Issue no: 798/4
• DECEMBER 1 - 3, 2015
• PUBLISHED TWICE WEEKLY
PRICE: GEL 2.50
In this week’s issue... Excise Tax on Tobacco Products and Alcohol May Increase PAGE 3
Innovation Starts Here And Now… In Lisi Lake Greenhouses
ON WINNING Wissol named Company of the Year, Alta+Okay make a winning combination and Jordan Belfort wows the crowds
PAGE 2, 10
ISET PAGE 4
Dechert OnPoint: Georgian Tax Residency PAGE 8
First Scandinavian Restaurant Opens in Tbilisi PAGE 9
Alta + OK: Two Top Technology Retail Companies Merge BY ANA AKHALAIA
wo of the largest technology retail companies on the Georgian market, Alta and Okay, have merged to become Altaokay. The new company will offer customers better prices and services, with the renovation of the Alta and Okay stores to start from December and expected to finish in early 2016. The main stores will be working under the new name from December 1st. According to the Director of Marketing Department of Altaokay, Dimitri Abuladze, after 18 years experience, the priority is to become a
society-oriented company, and offer the right products. Alta consumers are people with higher incomes, however, following the merger, the positioning has changed, and from now on AltaOkay will be a technology store open to anyone. “From now on Alta won’t have boutique-style stores. Now there will be 800-1000 square meter stores. Accordingly, the technology will be for a wide range of customers,” said Abuladze. Altaokay offers four different concepts: 1. Altaokay-Mobile which will sell smartphones; 2. Altaokay-Kitchen will represent kitchen technologies; 3. Altaokay-Express will have most popular products; and 4. Altaokay, which will be the largest supermarkets offering a full range of products.
The Power of Persuasion: The Wolf Wows Tbilisi PAGE 10 Prepared for Georgia Today Business by
At the first stage, the purchasing groups of the two companies united and started to buy the products together in order to offer customers more options and lower prices. Now they have merged their networks by combining their old names Alta+Okay to maintain their existing popularity and recognisability.
First Micro-Entrepreneur 2015 Award Held BY MERI TALIASHVILI
he Georgian Micro Finance Association and Micro Finance Center jointly organized the first “MicroEntrepreneur 2015” Award ceremony on November 30th within the framework of the Poland Development Corporation program, funded by the Polish Foreign Ministry of Affairs. This year’s awards were granted in the following nominations: Best Micro-Entrepreneur 2015 Best Young Micro-Entrepreneur 2015 Best Women Micro-Entrepreneur 2015 Most Innovative Micro-Entrepreneur 2015 Socially Oriented Micro-Entrepreneur 2015 The prize fund consists of 15,000 GEL while the best micro-entrepreneur will be awarded with 5,000 GEL. Hundreds of applications were submitted to the contest from all
regions of the country. Each application was thoroughly studied and examined by a competent jury which is made up of government officials and business association representatives. Micro-Entrepreneurs 2015 aims to promote the development of entrepreneurship and identify the best micro entrepreneurs who successfully lead and develop their business in Georgia. The award ceremony was attended by government officials, members of the private sector, and international and civil society organization representatives. For the latest on the results of the 2015 Micro-Entrepreneur Awards Ceremony, check out this story online at: www.georgiatoday.ge
DECEMBER 1 - 3, 2015
WISSOL Group Wins at Business Rating Awards
Soso Pkhakadze, WISSOL Group General Director
BY ANA AKHALAIA
New Ski Resort to Open in Southwestern Georgia
he WISSOL Group has been named Company of the Year at the 16th edition of the Business Ratings Awards held by the Georgian Times and public opinion and marketing research company GORBI (Georgian Opinion Research Business International.) WISSOL was awarded the Grand Prix – the national business award which consists of a handmade and exclusive composition of the Bolnian Cross. WISSOL Petroleum Georgia General Director Vasil Khorava was awarded a gold badge with a cross and certificates
in the following categories: Public Image and Reputation, Highest Quality of Products and Services, High-tech Service Products and Corporate Social Responsibility. WISSOL Group subsidiary, Smart, one of the largest supermarket chains in Georgia, and its General Director Soso Pkhakadze were awarded with prizes in the following categories: Highest Quality of Products and Services, the Most Successful Brand in the Supermarket Sector and User’s Choice. “This is very large encouragement for the WISSOL group to do more good work and take on more interesting projects,” Pkhakadze said. Our one goal is that our country is strong and developed and the WISSOL group wants to contribute to building the economy.”
RUSTAVI AZOT and General Director Levan Burdiladze were awarded prizes in: New Export Market, Innovative Cutting-edge Technologies and Social Responsibility. “These companies are the backbone of the Georgian economy,” said Malkhaz Gulashvili, project organizer and President of the Georgian Times Media Holding. “We promote these companies in order for them to do more good work and be appreciated. They employ people and bring money into the budget. They need this kind of support from us.” A list of companies that bring more than 1 million GEL into the Georgian economy was revealed and the top 30 companies were given awards out of all 60 competitors.
BBC: Russia’s Ban on Turkish Products Similar to the Georgian Case BY NINO IOSELIANI
oderdzi Resort is to open on December 5th, 2015, according to the Ministry of Finance and Economic Development. Goderdzi Pass is located 2,350 meters above sea level, and connects the regions
Adjara and Javakheti. Goderdzi Resort is a two hour drive from the popular seaside resort town of Batumi, Georgia, and is ideally situated for the creation of an all-season mountain resort. The mountains are snow-covered from November until April. Goderdzi pass offers an 8 km track and two cable ski lifts with eight seats.
BC draws a parallel between Russia’s potential ban on Turkey’s agricultural products and an embargo imposed to Georgian wine back in
2006. “At least according to Gennady Onishchenko, Russia’s former chief sanitary inspector and now prime ministerial aide, who said on Wednesday that “each Turkish tomato” bought in Russia contributes to the country’s economy and thus to purchasing missiles that could potentially be fired at Russian warplanes,” BBC reports. The comment of the Russian official appeared after Turkey downed a Russian Su-24 bomber on the Turkey-Syria border early this week. “Russian agriculture minister has announced that around 15% of Turkish produce does not meet Russian safety standards. Controls are being tightened, with possibly serious consequences for Turkish exporters.” “In March 2006, Russia banned wine imports from Georgia, citing health risks. The industry relied on Russian drinkers, and was hit hard,” BBC reads. According to BBC, analysts said Rus-
sia was irritated at Georgia’s increasingly pro-Western stance and ambitions to join NATO. “The Georgian president accused Russia of economic blackmail. The ban was finally lifted in 2013, with Russia quickly resuming its place as the top importer of Georgian wine.” Georgia’s Revenue Service (RS), Thursday, explained that some trucks with Turkish license plates that want to cross
the Georgia-Russia border had problems at the Larsi checkpoint (Georgia-Russia border). The RS said, part of the trucks were heading to Russia, while the rest were using the route just for transit. “Several trucks went back to Turkey and some to Azerbaijan. “The Russian side does not confirm imposition of any restrictions for Turkish vehicles,” the Revenue Service stated.
Al Jazeera on Wine: Georgia’s Most Popular Export Thrives in Embargo BY ZVIAD ADZINBAIA
l Jazeera has dedicated a large article to Georgian wine, featuring the long history and role of wine in the country and the Russian Embargo which conveniently “promoted Georgian wine in the West.” The reporter compares the Georgian wine-making method to the European one and describes a Qvevri, an earthenware vessel as a “subterranean pillar of
the world’s oldest viticulture.” “Wine is an integral part of life in Georgia; its use in the religious rites of one of the world’s oldest Christian nations gives it an almost sacred status. Unsurprisingly, perhaps, Georgia’s most outspoken son, Soviet dictator Josef Stalin, turned his homeland into a major source of wine for the USSR and Communist bloc countries,” the article states and then went on to review the crisis after the Russian ban on Georgian wine imports in 2006. The article highlights the process of improving the wine quality after the ban
and talks about how the industry expanded into former Soviet republics and Communist bloc countries such as Ukraine, Latvia and Poland. These countries “topped the list of new buyers- which also meant compliance with strict EU quality regulations.” “In 2015 some 210,000 bottles of Georgian wine were sold in the US Georgia’s National Wine Agency said in early November - not bad for a niche product hardly known to Americans, some of whom would have mistaken the country for a US state several years ago,” the journalist concludes.
GEORGIA TODAY DECEMBER 1 - 3, 2015
Excise Tax on Tobacco Products and Alcohol May Increase BY ANA AKHALAIA
rom January 1st, 2016, excise tax on tobacco products and alcoholic beverages may increase which is implied in Draft Law of Georgia on Amendments to the Tax Code of Georgia which was discussed at Executive Government Meeting on November 19, 2015. The goal of the Draft Law is to tighten control on tobacco to get closer with EU Directives and to optimize the excise tax rate on alcoholic beverages. “The World Health Organization demands maximum limitation on consumption of cigarettes and an increase of the excise tax is one of the measures,” said the MP Zurab Tkemaladze. Fixed rate of excise will increase on the following commodities from January 1, 2016: Filtered cigarettes (20 sticks) with 0.20 GEL; Non-filtered cigarettes (20 sticks) – with 0.05 GEL; One stick of cigarette and 20 sticks of cigarillos – with 0.4 GEL; 1 kg of pipe-smoked, chewed
or inhaled tobacco - with 5 GEL. Filter and non-filter cigarettes (20 sticks) proportionate excise will increase from 5 to 10 per cent. Also, excise tax rate will increase on whisky, rum and tuffy, gin and juniper liquor from 10 to 15 GEL, while other alcoholic beverages and ethyl spirit (except for grape wine or grappa distillate-born spirit beverages, liquors and some other low content alcohol) excise tax rate will increase to 10 GEL. Government requests Draft Law, submitted to the Parliament of Georgia, to be discussed in an accelerated manner. It is believed that the bill will increase income in the budget by about 90 million GEL in 2016. The largest opposition party in Georgia, United National Movement critics the government’s decision and says that will not support this bill. “They lack income in budget and the first thing they are doing is to increase tax. They will have to increase not only excise but also all taxes next year because the economy is declining and their expenses are increasing. This is a bad initiative in all regards, wrong draft law
and of course we will not support it,” commented Petre Tsiskarishvili, member of the United National Movement. According to Deputy Finance Minister Lasha Khutsishvili, Georgia has an obli-
gation to increase the excise tax rate to EUR 90 per 1000 cigarettes by 2024. Excise tax on cigarettes should be increased annually in order to avoid sudden rise in price.
Some businessmen hope that excise tax will not be a tax increase mechanism in disguise and the Government will make sure to make a clear explanation of the process.
Georgia, Turkey, Azerbaijan and Kazakhstan Make Joint Trade Deal
joint decision has been made by Georgia, Turkey, Azerbaijan and Kazakhstan to transport goods from China to Europe through each of them. According to the Georgian Railway press center, representatives of transport and logistics companies in the four countries agreed to establish a consortium to transport goods during a meeting in Istanbul. According to the press release, an agreement was made during a presentation in Istanbul of the opportunities and prospects for a Trans-Caspian
transport route, China-Turkey-Europe, held during the international transport and logistics exhibition, Logitrans. The Turkish side will be represented
in the consortium as an associated member. Levan Sulaberidze, the director of Trans Caucasus Terminals, emphasized that the 2016 project aims to transport the first few thousand containers from China to Turkey and Europe through Georgia, and it is also planned to start shipping through Ukraine to Northern and Eastern Europe next year. “This project is vital for Georgia. Through the project, the country will return to its historic trade function, which is the Silk Road,” Sulaberidze said.
DECEMBER 1 - 3, 2015
THE ISET ECONOMIST A BLOG ABOUT ECONOMICS AND THE SOUTH CAUCAUS
The ISET Policy Institute (ISET-PI, www.iset-pi.ge) is an independent think-tank associated with the International School of Economics at TSU (ISET). Our blog carries economic analysis of current events and policies in Georgia and the South Caucasus region ranging from agriculture, to economic growth, energy, labor markets and the nexus of economics, culture and religion. Thought-provoking and fun to read, our blog posts are written by international faculty teaching at ISET and recent graduates representing the new generation of Georgian, Azerbaijani and Armenian economists.
Innovation Starts Here And Now… In Lisi Lake Greenhouses BY SALOME GELASHVILI AND PATI MAMARDASHVILI
ina Petrova-Dzneladze, a Swiss-trained interior designer, brought her innovative vision and great taste to Georgian family farming. Her organic produce is already popular with Georgian and expatriate consumers, proving that innovation pays off, even in agriculture. Innovation is not necessarily about Silicon Valley Hi-Tech startups. It can happen here and now. In particular, contrary to what we have been hearing from our liberal politicians, there is plenty of scope for innovation in Georgia’s agriculture! Owned and managed by Nina PetrovaDzneladze, Lisi Lake Greenhouses is a family farm located on 0.6ha of land in Tbilisi. The complex consists of three medium size greenhouses producing fruit and vegetables. One might think that there are a lot of similar greenhouses in Georgia but this one is genuinely different from others. It is quite innovative both in terms of its produce and technology. To begin with, some of the products (e.g. black cherry tomatoes, basil, and mangold) are not typically found in the Georgian kitchen, which may already explain the popularity of Ms. PetrovaDzneladze’s small farm shop with expats and Georgian consumers who are willing to try new things, including many well-known bohemians, parliamentarians and government officials. Additionally, all Lisi Lake farm products (including apples, tomato and cucumber) are organic and will soon be officially certified as such, further differentiating them from whatever else may be available in the Tbilisi market. It goes without saying that this kind of product innovation pays off because having a better and different product implies clear advantages in marketing (and pricing!). But, Ms. Petrova-Dzneladze’s innovation does not stop there. Her business model is not just about new products, but also about her greenhouses’ relationship with technology. Instead of expensive energy such as gas or electricity, Lisi Lake greenhouses are kept warm in winter using the natural heat of thermal waters, of which Georgia has plenty. Given the massive energy requirements of a greenhouse, the cost of heating is the break-it-or-make-it factor in greenhouse technology production. Nina’s ability to find an innovative and effective solution to the heating problem was certainly key to her commercial success. Unfortunately, innovation is still the exception rather than the rule in Georgia’s agriculture (and economy, more generally). All in all, Georgia’s agriculture remains quite traditional in terms of its technology and products. Of course, traditional agriculture is also able to reinvent itself in some interesting ways.
Recent examples are the synergetic use of sheep (not goats!) in peach and hazelnut plantations. (This turned out to be a great way to feed the animals while employing them as natural frost protection, fertilizing and de-weeding “machines”.) The majority of Georgian farmers, however, continue to be driven not by the zeal for innovation but more so by an old Georgian saying: “გაჭირვება მაჩვენე და გაქცევას გაჩვენებ“, which translates as “I will show you a solution once you show me the problem”. What Georgia needs is a more systematic approach to nurturing, commercializing and mainstreaming new ideas, ideas that play to Georgia’s strengths and tastes, and help overcome its weaknesses.
in the Innovation Input Sub-index and 86th on the Output Sub-Index. The gap between innovation input and output is a reflection of the fact that while Georgia has a developed tertiary education system, it invests relatively little in R&D – a key component to innovation culture. Unfortunately, when it comes to innovation (which may be about adoption of existing technologies, better production processes and products that are new for Georgia, but not necessarily for the world), Georgia is still trailing behind many of its neighbors, behind Russia, Turkey and Armenia, but ahead of the oil rich Azerbaijan. Table 1. Georgia’s ranking compared to neighboring countries
GEORGIA’S ABILITY TO INNOVATE ON A GLOBAL MAP The Georgian nation prides itself on its creativity and artistic talent, however, we are not yet able to translate our talent into actual innovation, as reflected in Georgia’s international rankings. For instance, the 2015 Global Innovation Index (GII) ranked Georgia 73rd out of 141 countries. In particular, Georgia ranked 67th
The difficulty lies not so much in developing new ideas as in escaping from old ones. John Maynard Keynes
10 Galaktion Street
Georgia’s relatively low rankings signal the need for change. The establishment, in April 2014, of Georgia’s Innovation and Technology Agency (GITA) under the Ministry of Economy and Sustainable Development is one step in the right direction. This was followed in January 2015 by the creation of a national Research and Innovation Council, chaired by Georgia’s Prime Minister. The challenge for Georgia is, of course, to move beyond these formal steps, and beyond one-off innovation activities such as “innovation camps” and glitzy “award competitions”. Of course, such events constitute important links in the innovation “value chain”, but we need the whole chain, including education (school readiness programs, schools, universities), labs in which new ideas can be tested, and links with venture capitalists and industry (to support commercialization). For instance, the innovation camp organized by GITA in August 2015 provided 32 young inventors aged 16-23 with a fantastic opportunity to present their
Nina Petrova-Dzneladze, a Swiss-trained interior designer
ideas, develop prototypes (with mentorship by local and international experts), to form networks and compete with each other. But whether or not these young inventors will be able to go on and achieve greatness will depend on the availability of training, funding and institutional support systems on which to rely in the future. Another major bottleneck is to make sure that Georgia’s education system produces many more young inventors – in Tbilisi as well as in other, underprivileged and underserved jurisdictions.
WHAT MAKES FARMERS INNOVATE? Whether farmers innovate on their own or adopt existing technologies, the result is the same: improvement in agricultural productivity, incomes and the country’s economic development. But what makes farmers innovate? Why, when operating under similar conditions, some farmers innovate while others do not? What are the particular characteristics of innovative farmers? How critical are information and funding bottlenecks? Do farmers better innovate individually or together? The development literature provides many important insights. Innovation is certainly related to farmers’ personal characteristics, available resources as well as the market and institutional environment. Innovation is very much about a process of trial and error, and hence is inherently risky. As may be expected, research shows that cash strapped farmers may be particularly risk averse, slow-
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ing down technology adoption in agriculture; the innovators among them tend to be younger and better educated. What follows is that farmers are more likely to adopt innovations that have proven successful in their immediate environment. In other words, a neighbor who has successfully introduced a new crop or an innovative production technology is the best agricultural extension worker! Another important finding in the literature is that wealthier farmers – being better informed and having superior access to financial resources – are more likely to adopt new technology. However, even smallholders frequently come up with small changes in their production or marketing techniques. Such small changes might become game-changers for small poor farmers. The way to encourage such small scale innovation is to make the focus of donor/government aid and technical assistance on cheap and easy to adopt solutions. “Small change is beautiful change” might be a useful slogan for promoting bottom up innovation in Georgian smallholder agriculture. Finally, research also suggests that farmers tend to innovate more if integrated into value chains and have secure market access. Moreover, studies show that most innovations come from groups of people rather than individual ‘geniuses’. Thus, research by Darr and Pretzsch (2006) confirms that intensive information exchange and collaboration among group members foster innovation and its diffusion. Similarly, Nwakwo et al (2009); Odoemenem and Obinne, (2010); Kolade and Harpman, (2014) find that membership in a cooperative is positively related to technology adoption by small farmers. Both value chain integration and farmer cooperation are key objectives of the Georgian government’s agricultural policy. In the end, however, this policy will not lead to innovation and increased agricultural productivity without young, well-educated, and creative leaders, such as Nina Petrova-Dzneladze. The article was produced with the assistance of the European Union through its European Neighbourhood Programme for Agriculture and Rural Development, Austrian Development Cooperation, CARE Austria or CARE International in the Caucasus. The contents are the sole responsibility of the authors and can in no way be taken to reflect the views of the European Union, Austrian Development Cooperation, CARE Austria or CARE International in the Caucasus.
GEORGIA TODAY DECEMBER 1 - 3, 2015
DECEMBER 1 - 3, 2015
Innovation Laboratory GeoLAB Hosts Start-Ups Workshop BY ANA AKHALAIA
ollowing on from last week’s introduction to the Geocell GeoLAB concept, Georgia Today will now introduce you to the latest GeoLAB project: a three-day workshop ‘Traction Camp’ organized by USAID-REG, CCC STARTUPS and the Innovation and Technology Agency of Ministry of Economy and Sustainable Development. 25 founders of early-stage technology product
startups took part in the workshop, coming from Armenia, Azerbaijan, as well as from Georgia. The trainers were experts of seven leading startups who shared their experience and conducted practical work in a 40-hour workshop. The goal of the workshop was to give an opportunity to people working in the field of technologies to better understand the market for their product and how to measure the client’s needs; to improve their skills in pitching the product to clients and investors; to learn to use and improve their product metrics; and to succeed in discovering, validating, and successfully penetrating
GeoLAB is an innovation Laboratory for mobile and web applications
distribution channels. The Innovation and Technology Agency promotes the introduction and use of information and communication technologies and innovations in various fields in order to increase their efficiency. It is especially important for the business sector to develop in this regard, and the introduction of international experience is necessary. Due to the development of the field, Georgia and its two neighboring countries already have a need of such activities which significantly contribute to their development. GeoLAB is an innovation Laboratory for mobile
and web applications. It is open 24/7 to the development of different, interesting, useful and at the same time innovative ideas. It is equipped with the latest technology and offers qualified assistance from the GeoLAB team. GeoLAB recently hosted Devfest Tbilisi 2015, sponsored by Geocell. Devfest is one of the biggest events of Google, supporting the development of new Technologies and Innovative Solutions in Georgia. GeoLAB has been up and running since May 6, 2015 and can already boast to having hosted 23 events and presentations.
Farmers’ Association: “The Farmer is our Patriot” BY ROBERT ISAF
even years ago, businesswoman Nino Zambakhidze got an unusual call from her business partner. He was in the countryside, he was drunk, and he’d just bought two cows. From that moment, Ms. Zambakhidze’s
life began to follow a different path. Today she is the chairwoman of the Georgian Farmers’ Association, an organization she founded after encountering first-hand the difficulties facing the county’s agricultural sector today. Georgia Today sat down with Ms. Zambakhidze to talk about the Farmers’ Association. We’ve let her present herself in her own words, with only mild editing for clarity.
Businesswoman Nino Zambakhidze
ON HOW TO DEFINE A FARMER The question is, what is a farmer? Because we don’t have that definition in Georgia. Even in the Georgian Constitution the farmer has been named a ‘peasant.’ Based on our history, a peasant was someone who didn’t have proper education. He was hired because he couldn’t do any intellectual things, just dig and plant. So if you’re going to call me a peasant, I’m not going to accept that. That’s why we decided just to destroy that term and call them farmers but we don’t have an exact definition of what a farmer is! Even in my Association we have that issue. Because if you have one hectare of land and you have a greenhouse, you are one of the biggest farmers around. But if you have one hectare of land and an apple orchard, you cannot be called a big farmer. So it’s even hard to tell you how any definition can be justified. So we just call them all farmers - because they call themselves farmers. We don’t want to abuse anybody, and, after all, they are certainly not peasants.
ON WHAT THE FARMERS’ ASSOCIATION DOES Right now we have 1,300 members all over Georgia and we have three main directions. One is to act as advocates for farmers; to be a ‘middleman’ between farmers and the government. 49% of the population is engaged in farming. To count, more or less, that’s 800,000 people. And we decided to consolidate all problems that the farmers are having in the regions, and to communicate in a proper way with the government so that the government will be able to fix the problems. They simply cannot do it separately for each farmer. The second thing that we do is to help farmers connect to the market – with all those supermarket
chains, hotels, restaurants, and cafes coming and asking for local production. We’re helping the farmers to sell their products to these buyers. In this case the middle-man jumps out, and the farmers have much more profit margin on their products. And third, we’ve started up a media team – TV, journals, newspapers – and we are publishing the success stories and failures of our farmers. And at the end it came out that while we were promoting farmers, the quality of those farmers’ products also become higher. Because they were well-known, they were using less pesticides and fewer fertilizers. So, let’s say, we shot these two rabbits with one gun. The farmers became famous, and they increased the quality of their products.
ON WHAT NEEDS TO CHANGE One major problem we’re facing is that we don’t have land registry. We don’t know what is stateowned, and what is owned by individuals. It might be that an individual has 4 or 5 hectares, but is not registered as such. He considers it his, but the state believes it is state-owned. This has to be a priority for the country. You have to register land, first in order to know what you own, second in order to be able to manage the land. We say Georgia is an agrarian country, but it’s NOT, not at all. We have the ambition to be an agrarian country, but we’re not. We are a country with a lot of problems.
ON HOPE FOR THE COMING YEAR My biggest hope is that farmers will get a proper education. Farmers have to have the opportunity to get the financial resources they need to start businesses. And that, step by step, problems like insufficient infrastructure, financial resources, insurance and education will be somehow satisfied.
GEORGIA TODAY DECEMBER 1 - 3, 2015
Old House, New History – Historical Building Seeing New Heights BY ANA AKHALAIA
historical Tbilisi building which has been sinking into the ground, is to be lifted up by 3.5 meters. This unique project is being carried out by Socar Energy Georgia and the developing company Confidence Group. The building, built by well-known Polish architect Aleksander Szymkiewicz at the beginning of the 20th century and later having sunk into the ground by 3-4 meters as a result of natural processes, is located at 18 Ialbuzi St., beside the headquarters of Socar Energy Georgia.
After discovering the architectural value of the building, Socar and Confidence Group initiated the resurrection project, inviting Dutch technologists who have the know-how to ensure that the building is lifted without damaging the structure. The technology which is being used for lifting is unique and unprecedented not only in Georgia but also throughout the Caucasus region and abroad. It has been used in several places round the globe to date. “After a lot of discussions, it became clear that in the developing process of the city, the sunken building could only be resurrected by lifting it to the level of the street,” stated Socar Energy Georgia. “Therefore, world famous company
Bresser, which has a lot of experience implementing such projects, was invited to carry out the project.” The historical building is now owned by Confidence Group. Lifting it to streetlevel will take number of days. After this, according to Mahir Mamedov, General Director of Socar Energy Georgia, the building will be restored and a hotel complex will be built there, bringing the past glory back to the Polish architect’s work. “The project has historical value for everyone,” Mahir Mamedov commented. “It is special because we are lifting the building by 3.5 meters to make its façade visible from the central street. This is a remarkably historical building and we are treating it with special attention. In the future this building will become part
Night falls in Tbilisi. At 18.00 local time the historic building is lifted to 1:26 m. Source: Bresser
of a hotel complex which is now being planned. This will have a great importance in terms of cultural and historical sights of Georgia.”
The lifting process of the old historical building, launched on November 27th, is being recorded by a documentary film crew.
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Business Café – Second Meeting of Joint Project by Insource and PASHA Bank
New Pharmaceutical Company Ynnovas Opens in Georgia BY ANA AKHALAIA
igh-tech pharmaceutical company Ynnovas has opened in Tbilisi with assistance from the state program Invest in Georgia and with the financial support of the Enterprise Georgia segment of the Ministry of Economy and Sustainable Development. Ynnovas is the first company on the market to use Georgian medicinal flora and carry out the extraction, manufacture, production and export of pharmaceutical products. After processing around 40 kinds of plants, about 60 types of active substances will be released which could be widely used in pharmacy, perfume and the hygiene industry.
Ynnovas will support family recipes in order to establish itself in the pharmaceutical industry. The investment cost around $9 million. The company will employ between 50 and 140 people and, seasonally, 1000 people will be involved in the extraction process of raw plant materials in the region. According to the company this number may increase to 2000 depending on the seasons and plant varieties required. 90% of company production will be export-orientated. Ynnovas will carry out production to international standards and is already preparing for the GMP/ HASP/ ISO certification. As part of the Invest in Georgia program, 123 projects have been funded and around 350million GEL is being invested for the implementation for the development of Georgian production.
o n s u l t a n c y co m pa ny Insource and PASHA Bank have hosted the second meeting of the Business Café, held at Holiday Inn Tbilisi. Among the guests were representatives of top management of the leading Georgian businesses. The meeting was moderated by Mr. Alexander Jejelava and the main topic of this interactive discussion was organizational corporate culture. The project aims to arrange meetings of top-management representatives from different companies during which they will be able to discuss specific workrelated topics and share experience with each other. The invited guests discussed examples of the corporate culture of their own companies, its importance and the ways of development. There is a rising interest in Business
Café meetings from the managers of large and successful companies. The project will continue in 2016 and offer numerous new features to its guests. “PASHA Bank always tries to support projects which aim at professional devel-
opment in the business sector,” said the Head of PR and Marketing Department of PASHA Bank. “We are more than happy to have the opportunity to take part in this interesting and useful initiative.”
Georgian Mandarin Harvest Booming BY KATIE RUTH DAVIES
andarins can be seen on almost every street corner in Tbilisi at this time of year- most often with a female representative of the family that grew them sitting nearby ready to sell to you. Upping the scale and we can talk about the regular exports of mandarins to Ukraine, Russia, Belarus, Kazakhstan,
Kyrgyzstan, Armenia and Azerbaijan. The Government has allocated 2 million GEL to support the export of Georgian mandarins abroad which has been used to add extra transport vehicles for speedier delivery and additional storage facilities. What’s more, according to Georgia’s Minister of Agriculture Otar Danelia, Georgia and Russia have reached an agreement whereby Georgian citrus fruit will be exported to Russia “without obstacle.” Georgia’s citrus harvest lasts from
November to January. After last year’s poor citrus harvest, Georgia is this year experiencing a bountiful, high quality crop and the 2015-2016 harvest is expected to bear over 100,000 tonnes of citrus fruit. Georgia’s Agriculture Minister recently travelled to Adjara to visit the GM Group citrus processing plant. This year GM Group expect to receive 15,000 tonnes of mandarins with which they intend to satisfy local demand for juice as well as to export fruit juice to Holland, Israel, and Japan.
DECEMBER 1 - 3, 2015
Dechert OnPoint: Georgian Tax Residency
echert Georgia, through the contribution of partners Archil Giorgadze and Nicola Mariani, joined by senior associates Ruslan Akhalaia and Irakli Sokolovski, as well as Ana Kostava and Ana Kochiashvili, is partnering with Georgia Today on a regular section of the paper which will provide updated information regarding significant legal changes and developments in Georgia. In particular, we will highlight significant issues which may impact businesses operating in Georgia. Dechert’s Tbilisi office combines local service and full corporate, tax and finance support with the global knowledge that comes with being part of a worldwide legal practice. Dechert Georgia is the Tbilisi branch of Dechert LLP, a global specialist law firm that focuses on core transactional and litigation practices, providing worldclass services to major corporations, financial institutions and private funds worldwide. With more than 900 Lawyers in our global practice groups working in 27 offices across Europe, the CIS,
Asia, the Middle East and the United States, Dechert has the resources to deliver seamless, high quality legal services to clients worldwide. For more information, please visit www.dechert. com or contact Nicola Mariani at nicola. firstname.lastname@example.org.
In recent years, more and more individuals have become interested in acquiring Georgian tax residency status. This is caused primarily by rising tax rates in developed countries. By contrast, Georgia offers the following advantages: (i) Georgian income tax rates on individuals are relatively low (usually 20%) and even lower tax rates (5%) apply to certain types of income (e.g. dividends, interest); (ii) Georgia does not tax income from non-Georgian sources earned by Georgian resident individuals; and (iii) Georgia has treaties for the avoidance of double taxation (the “Treaties”) with more than 45 countries. The treaties provide important benefits to Georgian tax residents who receive income from sources in
Georgian Treaty partner countries (the “Treaty Partner Countries”). Given these Treaty benefits and the fact that Georgia does not tax the foreign source income of its tax resident individuals, in certain instances non-Georgian source income earned by Georgian residents is not taxed in any country. Thus, there are some compelling reasons for acquiring Georgian tax residency, and Georgian tax regulations show flexibility on the granting of residency status.
GEORGIAN TAX RESIDENCY FOR HIGH NET WORTH INDIVIDUALS Georgian residency is, in most cases, granted to individuals who are present in Georgia for 183 or more days during any consecutive twelve-month period. However, some individuals are not interested in spending this amount of time in Georgia but still have an inter-
est in acquiring Georgian tax residency. To accommodate such persons, Georgian policymakers introduced a special regime for the granting of Georgian tax residency to high net worth individuals (the “Special Residency Regime”). For Georgian tax residency purposes, the individual is deemed to be a high net worth individual if: (i) the value of his or her confirmed property exceeds GEL3,000,000 (three million Georgian Laris), or (ii) his or her annual income has exceeded GEL200,000 (two hundred thousand Georgian Laris) during the last three years (the “High Net Worth Individuals”). In order to receive Georgian tax residency status under the Special Residency Regime, the High Net Worth Individual must also satisfy certain additional requirements. In particular, under the Special Residency Regime, Georgian tax residency status is granted to a High Net Worth Individual only if: (i) he or she has either a Georgian residency permit or Georgian nationality; or (ii) he or she verifies receiving more than GEL25,000 (twenty-five thousand Georgian Laris) of Georgian source income during a single year. A High Net Worth Individual may request Georgian tax residency on the basis of any of these two grounds. Which of these grounds is preferable for any given individual depends on personal circumstances. For instance, if the High Net Worth Individual has neither Georgian nationality, nor a Georgian residence permit, then he or she may claim Georgian tax residency on the grounds set out under item “ii”. If that option is not suitable for a specific individual (e.g. the individual does not have required the GEL25,000 Georgian-source income), then he or she may resort to the option set out under item “i”. High Net Worth Individuals submit their applications for Georgian tax residency to the Revenue Service of Georgia along with documents confirming their meeting of all other requirements for the granting of Georgian tax residency, as set out above. If the application documents comply with legal requirements, the Revenue Service shall forward the application to the Minister of Finance for approval. The Minister of Finance makes the final decision on the granting of Georgian tax residency. Notably, Georgian tax residency is granted for a one-year term only. Respectively, if the High Net Worth Individual wants to maintain Georgian residency status, he or she must re-apply after one year. It should also be noted that re-application is not required if the individual becomes a tax resident of Georgia under the general rules on tax residency (i.e. the individual spends at
least 183 days in Georgia during the relevant period). As noted in this article’s introduction, there could be compelling reasons for a High Net Worth Individual to receive Georgian tax residency under the Special Residency Regime. The Revenue Service, however, received only a handful of applications and few individuals have been granted such status.
PROSPECTS OF SPECIAL RESIDENCY REGIME Under the Tax Code, currently both Georgian and non-Georgian residents are taxed only on Georgian-source income. Therefore, receipt of Georgian tax residency status does not offer a significant advantage with regards to Georgian personal income taxes to High Net Worth Individuals. The same is true (subject to certain exceptions) with respect to Georgian property taxes as residents and non-residents alike pay such taxes on property located in Georgia. This may be one reason why only a handful of individuals have applied for Georgian tax residency. At first glance, Georgian tax residency may also be beneficial from an international tax perspective. Specifically, an individual holding Georgian tax residency may claim benefits under Georgia’s relevant Treaty. For instance, under some Treaties, the Treaty Partner Country may not tax dividends received by a Georgian resident from a source in the Treaty Partner Country. Thus, upon gaining Georgian tax residency, an individual holding such status may avoid taxation of its dividends received from a source in such Georgian Treaty Partner Country. However, some jurisdictions do not recognize the residency status of individuals and companies claiming Treaty benefits if such status is granted merely on formal grounds and there is no material economic connection between the individual and the country granting residency status. Each country makes a decision on this matter based on its own law and practice. High Net Worth Individuals who gain Georgian tax residency status under Georgia’s Special Residency Regime run the risk of a Georgian Treaty Partner Country not recognizing such residency for treaty purposes and, respectively, denying Treaty benefits to such individuals. Georgia’s Special Residency Regime may thus prove to have material limitations despite its offering of tangible tax benefits to High Net Worth Individuals. Note: this article does not constitute legal advice or tax advice. You are responsible for consulting with your own professional tax advisors concerning specific tax circumstances for your business.
GEORGIA TODAY DECEMBER 1 - 3, 2015
First Scandinavian Restaurant Opens in Tbilisi BY MERI TALIASHVILI
he first Scandinavian restaurant in Tbilisi opened about a month ago and has already gained a huge fandom amongst both Georgians and expats. It is the first restaurant to have a shop on site, offering homemade foods, jams, pickles, and chutneys. Here, in a cozy environment you will be served with a great combination of Scandinavian and Georgian cuisine, the best European and Georgian wine and what’s most important, you will feel at home. Georgia Today met Tobias Dyreborg, owner and manager of Stampesoe Delicatessen Restaurant, to talk about this terrific food locale.
TOBIAS, HOW DID YOU DISCOVER GEORGIA? The reason I started learning about Georgia was due to the fact I’ve worked with food and wine all over the world. I worked on natural wine in Denmark and then I was told to check out the natural wine scene. It took me a few years to go back and forth and after some time I realized that it would be interest-
ing to come here and see the potential to make a Nordic style restaurant with Georgian organic products. I moved here eight months ago and deal with the general day-to-day running of the restaurant and shop. I wanted to try to make a combination of delicatessen and restaurant and to do so in a Nordic way. I was inspired with the many such places I saw in Europe and Denmark
hard to get. For instance, we use a suviet to do our chickencooking it in a suviet for over 6 hours with butter, honey, and mustard. The taste is pretty intense.
WHAT DO YOU OFFER YOUR CUSTOMERS?
AS A CHEF, WHAT IS MOST IMPORTANT TO YOU TO OFFER CUSTOMERS?
1% European organic wines and Italian products alongside 99% Georgian wines and foods. Additionally, we work with lots of Georgian people to promote local products. We have eleven different kinds of honeys from all over Georgia. We soon realized that there was room to do something a little bit different with our produce and so we made up different lunch and evening menus, separate menus, daily soups, and individual menus for Fridays and Saturdays of a more European style. We do all kind of salads, including traditional Danish salads. In the evenings we offer very classical Danish dishes with a little twist to fit them with Georgian products. We’ve also brought some new technology that was
WHICH DISH TO CUSTOMERS LIKE BEST? The chicken with honey and mustard is very popular among our customers.
It was important for us to have a homely feeling. When you come here you should feel at home, we want people to feel welcomed, relaxed, and also to experience high quality service and constant innovation. I’ve been coming to Georgia and I don’t see many changing in terms of food venues. Some have changing seasonal menus but many don’t develop and have the same menus the entire year. I understand it depends on revenue and it’s not so easy to change the dishes, but we are willing to work in this direction. For people coming here there will be a new experience every time. That’s why people should come here; a place where you want to drop into not just to come
Tobias Dyreborg, owner and manager of Stampesoe Delicatessen Restaurant
to a formal restaurant for a meal. I will say that we’ve been very well received. The locals and expat community as equally happy to come here.
TELL US ABOUT THE SHOP We decided to open a shop in the restaurant to offer pickles. This products in the shop are made with Georgian organic products but the technique we use is Danish. You can come eat and then buy something to take home. Additionally, we make our own bread. I find it difficult to find high quality bread here.
Therefore, we bake it on our own, offering something new for Georgians. But since we own a small place we have no capacity for full a size bakery. It’s my dream to add several businesses down the line. But the ultimate dream is to buy some land in Kakheti to grow on my own vegetables, to have my own pigs, my own chickens. As for the restaurant, we also plan to make a small sitting area downstairs and offer coffee. If you have been inspired to give the homely Stampesoe a try, head over to Lado Asatiani Str. 56.
DECEMBER 1 - 3, 2015
The Power of Persuasion: The Wolf Wows Tbilisi BY KATIE RUTH DAVIES
alome Kukava, Corporate Communications Manager of Alliance Group Holding: “We are devoted to raising the literacy of people involved in business, as well as ordinary citizens. Any citizen should realise that saving capital is crucial. It should be diversified. The most common way to save is through banking deposits. There are also other alterna-
tive sources though, like bonds, company’s stocks, etc. In this regard we regularly organize various trainings and master classes in Georgia. As we are witnessing some progressive steps towards the development of the capital market, we decided to invite the ‘Wolf of Wall Street,’ Jordan Belfort, to Tbilisi.” Last Saturday saw the much-anticipated arrival of Jordan Belfort- the self-made millionaire known as the Wolf of Wall Street. He was luxuriously accommodated in Tbilisi to pass on his secrets of success to the packed auditorium at the Tbilisi
Concert Hall in a one-day masterclass. Georgia Today spoke to some of the participants to find out how it went. A masterclass participant from a prestigious Georgian company, one of a number of colleagues who were paid to attend, praised the charisma and natural method of Mr Belfort, who, in all, spoke for some fourhours.“Nogreatsecretswererevealed,” she said, “but it was a very enjoyable trip into the world behind [Jordan’s] sales techniques and success and we [at the company] will be putting his techniques into practise with a training program.”
Jordan Belfort- the self-made millionaire known as the Wolf of Wall Street
It was a particular hit with both young salespersons and students, especially considering that the latter had been offered cut-price tickets to be able to attend the masterclass and learn the tricks of the trade: good salesmanship and the key to wealth. The only disappointment came when the joke that Leonardo DiCaprio, the Hollywood version of the ‘Wolf of Wall Street,’ was paying a surprise visit- which was very much part of the on-going intrigue in the lead-up to the masterclass- fell flat when the actor’s double
came out on stage after most the auditorium had already emptied. Was the $100,000 spent on Jordan Belfort (not including the two flights booked to get him here- from New York and Australia, as, until the last minute he was unsure where he would be-, accommodation, or the special brand food and drinks flown in just to satisfy his demands) well spent? Let’s answer that in a few years’ time once the salespersons and students who attended his talk with such rapture have (or have not) put into practise his methods.
EU Provides EURO100 Million to Support Reforms in Georgia
he European Commission has adopted a new assistance package to Georgia of €100 million to support reforms related to the EUGeorgia deal. According to the statement has released today, Commissioner for European Neighbourhood Policy and Enlargement Negotiations, Johannes Hahn said ‘’With the Association Agreement, the EUGeorgia relations have moved to another level. The assistance package will support central elements in this ever closer
relationship’’. The new package will additionally support Georgia in meeting its reform objec-
tives in the sectors of public administration, agriculture and rural development. It will help to promote an active civil
society, assist key Georgian institutions in implementing the Association Agreement and advance Georgia’s visa liberalisation process with the EU. The funding comes from the European Neighbourhood Instrument (ENI), the main financial and cooperation instrument through which funding is given to the European Neighbourhood Policy (ENP) countries, including Georgia. In June 2014 the EU and Georgia signed an Association Agreement, which includes a Deep and Comprehensive Free Trade Area (AA/DCFTA).
The Agreement significantly deepens political and economic ties with the EU in the framework of the Eastern Partnership. Additionally, respect for democratic principles, human rights and fundamental freedoms, constitute essential elements of this new generation Association Agreement. In addition, mobility of persons is high on the EU-Georgia agenda, particularly through implementation of the Visa Liberalisation Action Plan (VLAP) and Readmission Agreement.
ASSOCIATION PRESENT AN EXHIBITION DEDICATED TO THE GREATEST MILITARY AIRCRAFT DESIGNER IN HISTORY. The exhibition will demonstrate the life and merits of the Georgian emigrant, an innovator of American and World aviation - Alexander Kartveli (Kartvelishvili /1896-1974/). The exhibition will also showcase models of aircrafts designed by Kartveli, blueprints, archives, documentation, articles, photos and multimedia materials. The exhibits will highlight the extraordinary life that Kartveli lead and his enduring legacy in military aircraft design.
THE NATIONAL GALLERY Address: 11 Rustaveli Ave. www.museum.ge
WHAT’S ON IN TBILISI CINEMA
TBILISI INTERNATIONAL CINEMA FESTIVAL www.tbilisifilmfestival.ge Venue: Rustaveli Cinema, 5 Rustaveli Ave. Amirani Cinema 36 Kostava Str. Tel.: 255 50 00, 299 99 55 Language: Original Georgian and English Subtitles Ticket price: 3-5 Lari December 1 14:00 Baal/Amirani Cinema Beats of Freedom/Amirani Cinema Tokyo Bitch, I Love You/Rustaveli Cinema No Land’s Song/Amirani Cinema 16:00 Mediterranea/Amirani Cinema Georgian State University of Theatre and Film Presents/Rustaveli Cinema Come to my Voice/Amirani Cinema Speak Out! /Amirani Cinema Madona (Repeat) /Amirani Cinema Memories of the Wind/Rustaveli Cinema 19:00 Spartans/Amirani Cinema Dancing Arabs (A Borrowed Identity) /Rustaveli Cinema Nahid/Rustaveli Cinema Goat/Amirani Cinema Phoenix/Amirani Cinema 21:00 Louder than Bombs/Rustaveli Cinema Sworn Virgin/Amirani Cinema A Pigeon Sat on a Branch Reflecting on Existence/Rustaveli Cinema Dog/Amirani Cinema The Summer of Frozen Fountains/ Amirani Cinema December 2 12:00 Mediterranea (repeat)/Rustaveli Cinema Goat (repeat)/Amirani Cinema 14:00
Beware of a Holy Whore/Amirani Cinema No One’s Child/Rustaveli Cinema The Brand New Testament/ Rustaveli Cinema Much Loved/Amirani Cinema Black-and-White War/Amirani Cinema The Summer of Frozen Fountains repeat/Amirani Cinema The Enclosed Space/Amirani Cinema Somali Captives/Amirani Cinema 16:00 Diary of a Chambermaid/Rustaveli Cinema The Man Who Became a Horse/ Amirani Cinema Onegin/Rustaveli Cinema Exodus/Amirani Cinema Father/Amirani Cinema Wake Man/Amirani Cinema The First Day/Amirani Cinema Ogasavara/Amirani Cinema The Youth and the Leopard/Amirani Cinema 19:00 Miracle of History/Rustaveli Cinema Dora or The Sexual Neuroses of Our Parents /Amirani Cinema Hilda/Rustaveli Cinema Pikadero/Amirani Cinema Youth/Amirani Cinema 21:00 All about Them/Amirani Cinema As We Were Dreaming/Rustaveli Cinema Force Majeure/Rustaveli Cinema Wanja/Amirani Cinema The Lesson/Amirani Cinema December 3 12:00 The Lesson/Amirani Cinema Madona/Rustaveli Cinema Sworn Virgin (repeat)/Rustaveli Cinema 14:00 Line of Credit/Amirani Cinema 45 years/Amirani Cinema Horizons/Rustaveli Cinema Taxi/Rustaveli Cinema Niko’s Way/Amirani Cinema Double Aliens/Amirani Cinema 16:00 Fassbinder - To Love without
Demand/Amirani Cinema Cobain: Montage of Heck/Rustaveli Cinema Looking for Grace/Rustaveli Cinema Motherland/Amirani Cinema As I Open My Eyes/Amirani Cinema 19:00 Forbidden Voices/Amirani Cinema Body/Amirani Cinema The Wednesday Child/Amirani Cinema The People vs. Fritz Bauer/Rustaveli Cinema Endless Escape. Eternal Return/ Rustaveli Cinema 21:00 The Sound of Torture/Amirani Cinema Far from Men/Rustaveli Cinema From Afar/Amirani Cinema Some Interviews on Personal Matters /Amirani Cinema Tokyo Bitch, I Love You (repeat)/ Rustaveli Cinema MUSEUM
GEORGIAN NATIONAL MUSEUM SIMON JANASHIA MUSEUM Address: 4 Rustaveli Ave. Telephone: 2 99 80 22, 2 93 48 21 www.museum.ge ARCHAEOLOGICAL TREASURE PERMANENT EXHIBITION Examples of work by early Georgian goldsmiths were discovered during archeological excavations, and are currently preserved in the archeological treasury. The exhibition presents three periods of development in the history of Georgian goldwork, from the 3rd century BCE to the 4th century CE: KURGAN CULTURE (3-2 BCE), GOLDEN FLEECE COLKHETI (8- 3 BCE), KINGDOM OF KARTLI-IBERIA (3rd century BCE-4th century CE). November 17 - May 1 GEORGIAN NATIONAL MUSEUM AND ALEXANDER KARTVELI
November 20 – December 4 PAPER INNOVATION The works are presented from different countries of Europe, Asia, Latin and North America. Exhibition organized by the Amateras Foundation and Embassy of the Republic of Bulgaria in Georgia. GALLERY
GALLERI NECTAR Address: 16 Aghmashenebli St. Telephone: 2 95 00 21 www.gallerynectar.ge December 3-5 VOWELS, AS THE MOST INTIMATE WAY OF SELFEXPRESSION. SOUND AS A FORM. With this exhibition they aim to simulate the way we perceive reality that exists in our physical world in various layers and shapes. Opening: 19:00 RED SQUARE Address: 88 Paliashvili Str. Telephone: 577 74 77 45 November 25 – December 6 RED SQUARE gallery presents ELENE AKHVLEDIANI personal exhibition
November 7 – December 6 AN EXHIBITION OF SCENOGRAPHY BY THREE GEORGIAN ARTISTS – OLEG KOCHAKIDZE, ALEXANDER SLOVINSKY, YURI CHIKVAIDZE. Exposition is dedicated to the 80th anniversary of the three members of the artistic group working on scenography. Exposition dedicated to the 80th anniversary of the three members of the artistic group working on scenography. All the exhibits are from the collections of the Georgian National Museum, State Choreography Theatre, Shota Rustaveli Drama Theatre and authors’ private collections. MUSIC
TBILISI BAROQUE FESTIVAL 2015 www.tbf.ge December 3 Sergio Azzolini/Christine Busch I George Frideric Handel 1685 - 1759 Concerto doppio c-Moll HWV Antonio Vivaldi 1678 -1741 Fagottkonzert d-Moll RV 481 Konzert g-Moll “La notte”, RV 104a II Johann Bernhard Bach 1685 -1750 Konzert a-Moll für Violine, Streicher und basso continuo BWV 1041 in a-moll Guiseppe Antonio Brescianello 1690-1758 Konzert B-Dur für Violino concertato Fagotto obligato und Streicher Start time: 19:30 Ticket price: From 10 Lari Venue: Rustaveli Theatre
GEORGIA TODAY DECEMBER 1 - 3, 2015
Haig’s Georgia Breaking Down Barriers of World Rugby BY ALASTAIR WATT
t has been an historic year for Georgian rugby, so it comes as little surprise that head coach Milton Haig is feeling ever so slightly worn out as 2015 draws to a close. “I’m a bit fatigued from four and a half months focusing on the World Cup, I’ve been in a bubble,” says the New Zealander with a smile that seldom leaves him in the hour and a half we spend in his office at Shevardeni Stadium in Tbilisi. “It was such an engulfing experience, as all your thoughts and energy go into it. The poor old family take a bit of a back seat to the goal of qualifying automatically for 2019,” he adds. This, as no Georgian should need reminding, was a goal the Lelos accomplished at the tournament in England in September and October. Victories over Tonga in Gloucester and Namibia in Exeter, either side of losses to Argentina and eventual champions New Zealand, were enough to earn Georgia a first-ever third-placed finish in a World Cup group thereby securing automatic qualification for the next edition in Japan in 2019. “We had a single focus going into the tournament and that was to win the games against Tonga and Namibia. Clearly, we wanted to put in good performances in the other games, but this focus on two wins really kept us on track. “Before the tournament we looked at all the groups from the last two World Cups and found that 8-12 points secured at least third place – so the target became two wins,” reveals Haig whose men attracted widespread acclaim from rugby pundits, not only for their surprise defeat of Tonga but also the way in which they
competed against New Zealand in Cardiff. A Kiwi himself, Haig previously described the chance to coach against the All Blacks at a World Cup as a dream come true. When the reality came, Georgia didn’t disappoint, giving the All Blacks an early scare before bowing out 43-10 in Cardiff, a result which grew in respectability when New Zealand thrashed France by a greater margin soon after. Now world leaders in the game by some distance, Haig places much faith in the rugby coaching philosophy from his homeland. “The New Zealand way of coaching emphasizes technical knowledge and confidence. If you have a good player, and give him confidence in his ability, he becomes a very good player,” he explains. The Georgian head coach intends to spread the New Zealand approach among Georgia’s coaches and he will take four coaches to his native country this December to see first-hand how two top New Zealander clubs (the Blues and the Chiefs) train. Thereafter, he will spend Christmas back home with his wife and two daughters, all of whom are enjoying life in Georgia. “Having lived here for four years, you get submerged in the culture and there’s no doubt that if the family and I left tomorrow, there are many things we would really miss about Georgia,” adds Haig who has been relentlessly promoting Georgia and its rugby to the world’s media at every opportunity. Looking to the next step for Georgian rugby on its upward trajectory, it is no secret that the target is to break in to the prestigious Six Nations championship, held annually between England, France, Ireland, Italy, Scotland and Wales. But demolishing a comfortable and lucrative status quo is a formidable chal-
lenge, something of which Haig is only too aware. “They’ve got a nice little package which brings in lots of money to the countries involved. Why would they want to split the financial share a seventh way (by inviting Georgia)? “These organizations don’t tend to move quickly. But in 3-4 years the current setup could become stale and they’d be forced into change. There IS a history of rugby in Eastern Europe, not only here but also in Romania and other countries,” pleads Haig on one of European rugby’s hottest issues. “I don’t think the promotion/relegation idea has any chance, it would have to become a seven or eight nations. Seven nations would still fit into the calendar, and would still fill stadiums,” adds the New Zealander who will know that by the time Georgia do beat down the door to Europe’s rugby elite, he will probably have moved on. Where to, he is not sure although he cites Japan as a possibility due to its relaxed league schedule and shorter travel time back to New Zealand. When I ask whether he’d be looking more east than west, Haig claimed it would depend
on what was on the table and that “there are some nice spots in the south of France!” For now though, his focus is Georgia providing his contract, which expires at the end of this year, is renewed. Georgian Rugby Union president Giorgi Nijaradze has stressed his desire to keep Haig in place, but won’t conclude contract formalities until the GRU’s presidential elections are held in December. It seems inconceivable that Nijaradze won’t prevail having overseen a remarkable boom in Georgian rugby since taking over as president in 2008. Indeed, at the time of writing, no opposing candidates had been confirmed. Therefore, Haig, a fundamental part of said advancement, will almost certainly remain in charge beyond his highly impressive first four years in the role. “I gave myself at least six years. We are only just arriving at where we need to be. We’re another good two years off where we want to be. Georgia are hosting the 2017 World Under-20 Championships and I want to be here for that, and be involved in some capacity. This is a really big event for Georgian rugby,” says Haig.
Leading Georgia to another World Cup is something that is clearly also in Haig’s mind, as he outlines that 70% of the 2015 squad ought to be available for World Cup selection in just under four years’ time. But in the immediate term, Georgia’s focus is the comparatively modest European Nations Cup in which they host Germany next February in their next fixture. “Now we have a chance to have a look at some younger players, and we will also have the chance to show the Georgian crowds that the World Cup was no one off – we have taken it to another level. So we’ll play some good rugby and the players can enjoy playing in front of the home crowd,” adds Haig, managing to put a positive focus on what may feel like quite a comedown from the World Cup history-making of recent months. Nevertheless, with World Rugby committing to giving Georgia test matches against tier 1 nations in the coming years, Haig’s Lelos will (literally) be rubbing shoulders with the world’s best on a more regular basis from now on and few would deny that they deserve the opportunity.
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Dec. 01 - 03, 2015