Caucasus Business Week #294

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September 9, 2019 -





Paths to improve Georgian Tourism

Economic Forecasts by TBC Bank and Its Leader

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Opportunities for Innovative Startups

Serious Recession, Slowdown in Investments and Licensing – Development Sector responds to Deputy Economy Minister

Lasha Barjadze: "We are trying to digitize Everything, along with Changes in Technology"

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Payment has never been so Easy TBC Bank offers Apple Pay to its Users

After Buckswood, BGEO Successor takes over 80% Stake in Another Public School

If comfort is important to you, you are a TBC Bank client and you have an iPhone then you are lucky! With an innovative, streamlined secure mobile payment, you can simplify your life and save time.

After split in BGEO Group PLC investment group, Georgia Capital, one of its former companies and Tbilisi Green School have merged.

Tbilisi joins World Tourism Cities Federation Working on Bakuriani Urban Renovation Project and Strategic Plan of Transport Mobility commenced The Municipal Development Fund of Georgia (MDF) has concluded the Contract for development of Strategic Plan on Bakuriani Urban Renovation and Transport Mobility.

Tbilisi City Hall to buy 110 New Buses Tbilisi City Hall plans to buy 110 new gas-engine buses, Tbilisi Mayor Kakha Kaladze noted at today’s government meeting. Tender will be announced in several days, Kaladze said.

Why GEL depreciates – Comments by National Bank President Koba Gvenetadze, president of the National Bank of Georgia (NBG) has commented on reasons why GEL has deprecated over the past months. Negative expectations have driven the process mainly, he said.

Georgian capital of Tbilisi has joined World Tourism Cities Federation (WTCF), said Mayor of Tbilisi Kakha Kaladze.

Mutso Village Preservation Project at Europa Nostra Awards In May, Europe’s most prestigious award in cultural heritage – Europa Nostra Awards -announced this year’s winners. Among them were artists and projects from Armenia and Georgia.

Public Schools to receive 55 000 Computers in 2019 All public schools in Georgia will be equipped by wireless internet and the process will be ended in 2 years, Minister of Education Mikheil Batiashvili noted at the parliament.

Bidding announced on Construction of Animal Shelter in Gurjaani The Municipal Development Fund of the Ministry of Regional Development and Infrastructure of Georgia has commenced the project for an arrangement of companion animal shelters.

Hydropower Production in Georgia reduced by 17% In July 2019, Georgia’s power plants generated 1,055 million kWh of electricity that is 16.8% less compared to the previous year (in July 2018 the total generation made 1,268 mln kWh). The decrease in generation on a yearly basis comes from the decrease in thermal (-52%) and hydropower generation (-17%), more than offsetting the increase in wind power generation (+11%).

The Editorial Board Follows Press Freedom Principles Publisher: LLC Caucasian Business Week - CBW Director: Levan Beglarishvili WWW.CBW.GE Address: Aleksidze Street 1 Sales: Mob: +995 591 01 39 36 Email: Editor: Nutsa Galumashvili. Mobile phone: 595 380382 Copy Editor: Ellie Rambo Reporters: Nina Gomarteli; Mariam Kopaliani; Merab Janiashvili, Economic columnist: Andria Gvidiani; Technical Assistant: Giorgi Kheladze;

Master Classes, Literature and Good Music – LitFest Gudauri 2019 organized by Marco Polo Hotel On September 7 the literary festival was held for the fourth time in Gudauri. The event was organized by Marco Polo hotel and Ski Resorts Development Company. Interest towards the Festival grows year to year and the 2019 LitFest Gudauri has offered interesting activities too. The book fair opened the event at 11 o’clock. Several publishing houses introduced fiction, children and school literature at affordable prices. The quiz winners received gifts from publishing houses. The event guests could listen to

lectures of interesting speakers. Levan Berdzenishvili talked about tendencies in modern literature. Soso Galumashvili conducted a master class for guests interested in business literature. Writer Ana Kordzaia-Samadashvili talked about Group 47 and Ingeborg Bachmann. One more interesting novelty was introduced at the Festival this year – Bookshelf has taken part in the event and the guests could expose their knowledge and the quiz participants received interesting prizes. Marco Polo hotel arranged

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comfortable environment specially for children with playing and children corners on the hotel territory, where children from regions revitalized the paintings by Nikoloz Pirosmani. Besides outdoor relaxation and entertainment, DJ Hatsvali has also tuned the guests’ mood. Those who love literature, music and mountains will have the opportunity to attend the event in 2020 too.

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Paths to improve Georgian Tourism Interview with the director of Discover Georgia Nina Kekelidze What is the focus of Georgia’s tourism policy? What would you say is Georgia’s strongest advantage in tourism? The main focus of Georgia’s tourism policy, as indicated in the Georgian Tourism Development Strategy 2025, is to develop sustainable tourism and increase tourism revenues, improve the tourism , and reach these eight primary objectives, that are being implemented by the private and public sector: 1.Increasing state and private investments in tourism; 2.Improving the business environment to increase foreign and local investment; 3.Attract tourists from high-spending markets through an efficient marketing and informational campaign, and incentivizing the internal market; 4.Increasing competitiveness by offering world-class tourism services; 5.Using Georgia’s natural and cultural heritage assets to allow for a unique and authentic visitor experiences; 6.Enhancing respect, protection, and promotion of the natural and cultural heritage of Georgia; 7.Improving data gathering and analysis, and evaluating the possibilities of the tourism field; 8.Setting up partnerships between the government, the tourism industry, non-governmental organizations, and communities to achieve these objectives. Georgia’s strongest tourism advantages are traditional and cultural fields, natural, recreational, wellness and spa, as well as adventure tourism fields like skiing, hiking, maritime and river sports, agricultural and MICE tourism. What are the three major concerns you have regarding Georgian tourism? Georgia has a unique geographic location, as a midpoint of Europe, the Middle East, and Central Asia. The country’s unique culture, traditions and hospitality, diverse nature and rich history have a positive influence on Georgia’s tourism development prospects. The Georgian tourism industry plays a significant role in Georgia’s economic development. According to a 2018 report assessing the impact of travel and tourism on the economies of 185 countries, published by the World Travel and Tourism Council (WTTC) last year, the direct contribution of travel and tourism to GDP in Georgia was 9.3%, and it is anticipated that this rate will increase to 10.5% by 2028. Taking into consideration all this information, the Georgian tourism industry is still facing challenges, with the most crucial ones related to Georgia’s geopolitical situation and the Georgian national identity, at a time when 20% of the Georgian territory is occupied by Russia. What challenges need to be addressed? First of all, Georgia is facing several geopolitical and

national identity challenges which negatively influence Georgia’s development as a tourism destination. Only after that it is possible to discuss other challenging areas such as service, University-level and vocational tourism education, tourism law, as well as the standards and regulations which have to be updated, tourism infrastructure, and others. What is Georgia’s traditional market, and is attracting new markets among your goals this year? Georgia’s main, traditional markets are neighboring PostSoviet, and European countries. Additionally, Georgia is attracting new markets from Asia, mostly from Gulf countries. What does the traveler look for in a destination in Georgia? According to the National Statistics Office of Georgia, the primary goal of a traveler’s trip to Georgia is holiday, leisure and recreation with 42.7%, after that comes visiting friends and relatives with 20.3%, business professionals with 8.7%, shopping at 6.9%, health and medical care 2.7%. Popular tourist activities include enjoying Georgian cuisine and wine, sightseeing, visiting national parks, natural landscapes, swimming in the Black Sea, visiting religious, historical, and cultural destinations. Which are the five most popular destinations for travelers? The five most visited destinations in Georgia are Tbilisi, Kutaisi, Batumi, Mtskheta and Kazbegi, after comes Borjomi, Signagi and Telavi. Do you believe that the tourism sector of Georgia has potential regarding investment from foreign entrepreneurs? The Georgian tourism sector has significant potential for investment from foreign entrepreneurs. The Georgian Chamber of Commerce, as well as the state agency “Enterprise Georgia”, support and promote foreign direct investments to Georgia, highlighting the country’s potential as a new tourism destinations with easy doing business environment. What are the main challenges for tourist companies in Georgia, and what are the best ways to face these challenges? One of the main challenges for tourist companies in Georgia is an old-fashioned tourism law signed in 1997, which featured weak or non-existing clauses regarding several international tourism norms and regulations, like permits, licenses, or others, related to tourism company formation and management. On the one hand, Georgia offers environment with ease of doing business, where everybody can establish his/her own tourism company in one day, only paying 105 GEL, and this seems quite good for professionals who understand the tourism industry well, and who have structured its business plan and strategy, but, on the other hand, when a person with no tourism education nor tourism experience forms a tourism company, without any bank guarantee or other necessary licenses, an unregulated tourism private sector develops, which is clearly visible everywhere in the old part of Tbilisi, with small cars and

minivans offering tourism services all around the country. Russia has recently banned flights to Georgia. How many visits were flown between Georgia and Russia last year? Where are we this year in regards to early bookings? And how could Georgia attract other countries to keep the same number of tourists? Recent relations between Georgia and Russia are a vivid example of why Georgia’s economy has to diversify its export markets, and not focus mainly on the Russian market. Last year, there were 1,404,757 international visitors from Russia to Georgia, which is assumed to have decreased this year. Most early bookings of Russians traveling to Georgia are canceled at this moment, but nevertheless, it is argued that despite the banned flights from Russia to Georgia, Russians can still visit Georgia either by land or flying in via a third country. The following case would be a good example for Georgia to follow in order to diversify its tourism market, and begin a marketing campaign oriented to other strategic visitor source countries. The Georgian government has to anticipate and reduce upcoming risks related to the country’s economic development, which means not being over-dependent on tourism from Russia. Georgia should stop spending finances on the Russian market, and redirect marketing campaigns to other countries with high-spending ability tourists. What are your strategies for 2019 concerning Georgia? Discover Georgia's the strategy for 2019, which focuses on diversifying the market and attracting travelers from the EU, Post-Soviet space, as well as from Gulf countries. Together with incoming tourists, one of our company’s main services is a training center, where we focus on improving the tour operators’ training process to maximize the quality of tourism service education in Georgia. What is your vision for collaboration with the National Tourism Administration? What are the goals set for the immediate future? Discover Georgia is actively involved in various projects with the Georgian National Tourism Administration in order to increase Georgia’s awareness as a new tourism destination. During 2018 and 2019, we took part in several international tourism fairs for promoting Georgia, as well as implemented a joint project on Georgian Tourism Fair in May 2019, where Discover Georgia, in cooperation with Georgian Tourism Expo, GNTA and the representatives of the private sector, organized Tbilisi Info Tour for Travel Agencies from Post-Soviet countries. For the immediate future, Georgia has to increase a marketing campaign in countries where Georgia has direct flights, and more articles in media should be published, as well as TV shows which have to be broadcasted internationally about Georgia’s secure environment and tourist attractions.

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Economic Forecasts by TBC Bank and Its Leader The Business Partner TV program broadcast by Channel One of the Georgian Public Broadcaster (GBP), has discussed the economic forecasts of TBC Bank and its leader. The TBC Bank Director General, Vakhtang Butskhrikidze, noted that TBC follows only one objective – the simplification of the life of Georgian citizens and partner companies. This is a fundamental value for TBC. Therefore, the bank aims to shape an ecosystem capable of granting more free time to people. Today, TBC Bank is thought of as a commercial bank, but it is not only the commercial components that generate incomes. The corporation has embraced an expanding number of institutions. Consequently, the commercial bank is not supposed to remain a key source of income for TBC. Participants on Business Partner noted that their current success seemed unimaginable 25 years ago. Today, we can talk about TBC as a technological corporation that has introduced a lot of technological innovations. So, where will TBC Bank be in 25 years, both

in Georgia and abroad, and will TBC be perceived only as a commercial bank? – When talking about these issues, Butskhrikidze noted that the size of major companies has essentially changed at the London Stock Exchange and in the US over the past 50 years. For companies in the 19th century an average age was 100 years; this age narrowed in the 20th century, and today in the 21st century technologies change rapidly. Consequently, companies pass through different phases very quickly. Therefore, our team believes that TBC has passed a very important phase, but, at the same time, changes and necessary adaptation are necessary, including the shaping of an ecosystem. When developing similar ecosystems, commercial banks frequently go out of their action range and enter noncore businesses. Regarding this issue, Butskhrikidze noted that a commercial bank does not make investments in physical real estate, and this is not their objective. Investments are made in the only space that TBC puts money in jointly with partners.

“Based on western research reports, commercial banks remain reliable institutions to invest in, and commercial banks have higher trustworthiness in this respect. In Georgia, like western countries, the banking sector is the most regulated field in terms of financing and information. Therefore, to protect TBC data, TBC has recently been investing tens of million of GEL in technologies”, Butskhrikidze noted. Vakhtang Butskhrikidze has also commented on the GEL exchange rate, as a major challenge for the business sector in Georgia. Today, the GEL has slightly declined, and its exchange rate came closer that of early August 2019, when 1 USD was worth 2.97 GEL. Then the rate slightly strengthened, and today the rate is at 2.96 GEL. The TV program’s co-presenter Mikheil Chkuaseli, Director General of the Gurieli company. noted that it is necessary to comprehensively explore the reasons behind currency depreciation, because the GEL exchange rate has declined despite the fact that all fundamental macroeconomic parameters affecting the GEL are

positive. The co-presenter has also referred that GEL exchange rate forecasts made by the Galt & Taggart Analytical Company, a subsidiary of Bank of Georgia, and TBC Bank. According to an analysis by both financial companies, the GEL exchange rate has depreciated 10%-13% more than expected, and the national currency is expected to strengthen by the end of 2019. Butskhrikidze agreed with the co-presenter’s forecast, and noted that it is difficult to determine the exact time when the GEL will start strengthening, but there are theoretical expectations that GEL will strengthen. “I would refer to in-house reports by our analysts, under which, based on both external and internal factors, the GEL has devalued more than expected. I cannot specify the time, whether it happens in a week or several months, but there are theoretical grounds to assert that the GEL will strengthen, definitely”, the TBC Bank Director General noted.

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Opportunities for Innovative Startups Georgia’s Innovation and Technology Agency has named 20 winners as part of its grants program. Mariam Lashkhi, Deputy Head of the Innovation and Technology Agency, told the TV program Business Partner that it is of crucial importance to build an economy based on knowledge, and innovations to boost our economic development. This objective could not be achieved through promoting only traditional startups and traditional companies.

the support of the World Bank, and this program is to expand access to financial resources for similar companies”Lashkhi noted. The interested organizations intensified efforts, she noted. For example, previously, about 150 applications were submitted, while this year, more than 190

grant of 650,000 GEL to further develop and promote co-funding from the private sector. In this case, the 650,000 Gel grant implies 50% cofunding. The program was announced in May 2019, and one winner has already been named. The private sector has already joined the process, and it participates in

applications were submitted in the Georgian and English languages. The licensing office has engaged in the process. Three startups will pass the acceleration phase at Silicon Valley in the USA, she said. Besides the 100,000 GEL grant, the Innovation and Technology Agency enables applicants to obtain a larger

intellectual projects, Lashkhi said. Domestic companies just invest more money in research and development projects. As a result, incomes will at least triple, Lashkhi said. As for collaboration with domestic companies to make sure they aid with venture

A creative and innovative mind is very important, as well as entrepreneurial skills. These creative and innovative ideas should be implemented in reality. This sector grows much faster compared to traditional sectors, Mariam Lashkhi pointed out. “I would like to also note that similar startups represent large risks. The private sector does not put much money in similar companies. It is important that at the initial stage, when risks are very high, the government provides appropriate guarantees. To this end, the Innovation and Technology Agency of Georgia has initiated this program with

capital, Lashkhi noted that collaboration with domestic companies should proceed in two directions: 1) domestic companies should become innovative enterprises and 2) they should make more investments in research and development projects to at least triple incomes. “Two aspects of this remain to be determined: current entrepreneurs should become more innovative and more investment should be placed in research and development projects, and these efforts will at least triple incomes, according to the World Bank estimates. For example, as a result of a combination of research and development, hazelnut growers have realized that they could receive additional revenues from shells. Sometimes, it turns out that the idea of a research-development process brings more income than other businesses. It is very important that the existing companies put more investment in the research and development process, introduce more technologies and automation to reduce expenses and increase revenues”, Mariam Lashkhi said.

Serious Recession, Slowdown in Investments and Licensing – Development Sector responds to Deputy Economy Minister “Economic growth has been diversified – construction was one of the key contributors to economic growth in July 2019. Essentially, an upturn was also recorded in industry and trade. It is noteworthy that a fundamental improvement in external trade indicators significantly determines economic growth. In July 2019, exports grew by 17.5%, and the trade deficit declined by 83.5 million USD, Deputy Economy Minister Ekaterine Mikabadze noted several days ago when appraising the Geostat report. According to Geostat, the national statistics service of Georgia, unusually high economic growth rates were recorded in July 2019, as compared to the same period in 2018, and the figure made up 6.1%. The average economic growth in January-June was at 5.1%. “Construction, the processing industry, trade, real estate operations and communal, social and personal services – these sectors have seen growth in July. Other factors promoting growth also improved – 7.8% upturn was recorded in net money transfers, an important element of domestic demand and consequently, its growth, has had a positive impact on economic growth”, Ekaterine Mikabadze noted. Has the development sector actually increased amid a flurry of regulations introduced over the past period? The Caucasus Business Week (CBW) has explored the issue. Tornike Abuladze, ARCI Executive Director and member of the Developers Association, explains that about 6,000 job places were lost in the development sector, investments shrank. Therefore, Abuladze has expressed astonishment regarding the Deputy Economy Minister’s statement that the growing development sector has had a positive influence on economic growth in July 2019. The situation reported in the development sector over the past 6 months has resulted in an absolutely different reality, Tornike Abuladze noted.

“I could not have expected such a statement, because our sector feels like it has entered a slowdown in real life. Through the first half of 2019, we talked about a serious recession in the development sector – investments declined, and in general, the pace of licensing shrank essentially. At the same time, new regulations seriously damaged the sector. Each regulation is normal when isolated, but they were enforced simultaneously, and neither the business sector nor regulators were ready for the new reality. There are certain problems in this sector, but I do not think it is expedient to introduce so many regulations simultaneously”, Tornike Abuladze noted. In the first quarter of 2019, the development sector’s turnover started decreasing, and the losses totaled 9.6%. According to the reports, the previously growing sector has seen serious losses in 2019. As a result of intrusive regulations in the banking and development sector, more than 4,000 people lost their jobs, thousands of our citizens cannot buy private property, and this previously dynamically growing sector is now in decline. Based on Geostat reports and other research work on this issue, development sector growth was protracted as a result of exaggerated regulations, mainly bank regulations. Over the past few years, there were no special factors in the Georgian economy that would frustrate the sector’s expansion. The past several years have recorded very dynamic and rapid growth in the development sector. According to 2018 indicators, the total ratio of the development sector in GDP made up about 9%. Based on real estate operations, the development sector’s share of GDP is about 17%.

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Lasha Barjadze: "We are trying to digitize Everything, along with Changes in Technology" Interview with Marketing Manager of “Good Travel’’ and the training center “Tourism Organization’’, Lasha Barjadze. Tell us about how you got into the field of marketing, and what factors played an important role in choosing this profession? At the age of 14, in 2012, for the first time, I made money through my entertainment page, and since then I became interested in social media management and outsourced it to various small companies, big brands, politicians and individuals. Later, I worked in marketing for restaurants, nightclubs, online stores, and companies with varying profiles, where I accumulated to different experiences, and made sure that marketing really interested me and was my field. Keeping in mind the current backdrop in technological changes, what challenges do you face as the Head of Marketing? Along with changes in technology, we are also trying to change the nature of our marketing campaigns and digitalize everything, keep up with trends, and fully adopt new technologies. What has changed in the field in the last 5 years, and what changes are expected? Marketing has become increasingly responsive, and digitalization has provided many new tools that make it easier to run, analyze, and budget marketing campaigns. This has enabled many small businesses to develop their businesses. Digital marketing is evolving day by day, and there are lots of interesting and accessible tools that make it easier for companies to budget and reach a larger audience. The digital world is this way for everyone. What do you think are the most important traits a marketing manager should have, and what is his or her role in the organization in general? In my opinion, a marketing manager should not constrain themselves in any way, she should be able to imple-

ment her ideas. They have to necessarily be trendy and active, must love the field in which they work in, and constantly focus on developing themselves. The role of marketing manager in every organization is uniquely important and appreciated. They are responsible for the image and sales of the organization, without which the organization cannot exist.

What’s your organization’s business model regarding PR and marketing?

What are you doing to help the organization keep up with new trends and use innovative approaches in the field of marketing? We always innovate in our companies, and then train our employees in these programs to deliver the results we have. For example, Facebook has added a messenger bot feature that automatically fills a customer's order and offers various options automatically, and do customer classification, demand analysis and customization. With this innovative tool, we have simplified our business and communication with our customers.

Up or out - develop or go/die.

Our business model of marketing is built on the complete customer experience and interests; we learn about our customers and their needs, then deliver the right offers. The most useful advice you’ve ever received in your life?

Think of a person who inspires you, professionally. Mark Zuckerberg (Facebook), Larry Page and Sergey Brin (Google) - People who have literally created digital marketing.

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Business News

LiveCaller's International Experience

Beeline Digital Platform to become a Winner of Brandon Hall Excellence Awards

LiveCaller is a cloud-based customer communication software which was implemented not long ago. As Merab Gotsiridze and sales director, Sandro Tsirekidze tell, startup already participated in the international events, such as GIST Macedonia, Startup Wise Guys, Seedstars Tbilisi.

Mobile operators international group, Veon got an award of Brandon Hall Excellence Awards. The company was granted duo to implementing learning technologies and successfully using the platform of Crossknowledge.

Agra – New Georgian Brand to appear in September New Georgian brand Agra will appear on Georgian market on September 15 and offer top quality vegetables and consumers will be able to buy these products at supermarkets. Georgian-Swiss Agreement to protect Indications of Kakheti, Sulguni and Borjomi

New Startup Lacoaj provides Retro and Contemporary Clothes Shirts representing Abkhazia They see Lacoaj as a Fast Fashion brand, which will meet new seasons with new collections. Lacoaj aims to make shirts representing Abkhazia popular and tradable worldwide. They create several designs every week and therefore, choose, which is the best. They specially sew and compose different models of shirts for every design. Then they are printed with high quality, where the colors should be bright and different.

The Georgia-Switzerland agreement on protection of indications of location, origin and sources came into effect on September 1, 2019.

Enamel Brand introduces Jewelry created due to Works of Rusudan Petviashvili New Georgian brand Agra will appear on Georgian market on September 15 and offer top quality vegetables and consumers will be able to buy these products at supermarkets. Georgian Amber Wines introduced in Korea A special tasting of amber wines was held in Daejeon, Republic of Korea, where Anna Godabrelidze, Chairwoman of the National Wine Agency tasting committee presented Georgia.

The Government of Georgia issues Business Grants for 20 more Startups For the selection of the most perspective startup projects, the Agency of Innovations Technologies of the Ministry of Economy and Sustainable Development invited the world's best venture investors in the committee of investments.

“Meidan Group” sets up Georgian Wine Museum Georgia is considered as ancient wine making country, with 8000-year winemaking tradition. On the global map Georgia is marked as a homeland of winemaking. American Business of Georgian Artist Georgian hyperrealist artist, Tiko Sanikidze opens an online shop on the American market in a month. will be the name, where an artist will provide men's, women's and children's clothing, bags and different accessories.

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HUAWEI releases Global Industry Vision Report HUAWEI has been leading the market for years and is an advanced company in the field of smart device manufacturing. Accordingly, it is not surprising that its representatives, based on the facts, have presented 10 megatrends that they believe will be made a reality in their Global Industry Vision (GIV) Report, which specifically outlines the company's foresight on technology development prospects and industry vision for 2025. Living with Bots: Advances in material science, perceptual AI, and network technologies are allowing the use of robots in a variety of home and personal scenarios. HUAWEI in its GIV, predicts a 14% global penetration rate of home robots. Super Sight: The convergence of 5G, VR/AR, machine learning and other developing technologies lets us make new and unique discoveries in people, business and culture. The HUAWEI GIV predicts that the percentage of companies that use AR/VR will increase to 10%. Zero Search: The time spent searching for the information we need will be cut significantly in future, as it will find us via smart devices able to predict our needs in advance. The GIV forecasts that 90% of smart device owners will use electronic personal assistants based on artificial intelligence. Tailored Streets: Intelligent transport systems will connect people, vehicles and infrastructure. HUAWEI’s GIV predicts that 15% of vehicles will be connected to such technologies. Working with Bots: Many industries will be transformed.

Smart automation will take on more important tasks than it can at this point. The GIV claims there will be 103 robots in industry for every 10,000 employees. Augmented Creativity: Cloud artificial intelligence will reduce the cost and barrier for scientific experimentation, innovations and art. The HUAWEI GIV predicts that 97% of large companies will be using artificial intelligence by 2025. Frictionless Communication: Artificial intelligence and data analysis will create communication between companies and users and break down language barriers; moreover, understanding and trust will be the basis for business relationships between companies. GIV predicts that 86% of enterprises will be fully using accumulated data. Symbiotic Economy: Companies worldwide are using digital technologies and smart applications, which means more collaboration, resource allocation, global ecosystems and high productivity. The HUAWEI GIV predicts that 85% of companies across the globe will be using Cloud technologies and 85% of business applications will be created based on the Cloud. Rapid Rollout of 5G: 5G is evolving at a very fast pace, faster than any other wireless technology. Consequently, the potential for individuals, businesses and societies is infinite and comprehensive. The GIV predicts that 58% of the world's population will be able to access 5G by 2025. Global Digital Governance: The development of digital technologies needs to be balanced with shared data

standards and principles for data usage. The GIV predicts that the annual volume of global data will reach 180 ZB (1 ZB = 1 trillion GB). According to Kevin Zhang, chief marketing manager of HUAWEI's ICT infrastructure - “Humanity will never stop technological development. We need to visualize the perspectives, see what we might not be able to see right now - we have to shift from innovations to inventions. HUAWEI has for many years been committed to offering every person and organization a technologically advanced future and completely new approaches to technological development. ” HUAWEI products and services are available in more than 170 countries and are used by a third of the world's population. There are 16 research and development centers operating worldwide in the USA, Germany, Sweden, Russia, India and China. HUAWEI Consumer BG is one of HUAWEI's three business units, mainly focusing on Smartphones, personal computers, tablets and cloud services. HUAWEI Global Network is based on 20 years’ experience in the telecommunications business and serves to provide innovative technologies to customers around the world.

Currently, EMUI counts more than 500 million daily users in 216 countries and has support in 77 languages. Technological development began in 2012 with the launch of EMUI 1.0 and has been ongoing for seven years, and HUAWEI is working non-stop to further improve the technology. Based on growing statistics, the company estimates that around 150 million users are set to upgrade their smartphones with EMUI10. In recent years, the number of HUAWEI cell phones has increased significantly. In the company this year, the five-month sales figure reached 100 million. In the future, EMUI promises customers more application and synergy experiences, which will also increase sales significantly. Importantly, in recent years HUAWEI has invested heavily in EMUI research and development to improve system performance. Still, what makes a new interface stand out and what new features does it offer customers? Its advantages were discussed at the developer convention, where Wang Chenglu formally presented the EMUI10. EMUI10 offers three major innovations: UX design, improved functionality in all circumstances, and a new standard for smooth operation. Studies have shown that color is perceived differently in light and dark backgrounds. Consequently, darker backgrounds make colors and graffiti more contrasting and more comfortable for the customers to use. Through the revolutionary technology EMUI10 provides

the support of HD video calls for various devices. Users can make audio and video calls anytime and anywhere. With the new technology, workflow is simplified: it can share a smartphone screen with a computer to make data exchange faster and easier. Smart devices are becoming more and more diverse as the application ecosystem, devices, and users grow. Developers face a big challenge when they have to adapt a lot of devices, use multiple languages and convert data to different devices. HUAWEI users can be confident that the company pays great attention to protection and security systems. Accordingly, the company is actively working to develop a reliable security system to improve the product.

HUAWEI Officially presents EMUI10

What innovations can the smartphone industry offer modern consumers? HUAWEI continues to invest in the EMUI research and development direction to maximize the improvement of uninterrupted system performance. HUAWEI officially introduced the result in the innovative EMUI10 at a developers’ convention. With the new EMUI10, the company offers customers the ability to connect with uninterrupted devices and applications. In addition, a new interface designed for a variety of devices reduces costs and at the same time increases efficiency. According to Wang Chenglu, President of CBG Software (Engineering Division) at HUAWEI Customer Business Group, the EMUI10 offers its users the right functionality in any environment. Due to its limitless capabilities, the new technology presents special applications tailored to different scenarios, such as making audio and video calls in any situation, doing business tasks between different devices, and operating smart devices installed in your car. EMUI has made it possible to connect between several devices as well as between devices and applications and continues to improve the service experience in all possible environments. According to Chenglu, the beta version of the EMUI10 will undergo internal testing on the HUAWEI P30 series, and on September 8, on all other models. The EMUI10 will also be available for the next generation of Mate series products.

HUAWEI products and services are available in more than 170 countries and are used by a third of the world's population. There are 16 research and development centers operating worldwide in the USA, Germany, Sweden, Russia, India and China. HUAWEI Consumer BG is one of HUAWEI's three business units, mainly focusing on Smartphones, personal computers, tablets and cloud services. HUAWEI Global Network is based on 20 years’ experience in the telecommunications business and serves to provide innovative technologies to customers around the world.

11 September 9, 2019 #294

Government Reshuffle and Economic Initiatives Levan Kalandadze, Deputy Business Ombudsman, Mikheil Chkuaseli, Gurieli company director general, Giorgi Abashishvili, Iliauni business school director and GEPRA consulting company founder Soso Galumashvili have talked about government reshuffle and economic initiatives at the Business Partner TV program. Ex Prime Minister of Georgia Mamuka Bakhtadze failed to provide valuable communication with small business sector, Soso Galumashvili noted. “Communication with business sector was an evident weak point for Bakhtadze. Fundamental factors affecting GEL exchange rate is one side and management of the exchange rate is another issue and this is the competency of Prime Minister and his cabinet. Certain meetings were held and certain communication was held with major business, but this was not sufficient, because similar expectations are not shaped only in major business. The problem with expectations come from micro, small and medium businesses. Bakhtadze had no problems with communication with major business, but people felt abandoned in lower segments”, Galumashvili said. It is important to determine what kind of a Prime Minister we want to see. The new Prime Minister should follow specific strategies and views. Moreover, there are certain issues for which specific strategies should be developed in the shortest period to determine where the countries aspires, Soso Galumashvili noted. “For the first time over the past 25, this July Georgia bought electricity. Our power system structure cannot ensure all technical needs. Therefore, first of all, we should develop strategy for hydro power plants”, Galumashvili noted. Gurieli company director general Mikheil Chkuaseli has also appraised the performance of Prime Minster Mamuka Bakhtadze. About a year ago Bakhtadze was appointed as Prime Minister and he determined 5 principles and 36 strategic directions, including the concept of a small government and reduction of bureaucracy. Chkuaseli asserts that the Government has taken steps for implementing the small government concept and the number of Ministries decreased, but bureaucracy has not become more efficient, Chkuaseli said. “His strategic vision was absolutely right. He took certain decisions for optimization of Ministries, but fundamental reforms were not carried out for achieving efficient state governance and bureaucracy”, Chkuaseli noted.

Mamuka Bakhtadze has provided serious job in terms of technologies and innovations, but failed to develop the so-called e-government mechanism, he added. “He announced technologies and innovations as very important directions and he took serious decisions in this respect. He had a lot of meetings with the US leading research centers and universities. We will reap results of these meetings in the future, because a lot of projects will be implemented. However, we have not made progress in terms of introduction of new technologies in state management. The s-called e-government was not developed, the government structure was not integrated into the so-called blockchain system that would enable to lower bureaucracy and take quick decisions. This concept will cut expenditures and the management will become more optimal. Regretfully these plans have not been implemented yet”, Mikheil Chkuaseli said. It is also important to determine whether inflation is calculated in right way, he added. “After we determined the inflation rate by 3%, have we analyzed why have chosen this very rate? Maybe, we should have 6% or 7% and this decision would give absolutely different impulse to the economy. We should explore this issue”, Chkuaseli noted. Deputy Business Ombudsman Levan Kalandadze explains that Mamuka Bakhtadze’s resignation statement comprises self-criticism referring to the fact that undefeated occupation and poverty could not be considered as the success of a prime minister. “I like this statement and self-criticism very much, because, GEL exchange rate remains number one challenge”, Kalandadze noted. The Business Ombudsman’s office actively discusses the GEL exchange rate problems too, despite the currency exchange rate is not the competency of our office, Kalandadze noted. During communication with business, GEL remains number one challenge for business, whilst a lack of rapid decision-making practice as another major challenge, he added. „We realize that Georgia is a small and open economy and a small economy with open policy comprises a lot of risks and this factor requires due management. We do not have time to delay this or that project too long. We need quick decisions. Let’s see how the Government and the government’s economic team will be structured. The fact is that decision-making efficiency is necessary in combination with GEL-related issues. When talking about small-size government, this means a little bureaucracy with quick decisions. We remember a lot of power projects and we do not talk about them and these projects have not been implemented yet”, Kalandadze said.

We should know where we area heading, whether we build a state, where all citizens are oriented on social allowances or the country relying on strong business and rich people, Kalandadze added. Economic risks should be managed better and state security does not mean only prevention of military aggression, the Deputy Business Ombudsman noted. We should preventively foresee such risks that arose after Russian embargo in July 2019, when currency inflows were corrected. The Deputy Business Ombudsman believes that a certain plan should exist for specific cases and risk management will be less painful in this case, Kalandadze pointed out. “Consequently, economic policy should become one of the important components of the state economy security”, Kalandadze noted. Iliauni business school director Giorgi Abashishvili has also appraised Mamuka Bakhtadze’s performance. Mamuka Bakhtadze has always prioritized collaboration and efficiency of state structures and institutions and I thank him for these efforts, Abashishvili said. As to New Prime Minister, Abashishvili suggests him to make emphasis on economic and security issues. “Prime Minister Bakhtadze has always prioritized collaboration and efficiency of state institutions and I appreciate these efforts. I would like to see the new prime minister who takes decision quicker and who prioritizes both economic development and security issues. As a result, each citizens of Georgia will have better economic conditions, in terms of inclusive aspects and on the other hand, they will have maximum security in terms of domestic and external threats”, Giorgi Abashishvili noted. As to GEL exchange rate, fundamental factors should be better analyzed, he added. “What will we receive if the National Bank employs currency reserves? Ok, it spends all reserve and what then? Somebody should explore where the reserve money has gone. My key question is - why has the NBG spent this money, did they have any calculation, analysis? We can spend reserves, but first of all we should analyze fundamental factors. When we bought electricity in July, this meant foreign currency was taken away from the country. We should analyze development in this direction”, Abashishvili said.

12 September 9, 2019 #294

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