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JANUARY 2010

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FINANCIAL MAGAZINE | JANUARY 2010


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FINANCIAL MAGAZINE | JANUARY 2010


Contents: January 2010 | Vol.1.No.1 MARKET REPORT: CARBON TRADING

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REGULARS: p.2 CARBON TRADING

BY TAMAR KHELAIA

MARKET REPORT: CARBON TRADING

p.3 CARBON TRADING

p.3 CARBON TRADING

BY TAMAR KHELAIA

MARKET REPORT: CARBON TRADING

p.3 CARBON TRADING

p.3 CARBON TRADING

BY TAMAR KHELAIA

MARKET REPORT: CARBON TRADING

FEATURES: CARBON TRADING BY TAMAR KHELAIA

p.3 CARBON TRADING

p.3 CARBON TRADING

BY TAMAR KHELAIA

FEATURES: CARBON TRADING

MARKET REPORT: CARBON TRADING

BY TAMAR KHELAIA

FEATURES: CARBON TRADING

p.3 CARBON TRADING

p.3 CARBON TRADING

BY TAMAR KHELAIA

BY TAMAR KHELAIA

p.3 CARBON TRADING

p.3 CARBON TRADING

p.3 CARBON TRADING

Wealth

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FINANCIAL MAGAZINE

| December 2009-January 2010

Publisher: Intelligence Group llc. Director and Editor-in-Chief: Zviad Pochkhua. Copy-editor: Iona Maclaren. Technical Director: Temur Tatishvili. Marketing Director: Lali Javakhia. Communication Manager: Eka Beridze. Layout: Intelligence Design Studio. Writers: Madona Gasanova, Tamar Khelaia. Distribution: Intelligence Group llc. Projected in partnership with American Chamber of Commerce. Consulting: Global Idea. Sponsored by: DLA Pipers, Radisson, All materials are copyrighted. Copying, reproduction or distribution of text and image materials are prohibited. Address: 17 Mtskheta str. Tel: (+995 32) 252 275. E-mail: marketing@finchannel.com Letters to Editor: editor@finchannel.com | Website: http://wealth.finchannel.com

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“I think that Georgia has a problem with convincing investors. I hope and I believe that it is understood now…”

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Come Start Business in Georgia Georgia will return to its pre-war position in 2010, David Lee, President of American Chamber in Georgia says in exclusive interview with The FINANCIAL’s Wealth Magazine. Mr. Lee believes that foreigners are not facing any kind of risks by coming here. “There is really nothing now that can stop Georgia from doubling its GDP in a very short time”, Mr. Lee believes. “This year foreign investment has clearly proved to be a problem. Less people are coming to Georgia because of the war, because of the financial downturn and political demonstrations on the streets. All of those factors together have turned out to be bad for business. AmCham’s point of view is that the worse of the recession is definitely over in most countries, we are seeing that in Georgia many of our members, banks, telephone companies are reporting that their revenues have started to rise again. Between May and July deposits rose in banks. It looks as though the recovery has started in Georgia as well. This is a recovery in people spending money. It is not necessarily a recovery in jobs and it is not a recovery in new investments. What we now need to focus on, for American businesses, is getting more American investors to come here and invest.

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INTERVIEW WITH DAVID LEE, PRESIDENT OF AMCHAM IN GEORGIA

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his is a number one priority of Amcham. We also want any companies from any country to come join us in Georgia. Specifically we are interested in the USA as it has the world’s largest economy. Q. Please name the investments made by US companies in 2009 or since the August war?

month ago and with the mayor of Batumi. We are going to try to put together another investment conference in the first half of 2010. I think that it is a good time to get new investments to come back to Georgia. | Q. How has the economical downturn affected the businesses of Amcham members?

A. The main problem for A. I do not have that information. Amcham members’ businesses It has not been a good year for has been the economical new companies. What has been downturn. The reduction of positive is that new and existing revenues was a big problem. companies have stayed. The only People in Georgia spent less. good thing about the last year People simply stopped buying. has been that we have not seen Even telecommunication any companies leaving Georgia. companies faced a reduction of So the majority of companies are revenues, people just made less still here. phone calls. The problem is that We also see when companies “It looks as though the reduced that some of the powerful recovery has started in revenues, they companies are reduced costs. Georgia as well. This continuing Many businesses is a recovery in people had to cut their to invest. Magticom is workforces; spending money” the biggest many businesses American stopped investment in Georgia. We have investing, many businesses already invested over USD 400 stopped even buying products million in Georgia. This year we to sell. The fall of demand was a will invest over USD 100 million similarly large problem for all of again. I think that if you look at the business sectors. the chains like GMT, Radisson, BP, all these companies are Q. Can Georgia assure continuing their operations. foreigners that the current We are not in terrible shape, political calm is not just it is ok but as for running good temporary? news about new investments, no. That is why I think that it is A. I think that Georgia has very good for the Government a problem with convincing to be doing this conference. investors. I hope and I believe Amcham continues to talk to that it is understood now. as many people as we can to When I talked to politicians, get new investments. The US both from the Government and Embassy together with Amcham from the opposition parties they was with the head of Georgia’s indicated that they do not want autonomous region Adjara a to create a situation in which

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investments and businesses are affected. During each meeting of AmCham’s with politicians, we received the same message that it is very important for them to keep business in Georgia working and get new investments coming in. I think that is a very positive sign when both sides of the political arguments seem to be agreed that it is in nobody’s interest to create a business environment where you cannot do business, or where new investors are concerned about that situation. Therefore I am positive about that. AmCham can do its job much easier than it could in the first part of 2009. They say that they are interested in a good business environment and they believe that Georgia needs to develop economically. That is very good for us when we talk to our potential investors. We do not have any serious political party in Georgia saying that they want to restrict business. Q. Georgia is often targeted for its pro-American orientation. Against this background, do you not think that the US should be more active in regard to investments? We can all see that the US did much supporting and lobbying of Georgia, but does the country not need more than this? A. If you look at the US’s relationship with Georgia, I think it is extremely difficult to criticize what the American Government has done for Georgia in the last five years. It is clear that the promised USD billion to Georgia in August last year has been delivered. Georgia hosted the Vice President of the new administration of the


INVESTING IN GEORGIA US just over two months ago. We see that the US is making all its commitments to Georgia on a political level. If we focus on a business level, the American Government cannot tell its businesses to invest here. The businesses have to want to come here. In this case, we cannot expect the US Government to do very much. What can encourage the entrance of businessmen are the conferences and the work of Amcham. The best message that we can deliver is to suggest investing in Georgia. In the end, the individual investors need to come here themselves. On that basis, are there enough American businesses in Georgia? Who’s fault is that? Our fault. The business community here needs to be more active in encouraging investors to come. The bodies of the Government can help us but we have to do those things ourselves. Q. We still read on the official website of the US Embassy to Georgia that “the Department of State continues to warn US citizens of the risks of travel to Georgia. Is Georgia safe for US citizens? A. I do not know why that is said on that website. I do not believe that the risk in Georgia is high. It was high when we had Russian tanks in our cities; when we had Russian tanks coming towards Tbilisi. Now I think that Georgia is not a

dangerous place for people or tourists or businessmen to visit. I think that this is something that the American Embassy needs to decide itself but I would recommend any tourists who plan to visit Georgia to come here. Those dangers are now over.

war and to continue this work for the next five years. There is really nothing now that can stop Georgia from doubling its GDP in a very short time. I think it is the right time for Georgian businessmen and politicians to start rebuilding Georgia. It is time to stop focusing too much on any level, security, economical etc. Q. When will Georgia return to its pre-war economical situation?

Georgia is a relatively safe place for doing business... The American Government cannot tell its businesses to invest here. The businesses have to want to come here...

Q. Can the US guarantee the safety of Georgia? A. I do not know, I am a businessmen not a politician. I just do not know what the security situation is between the US, Georgia and Russia. What I am much more focused on is Amcham. I believe that now is the time to get the business sector working and return to the level that we were at before the

A. I think that Georgia will return to its pre war position in 2010. To do that we need to start attracting investors again. We have to get this cycle flowing. We need to get as large investments as possible. We need to get a cycle of new investment coming in all the time. It is not all gloomy though.

CONTINUED ON PAGE 8

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INTERVIEW WITH DAVID LEE, PRESIDENT OF AMCHAM IN GEORGIA If you go down to the west of the for political stability and now of Scotland or Ireland but does country now, you will see the we have a much positive picture not yet have the visibility in the massive road works taking place than what it was like just six business community of those there. When you get to Batumi, months ago. Risks for investors countries. you see huge development taking who are coming to Georgia for We should think about Georgia place as well, the construction of the purpose of starting a business first and need to talk the new hotels, a new container port, have probably been identified average person sitting in NY, and container terminal at Poti. and Georgia actually has a good saying “come start business in These are all good indicators, environment for doing business. Georgia”. Every single Georgian, but as the President of Amcham It is impressive when you look at particularly those who are in what I really want to see is that how foreign and local businesses foreign colleges, universities, new businesses are coming in as have developed over the past five who have business, who have well. It is about building what we years. Georgia is a relatively ideal contact with foreigners, should have, getting back to last year’s place for doing business. try to sell Georgia. level as quickly as we can. I am The main reason for the lack of positive about 2010’s forecast. US businesses in Georgia is that Q. What should Georgia do I think that US businesses, to attract US businesses, to the last six since the become as much attractive “There is really nothing months have financial as Singapore or the United now that can stop Georgia crash, were been good for Arab Emirates? from doubling its GDP in focused on Georgia. We are seeing loan survival. A. I think that Georgia is a very short time” changes We have fundamentally attractive to in many seen major foreigners. It is on the eleventh things, in both the economical American companies fail, level according to the World and political situation, it all including banks. It really was Bank’s rates for doing business. looks much better than it did six unexpected. We understood a Culturally, it is European. Any months ago and it is ten times long ago that would not manage European or American would better than it was a year ago. to get any new investments in be very comfortable here. It is a Georgia for some time. The best European oriented society. It is Q. What are the main risks we can hope for is to keep the not strange being here, it is very investors face in Georgia? companies that are presented a welcoming place. So I do not here and continuing to invest. think Georgia has to do anything, A. There are three things that And we have seen that Magti is I think it has done much already. investors look at before making a the best example of this. They just have to go on being commitment. In 2009, Magticom invested in European-oriented and that The first and most important Georgia more than we did in takes care of itself. Everything thing, without which there is 2007 or 2008. We are continuing is now in place. The law, the no point in investing, is the to invest and other companies infrastructure - and all that is market. You have got to be able are doing the same thing, HSBC, almost developed now. The tax to see that you can create a the Hilton regime is good, successful business. Georgia has in Batumi. corruption is “Losing Russia was not single exceptions of potential in This lack of there is a ideal, but gaining Europe low, telecom, tourism and agriculture investments huge market will compensate our loss” here, it is all in directions. We are importing from the food products from Turkey when USA was place. What we we could be producing them expected. need to do now here. There is a huge opportunity Georgia is a small country. Most is sell it and hope that nothing for making money in this sphere. people in Europe and America, unfortunate happens again, like The second and most important unfortunately, do not even know the financial crisis, war or more thing is corruption. Georgia did where Georgia is and would not street demonstrations. All we can a great job in this area and has be able to point to it on the map. do now is wait and see. made it easy to start a business. We just have to be realistic about BY MADONA GASANOVA Businessmen are always looking this. Georgia is roughly the size

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TBC BANK

In his interview with The FINANCIAL, Mr. Jonas, Tbilisi Managing Partner of DLA Piper summed up the work of the DLA Piper Tbilisi office and talked about the main challenges for Georgia in 2010.

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ADVERTISING IN PRINT IS TWICE AS EFECTIVE AS TV, SAYS MICROSOFT rint advertising is more than twice as effective as television advertising for large retailers, according to new data seen by The Times. Every £1 spent on print advertisements yields £5 in revenue, compared with £2.15 for television and £3.44 for online advertising, a study of 26 leading UK retailers found.

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The anonymous participants of the study, which was carried out by Microsoft Advertising, included large clothing stores, big grocery retailers, fashion retailers and department stores. Of the firms surveyed, 24 were in the top 100 UK companies in terms of media spend. The study recommended retailers increased online and print advertising budgets by 10 per cent and decreased television budgets by that amount. “Print is very good for targeting specific audiences and getting eyeballs on key products,” said Joel Dawson, head of online marketing at Boots. Of television advertising, Mr Dawson said: “It works very well for us in terms of reach and frequency.” Deloitte, the professional services firm, forecast that online advertising’s global share would grow from its current 10 per cent to 15 per cent by 2012.

The FINANCIAL LEADING BUSINESS EDITION IN GEORGIA PHONE: (+995 32) 252 275 EXT: 1 EMAIL: marketing@finchannel.com

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FINANCIAL MAGAZINE | JANUARY 2010


President Barack Obama reads the newspaper in the Outer Oval Office. March 05, 2009 White House. Pete Souza / Maison Blanche

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INVESTING IN GEORGIA

Americans have another reason to invest in Georgia… ............................... In his interview with The FINANCIAL, Mr. Jonas, Tbilisi Managing Partner of DLA Piper summed up the work of the DLA Piper Tbilisi office and talked about the main challenges for Georgia in 2010.

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e kept our prior doubled in size from 2006 to 2007. If we have a 15% decommitments crease in revenue in 2009 we and donated have managed to reduce our the same costs in a way that it has kept amount of money in 2009 as pace with that, so basically we did in the past. We also we are doing okay, considermanaged to reduce our faciling it’s a recession. ity costs, our lease costs. We have not lain off anybody. Q. You said Georgia reSo that has been very good. mains as attractive for inSome people left to go study vestments today as it was in the USA. A couple of othbefore the war, perhaps ers left to go work in busieven more ness. But we did 2009 has been a slow so. What are the main not have to year for business. risks invesdischarge any tors face in of our people. We did decrease our In prior years costs in various ways. Georgia right now? we were con- We reduced some of stantly tryour advertising and A. Well, what ing to recruit I mean is that more people, marketing costs. We and if anyone maintained charitable I do not think that the reality left, it was giving and CSR type is any riskier a big problem and the activities at previous than it was before, even if vacancy had years’ levels though. the perception to be filled is different. immediately. In some ways, the realThat’s not the case now. ity is less risky than before. We have gone from a high There was always instability of 19 fulltime lawyers in mid in terms of risk of war over 2008 to 15 now. We have Abkhazia and South Ossetia. seen some decline in our I think that that risk is business and we will see how actually less now. Because things go by the end of the unfortunately we have now year, but I expect we will been through it and experiprobably have a 15% reducenced the worst. So I think tion in our top line revenue that currently there is a lot level compared to 2008. attention being put on the This is not good but comsituation, not only by Georgia pared to how other busiand Russia but even more by nesses have suffered in this recession, and how other law the USA and EU, focused on preventing any further hostilfirms have done generally ity. in Georgia and elsewhere, I As for political instability, think it’s not bad. there is also a risk that demIn previous years, we had onstrated itself in November tremendous growth – we


INTERVIEW WITH MANAGING PARTNER OF DLA Piper

2007 and demonstrated itself again in spring of 2009. The Government has learned some lessons from how they handled the situation in 2007 and did a better job this time of staying calm and accepting the protests peacefully. The opposition’s tactics were very counterproductive and most of the public saw that. So I think that the Government is stronger today than it was before the Russian invasion. Q. Do you think that the economic downturn, which was regarded as one of the main reasons for a lack of investment in Georgia from Europe and the US, is still hampering investments? A. The major thing that is still preventing investment in Georgia is the international economic situation. After the world economy begins to pick up again, and I think that is going to happen soon, nobody knows for sure, certainly not me, but I think the general opinion is that things are getting better and probably within the next few months, we will really see an improvement in the international economy. Foreign investment capital is going to begin moving around again to the places it is interested to go. Georgia will probably begin to benefit along with other targets of foreign investment. But Georgia is going to have perception problems to overcome. There have been political crises and a Russian invasion. The international economic crisis has left investors with less money than they had before, so even without the political problems and

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the war foreign investors will be more cautious simply because they recently went through an economic crisis. For all these reasons, investors will be a lot more careful about Georgia in 2010 than they were in 2007. So the big challenge for the Georgian Government is to create a positive image and a positive reality for foreign investment when it is ready to come back here. They are trying to do that with ads being aired on BBC and CNN. But they need to match the image with substance. Q. Every year we are questioning global companies operating in Georgia about the advantages of working in this tiny country. Why should Americans invest in Georgia? A. Americans should invest in Georgia for the same reasons anybody should invest in Georgia. Georgia is a natural transit corridor; it is a natural physical reason to invest in any kind of warehousing, terminaling, product assembly -- anything that takes advantage of and uses the

country’s position as a transit bottleneck and corridor between Europe and Central Asia. Georgia is a beautiful country where tourism remains a pomising sector for future development. Every year Georgia, despite the fact that its tourist infrastructure is underdeveloped, and there are perception problems about safety and stability, sees more tourists coming here. Real estate assets were underpriced in Georgia even in 2007 and now the prices have deflated. In the banking sector all the things that were attractive before will still be attractive. I do not think that there is anything uniquely attractive for Americans, or for Europeans or anybody else by nationality. But one thing that can be more attractive for Americans is the political relationship between the USA and Georgia. The political relationship is so strong and the USA is so important as a political ally for Georgia that American investors can feel an added layer of confidence that their investments will be safe in Georgia. So perhaps there is a political reason why American investors should feel even more secure than others investing here, but economically the reasons are the same for everybody. Q. What kinds of services have become more in demand since the August war? A. We had two major restructuring transactions in late 2008 and in 2009. They involved exactly what you mention -- restructuring


debt, rescheduling debt, debt for equity swaps, restructuring of shareholdings. It’s a common joke that lawyers make money coming and going. It is true that there is business for lawyers that is actually generated by the bad economy. Not only restructurings but litigation can increase in a bad economy. And both the restructuring work and the increase in business litigation have benefitted our business in 2009. But it doesn’t come close to replacing the business that we have in a booming economy. Like I said, we are going to have a drop in our overall revenue in 2009. A managageable one, but a drop nonetheless, And that is not nearly as good as the double and triple digit growth we had in previous years. I’d rather be making money off of real estate deals, M&A, banking, corporate finance work, capital markets – the kind of work we doing well into 2008 -- than restructurings. eorgian banks are very conservative about lending right now but I cannot blame them. They are trying to keep strong balance sheets. It is obvious that they have had many borrowers’ defaults – consumers and businesses who cannot repay their loans. The banks need to be conservative, to conserve cash resources, to deal with the risk of more defaults. That is why we need credit to be infused into this economy. The private international banks are doing the same things as Georgian banks are doing. JP Morgan and Citibank are not lending into Georgia today like they were 2 years ago.

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mediate cash prospects and When private international so will not invest right now banks, private equity funds, real estate funds, have started because things are too slow. But fundamentally you canto feel better and more senot change facts of nature and cure and can start looking geography, and that’s why for investments again, that is going to start bringing money it makes sense to invest in transportation infrastructure into the Georgian economy. in this country, because its adThe Georgian economy needs vantages are simply a product liquidity like this coming in from outside. Hopefully in the of its location and topography. Once the international next year we will start to see economy gets better things in more capital coming in. Georgia will get better too. Q. You said warehousing, Q. What is the strategy of transportation and logisthe DLA Piper Tbilisi office tics services are attractive for 2010? for investments, and that A. Our strategy for 2010 is Americans are good at this “continued conservatism.” We business. However, we see are not hiring new people for that there is still very weak the moment because we are interest towards these secsatisfied that we have a good tors. level of staffing for the current A. The reason is that the situation. We are not looking international economy is to take on additional fixed still weak. Those businesses costs in terms of office fa-- ports, shipping, cargo cilities or number of lawyers. handling -- all of them lost We are in the right place for a lot because there has been the current level of business, a drastic reduciton in the although certainly that could international shipment of goods due to the recession. We’re more active than we used Mainly due to be in writing articles on legal to the decline subjects and getting them published, of consumer putting out brochures with demand in information about Georgian law. the US and Europe, but We want to be out there publicly and elsewhere show people what we can do. too. The shipping business will pick up when the change and we have a good pool of candidates to draw on general economy picks up. for new hires if we need them. I think right now the only And I want to mention we people who are going to invest have not cut back on training in transportation infrastrucour people. We’ve had trainture are people with deep ers here in Tbilisi from DLA pockets or good credit, which Piper in the UK working with is the same thing, who are our lawyers on legal writing, looking at the long term opnegotiating skills and other portunity and not depending on short term cash flow. Most subjects. businesses need to know that BY MADONA GASANOVA their projects will have im-

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EXECUTIVES LADO GURGENIDZE

Photo: Daniel Berehulak/Getty Images

ado Gurgenidze, 39, former PM of Georgia was hired by African bank – Bank of Kigali in December 2009. “We’re trying to go regional and become dominant. This is where Lado Gurgenidze comes in with his international experience,” James Gatera, Managing Director of Bank of Kigali told Bloomberg. Bank of Kigali has assets in excess of $200 million, while Rwanda’s gross domestic product is about $4 billion. Gurgenidze was CEO of the Bank of Georgia before his 11-month stint in politics. He stepped down as prime minister in October 2008. Late November he took the reins as chief executive at People’s Bank of Georgia, the former state agricultural bank. Gurgenidze and a partner, Romanian oil and real estate billionaire Dinu Patriciu, bought 91 percent of People’s Bank for $15 million, with a promise to invest an additional $10 million”. Rwanda is a small, landlocked country in Central Africa with 9.7 million people and a high population density (368 people per sq. km). Rwanda became independent in 1962 after colonization by Germany (1899) and Belgium (1919). According to World Bank Rwanda’s US$4.2 billion economy grew 7.9 percent in 2007 and an estimated 8.5 percent in 2008. Gurgenidze holds dual citizenship of Georgia and of the United Kingdom.

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Billionaire Roman Abramovich planning £3-million star-studded bash

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ussian billionaire Roman Abramovich is reportedly planning a 3-millionpound extravaganza on the Caribbean resort island of Saint Barthélemy. The 43-yearold owner of Chelsea football club recently bought the Gouverneur Bay estate, a 54-million-pound 70-acre cove surrounded by hills leading down to a beach. Abramovich was said to be

making arrangements for a beach party expected to host around 250 people. Singer Prince was said to have been roped in for a performance at a reported fee of 500,000 pounds. “Roman is new to the island and wants to come in with a bang,” the source said. Abramovich, has two sons and three daughters with his ex-wife Irina. He has been with fashion

designer Dasha Zhukova, 28, daughter of wealthy Alexander Zhukova, for more than three years. In December 2009 Russian Dasha Zhukova, gave birth to a boy, Aaron Alexander Abramovich. Former model Dasha heads fashion label Kova & T, is editor of style magazine Pop and last year opened Moscow art gallery The Garage Centre for Contemporary Culture.


Wealth&Money China’s lonely billionaires hope money can help buy love

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t least 21 of China’s 130 dollarbillionaires are lonely men in search of suitable partners, Irish Times reported based on recent study. It’s not all hearts and flowers being a billionaire in China these days. Forced to focus on building a huge pile of wealth during the early part of their careers, many of China’s filthy rich simply don’t have time, or the inclination, to follow the traditional route and take their parents’ advice on who to marry. Finding the time to socialise is always a challenge when you are busy amassing billions of yuan. The average wealth among China’s richest 1,000 people grew by 30 per cent to €400 million in the past year or so, which is even more than in the boom year of 2007. While money can’t buy you love, it can help in the search for affection. Nearly 30 billionaires who have appeared on the Hurun annual rich list have been charged with bribery or are at the centre of a police investigation, while 19 of the 1,330 business tycoons listed in the past 10 years are either in jail or are waiting for sentencing on bribery charges. The super-rich with too many problems to deal with can always indulge in some retail therapy. Wealthy Chinese bought one quarter of all luxury goods in the world last year, and this year China will replace the US as the world’s secondlargest luxury goods market, according to the head of Gucci. Chinese customers bought 60 per cent of luxury goods when they travelled overseas.

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Credit Cards In 2010

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he most important changes in U.S. will come in late February. That’s when the final provisions of the Card Act, legislation passed last May with overwhelming support from both parties, will take effect. According to Forbes magazine, beginning Feb. 23 financial institutions will be prohibited from several billing practices that have long irked cardholders. Among the most important: All payments must go to the highest balances first. That means that if Bank of America ( BAC - news - people ) charges you 30% for cash advances and 15% for all other balances, the money you send should help you erase the most problematic debt first. Banks will no longer be able to say that payments are due at say, 10 in the morning, and instead accept all payments until the close of business on the due date. They will no longer be able to raise a customer’s interest rate on a fixed-rate card and cannot make significant changes without 45 days’ written notice. Consumers will also get a wakeup call on every bill on how making only the minimum payments will keep them in debt. Banks will soon have to disclose how long it will take a cardholder to pay off his entire balance if he sends in only the minimum.


“In 2010 Georgian banks have to be more active in giving credit to clients as they are facing unprecedented liquidity. Many credit products, like mortgage loans and auto credit that were well structured and stable in the past, will return in 2010 and their terms and interest rates will be very attractive. There will be good products, with good terms and for good payers”

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n 2010 we will be more active towards our corporate clients. Corporate customers will have some advantages compared to other clients. We will offer them the whole spectrum of credit packages”. “At the same time we plan to increase the share for financing small and middle sized businesses. We will increase our portfolio in this segment. It is more difficult now for banks to give out loans than it was previously. Bankers have become more cautious and also customers who previously were optimistic about their businesses are now trying to avoid any additional monetary responsibilities”. “In Russia VTB Group is one of the leading banks, with over USD 100 billion of assets. They hold second position there and have aggressive plans to become first in the country. As for us, we do not have such an aggressive policy we just want to consolidate our niche”. “Currently VTB Bank Georgia is occupying 5% of the local market. In the short term we do not expect our share to grow by more than Hopefully the total share 2%. Hopefully of VTB Georgia will be the total share 10% in five years time of VTB Georgia will be 10% in five years time. We will not occupy more of the market share in Georgia than that as we do not want to focus on retail banking. Out of the 20 largest companies in Georgia the majority are our customers”.

Georgian Banks Will Face Unprecedented Liquidity in 2010 Archil Koncelidze, General Director of VTB Bank Georgia

“If we rate the banks in Georgia least affected by the recession VTB Bank Georgia would be among the top three with a doubt. As for VTB Group, they were in the list of banks that were more affected by the recession. The effect of the crisis was hardest in Russia and in Ukraine, where VTB Group is very active. However they have now managed to return to their pre recession situation”. “The Georgian economy was severely dependent on direct foreign investments. Direct investments dramatically decreased. No one expects the economical boom that Georgia experienced in 2006 to return in 2010. The financial support issued by international donor organizations will compensate the losses, but not totally. “As for the real estate sector which was not connected to direct investments, currently it has stabilized and I do not expect its further downfall. I think that the real estate sector will actually increase this year, as prices of real estate have stabilized and circumstances for exporters have improved. “We will see obstacles in the development of the economy, as our economy was mainly dependent on foreign investments. It is hard to actually count though what share of the Georgian economy depends on direct investments. The less that is dependent on foreign investments, the better it will be for the economy’s recovery”.

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Switzerland millionaire hit by record speed fine

Most Popular Destinations in Winter

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Swiss millionaire has been handed down a record speeding fine of $290,000 (£180,000) by a court. The man was reportedly caught driving a red Ferrari Testarossa at 137km/h (85mph) through a village. The penalty was calculated based on the unnamed motorist’s wealth - assessed by the court as $22.7m (£14.1m) - and because he was a repeat offender.

Average Number of Major Weather-related Catastrophes Increasing Dramatically Munich Re’s NatCatSERVICE database shows that, globally, the average number of major weather-related catastrophes such as windstorms, floods or droughts is now three times as high as at the beginning of the 1980s. Losses have risen even more, with average increases of 11% per year since 1980. To what extent the increased losses are due to climate change is not yet clear. Preliminary analyses suggest that it accounts for a low single-digit percentage of annual overall losses. Although this increase appears low, the amounts involved are enormous. According to studies by Munich Re, overall losses due to weather-related events came to around US$ 1.6tn in original values, with insured losses amounting to approximately US$ 465bn. In the period from 2000–2008 alone, overall losses totalled over US$ 750bn, whilst insured losses came to around US$ 280bn.

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n average 36,000 tourists will visit Gudauri and Bakuriani, famous winter resorts in Georgia, during the winter season 2009-2010, says the Department of Tourism. Almost all hotel rooms in Bakuriani and Gudauri are already booked for the Christmas period. The majority of tourists who visited the ski resorts last year were Georgians. Bakuriani is popular among Georgians living in Russia whereas Gudauri is mostly visited by Ukrainian citizens. Bakuriani is located on the northern slope of the Trialeti Range, at an elevation of 1,700 meters (5,576 feet) above sea level. Gudauri is a ski resort located on the southern slopes of The Greater Caucasus Mountain Range in Georgia. The resort is situated in the Stepantsminda District, along the Georgian Military Highway near the Cross Pass, at an elevation of 2,196 meters (7,200 feet) above sea level. The trip from Tbilisi to Gudauri usually takes two hours by car. The ski season lasts from December to April. Heliskiing is also available throughout the season.

Hotels in Bakuriani vary in prices and services. On average you need 300-350 GEL per day for all the activities that are associated with holidays in Bakuriani. Hotels cost 70-120 GEL per person per day, Skis are available at 25 GEL per day or 10 GEL per hour, you need to pay 100-150 GEL for a Buran (snowmobile) per hour and a trip by horse will cost you 50 GEL per hour. Moreover, Hotels provide one day tours to Tabatskuri, the 4th largest lake in Georgia. The 5-6 hour tours are by Buran (snowmobile) and cost from 200 GEL to 200 USD per person. The highest costs are usually in the first two weeks of January, after which the costs usually decrease. In most hotels children under the age of three are free of charge. Gudauri It costs less to holiday in Gudauri compared to Bakuriani. On average a person will need approximately 130-200 GEL per day in Gudauri. The price of hotels varies from 80-115 GEL per person. A day pass for the cable way is 25 GEL and a one-way ticket - 3 GEL. A week at a Georgian ski resort costs less for Georgians than it would in Europe. A weekend (or 3 nights) in Switzerland, one of the most popular destinations for wealthy ski lovers, costs about GEL


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n his third day in Tbilisi, Andrei Piataxin, 34, newly appointed General Director of Beeline in Georgia, traveled around Tbilisi aquainting himself with the characteristics of the city. “The first thing that I looked for after my arrival in Tbilisi was a teacher of the Georgian language. People here are polite and hospitable. We have a similar faith and lots of things in common. There might be some political difficulties between our countries at the moment, but they are not relevant to the relations between our citizens.”

Our plans sound ambitious, but why not!

“When it was first suggested I move to Georgia, I called my father-in-law who served as a soldier in Georgia and asked him to share his impressions of the country. As it was long time ago, the first thing he remembered was that roses were flourishing in January. Of course he had a lot of positive impressions. My expectations were also positive as a result and I have not been dissapointed yet.” “The political disagreement between Russia and Georgia has not influenced our business in Georgia. Although since the August war we have become more careful in what we do and say. Sometimes we like to avoid this topic and try to leave it out of the messages we give out.” “Georgians should not consider Beeline a Russian company”.

Andrei Piataxin, 34 years old, was born on September 5, 1975, in Lipetsk. In 1997 he graduated from Lipetsk Technical University. In 2007 he received an MBA grad at the American University of Business Administration. Piataxin began his career in the sphere of telecommunications in 1996. In 4 years from an expert of the department of marketing he advanced to the Deputy Director of the Lipetsk branch of the Joint-Stock Company Mobile Communication of Chernozem region. Andrei Piataxin came to Vimpelcom in 2001 at the position of sales manager of the Lipetsk branch, and in 2004 moved to position of sales manager of the Ural region of Vimpelcom. From 2006 Andrei was responsible for the corporate sales of Vimpelcom, at first in the Moscow region, and then on a corporate level. After integration of the business Vimpelcom and Golden Telecome in Russia Piataxin was appointed to the position of Director for development of corporate business in the regions of Russia. Piataxin is married and has two kids. His family members think to move to Georgia aswell.

“The majority of our employees are Georgians. Some of them do not even speak the Russian language.” “When I was offered the chance to come to Georgia the main criteria was a knowledge of the English language, not Russian”.

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Give Us Stability and Take Billions

Fady Asly, Chairman of the International Chamber of Commerce says Georgia remains a beacon of democracy

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“I am sure that the Georgian economy will do pretty well and I strongly believe that Georgian businesses will perform strongly in the future too. Georgia will continue being a very attractive place for foreign investors and will no doubt become the pearl of the Caspian and of Central Asia,” says Fady Asly, Chairman of the International Chamber of Commerce and President of Agritechnics Holding. “Give us stability and take billions, this should be our motto,” says Mr. Asly.

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ell I have not changed opinion; I am still holding to what I said. Georgia remains a beacon of democracy, leadership and of progress in the region despite the challenges that we have been facing in 2009. I am glad to notice that everything ended relatively happily despite the negative impact of having Georgia shown regularly on international news

for about 2 and a half months. Yes there are many challenges but the Government is pro-active and tackling them properly.. Q. The year 2009 has been quite tense, politically and economically. How would you evaluate the last year, has Georgia lost or attracted more foreign investors in the country? A. Georgia is not the only country to have lost its attractiveness; all emerging markets have lost their competitive edge. There is a shortage of liquidities on the international markets, and for those investors who have access to cash, the western markets offer today very attractive opportunities and therefore such investors are ignoring emerging markets for the time being. Georgia being one of those emerging markets is suffering for sure. However among the emerging


markets I believe that Georgia is still offering many advantages that other competing markets are not, be it the geographical location, the country’s potential or the business and investment climates, all of which play tremendously in Georgia’s advantage. Q. What can you tell us about the investment climate in Georgia at the moment? A. Georgia’s legislation is very business friendly however we are still waiting for investors; if you own a good restaurant but have no customers you have to be patient!. If the location is good, the food tasty, the service efficient and the prices moderate, all the parameters are there to succeed. I strongly believe that FDI will increase substantially starting the end of 2010. We will have a difficult year in this respect but there is nothing to worry about as long as political stability is guaranteed, this is where the opposition needs to take responsibility and preserve internal stability by keeping their struggle within the frame of the institutions. Q. In your view do foreign investors have enough information about Georgia? A. I think that foreign investors cannot be grouped in one category only. On one hand there are the larger or wealthier foreign investors who are specialized in emerging markets. Those investors are well informed about Georgia and track regularly all information related to emerging markets through the data released by the International Financial Institutions However a very large number of insular investors don’t

know where Georgia is on the map considering the small size of our country and this is where the government is doing a very good job by advertising Georgia and doing business in Georgia on the major international TV channels. Q. What were the main challenges for Georgia in 2009? A. Well starting November 2007 it has been an uninterrupted ballet of events that seriously undermined the investment climate in Georgia. It all started with street protests in November 2007 that were followed by presidential elections, legislative elections, the 5 days Russian aggression on Georgia, then the international financial crisis and to rap it all the April and May 2009 protests. ICC was very vocal about the negative impact that the street protest would have on the economy but a proverb says: “No one is more deaf than the person that doesn’t want to listen” and unfortunately the Georgian opposition had an agenda and didn’t want to hear the voice of reason... It takes years of hard work to improve the image of a country but it unfortunately takes 30 seconds on CNN and Euronews to destroy years of hard work. Those were the challenges that culminated in 2009, currently businesses are assessing their damages and implementing the proper strategies to recover... I sincerely hope that all political leaders understand now that the only way to improve things is through dialog within the frame of the institutions and not in the streets Q. What is your suggestion, how should Georgia become at-

tractive in terms of investment? A. I think that Georgia is attractive in terms of investment. There can be no investment without political stability. Therefore all political forces should work constructively and with a big sense of responsibility to ensure internal political stability. Once we have long term political stability the potential for investment is huge in so many sectors, be it hydro power, green energy, agriculture, tourism, real estate, infrastructure, services, you name it;. Georgia is the entry gate for the whole Caucasus and Central Asia and therefore offers so many opportunities, In Georgia both local and foreign investors are treated equally which is not the case in many of our neighbouring countries. One of the sectors for improvement is the proficiency of the mid-level public servants who need more training so they could perform better and this is true mainly in Tax and Customs; At the highest level of the hierarchy things are handled very professionally in general, our economy is free and business friendly and there is a genuine political will to transform Georgia into one of the most attractive destinations for business in the world. Q. Why should foreigners invest in Georgia, what is the most attractive things about the country? A. Well there are several sectors, first of all in green energy there is huge potential, and Georgia with hundreds of hydropower stations is a leader in this respect. Agriculture is for sure another area of tremendous potential for both internal and export markets. When we speak of agriculture we

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INTERVIEW WITH ICC PRESIDENT

mean value added agriculture of course not cereals.. Georgia is blessed with many microclimates that vary from subtropical to temperate. Infrastructure offers lot of opportunities starting with new roads, ports, dams creating, building, you name it. Services like banking, insurance, restaurants, tourism, I am just giving you some examples as there really is a lot of potential in almost every sphere. Georgia is serving the whole region, the region is very wealthy, it’s an oil and gas region so this will have a formidable impact on Georgia.

west will dry out, then investors will be massively eying towards emerging markets that would have regained their competitive edge, Q. What should Georgia do to attract US businesses, to become as attractive as Singapore or the United Arab Emirates? A. Georgia cannot become overnight as attractive as

Q. Georgia is often targeted for its pro-American orientation. Against this background, do you not think that the US should be more active in regard to investments? I know that the US did much supporting and lobbying of Georgia, but I mean much more than this. A. frankly I think that the United States has done as much as anyone could do. What do you expect the US administration to deport investors to Georgia? Through USAID the US Government has done a lot for the country and the US Embassy in Tbilisi is extremely active in assisting to improve the business climate. By the same token we have a very active Georgian Ambassador in Washington who is doing a great job in promoting Georgia there as much as possible. Georgia remains a small country and potential investors in the States and elsewhere are struggling themselves, therefore no one expects flocks of investors invading Georgia anytime next week; Once the good opportunities that were created by the world financial crisis in the

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Singapore or the United Arab Emirates, for the simple reason that these are very wealthy countries with very high revenues and that have been building up their economies since the 1950’s.. In the United Arab Emirates there are thousands of investments worth hundreds of billions of dollars on a totally different scale from what we see in Georgia. However if it will take us several decades to reach this level is not important, what is important is that we are on the right track to achieve it. Q. Are Americans interested

in doing businesses in the Free Industrial Zone in Poti? What are your suggestions for them in this regard? A. I think that not only Americans but any businessman interested in operating in the region should have huge interest in the free industrial zone. I think that the free industrial zone is a brilliant idea. I think that it’s extremely well managed; the concept is very good and I would strongly encourage any business that operates in the region to use Poti Free Zone as a base. Prices are way below competing free zones in the area and you have hundred fifty million consumers at the grab of your hand. The bottom line is: Give us stability and take billions, this should be our motto. The US markets cannot substitute the Russian market. that was substantially supplied with Georgian products. During Soviet times, Georgian wines and fresh produce were heavily present in the Soviet markest and very much in demand. Today in the US, Georgian wines are not well known and have to compete with the best wines coming from Chile, Argentina, France, Italy and every other wine-producing country, so it is a very difficult market. Yes the Georgian embargo has hurt the Georgian economy but it did not destroy it as planned by Russia. Little by little the market will readjust, and we will reach a golden equilibrium between our potential to produce and our ability to sell. On a positive note the Russian embargo has helped Georgian businesses to find other markets that gradually will totally substitute the traditional Russian market.


Esabi Ltd, the one of biggest Georgian IT companies, is celebrating 20 years of success in developing the IT market of the country

It’s a bit difficult to sum up such a long period, so it’s easier to speak about the company’s development. I have to remark on the fact that these years have been quite hard at times and full of challenging periods to overcome in order to have the final face of the company that we present nowadays.

Esabi

20 years on the Georgian Information Technologies Market Mr. George Bakanidze

Director and one of the stakeholders of ESABI speaks about company development strategy

We, like all companies existing on the local market have gone through quite a tense period most recently. We have seen wars and many other problems in the country but we managed to survive and maintained our strength and the right activity directions. We now believe that we can overcome any potential future problems too based on our market knowledge, expertise, qualified company staff, and permanent company structure which change in line with customer demand. Our company was established in 1989 on the 12 December. The company first started working as a Xerox Ltd. partner. Of course it’s an American company and our first customers were American companies - the American Embassy of Georgia. Other missions were also added to the list of our customers, including USAID, the UN and EU. Our strong excellent business reputation gave us the opportunity to make a sale of equipment and service support to all foreign embassies in Georgia. In 1997 we became the first partners that signed a contract with the American company HP, which is the producer company of computer technology and extended Esabi product portfolio to give our customers more that we could provide them with before. Then we found new partners in office technology providers Kinderman and GBC which is an office accessories provider. Also last year we became direct partners of the American company APC. We consider the Esabi product portfolio balanced at the moment to satisfy every customer of the country in terms of IT.

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Mr. George Bakanidze Director and one of the stakeholders of ESABI speaks about company development strategy

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20 YEARS ON GEORGIAN IT MARKET

Our main clients on the local market are the international organizations and embassies, organizations equal to them, diplomatic corps, governmental organizations, ministries, as well small and medium sized businesses. We have our retail show room and have a Digital Print Shop equipped with the latest Xerox and HP equipment specially designed for Graphic Arts industry situated on Vazha Pshavela street. Esabi has a retail shop and service centre with qualified engineers certified by Vendor’s training centres ( Xerox, HP, APC, Microsoft, Oracle and others) with a services agents network to cover cross country customers warranty and post warranty support. Also Esabi Digital Print Shop gives advanced print and copy documents services on a fast and quality basis. Our strategy is 100% our customers’ satisfaction. We serve our customers to fully meet customer expectations. The marketing strategy is competently, fast and fully informing Esabi customers about all novelties in equipment, software, solutions and services which the company can deliver to the Georgian market.

BENEFITS First of all our quality of service makes us different from other companies. We also have quite larger share of experience than most because there are only a few companies that have been working on the local market for such a long time as us. Our company has a wealth of experience of working on the Georgian market and that’s the main advantage of ours; we know what and how to offer our clients in order to make them fully satisfied. One of our strongest points is our service support centre to support all the equipment and software we sell with a high level of competence to our consumers. We have very serious and experienced engineers, certificated and trained abroad

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in the companies mentioned above and that’s what gives us the opportunity to offer the highest quality service to our customers.

MOST POPULAR PRODUCTS We offer a full range of computer operational systems to our corporate clients, office programmes, antivirus programmes and software solutions that help our customers keep data secure in all their activities. I will name some of them: these are the products of Microsoft Corp., Kaspersky production, Symantec production and also Adobe products used in documents design. According to our retail sales, laptops are very popular among young people. Generally they are interested in computer products and we hope that this tendency will continue with future generations too. For the whole of Georgia when speaking about the comparative sales of laptops and computers of course the more popular product is the desktop, but in retail sales the most demanded is the laptop. We import products from Europe. Mostly from Holland, Finland, Switzerland and Luxembourg. We also import products from Ireland and France as well. Esabi gets the majority of office accessories from Germany and Hungary. This is the very fastdeveloping sphere. Esabi is changing together with customers demand. We are moving into project business to optimize customer data flows by offering solutions like billing solutions for Telecoms, corporate data flow management automation in Government institutions, solutions for banking to reduce their expenses per every electronic or paper document paper page, low cost solutions for Graphic arts and corporate print shops and others.

Of course they have changed, there is a more refined consumer in Georgia at the moment and this is similar to the situation in fully developed countries. In every family, people are becoming more aware of the characteristics, the usefulness of a product, how to choose it and where to buy it from. The most remarkable thing is that whereas 8-10 years ago the average customer would buy a cheap computer and not care about its services at all, over the last 3 years the tendency has been that most retail customers prefer to pay a bit of a higher price but get a higher quality product. They prefer to buy computers set up by the manufacturer, which have the factory’s guarantee for 3 years, rather than ones set up on the local market.

STRATEGY The strategy is development and improvement of our 20 years of experience. We are going to implement a culture of consumption of equipment bought by official producers and manufacturers, because at the moment the majority of equipment available in Print Shops are bought in China under nameless production with no service support. The companies using these products try to look after the equipment at their own expense which is quite unacceptable at serious job and they spend more money and resources on improving these products. We just want to change this tendency and make people used to buying products under the official brands which have proper service support. People do not have official programmes at home and this is a very serious issue absolutely unacceptable in Europe or the States, but one that is popular in post Soviet countries. We are trying to change this psychology amongst the people in Georgia at the moment.


20 Years at Georgian IT Market

37d Chavchava d ze a v e . T b ilis i, 0 1 6 2 , G e o rg ia

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USD 18,000,000 has been spent on the construction of the hotel. This Georgian-Italian project has the capacity to host 350-370 people. It includes 156 apartments. Among them are 5 single rooms, 4 rooms for disabled people, 111 double rooms, 31 De LUXE and 5 LUXE type rooms.

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eorgia Palace Hotel, an exclusive five-star hotel located on the Black Sea coast in Kobuleti which is distinguished by a unique microclimate which benefits cardiovascular, respiratory and nervous system unlike any other on Georgia’s Black Sea coast.

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“First of all we are lucky that we have a unique location for recreation but of course our biggest priority and asset is the outstanding quality of our overall service”, Lela Tsulukidze, GPH Executive Director is introducing the hotel. “Kobuleti is historically known as a prestigious curative and recreational place. Kobuleti is famous for its unique microclimate, which helps in curing heart diseases, problems with inhalation and the nervous system. Kobuleti has huge investment potential and it comes as no surprise that there’s been such a concentrated amount of


Georgia Palace Hotel lobby

investments there recently. First of all it is worth mentioning that as a result of this project new workplaces appeared in Kobuleti and hundreds of locals were employed. This project has introduced Kobuleti to many people. Foreign guests who visit us become acquainted with the beauty of our region and underline that our country has quite large potential for developing tourism in the country. Many of the representatives of foreign organizations choose Kobuleti as a place for recreation or business meetings, which is indisputably due to the merit of Georgia Palace Hotel. Prices have significantly decreased at our hotel and we have

introduced new special packages for newlyweds and businessmen as well. Q. Summer 2009 was quite busy for Georgian Palace Hotel. Despite the economic crisis, popularity of the 5 star hotel increased dramatically compared to the previous year. What do you think was the main determiner of the success of your hotel? A. The popularity of Georgian Palace Hotel was determined by many different factors; among them the most important is that we represent the first Georgian 5 star brand. This fact counts for a lot and it is necessary

to prove every day that the hotel really corresponds to the stated standards. The quality of service, right method of approach and hard work of the staff all contributed to the company’s level of popularity. Despite the unstable economic conditions existing in the country, interest in GPH increases on a daily basis. In 2008 we hosted only 7,112 guest but we should not forget the August events in 2008 that significantly contributed to a lower number of guests. For the year 2009 the situation has changed radically. We hosted nearly the same number of guests in August of 2009 that we did in the whole 2008.

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156 elegantly designed rooms, all with private balconies and wonderful views of the sea and garden

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As you see our predictions have come true. On average 35% of our guests are foreigners and 65% Georgians. In our view, this percentage index will significantly change in 2010 and the percentage index of our Georgian and foreign guests will become practically the same. We are mostly visited by people from neighbouring countries Armenia, Azerbaijan and Turkey. Out of the European countries we get most guests from Germany and Italy. We also have many guests from the USA. Q. At different periods your guest list has included the likes of Tanya Marya, Marcus Miller and Victor Uschenko. Which celebrities visited you in the year 2009 and tell us of their impressions. A. Every year the Black Sea Jazz Festival is held at GPH which means us hosting a wealth of famous guests. At different periods our guests have included Katie Melua, Marcus Cahill, DJ Giom, Naturally Seven. We have also been visited by world opera star Nino Surguladze and Prima Ballerina Irma Nioradze. We have also hosted famous singers Diana Gurtskaia, Bianka and many others others. We have of course had many famous Georgian politicians as guests, I would specially like to mention out of our foreign guests the Swedish Premier Minister Carl Bildt and Representative of the EU Peter Semneby. Our corporate clients are prioritized for our hotel. We have low tariffs specially for our corporate clients and we give them maximal comfort and satisfaction for the price of their stay. The prices have significantly decreased and we

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have made special packets for newlyweds and businessmen. For very low prices our guests will be able to live in a comfortable area, use the spa centres and other different services. Q. What is the difference between the numbers of summer and winter guests at your hotel? A. Winter is generally a hard time for the Adjarian Region, however despite this the hotel management and sales department try to turn the statistics around so as to maximally increase the number of guests in winter, and decrease the margin between the 2 seasons. Q. Are you interested in attracting investments? A. Of course we are interested in attracting investments. We welcome any kind of investment if they are directed in the right way and what’s most important, if they will be implemented by our partner country the US. Q. What makes GPH different from those other famous hotels brands in Georgia that are planning to open in Adjara? A. First of all it’s the name - “the First 5 Star Brand”, our service quality and the uniqueness that only GPH offers its customers. The existence of such a kind of hotel in Adjara is in itself a popularization of the region. That’s exactly the main idea and charm of the place and I think that we do our best in this regard. And we trust that our hard work will definitely yield more positive results in the future.


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EDITOR’S PICK

Serve Your Country At MyCareer.ge we are assisting HR professionals to recruit candidates they need. We are promoting thousands of professionals in order to support their career development. We are developing employment in Georgia. This is the way how we serve our country. http://mycareer.ge Assisting to Build a Better Career

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Top Hiring and Human Resources Trends for 2010

flexible work arrangements in 2010, including: alternate schedules; telecommuting; and compressed workweeks.

Replace Under-Performing Employees: Taking advantage of the large number of talented jobseekers currently looking for work, employers plan to replace underperforming employees in 2010.

Rehire Retirees & Postpone Retirement: Employers will consider retaining workers approaching retirement in 2010, large number of workers expressing interest in postponing retirement.

Use Social Media: Employers plan to emphasize social media in 2010, some of them will add social media responsibilities to current employees.

Hire Freelance & Contract Workers: Employers anticipate hiring freelancers or contractors in 2010.

Trim Perks and Benefits: Perks and benefits will be cut significantlly in 2010, including: bonuses; medical coverage.

Rehire Laid-off Workers: Among companies with lay-offs in 2009, many of them plan to bring back workers in 2010.

Recruit Bilingual Workers: Employers will hire bilingual candidates in 2010 and half will hire the bilingual candidate of two otherwise equally qualified candidates.

Provide Flexible Work Arrangements: Employers plan to provide more

Reduce Business Travel: Employers plan to have less business travel in 2010 than in 2009

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MyCareer.ge users are:

Employers and Employees Experienced C category managers; Alumni and students; http://mycareer.ge Assisting to buil a better candidates

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Wealth&Health: CELEBRITY RECESSION:

Health Is More Important Than Beauty and Wealth for Singletons in 2010

Who Lost It All In 2009 Not even celebrities were immune to the economic downturn of the past year. See who fell and why. While you’re ringing in the New Year, take a moment to be grateful. Even if it has been a difficult year financially, you probably haven’t lost as much money as these celebrities. Stephen Baldwin Stephen Baldwin, of The Usual Suspects and, more recently, reality TV, filed for bankruptcy this past summer as a result of more than $2.3 million in personal debt, including more than $1 million owed in back taxes. Baldwin became a victim of the housing market collapse after he took out a second mortgage on his $1.1 million home and became “underwater” on the loan. Kim Basinger If you’ve ever quit a job, you can be thankful that it probably didn’t cost you nearly $9 million. That’s how much a judge ordered Basinger to pay a film production company for failing to honor her commitment to star in the movie Boxing Helena. Apparently she didn’t save enough of her previous earnings to pay the bill; she ended up losing $19

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It’s that time of year again when we all evaluate our lives over the past 12 months and set ourselves goals for the year ahead. Fast developing UK’s dating website Smooch.com revealed that nearly half of the members surveyed (48%) hoped to be healthier in the new year. This rose by six percent in comparison to last year. In contrast, only 7% set themselves the goal to increase their attractiveness; this fell from the 10% in the previous year. With the increased media exposure of issues such as obesity, bingedrinking and the effects of smoking in the past year, it is likely that people are taking note and working from the inside out. Despite the credit crunch of 2009, only 16% of members aimed to be wealthier in the coming year. Interestingly, this also fell slightly from 18% last year. Whether people feel more comfortable in the economic climate or have simply become accustomed to it is unclear, however it appears to have had little impact on our hopes for the future. Women were most likely to make resolutions to be more attractive


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Wealth&Health: Celebrity Recession: Who Lost It All In 2009 Not even celebrities were immune to the economic downturn of the past year. See who fell and why. While you’re ringing in the New Year, take a moment to be grateful. Even if it has been a difficult year financially, you probably haven’t lost as much money as these celebrities. Stephen Baldwin Stephen Baldwin, of The Usual Suspects and, more recently, reality TV, filed for bankruptcy this past summer as a result of more than $2.3 million in personal debt, including more than $1 million owed in

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back taxes. Baldwin became a victim of the housing market collapse after he took out a second mortgage on his $1.1 million home and became “underwater” on the loan. Kim Basinger If you’ve ever quit a job, you can be thankful that it probably didn’t cost you nearly $9 million. That’s how much a judge ordered Basinger to pay a film production company for failing to honor her commitment to star in the movie Boxing Helena. Apparently she didn’t save enough of her previous earnings to pay the bill; she ended up losing $19 million when she had to sell the town of Braselton, Ga., which she purchased in 1989, and had to file for


EDITOR’S PICK

Prices: AEROBICS: TENNIS CLUB: POOL: IOGA:

Nicholas Cage The National Treasure star owes a king’s ransom to the IRS--more than $6 million in back taxes to be exact. He blames his former manager, Samuel J. Levin, for losing millions of dollars to risky and speculative investments and recently filed a $20 million suit against the CPA. To settle up accounts, he recently sold his castle in Bavaria. He also lost two of his homes in New Orleans to auction after falling into foreclosure. Jon & Kate Gosselin With both their marriage and TLC series (Jon & Kate Plus 8) ending, the reality TV couple is, at the least, losing their $3 million to $4 million salary from the cable TV company, not to mention all of the freebies they enjoyed as a result of their show, including trips, clothes and toys for their brood of young children. Victoria Gotti Daughter of deceased mobster John Gotti, this TV reality show star (Growing Up Gotti) filed for bankruptcy after her

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mansion in Long Island went into foreclosure. Blaming her financial misfortune on her ex-husband’s imprisonment, she lost the home after the bank reported that she owed more than $650,000 in back mortgage payments. Billy Joel He may be a musical genius, but this Grammy winner hasn’t enjoyed the same string of success when it comes to his finances. He has had to file for bankruptcy, and he filed a $90 million lawsuit against his former manager (and former brother-in-law) Frank Weber for losing tens of millions of dollars as a result of fraud, risky investments and unauthorized loans. ***************** CONTACT:

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Not even celebrities were immune to the economic downturn of the past year. See who fell and why. While you’re ringing in the New Year, take a moment to be grateful. Even if it has been a difficult year financially, you probably haven’t lost as much money as these celebrities. Stephen Baldwin Stephen Baldwin, of The Usual Suspects and, more recently, reality TV, filed for bankruptcy this past summer as a result of more than $2.3 million in personal debt, including more than $1 million owed in back taxes. Baldwin became a victim of the housing market collapse after he took out a second mortgage on his $1.1 million home and became “underwater” on the loan.

Celebrity Recession: Who Lost It All In 2009 Not even celebrities were immune to the economic downturn of the past year. See who fell and why. While you’re ringing in the New Year, take a moment to be grateful. Even if it has been a difficult year financially, you probably haven’t lost as much money as these celebrities. Stephen Baldwin Stephen Baldwin, of The Usual Suspects and, more recently, reality TV, filed for bankruptcy this past summer as a result of more than $2.3 million in

Kim Basinger If you’ve ever quit a job, you can be thankful that it probably didn’t cost you nearly $9 million. That’s how much a judge ordered Basinger to pay a film

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Michael Jackson is the last hope for music retailers in Georgia. His death has prolonged life of moribund music business Jackson’s “Thriller” is one of the best selling albums of all time, and is still popular some 26 years later 56 Wealth

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usic stores in Georgia claim that sale statistics have fallen dramatically over the last few years. There is almost no demand any longer for audio albums at stores selling CDs. But Michael Jackson’s Triller is still one of the best selling albums. Retailers are actually in the process of closing down their businesses. Store managers are blaming the social and economical situation for the music crisis, but continue closing their eyes to the unauthorized distribution of digital music. According to International Federation of the Phonographic Industry (IFPI) statistics 95 percent of music downloads are unauthorised, with no payment to artists and producers. In 2008 the digital music business internationally grew by around 25 percent to USD 3.7 billion. Digital platforms now account for around 20 percent of recorded music sales, up from 15 percent in 2007. Single track downloads, up 24 percent in 2008 to 1.4 billion units globally, continue to drive the online market, but digital albums are also growing steadily (up 37%). The top selling single of 2008 was Lil Wayne’s Lollipop. The US is the world leader in digital music sales, accounting for some 50 percent of the global digital music market value. Single track downloads crossed the one billion mark for the first time in 2008, totalling 1.1 billion, up 27 percent on 2007. Digital album sales totalled 66 million, an increase of 32 percent (Nielsen SoundScan). In Japan, a predominantly mobile music market, digital sales helped overall trade revenues to grow in the first half of 2008. 140 million mobile singles were sold in 2008, an increase of 26 percent from the previous year (RIAJ). The UK saw the biggest increase in digital sales in the first half of 2008 among the top markets, with sales up by 45 percent. 110 million single tracks were downloaded in 2008, up 42 percent from 2007. Digital album sales also rose sharply, by 65 percent to 10.3 million now accounting for 7.7 percent of the albums market (OCC/BPI).

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EDITOR’S PICK

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ichael Schumacher returns to the fast lane of F1 racing in 2010 and he has to be a strong contender for the world drivers’ championship now that he had teamed up with Mercedes. He has signed a one-year deal with the renamed Brawn team which steered Jenson Button to the title this year. Often it is said that ‘they never come back,’ but Schumacher is a different kettle of fish. He wouldn’t entertain the idea unless he felt he had a serious chance and he is quoted at 9-2. Still only 41, he retired in 2006 and jettisoned the idea of returning last year, probably to concentrate on his fitness.

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SCHUMACHERS

Net worth: $900 million

“If his Mercedes is fast enough, there’s no reason to think that Schumacher will not be competing at the front with the McLarens of Lewis Hamilton and the current world champion Jenson Button; the Ferraris of Alonso and the Brazilian Felipe Massa; and the Red Bull of Sebastian Vettel”, Associated Press, January 2010 Michael Schumacher is the only German to win the Formula One World championship. He is an ambassador for UNESCO and a spokesman for driver safety. He has been involved in numerous humanitarian efforts throughout his life and donated tens of millions of dollars to charity. He is the elder brother of former F1 driver Ralf Schumacher, who currently races in the Deutsche Tourenwagen Masters (DTM). They stand as the only brothers in F1 history to have both won races and they scored the first sibling 1-2 finish in Formula One. Ralf Schumacher said in January 2010 he would follow his older brother Michael’s return to Formula One racing if he receives a good offer.


World’s Most Expensive

CARS 2009-2010

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ASTON MARTIN ONE MILLION EUROS U.S. dollars: $1.4 million

Even with a sticker price (as if Aston would put a sticker in the window of this car) of more than a million U.S. dollars, all 77 examples of the Aston Martin One-77 supercar have been snapped up already. The distinctive shape has won design awards already in the model’s short life. Front-mounted 7.3-liter V12 700 bhp, 553 lb-ft of torque Carbon fiber body with aluminum panels

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U.S. $1.2 MILLION The Koenigsegg CCXR is notable for being the first FlexFuel supercar. That’s right -- this monster runs on gasoline or biofuel. But while lower greenhouse gas emissions are a nice perk, the CCXR uses bioethanol to go even faster. Can fuel make that much of a difference, you ask? Oh, yes -- a 200 hp and then some difference. 4.7-liter twin turbo engine 806 bhp on gasoline; 1008 bhp on E85 Still only gets about 11 mpg on E85

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Lamborghini Reventon ONE MILLION EUROS U.S. dollars: $1.4 million

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Only 20 examples of the Lamborghini Reventon were ever built for sale, though there was one extra built at Sant’Agata for the Lamborghini museum. The Reventon was offered only to loyal Lamborghini customers, and even at more than a million dollars, it sold out before the production run was complete. Exclusive fighter-jet inspired Grey Berra exterior The G-force meter is displayed on a 3D TFT panel.The transmission shifts faster than any human driver

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Bugatti Veyron 16.4 Grand Sport 1.4 MILLION EUROS U.S. dollars: $2 million

The Bugatti Veyron 16.4 coupe is expensive enough at $1.5 million, but if you’re going to put down that kind of cash, why not go all the way to two mil? That’s what it costs to get a Bugatti Veyron 16.4 Grand Sport, with an open top through which you can see a sliver of sky. The tinted glass roof can be removed and stored inside the car, and a fabric canopy can be popped up in a pinch in case of rain. Chassis #1 sold for $2.9 million at the 2008 Gooding Pebble Beach auction. The fabric panel is only good for 80 mph - in a car that does 217. 1001 hp from an 8-liter engine.

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Pagani Zonda Cinque ONE MILLION EUR

$1.4 million

Maybach Landaulet $1,380,000

Cinque is Italian for five, so you could have guessed that only five Pagani Zonda Cinques will ever be built, making it one of the most exclusive supercars as well as one of the most expensive. And, of course, all five are already spoken for. Amazingly, the carbo-titaniumbodied car is street legal, even with a 0-62 mph time of 3.4 seconds. AMG-tuned engine from Mercedes-Benz 0-62 mph in 3.4 seconds; 62-0 mph in 2.1 seconds. Leather and carbon racing seats.

The Maybach Landaulet is the same under the skin as its fellow Maybach sedan, the 62S. But the Landaulet takes a tip from the early days of the auto age by offering a body style not seen since, oh, World War I. Sport-tuned V12 engine has 612 hp. Each car built to order. Options list nearly endless: embroidered coat of arms, 24k gold trim, etc.

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“2010 will be an exciting year for fashion; experts predict that we’ll emerge from the global financial crisis and, as a result, we can expect to see a new standard of fashion rise up,” says Daniel P Dykes, Fashionising’s lead fashion trend analyst. Introducing 2010 fashion trends Dykes believes that the late-2000s credit crisis will be ultimately good for fashion. Dykes sees a future for fashion where grounded in traditional values; where luxury fashion again comes to represent quality production as opposed to being solely label driven. Classically inspired but with a serious infusion of the sex and skin, this is what we’ll be wearing in 2010.

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2010 FASHION TRENDS

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AVTANDIL

trends 2010 “In the new 2010 season black, beige and red colours will dominate,” commented Avtandil Tskvitinidze, famous Georgia designer. “Georgian’s favourite colour - Black, will remain in trend throughout 2010.” “Very short dresses and very long ones will also be in style. The waist should be tight and the dress should have some beads, stitching or decorations on it,” Avtandil Tskvitinidze says.

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BAKUR

BAKURADZE

trends 2010

“The colour black will be very fashionable in the year 2010,” told The FINANCIAL’s Wealth Magazine Bakur Bakuradze, famous Georgian designer. “Elastic materials will dominate in the general trends of 2010. My collection is called black rose. In every detail of my collection a black rose is present.” “Women’s attire will be very feminine in my 2010 collection and as a result I have sewn some extraordinary details in to my new line of clothing.” “My collection for 2010 is mysterious and is for high class women who will wear these clothes at work as well as informally. The collection is called Colleczione Donna. The price of a whole outfit at my salon might begin from around USD 250 and higher.”

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VICTORIA

SECRET SHOW 2009

The FINANCIAL and partners celebrated for five, so you could have guessed that only five Pagani Zonda Cinques will ever be built, making it one of the most exclusive supercars as well as one of the most

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Men’s Fashion

TRENDS OF 2010 Though men’s fashion trends change at a slow pace, and suits slowest of all, 2009 and 2010 will see a major move away from the monochromatic skinny-boy suit to something a lot more masculine and adventurous. But don’t worry, the slim cuts aren’t going anywhere. Taking their lead from 2009, 2010 men’s hair trends are the classic hair styles revived. While the classic revivals sees the Edwardian hairpart revived, styles such as the Regency fringe will increasingly take a modern twist as they fused with a style normally reserved for women: bed hair.

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EDITOR’S PICK

ugg

U

gg boots are still hanging on despite previous predictions they would fade into oblivion. Here’s hoping that 2010 is the year that Uggs are undone. Uggs are popular unisex sheepskin boots lined with wool on the inside and with a tanned outer surface. Ugg boots often have a synthetic sole, although this is not universal. Uggs became popular in Georgia thanks to Georgian tourists and business travelers frequently visiting Amsterdam and Paris. There has been considerable dispute over the origins of the ugg boot style, with both Australia and New Zealand claiming to have been the originators of the footwear. The UGG trademark in the United States was first registered in 1984 but has gone through several stylistic changes and changes in ownership until its present state.

Uggs are being advertised on the Internet at prices significantly below retail. While a pair of the popular “Classic Black Tall” boots retails for $179, the average price on eBay was recently $105. The catch: Those cheaper Uggs probably aren’t real.

Eva Longoria Parker. Image: Pacific Coast News

Hayden Panettiere

Jessica Simpson wearing ugg boots

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Robbie Savage, 2009 Image via EMPICS-KEYSTONE Press FINANCIAL MAGAZINE | JANUARY 2010


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FINANCIAL GLAMOUR

NIGHT TBILISI, EVENT HALL

LOUIE AUSTEN Wealth 79

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GLAMOUR

NIGHT

The FINANCIAL, leading Georgian business newspaper and its partners celebrated company’s birthday at Tbilisi Event Hall. More than a 600 distingueshed guests joined The FINANCIAL Grand Celebration. Louie Austen, world\s famous electronic scrooner performed his famous Glamour Girl, Hoping and other hits.

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LOUIE AUSTEN

On photo: (From the left) Lali Javakhia, The FINANCIAL Marketing Director. Louie Austen, Scrooner. Zviad Pochkhua, Director, The FINANCIAL. Levan Lomtadze. & DJ TEGIEZ.

Cinque is Italian for five, so you could have guessed that only five Pagani Zonda Cinques will ever be built, making it one of the most exclusive supercars as well as one of the most expensive. And, of course, all five are already spoken for. Amazingly, the carbo-titanium-bodied car is street legal.

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TBILISI CLUB LIFE GURU CLUBBERS Cinque is Italian for five, so you could have guessed that only five Pagani Zonda Cinques will ever be built, making it one of the most exclusive supercars as well as one of the most expensive. And, of course, all five are already spoken for. Amazingly, the carbo-titanium-bodied car is street legal. Cinque is Italian for five, so you could have guessed that only five Pagani Zonda Cinques will ever be built, making it one of the most

TICKET COST: USD

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C

inque is Italian for five, so you could have guessed that only five Pagani Zonda Cinques will ever be built, making it one of the most exclusive supercars as well as one of the most expensive. And, of course, all five are already spoken for. Amazingly, the carbo-titanium-bodied car is street legal. is Italian for five, so you could have guessed that only five Pagani Zonda Cinques will ever be built, making it one of the most exclusive supercars as well as one of the most expensive. And, of course, all five are already spoken for. Amazingly, the carbo-titanium-bodied car is street legal. is Italian for five, so you could have guessed that only five Pagani Zonda Cinques will ever be built, making it one of the most exclusive supercars as well as one of the most expensive. And, of course, all five are already spoken for. Amazingly, the carbo-titanium-bodied car is street legal.

C

inque is Italian for five, so you could have guessed that only five Pagani Zonda Cinques will ever be built, making it one of the most exclusive supercars as well as one of the most expensive. And, of course, all five are already spoken for. Amazingly, the carbotitanium-bodied car is street legal.

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BAMBA ROOMS CLUBBERS

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inque is Italian for five, so you could have guessed that only five Pagani Zonda Cinques will ever be built, making it one of the most exclusive supercars as well as one of the most expensive. And, of course, all five are already spoken for. Amazingly, the carbotitanium-bodied car is street legal. Cinque is Italian for five, so you could have guessed that only five Pagani Zonda Cinques will ever be built, making it one of the most exclusive supercars as well as one of the most expensive. And, of course, all five are already spoken for. Amazingly, the carbotitanium-bodied car is street legal. of the most exclusive supercars as well as one of the most expensive. And, of course, all five are already spoken for. Amazingly, the carbotitanium-bodied car is street legal. Cinque is Italian for five, so you could have guessed that only five Pagani Zonda Cinques will ever be built, making it one of the most exclusive supercars as well as

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U2

360

o

IN BATUMI

U2 is currently in its 360 Degree tour that is expected to gross around 750 million USD by the time it ends later next year. Eastern Promotion, company responsible for organizational issues told WEALTH Financial Magazine that show in Georgia is planned to be in September “and it should be in Batumi”. It follows U2’s show in Istanbul. The concert, scheduled for Sept. 6 at Atatürk Olympic Stadium and coming as part of the band’s ongoing 360° Tour, will be the Irish rockers’ firstever appearance in Turkey. Organizers expect to sell over 100,000 tickets for the concert. The lowest ticket for the İSTANBUL concert costs 22 euros, which is 8 euros cheaper than the lowest-priced ticket for a concert on the European continent. Ticket for TBILISI show will cost around USD 100. The concert is expected to be held on Black Sea cost of batumi. The MOSCOW 360° show took place on August 25. The Turin show took place at the Stadio Olimpico on August 6 and the Rome show was at the Olympic Stadium on October 8. To date U2 band has played 44 sold out dates for 3.2 million people and grossed 320 million USD. The staging runs around 750,000 USD every day.

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Golden Brand

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Euro RSCG Prague the world’s fifth-largest global agency network, did this campaign for the Museum of Communism. The museum focuses on the totalitarian regime from the February coup in 1948 to its rapid collapse in November 1989. The theme of the Museum is “Communism- the Dream, the Reality, and the Nightmare” and visitors will be treated to a fully immersive experience. The museum is a great introduction before you step back even further in time and experience the wonders of The Golden City. Eda Kauba : Creative Director Jan Tamchyna : Art Director Lubomir Kopecko : Copywriter Advertiser Supervisor: Glenn Spicker Design: Lukas Pospichal

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