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BUSINESS
GEORGIA TODAY
FEBRUARY 2 - 4, 2016
W Hotels Construction to Start in Tbilisi BY ANA AKHALAIA
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evelopment company RED-Co plans to build a W Hotels brand hotel on Rustaveli Avenue or in the Vera-Vake district, in Tbilisi. At present the company is looking for land for the hotel, the construction of which is planned to start in summer, 2016. W Hotels is a luxury brand and part of the Starwood Group which requires the project to be multistorey with united office spaces.
Mirian Katamadze, RED-Co General Director, announced that the company plans to invest USD 100 million in the W Hotels project. W Hotels & Resorts is a luxury hotel chain owned by Starwood Hotels & Resorts Worldwide which is generally marketed toward a younger crowd than their other upscale properties. As of February 2013, W is operating 46 hotels in 24 countries and is continuing to expand both domestically and internationally. RED-Co has already introduced this brand, by Le Meridien, which is to be placed in Batumi Tower, Batumi. Starwood Hotels & Resorts Worldwide, Inc. also
manages Sheraton Metechi Palace which is a United States based company. It is a worldwide leader in the hotel management field and owns such brands as Westin, Sheraton, Four Points by Sheraton, The Luxury Collection, W Hotels, St. Regis, Le Méri-
dien, Aloft, a Vision of W Hotels, and Element by Westin. RED-Co (Real Estate Development Company), founded in May 2012, is a development company specializing in the real estate business.
Georgia ‘Mostly Free’ in Index of Economic Freedom BY ANA AKHALAIA
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eorgia has been listed as a ‘mostly free’ country in the Index of Economic Freedom 2016 by Heritage Foundation. Compared to the previous year, Georgia moved back by one place to take 23rd place. It also took 12th place in Europe with 72.6 points. Georgia has seen a 3.2 point increase since 2012. “Despite global and regional challenges, Georgia’s economy has demonstrated considerable resilience. Efforts to eliminate corruption and restore fiscal
soundness by revitalizing the commitment to limited government have borne fruit. Two years of fiscal consolidation has kept government spending under control and ensured macroeconomic stability,” stated the Heritage Foundation website. Research shows that Georgia has remarkable success in management of public finance, open markets, and regulatory efficiency. However, the rule of law is still a concern. “A leading economic reformer among the former Soviet republics, Georgia has reduced regulations, taxes, and corruption. Russia invaded Georgia in 2008 and continues to occupy its South Ossetia and Abkhazia regions. In 2012, billionaire Bidzina Ivanishvili and his Georgian Dream coalition
defeated President Mikheil Saakashvili’s United National Movement. Victory by Giorgi Margvelashvili in the 2013 presidential elections reinforced Georgian Dream’s political dominance. “Georgia has been affected by the economic downturn in Russia and low oil prices, and its currency has lost 30 percent of its value relative to the dollar since November 2014. Agriculture or related industries employ over half of the workforce. Georgia signed Association Agreements with the EU in June 2014 and hopes to join NATO,” says the study. The study of the Heritage Foundation also says that Georgia still struggles with the effects of Soviet-
era corruption as well as on-going Russian influence. Executive and legislative interference in the judiciary is also substantial. Yet protection of property rights has improved. The competitive regulatory framework is conducive to entrepreneurial activity. It takes only two procedures to launch a business, and no minimum capital is required, according to the study. Germany, Finland, Great Britain, Canada, and others are also listed as ‘mostly free’ among 178 countries. As for the regional countries, Turkey, Azerbaijan and Armenia are listed as ‘moderately free’ countries and Russia as ‘mostly unfree’.
EU Positively Assesses Georgia’s Work within GSP+ BY ANA AKHALAIA
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he European Union (EU) has positively assessed Georgia’s work within GSP+ (Generalized Scheme of Preferences plus) in terms of ratification and effective implementation of 27 major international conventions. Given that Georgia has signed the Association Agreement with the European Union, an integral part of which is the Deep and Comprehensive Free Trade Area (DCFTA), GSP+ will be canceled for Georgia at the end of 2016 (GSP+ remained for Georgia for two years after DCFTA’s entry into force). The EU’s Generalized Scheme of Preferences (GSP), operating since 1971, is designed to support developing countries export to the European Union (EU) and so facilitate their integration into international markets and contribute to their economic growth. It is based on clearly defined rules of the
World Trade Organization (WTO). The specific incentive arrangement ‘GSP+’ offers deep tariff cuts for vulnerable countries that ratified and effectively implemented 27 international conventions relating to human and labor rights, environment and good governance. It concerns additional tariff reductions for essentially the same 66% tariff lines. The EU gave a positive assessment on the achievements of Georgia based on the United Nations conventions in the following areas: human rights; labor rights; environmental protection and good governance.