created 20 more jobs. It is planned to open more brand shops in diﬀerent Georgian cities in the future. Meat Company Schirnhofer was established in Kaindorf, Austria by Josen Schirnhofer in 1926. His son, Karl Schirnfoer started producing meat products with his mother in 1950 and made it a big factory. Since 1992, Karl Schirnhofer Jr. has been manager of the company. Company Schirnhofer is located in the heart of Austria, ecologically clean region of Styria. It has been producing more than 600 kinds of meat products for almost a century now. Only Austrian meat is used for the production. That’s why family business turned into famous meat Producer Company in the world. European quality of the production and service, aﬀordable prices –this is an important announcement of the company and they hope that Schirnhofer will be a brand shop, where customers will always want to go.

LABOR MARKET

March 27, 2017 #186

Anatomy of Georgia’s Labor Market WWW.BFM.GE

Economists always discuss various statistics to appraise economic state of a country. Besides gross domestic product (GDP) level, the unemployment level is one of the statistical indicators that draws attention of economists and society. Unemployment is a heavy burden on Georgian population and it leads to economic, psychological and social losses. According to various theories, a 1% growth in unemployment level results in about 2% reduction in GDP. Moreover, the Authorities lose revenues as a result of reduction of number of taxpayers. In developed countries and in some developing countries, expenditures grow more, because the Authorities have to pay higher compensations for increased unemployment. There is a diﬀerent situation in Georgia, because the Authorities do not pay any compensation for unemployment and unemployment burden is laid on only unemployed citizens. Their incomes shrink and skills and experience regress in the course of time. Moreover, unemployment reduces motivation for working.

Current Situation According to all statistical and sociological inquiries in Georgia, unemployment problem is number one issue in the country. According to sociological survey conducted by NDI in May 2015, 67% of Georgian citizens consider a lack of job places to be a key problem, while according to the research, 66% consider themselves to be unemployed. According to national statistics service of Georgia, the year of 2009 recorded highest unemployment indicator (16.9%) and the lowest figure was recorded in 2015 (12%). Therefore, it is important to clarify what makes such huge difference between official statistics and reports of sociological surveys on unemployment issues. First of all, we should determine the essence of unemployment. A person is unemployed who cannot find a desirable job place with desirable salary. In Feudal system there was no unemployment in practice, because people did not have the right to reject job. If a person has no income, he/she has to leave for foreign countries or receive social allowance. Many countries issue high unemployment allowances and this factor competes with low-income job places too. Perception of unemployment is a very important issue. Because of this reason, in most cases official statistics does not coincide with sociological surveys. For example, many people, who do not work at desirable place, consider themselves unemployed, including taxi drivers, land workers and so on. But the official statistics does not consider them as unemployed. Employment in Numbers Business sector’s turnover in the fourth quarter of 2016 rose by 15.3% year on year and marked 17.4 billion GEL. The business sector’s output indicator also grew to 8.8 billion GEL in the fourth quarter of 2016, up 20% year on year. Ratio of major business in the reporting period made up 81%, medium business sector — 9.4% and small business sector — 9.6%. A little different situation is met in case of total output: major business — 79%, medium sector — 11.3% and small business — 9.7%. Value of goods and services purchased by enterprises marked 13 billion GEL, up 2.4% year on year, while sales of goods and services made up 8.1 billion GEL, up 11.7% year on year. Averaged number of employees constituted 620 800 persons, up 6.2% year on year, including 40.7% women. Ratio of major business in total number of the employed marked 61.3%, medium — 16.6% and small business — 22.1%. Total number of hired citizens made up 584.9 thousand persons, up 3.7%. Total personnel expenses constituted 1997.6 million GEL, up 12.2% year on year. Monthly salaries marked 1130.4 GEL, up 85.8 GEL year on year, including women salaries marked 819 GEL, up 66.1 GEL. Averaged monthly salary due to size of enterprises is the following: major business — 1268.5 GEL, medium — 1110 GEL and small business — 646.6 GEL; In the reporting period, trade (vehicles, household products and personal things), processing industry and construction fields emerged as leaders in terms of number of employees with 25.5%, 13.8% and 10.4% ratios, respectively. However, considerable ratio in the structure is recorded for health and social assistance (10.3%), transport and communication (9.9%), real estate operations, leasing and service companies (9.8%). As to number of employees, this indicator is distributed due to regions in the following way: Tbilisi — 65.8%, Ajara — 9%, Imereti — 6.9%, Kvemo Kartli — 5.5%, Samegrelo-Zemo Svaneti — 3.6%. Asymmetry of Methodology If we analyze international methodology of unemployment statistics, we will see that Labor Statistics Bureau determines unemployment level that provides annual indicators for unemployment and other aspects of labor, such as types and duration of unemployment. Indicators are calculated through research of household economies (families). Inquiries are held every quarter and members of 15 and above age categories of about 3400 household economies are inquired. Based on survey results, Labor Statistics Bureau includes each mature member of families in three

categories: employed — persons, who spent a major part of the week at offices; unemployed — persons, who tried to find a job place over the past 4 weeks, but failed; Those unrelated to workforce — bodies, who do not belong to either of the previous groups (students, housewives, pensioners). Bodies of 15 years old and above are considered unemployed if they have not worked for 7 days before the survey and if they have sought job place for the past 4 weeks, including agriculture sector workers, tutors, retailers and so on. If these persons have worked even an hour for seven days before the survey, they are considered employed, according to this methodology. In general, number of self-employed bodies exceed quantity of the employed in Georgia. Total number of the employed accounts for 1.7 million persons, including about 1 million persons are self-employed. That’s why a major part of population does not consider themselves as employed. According to official methodology, 1.7 million persons have been employed in Georgia, of which 246 000 are unemployed. If we analyze number of job seekers on domestic market, we will conclude that not only 246 000 persons seek job places, but a major part of self-employed too. This signifies that new job places are created in Georgia, but this does not signify that the new job places are occupied by unemployed citizens. There is much probability that the mentioned new positions be occupied by self-employed bodies. Currently, a major part of employed citizens are self-employed, of which 59% work in agriculture sector, which creates 8% in GDP. Structural Unemployment In the course of time, changes take place in structure and technology of consumer demand, which, on their turn, change structure of joint demand for workforce. As a result of similar changes, demand for professions grows. In this case unemployment arises because workforce does not fully respond to new changes in structure of employment. Access to finances does not represent a main obstacle for doing business in Georgia, but amorphous system of crediting business sector by commercial banks is an important problem. For example, if we analyze loans issued by commercial banks, almost 60% of total loans are concentrated in trading sector that is not a main source of formal employment, while the major employer industry receives only 20% of total loan portfolio. Noncompliance of workforce skills and experience to job places on the market is a key reason of structural unemployment. This especially concerns the former Soviet Republics, where values were revised and skills of workforce with Soviet education turned out inappropriate. Inappropriately-educated workforce does not exist in only elder generations. Despite reformation, education system still remains inefficient in bringing up future leaders, who would satisfy the modern market demands. Over the past 25 years, after announcement of independence, the state has not carried out efficient reforms against structural unemployment in either education or labor relations field. All reforms and initiatives, including creation of employment agency, introduction of general skills and other standard methods in educational space or various preferences for socially unprotected citizens, represented not socially-oriented policy for long-term results, but for short-term antisocial target policy, where the Government assisted them who were granted the official status of the poor. Meanwhile, the remaining part of population had to rely on families and market. As to reasons of arising unemployment, naturally, these factors vary. Factional unemployment is one of the reasons, the moment, when people need time for finding desirable job. The second reason comes from structural unemployment, when there is small working place on the market and the number of job seekers exceed the supply. (Based on economic situation of our country, the demand for employment prevails the supply). The third reason is related to market power of trade unions that raise salaries above the balance level and labor supply becomes excessive. Finally, we can summarize and say that unemployment is an incorrect communication of factors.

March 27, 2017 #186

PRODUCE IN GEORGIA

WHAT ARE THE DEVELOPMENT PERSPECTIVES FOR PRODUCE IN GEORGIA BENEFICIARY COMPANIES?

ifteen companies financed under Produce in Georgia state program will try to operate on the market independently. The issue is of companies that have completed 24-month cooperation period with Entrepreneurship Development Agency as part of the state program. According to Entrepreneurship Development Agency of Ministry of Economy and Sustainable Development, twelve out of 15 companies are newly established startups, which have set up new businesses with the support of Produce in Georgia state program, while the remaining three companies have expanded and reequipped the existing businesses under the mentioned program. Moreover, with the assistance of Entrepreneurship Development Agency, five companies make focus on exports markets and they have already exported 2 720 653 GEL products to foreign markets. These 15 companies have made investments of more than 60 800 000 GEL. Subsidies issued to these companies made up 6 899 329 GEL. They have transferred 12 969 167 GEL to state budget and this is a very positive indicator. It is important that these companies have created 470 new job places. In the future, the number of employees will considerably increase, because companies plan to actively expand production. LLC ColorPack, LLC Decora, LLC GRC, LLC Made in Georgia N1, LLC Green Energy, LLC Hemoline, LLC Tissue Paper, LLC Geocap, LLC Inovas, LLC Energy Georgia, LC Poliedro, LLC Iseko, LLC GVG Plast, LLC Polimer Plast – these companies continue operation on the market independently from the state. The Caucasus Business Week (CBW) has inquired how these companies plan to continue operation on the market, whether they have created competitive product and whether they have resources to continue operation without state assistance. Representatives of business companies state that this is a very important program, because 2-year grace period is huge support for business sector. LLC Green Energy, wooden granules manufacturing company, launched production of technologically and ecologically clean wooden granules in 2015. TBC Bank has issued 160 000 USD loan to the company. Under Produce in Georgia program conditions, Entrepreneurship Development Agency will cover 10% of loan’s interest rate for initial two years”, Ministry of Economy said. Investment value of LLC Green Energy project is 185 000 USD. The enterprise launched operation in village Manavi, Sagarejo District in February 2015, he said. Key direction of Green Energy company is to process raw materials (biomass) to receive wooden granules, which is solid biofuel and is alternative to firewood and will reduce a use of firewood in the country. LLC Green Eneregy considers all sectors, which actively use firewood, to be target markets in Georgia. According to preliminary estimations, the mentioned biofuel is a good alternative for reduction of expenditures in commercial sector (the company products are cheaper by about 10% compared to firewood). LLC Green Energy director Temur Matiashvili explains that he has completed cooperation with Ministry of Economy, but the company is able to operate on the market independently. Currently, the company sells products in Tbilisi and plans to expand the distribution network to regions too. Without Produce in Georgia program, it would be

diﬃcult to develop small businesses in the country, Matiashvili said. Inovas pharmaceutical company was launched by financial support of Produce in Georgia state program in Lilo settlement in Tbilisi in 2015. About 4.5 million USD has been invested, including TBC Bank has issued 2 million USD loan. The company manufactures ingredients that are necessary for medications. Inovas head David Ebralidze explains that starting November 2016 the company has been serving the loan independently. As a result, there are no problems in this respect. The enterprise works at full capacity and exports products to foreign markets. This year the company plans to expand operation and invest about 6 million EUR, Ebralidze said. «We plan to add new lines, new products and satisfy the demand on our neighboring markets. Currently, we manufacture ingredients fro medications», Ebralidze noted. Currently the company exports products to Russia, Ukraine and Kazakhstan, he added. «The program was very important, because the 2-year grace period is much stimulus. As to defects, we have not noticed anything», Ebralidze said. Denola,tourism accessories manufacturing company, completed cooperation with Entrepreneurship Development Agency several months ago. The company director Kakha Mosidze explained that in 2015 the company received 2 million USD financial package and arranged production in Avchala. Produce in Georgia state program has considerably assisted the company in business inauguration and taking control over 70% of market ratio. Despite product from Azerbaijan is imported under dumping tariﬀs and this factor frustrates development of Georgian production, the company continues operation on the market, however, it will be good if the Georgian Authorities prioritizes domestic production, Mosidze said. Woodmaster, which was financed as part of Produce in Georgia program, will complete cooperation with Entrepreneurship Development Agency in June 2018. The company director Kakhaber Jvarsheishvili explains that the company is very content with state program, because the company could not launch operation without this program. Tax amendments approved by Government that exempts reinvestments from profits tax enables to return these funds back to production and develop business, he added. We remind you that Woodmaster company took part in Produce in Georgia state program in 2017. Namely, National Property Agency transmitted 12 595 square meter land plot for a symbol price of 1 GEL to LLC Woodmaster in Zemo Ponichala. It was said that the company planned to produce furniture, wood and wood products, all sorts of watches and their parts. The company is to invest 1 793 000 GEL in production. Currently, Entrepreneurship Development Agency has supported 184 projects worth more than 384 million GEL, including in cinema industry and hotel business. It is also important that all theres projects have created 7 966 new job places as part of the mentioned project. By the initiative of Georgian Government, starting June 2014 Ministry of Economy and Ministry of Agriculture launched a new state program – Produce in Georgia. Key objective of this program is to support business companies, create new enterprises, expand the existing companies and re-equip them with the aim to develop entrepreneurial culture and increase exports potential.

PR PERSON

March 27, 2017 #186

Successful Writer Turned PR Manager Nino Jibladze who now works as a head of GULF Oil Company’s marketing department, was a great novel writer in her young ages, she was a nominee of Georgia’s most important awards, Saba Literary Prize.In her interview with Caucasus Business Week Nino talked about her amazing professional career in several fields starting from novel writer to working at US military cooperation and continuing to public relation’s manager.

-What is your profession? - I am a journalist by profession. In 1992 I became a student at Tbilisi State University faculty for international journalism, but later I continued studies abroad – in the field of Public Relations. - Your first job place. - I started working at two job places simultaneously – I used to write for the Droni newspaper and, at the same time, I was also working at television station for ChorNews program. -Current job and position. - Currently I work for GULF Oil Company. I am a head of marketing department. - Your first success. - The first success came when I passed an interview at US military cooperation service in 2000, as well as in the further working period for 8 years. I recall this service as a considerable step – the period of learning hardworking and sharing responsibility. - Business, project that you are proud of even today. - I am proud in the depth of my heart that once upon a time I used to write novels and my first novel was sold out fully in three months after publication. In that period I used to meet with young people – we were reading books together, shared our emotions and etc.. To put simply, this book has brought much pleasure to me in terms of profession. Shortly after publication, the novel was nominated for Saba award among the best novels, beside texts of Guram Dochanashvili and Aka Morchiladze. This was huge success and I will never forget this. - What factors make a person successful in your field? Besides knowledge, what special characteristics are required? - I would name emotions, aspiration for goals, unstoppable desire to step forward – these qualities can bring many successful results.

“

I would not say there is a classical model of PR in contemporary world, because everything I was personally taught disappears stage by stage and new approaches are coming to frontline.

We know cases, when most successful people have not graduated from universities, but they can turn the world upside down thanks to innovative approaches and divine talent that aspires for creating innovations. - Is it possible in Georgia today to study PR or international knowledge and experience are necessary? - We have many specialists, very talented people, who do not miss the day and read lectures – they can give many useful information. - Is PR perceived and understood in Georgia in its classical nature? -I would not say there is a classical model of PR in contemporary world, because everything I was personally taught disappears stage by stage and new approaches are coming to frontline. Previously, it used to take to spread information by printing news at newspapers, and now any horrifying information may be spread in seconds. - How easily can you settle crisis situations and take decisions? Do similar cases worsen quality of working process? - I think my working experience was full of crisis situations. Some cases seemed incurable, but I was starting care and action for improving the situation from those seconds. I would not talk much about myself. I think crisis management creates interesting experience that enhances professional people. -Interesting episode that has changed your life. - My family has changed my life – any good episode from life of our family. - If not this profession, which field would you work in? -I would be a diplomat. I adore this profession from my childhood. Invited diplomats used to visit our apartment, mainly from the USA, in 1990s. Sometimes, high-ranking oﬃcials have

climbed to 16th floor to our apartment. There were no restaurants and cafes in that period, therefore the most relevant issues were considered at homes. I recall these evenings with much pleasures and maybe that’s why I adore this profession. - What about your strong personal aspects, as an active person? - I think I am good in time management and I try to share aﬀairs to others maximally. I like reading and watching news programs. I like successful people and I always learn something from them. I respect people, who have attained much success by their own intellect and smartness and have brought benefits to the country. I was never content with myself. I always think that something does not suﬃce and this something does not mean a little. I was never content with myself and I think this is not a defect. - What benefits do you receive form your employer company? What makes it interesting for you? - The company where I work gives me a plenty of good things – first of all, chance for development, Our new and extraordinary undertakings are never refused, almost never. It is a source of internal peace in me, because this is a stable company that enables me to learn from professionals, who work here. It makes me full of much energy, because people working here show much respect and love to each other. This is very important. -What makes major discomfort in the working process? - Unstable environment at work creates discomfort for every employee. -Where do you see yourself after 20 years? -After 20 years I see myself as a person who created her own business and works hard for it.

March 27, 2017 #186

TECHNOLOGY

Microsoft Unveils New Cloud Strategy Technology in Georgia Microsoft Introduced New Strategy of Cloud Technology at Rooms Hotel Tbilisi on March 23. Nikoloz Doborjginidze, General Director of Microsoft Georgia, talked about advantages and opportunities of Cloud technology, digital transformation in business and its values, necessity of use of digital platform, Microsoft assistance package for business field and companies, which plan to digitalize operations, benefits of consumers from digital transformation and other important issues. Moreover, Nikoloz Doborjginidze will also hold discussions over the 4th

technological revolution with representatives of media agencies. Cloud is the core of business digital transformation and Microsoft strategy and growth. Digital transformation enables organizations in various fields to create values. Companies, members of Fortune 500, spent 20 years to create a value of millions of USD. And today digital startups need only 3-4 years, sometimes even 2 years. At the same time, digitalization process will bring much benefit to the society and promote environment protection steadiness, create new job places and upgrade

safety level of our life. We believe that, technology could help us to solve several problems. Our job is to empower people and organizations to do more. Eighty percent of the Fortune 500 is on Microsoft Cloud. We have producing experience to help companies throughout the world to make digital transformation, representative of Microsoft said. Microsoft Azure is an example of a public cloud. With a public cloud, all hardware, software, and other supporting infrastructure is owned and managed by the cloud provider. You

access these services and manage your account using a web browser. Cloud technology enables business fields to make breakthrough in development. Cloud service is established all over the world at high paces. Almost in all business organizations, Cloud changes working style, place and business doing rules. Modern IT companies play a considerable role in determining business strategy by use of Cloud technology. Azure oďŹ&#x20AC;ers easily adaptable Cloud and it is excellent for both big companies like GE Healthcare and NBC News, and startups.

BUSINESS

March 27, 2017 #186

Oetinger, N1 Bavarian Beer is in Georgia The spring arrived and drinking beer became far more pleasant in a warm weather. Beer fans traditionally are expecting novelties. The first one this year is Oettinger. Oettinger, a real Bavarian Beer has been brewed since 1731 with strict observance of the German Beer Purity Law. The history proved that in Germany Oettinger is the most consumed Bavarian beer. Now it can be enjoyed by Georgian beer fans as well. Unique combination of light color malt, aromatic hop and soft water creates transparent, golden liquid, which along with various flavors bears higher than average bitterness. Enjoy it!

AGL

BANK

Social Service Agency and Liberty Bank Sign Cooperation Memorandum considerable funds on these directions. A total of 322 children live at state-owned familytype houses, including 25 children with disabilities. Moreover, about 157 children receive everyday assistance at orphanages and daytime centers. Besides base assistance, they also receive psychological assistance, support in education, they are involved in culture and sport activities, receive vocational knowledge and skills. «I would like to express my gratitudes to Liberty Bank for support! Thanks

On March 22 Zaza Sopromadze, director of Social Service Agency, and Liberty Bank director general Aleksi Khuroshvili signed a memorandum on cooperation at Ministry of Labor, Health and Social Protection.

Under the memorandum, for a period of one year, Liberty Bank will cover electricity and natural gas consumption costs for more than 50 family-type houses and orphanages. It should be noted that in 2016 the bank spent

NEWS

STARTUP

Global Finance Names TBC Bank as Georgia’s Best Bank

Bigmarket.ge: The Online Supermarket With Diﬀerent Concept

The winner was selected due to several criteria: assets growth pace, profitability, return on assets and capital, coverage zone, innovations. “Tenfold victory is much honor for us. This is the thenth award granted by Global Finance. This fact proves we are market leaders in both bank products and financial indicators”, TBC Bank director general Vakhtang Butskhrikidze said. TBC Bank is a laureate of Best Bank in Georgia in 2004, 2006, 2007 and 2012-2017. The awarding ceremony will be held in Washington in October 2017, the date of annual meeting of IMF/World Bank.

A New Georgian Brand CROSTY The history of the brand started in Georgia, where shoe mass production didn’t exist before. Young brothers, Giorgi and Shota Mikaia decided to make their dream come true and create ideal sneakers. We decided to create minimalistic and a high quality brand at the same time. That’s how CROSTY idea was born. At this stage, we collaborate with several Georgian and foreign conceptual shops: Dots Tbilisi, Moreislove.com, SPOT2.55, Minsk, Belarus and at the same time, currently, we have active negotiations with diﬀerent shops from all over the world. Our sneakers are made with minimalistic design and we use the best quality materials for it.

One more online supermarket, bigmarket.ge appeared on the Internet. The aim of startup founders was to create a space which would give new opportunities not only customers but producers. Marketer conducted an interview with a co-founder of bigmarket.ge, Temo Berishvili about more details of the website. Temo, how did you create bigmarket.ge? I and my friends came up with an idea of creating bigmarket.ge, because there was not a similar service in Georgia. Co-authors of the projects are Lasha and Paata Tsagareishvili. We started working on the project in January, 2016 and we launched the website on 20th of March, 2017. What innovations do you oﬀer customers with this service? With the help of a flexible system, it is possible to spare money, time and energy. This innovative website made shopping easier. Besides, it is possible to buy the supply a week or month in advance. Customers can also listen to the music while they are doing shopping. Option: “Look for it and buy it simultaneously” will help customers buy the products while they are looking for other things and just click on the product to put it in the list. Where do you receive the production from and do you focus on the realization of Georgian production? We receive products from large distributors. As for Georgian products, we have one of the categories called “Georgian”, where all the products are Georgian and customers can find them easily. What are the conditions of the delivery service? You can receive a delivery service on the same day of the order and it costs 4.99 GEL. If you can wait for the next day, it will cost 2.99 GEL. On the third day, delivery service is free. If you buy products which costs more than 100 GEL, delivery service is free. We have 7 days delivery service and the customers choose place and time of delivery. What are your expectations? We hope that our idea will be acceptable for society. We don’t expect we will succeed immediately; of course it will take time. We are thinking about spreading our service in the regions as well.

to cooperation with Liberty Bank, we have managed to pay for public utilities of family-type houses and orphanages. Free money resources will enable us to care for resolving other problems and needs of beneficiaries of these centers», Zaza Sopromadze noted. Liberty Bank permanently cares for vulnerable beneficiaries. We are happy to be able to cover expenditures for more than 50 family-type houses and orphanages in 2017», Liberty Bank director general Aleksi Khuroshvili said.

Prashant Joshi appointed as CEO for Adjaristsqali Georgia LLC As Adjaristsqali Georgia LLC (AGL) completes construction of the Shuakhevi Hydropower Plant (HPP), one of the largest infrastructure investments in Georgia, and prepares to move into its operating phase, Prashant Joshi (Tata Power) has taken over from Ronny Solberg (Clean Energy Invest) as CEO of AGL. Mr. Prashant Joshi began his career in renewable energy at the 72 MW Khopoli HPP plant, where he spent ten years managing plant operations and maintenance. During the course of his long career spanning 23 years with Tata Power, Mr. Joshi has successfully managed assignments in a variety of functions including automation projects, Corporate Office, Regulatory affairs and Business Development (Domestic & International) . Prior to joining AGL as the new CEO, he was the Chief Operating Officer of Cennergi (Pty) Ltd., a South Africa-based wind power operator equally co-owned by Tata Power and Exxaro Resources of South Africa. . Ronny Solberg has led AGL since 2015 and, during his tenure, oversaw the construction of the largest and most advanced hydropower project in the history of independent of Georgia. AGL is deeply grateful for Mr. Solberg’s contribution during the construction phase of the 187 MW Shuakhevi HPP.

March 27, 2017 #186

Action Plan for 2017 Agriculture Development Strategy includes quite ambitions plans. The Governmentproposed document determines an action plan that should be implemented in the coming years. We introduce the action plan without changes. “Financial support will be provided to about 110 new and operating enterprises; 500 hectares of agriculture land plots will be insured; New gardens will be arranged on 700 hectares; water supply to irrigated land plots will be improved on about 7500 hectares; about 1600 hectares of spaces will be rehabilitated and dried; irrigation and drainage channels of about 800 kilometers will be cleaned and arranged; about 40 cooperatives will be equipped by due inventories; Rural economy diversification through enhancement of a chain of values related to agriculture and through development of sustainable nonagricultural directions as part of about 150 projects. Total investments will be 320 million GEL. 8000 persons will be employed additionally. About 1300 micro and small enterprises will be organized in the region, about 3000 beneficiaries will be trained; development of tourism and due tourism products in villages based on rural peculiarities and unique cultural identity as part of about 30 projects. Total investments will mark 40 million GEL. About 800 persons will be employed, 30 marked tourism routes and about 20 pathways will be arranged in addition. At least 700 representatives of private sectors will be trained all over Georgia. Upgrading perception in the fields of innovations and entrepreneurship, promotion of personnel. About 1500 beneficiaries will be trained for development of skills and promotion of employment (especially women and young people), number of bodies (students) involved in vocational education process will rise to 8000 ones in regions, residential houses jointly with land plots will be transmitted to 400 refugee families, residents of about 30 villages will attend Georgian language courses, employment

AGRO BUSINESS

forums will be held, salaries will be subsidized to persons with disabilities. Ten innovation centers in villages and settlements will launch operation; road infrastructure of about 250 kilometers will be rehabilitated; about 70 kindergartens will be built and rehabilitated; About 25 sports and culture facilities will be constructed and restored; water supply systems of about 300 kilometers will be built and rehabilitated, as well as about 20 cleaning facilities; natural gas will be supplied to 35 000 new subscribers; At least 6 events will be held on women rights and gender equality issues. At least 10 information meetings will be held; a new code determining categorization of forests will be developed. Assessment of Conditions of grasslands on protected territories will be developed for their sustainable management. For the purpose of shaping wastes management sustainable system in rural areas, a 5-year plan for municipal wastes management will be developed; pilot program for utilization of biodegradable wastes will be carried out. For the purpose of reduction of available negative impact of climate changes, agro-meteorology stations will be constructed and workshops will be held about climate change issues at municipalities”, the document reads. Lon-term Vision According to this rural development strategy, key direction of strategic vision is to ensure continuous growth in life quality and social conditions of rural population on the ground of diverse economic opportunities; sustainable management of natural resources, attainable social goods, rich cultural life, environment protection. Priority directions of rural development will be: economics and competitive capacity; social conditions and living standards; environment protection and sustainable management of natural resources. Economy and Competitive Capacity This document makes focus on economic development and

welfare of villages, namely, economic recovery of farmlands, their restructuring and modernization through diversification and development of eﬃcient supply chain. Rural economy diversification through enhancement of agriculture-related chain and development of sustainable agriculture directions; development of tourism and due tourism products in villages based on peculiarity of villages and unique culture identity. Social Condition and Living Standards Upgrading perception of rural residents in fields of innovations and entrepreneurship will be one of the key directions, as

Total investments will be 320 million GEL. 8000 persons will be employed additionally. About 1300 micro and small enterprises will be organized in the region, about 3000 beneﬁciaries will be trained; development of tourism and due tourism products in villages based on rural peculiarities and unique cultural identity as part of about 30 projects. well as promotion of employees through development of skills and employment opportunities (especially young people, women). Moreover, it is important to develop infrastructure and services, improve main infrastructures (including roads to culture heritage monuments and due infrastructure) and access to highquality state services, including information and communication technologies. Strategy Development Mechanism Agriculture Ministry ensures efficient coordination of the board activities. The rural development interdepartmental board ensures: monitoring of implementation of strategy and action plan, development of 2018-2020 midterm action plan for rural development strategy. Key functions of a rural development structural unit are: administering events under action plan, executing functions of the board secretariat.

AGRO SOLUTIONS

Agro Solution has submitted to market new agricultural consulting product “The aim of project is not only the increasing the productivity of hazelnut orchards, but also the quality of the harvest “

Business Consulting Company

IRAKLI CHIKAVA Director

he company Agro Solution has started implementation of new project, which means consultancy services for hazelnut orchards at various stages of vegetation. Under the project, the company Agro Solutions provides its customers a full range of agronomy and expert consultancy, concerning the maintenance of the hazelnut orchards owned by the customer. Within the above mentioned project, Agro Solution has presented to market 3 (three) types of consulting products: 1. „More Yield”- the one-year, full consulting service. 2. “Planting” - a sixmonth, garden cultivation advisory service. 3. „Basket“ -a two month service, in the directions of harvesting and storage. Product - „More Yield” • Detection and controll of the risk points in the nut orchards. • Providing with recommendations at all stages of vegetation. • Providing with practical recommendation during the specific agrotecnical operation. • Ascertaining – and evaluating the quality of performance of specific operations made by the Customer. • Reporting to the Customer during each visit. • Recommendations for the following directions: - Agro technical works (works for soil, channels for drainage system) - Cultivation of orchard (selection of species, determination of feed, plan-

ning of plot, planting). - Pruning-formation - Feed (types of mineral and organic fertilizers, filing dates and dosage) - Protection of plants (selection of insecticides, fungicides and acaricides, terms of aspersion and dosage) - Fighting against weeds - Harvesting and storage (Preparation of plot before harvesting, determination of the harvest time, storage technologies and recommendation). Product- „Plant it“ • Detection and controlling of risk points at the nut cultivation territory: • Providing with practical recommendation before starting the specific agrotecnical operation. • Providing with recommendations during the orchard cultivation will take place in the following directions : - Works for soil, - Channels for drainage system, - Selection of species, - Determination of feed, - Planning of plot, - Planting, - Watering, - Feeding (types of mineral and organic fertilizers, filing dates and dosage). Product - „Basket“ - Preparation of plot before harvesting; - Determination of harvest time; - Storage technology and recommendation. The present project will help the owners of orchards to keep their hazelnut orchards under the permanent monitoring, to get advices from experts constantly and to receive the reports about the conditions of their orchards. Finally, the purpose of this project is to help the farmers to increase not only the harvest, but also its quality.

PUBLICITY

March 27, 2017 #186

WORLD NEWS

March 27, 2017 #186

Quotes

“ You never lose “When our passengers are boarding the plane, their electronic devices will be taken by authorized staﬀ and put into special baggage after being wrapped in a foam case”

Turkish Airlines mulls measures to avoid potential losses from laptop ban

urkish Airlines is set to take a number of steps to avoid potential losses from a U.S. and U.K. ban preventing passengers from keeping large electronic devices in the cabin, announcing plans to offer special storage and carriage services for the devices, the company’s chief said March 24. The company has also accelerated its works to offer free WiFi services during flights, according to company representatives. “When our passengers are boarding the plane, their electronic devices will be taken by authorized staff and put into special baggage after being wrapped in a foam case. We ensure that our passengers’ devices will not be harmed or lost,” Turkish Airlines CEO Bilal Ekşi told Anadolu Agency. Turkish Airlines also said March 24 that it would offer uninterrupted internet connection during flights starting in April. Through a new app called “eXPhone,” passengers on Boeing 777 and Airbus 330 planes will be able to check emails, update social media accounts and send and receive text messages, Anadolu Agency reported. The app will be accessible after the plane takes off.

Passengers will be charged for the use of the “eXPhone” according to respective service operators’ roaming tariffs. The company has accelerated its works to offer free Wi-Fi services in cabins after the ban, Reuters reported March 24. Ekşi, however, noted that they were very aware that the potential losses of the ban could not be averted by offering free Wi-Fi or tablets. “We can consider these measures as well, but these will not lead to any permanent solution, as many people do not want to share their personal data on other electronic devices due to data security concerns,” he added. Turkish Airlines carried 1.45 million passengers to the United States in 2016 and 834,359 passengers to the United Kingdom, according to Reuters. In the first two months of this year, THY brought 156,542 passengers to the U.S. and 104,627 to the U.K. The U.S. and British decisions to forbid devices larger than a cellphone in the cabin on flights from several Middle East and North African states could hit Istanbul hard, after years building up its position as an international hub.

Russia’s Currency War Flounders With Central Bank on the Fence

ussia’s latest eﬀort to talk down its currency is misfiring, leaving the ball in the central bank’s court days before it reviews interest rates. A warning by Finance Minister Anton Siluanov that the ruble’s current level is about 10-12 percent “overvalued compared to fundamental valuations” barely registered with investors as the ruble headed for its fourth gain in five days on Tuesday. Similar comments a week ago by the economy minister -- who pointed out that its strength exceeded fundamentals -and Siluanov’s own remarks early this month that the exchange rate was “attractive” for buying foreign currency, have done little to take the edge oﬀ the ruble’s rally. The verbal interventions have been beside the point because the central bank is sticking with its free

float while keeping rates on pause since September, making the ruble a magnet for carry traders as borrowing costs remain near historical lows across developed economies. Although policy makers in Moscow will have a chance to narrow the rate differential when they meet on Friday, most economists surveyed by Bloomberg predict the 10 percent benchmark will remain on hold. “As before, the only two factors that matter for the ruble are the interest-rate differential and oil prices,” said Alexander Losev, chief executive officer of Sputnik Asset Management in Moscow. “All the rest are ‘ripples on the water’s surface.’” The ruble slipped initially after Siluanov’s comments were reported Monday, but then recovered and traded little changed. It was 0.2 percent stronger at 57.17 versus the dollar as of 4:43 p.m. in Moscow.

a dream; it just incubates as a hobby

”

“The BRI can be a truly “game changing” proposal provided it is able to foster trust and confidence among member states.”

Larry Page

Engineering studies for TANAP SCADA system underway Engineering studies are currently ongoing for SCADA (supervisory control and data acquisition) system for the Trans Anatolian Natural Gas Pipeline (TANAP) project, and crossings under the Dardanelle Strait and the Evros River, said a message posted on TANAP website. The engineering studies are partly funded by the Innovation and Networks Executive Agency (INEA), established by the European Commission. The scope of “Engineering Studies for TANAP SCADA System” includes all compressor stations, metering stations, block valve stations and the central control station, according to the message. The “Detailed Engineering for Dardanelle Strait Crossing” includes engineering designs of the two pipelines and fiber-optic cables which will cross the Dardanelle Strait within the Sea of Marmara. The “Detailed Engineering for Evros River Crossing” includes the pipeline crossing design of the Evros River which is located at the border between Turkey and Greece. The key documentations for the SCADA designs have been completed and the Factory Acceptance Tests for the equipment are currently ongoing, according to the message.

KPMG to prepare information on Armenia’s business and investment opportunities Armenia’s Ministry of Economic Development and Investment and KPMG, a global network of professional firms providing audit, tax and advisory services, operating in 160 countries, signed today in Yerevan a memorandum of intent. The Armenian government press oﬃce said the memorandum was signed by Armenian Minister of Economic Development and Investment Suren Karayan and KPMG Partner for Russia and other CIS countries Viktor Akulyan. Prime Minister Karen Karapetyan was present at the signing ceremony. Under the memorandum, KPMG will prepare information materials on Armenia’s investment and business environment and present them at various international venues.

China: Belt and Road Initiative

hina’s role in the global context has grown in terms of its output, trade and now its voice and leadership in sustainable and inclusive development, and resolve to pursue low carbon pathways. A further paradigm shift is anticipated in the role and influence of China, as it delivers on the Belt and Road Initiative (BRI) by leveraging on its successful infrastructure capabilities and the capital strengths of new financing vehicles such as Asian Infrastructure Investment Bank, New Development Bank and the Silk Road. The BRI can be a truly “game changing” proposal provided it is able to foster trust and confidence among member states. The initiative however should go beyond bilateral project transactions to promote regional and multilateral policy frameworks and promotes sustainability. It is true that the BRI will generate mutual benefits for China and its partners however the economic, social and environmental costs and benefits vary across corridors depending on the terrain, state of development, productive capacities and traffic flows. Research has shown that BRI corridors will entail higher benefits if partner countries lower cross border transaction costs and import tariffs, for instance a 30 per cent decline in both of these would generate economic gains of 1.8 per cent growth in GDP for China and anywhere from 5.3 to 16.9 per cent GDP for other participating member countries. Improving the quality of infrastructure in countries with less efficient trade regimes and border administration may result in only limited export gains. Our analysis suggests that a 1 per cent improvement in trade facilitation procedures, quality of transport infrastructure and ICT will deliver 1.5, 0.7 and 1.4 per cent increases in exports, respectively. Gains are higher for corridors where trade agreements may already exist. The BRI, through its aim of establishing comprehensive and seamless intermodal transport links along its corridors can reinforce regional plans of transport connectivity. There is a need to bridge the missing transport links along its corridors, particularly those in the China-Central-West Asia and the China-Indo-China-Peninsula corridors.

Transport corridors developed through the BRI could benefit from the existing Framework Agreements on Asian Highways, Asian Railways and Dry Ports. With nearly two-thirds of BRI countries facing energy deficits, the initiative needs to complement and supplement the subregional energy connectivity initiatives. There is much scope to develop power grids, promote smart, green and integrated power and gas markets, harness cross-border gas and oil pipelines from resource rich Central Asia to South and East Asia. Drawing on the initiatives of the State Grid of China Corporation and the Global Energy Interconnection Development Cooperation Organization to promote global energy interconnections can enhance the region’s energy security and advance sustainable energy access. It is also evident that ICT has to be an essential foundation for BRI as it can harness cross sectoral synergies. E-resilience of ICT can be enhanced through increasing diversified and redundant fiber optic cables, raising bandwidth, developing national ICT infrastructure, and lowering fixed-broadband prices as a percentage of GNI per capita. These actions can help develop uniform quality of services between endpoints which will facilitate traffic delivery, ensure low transit costs, and efficient Internet traffic management using Internet exchange points (IXPs). While the social benefits of some corridors are high, there is need to adopt more inclusive approaches to cope with social risks. For example, connecting the BRI to remote areas with new multi-country corridors would enable rural industrialization and help narrow urban-rural gaps. It is therefore important that synergies and complementarities between the objectives of the BRI and the Sustainable Development Goals can help create a win-win solution, particularly as regional cooperation and integration will facilitate realization of transboundary goals. The BRI with its unprecedented ambition and scale entails enormous complexities and challenges; however, it offers phenomenal opportunities to put Asia on a sustainable and well-balanced growth and sustainable development path. By Shamshad Akhtar

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March 27, 2017 #186

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 76-g Chavchavadze Ave., Tbilisi Tel: 231-11-61, 231-14-54 E-mail: 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

TBILISI GUIDE 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

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

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,

LIMELIGHTTRAVELINFOCENTER Address: 13 Sioni Street, 0105, Tbilisi (at the end of Shardeni Street) Phone: +995 322 999 123 E-mail: info@limelight.ge Web-page: www.limelight.ge Facebook page: www.facebook.com/limelight.ge

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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March 27, 2017 #186