Page 1

Issue no: 1138/174

• APRIL 2 - 4, 2019

• PUBLISHED TWICE WEEKLY

PRICE: GEL 2.50

In this week’s issue... Weekly Entrepreneurial News @entrepreneur.ge NEWS PAGE 2

FOCUS

ON FINTECH SUCCESS

An exclusive interview with a Georgian man who founded one of the top FinTech's in Europe

PAGE 6

UN Experts to Visit Georgia to Assess Corporate Respect for Human Rights BUSINESS PAGE 3

March Agri Review: GDP & Employment in Agriculture ISET PAGE 4

Large-Scale Reservoir to Be Built in Kaspi

Deputy Minister of Economy Talks about DCFTA in Strasburg BY SAMANTHA GUTHRIE

BUSINESS PAGE 5

Tbilisi Hosts Int'l Conference on Energy Efficient Construction

D

eputy Minister of Economy and Sustainable Development, Genady Arveladze visited Strasburg last week to speak at the European Parliament. Arveladze told the members of the EU-Georgia Association Agreement Parliamentary Committee about the progress and challenges achieved in the implementation of the Deep and Comprehensive Free Trade Area Agreement (DCFTA). The Deputy Minister said “the number of Georgian products in the EU market is increasing significantly,” stressing that the 2018 trade turnover of Georgia with the EU reached the highest level in the history of trade relations between the parties. Continued on page 3

BUSINESS PAGE 7

First ‘Golden Key’ in Georgia Awarded to Radisson Blu Iveria Concierge Image source: Ministry of Economy

BUSINESS PAGE 13 Prepared for Georgia Today Business by

Markets Asof29ͲMarͲ2019

STOCKS

Price

w/w

m/m

BONDS

Price

w/w

m/m

BankofGeorgia(BGEOLN)

GBP16.53

+0,4%

Ͳ2,2%

GEOROG04/21

103.20(YTM5.10%)

Ͳ0,3%

+1,0%

GeorgiaCapital(CGEOLN)

GBP10.90

+2,7%

Ͳ3,5%

GEORG04/21

105.76(YTM3.89%)

Ͳ0,1%

+0,2%

GBP2.00

+1,0%

Ͳ2,4%

GRAIL07/22

107.31(YTM5.29%)

Ͳ0,1%

+0,7%

GBP15.44

Ͳ1,2%

+0,4%

GEBGG07/23

100.53(YTM5.86%)

+0,5%

+1,2%

CURRENCIES

GHG(GHGLN) TBCBankGroup(TBCGLN)

COMMODITIES CrudeOil,Brent(US$/bbl) GoldSpot(US$/OZ)

Price

w/w

m/m

Price

w/w

m/m

68,39

+2,0%

+5,1%

GEL/USD

2,6895

+0,4%

+1,0%

1292,38

Ͳ1,6%

Ͳ0,1%

GEL/EUR

3,0176

Ͳ0,3%

Ͳ0,3%

GEL/GBP

3,5061

Ͳ0,9%

INDICES

Price

w/w

m/m

GEL/CHF

2,6973

+0,1%

+1,3%

FTSE100

7279,19

+1,0%

+2,4%

GEL/RUB

0,0409

Ͳ1,4%

+1,2%

GEL/TRY

FTSE250

Ͳ2,4%

0,4835

+3,9%

11526,04

+1,4%

Ͳ0,7%

GEL/AZN

1,5856

+0,3%

+1,1%

25928,68

+1,7%

Ͳ0,4%

GEL/AMD

0,0055

Ͳ

+1,9%

7729,32

+1,1%

MSCIEMEE MSCIEM SP500

+0,6%

Ͳ1,5%

DAX DOWJONES NASDAQ

19117,49

Ͳ0,3%

GEL/UAH

0,0984

Ͳ1,3%

Ͳ0,7%

164,89

Ͳ1,4%

+0,4%

EUR/USD

0,8914

+0,7%

+1,3%

1058,13

Ͳ0,1%

+0,6%

GBP/USD

0,7671

+1,3%

+1,3%

+1,8%

Ͳ0,4%

2834,40

+1,2%

+1,1%

CHF/USD

0,9952

+0,2%

MSCIFM

2708,32

Ͳ0,8%

+1,7%

RUB/USD

65,7550

+1,7%

Ͳ0,2%

GTIndex(GEL)

1582,68

Ͳ

Ͳ

TRY/USD

5,5707

Ͳ3,3%

+3,7%

GTIndex(USD)

1208,13

Ͳ

Ͳ

AZN/USD

1,7001

+0,0%

Ͳ0,1%


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NEWS

GEORGIA TODAY

APRIL 2 - 4, 2019

Driving under Influence of Drugs Becomes a Criminal Offense @entrepreneur.ge Gamarjoba! I’m the Editor-in-Chief of the Georgian edition of Entrepreneur magazine and I’m here to share the top weekly Entrepreneurial news with you: The Georgian accessories brand Humanoid, founded five years ago with just 5000 GEL, has seen impressive success abroad. Designer Nikoloz Lutidze integrates accessories created using Georgian materials with outstanding design through an interesting pricing policy. His products are priced from 1 to 420 GEL. Humanoid was recently shown at the Hong Kong international exhibition and future plans include Frankfurt, Milan, US and Tokyo exhibitions. Currently, Humanoid has two stores. A Qvevri-shaped hotel complex, integrating a main building with 15 rooms and 20 Qvevrishaped cottages, is to be launched in the village of Shalauri in Telavi. The main aim of the author of the idea, Giorgi Kldiashvili, is to associate the hotel with wine. The cottages will carry the names of wines, while their guests will be able to familiarize themselves with Georgian culture, traditions and wine-making technologies. Almost 1.5 million was invested in the project. Boutique cellar ‘Lukasi,’ launched in 2009, produces wine only of specially chosen grape varieties. Even though the family wine is produced in limited editions, it has gained much popularity beyond the borders of the country. 50% of the product is exported to the USA, EU, Japan and Hong Kong. The founders now plan to expand their business by building a hotel. Keti Gersamia, one of the founders, claims that it was difficult for a woman to establish herself in the wine industry, but says the current results clearly show the success of the brand. Follow the Entrepreneur Georgia Instagram page to get the latest updates from Georgian Entrepreneurs. For doing business with Georgian Entrepreneurs, write us on business@entrepreneur.ge

BY THEA MORRISON

G

eorgia’s Ministry of Internal Affairs (MIA) reports that driving a car under the influence of drugs, psychotropic or psychoactive substances will be punishable by criminal law.

The changes took from April 1. The amendments to the law read that driving a vehicle under the influence of a narcotic substance will be punishable either by a fine or imprisonment up to one year. The amendments also envisage deprivation of a driver’s license for a period of three years. The MIA said the police will be enti-

tled to request drivers undergo drug tests if they see the existence of grounds envisaged by the law. The MIA says driving a car under the influence of narcotic substances is criminalized in many European countries, including France, Germany, Holland, Italy, Poland, Portugal, Czech Republic, Croatia, Estonia, Romania, Finland, Sweden, and others.


BUSINESS

GEORGIA TODAY APRIL 2 - 4, 2019

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UN Experts to Visit Georgia to Assess Corporate Respect for Human Rights

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he United Nations Working Group on Business and Human Rights will undertake its first official country visit to Georgia from 3 to 12 April to assess efforts to identify, prevent and address adverse human rights impacts of business operations. “The inclusion of a specific chapter on business and human rights in the 201820 Georgian Human Rights National Action Plan demonstrates the commitment of the government to promote corporate respect for human rights. We look forward to learning about the concrete steps to develop a coherent policy framework and translate this commitment into reality,” said Mr. Surya Deva, Chairperson of the Working Group and

member of the visiting delegation. “We will pay special attention to the situation of individuals and communities who are particularly vulnerable to business-related human rights abuse, including in the context of natural resource extraction, large-scale construction and tourism projects,” Deva added. The UN experts will look at current efforts of the Georgian government and businesses to implement their respective human rights obligations and responsibilities under the UN Guiding Principles on Business and Human Rights. The Guiding Principles provide an authoritative framework not only to identify, prevent and mitigate adverse human rights impacts of business activities, but also to provide victims access to effec-

tive remedies. “We welcome the invitation from the government to conduct this visit, which

we hope will assist both the government and companies to advance business respect for human rights in the country

in line with international human rights law and standards,” said Elzbieta Karska, Vice-Chairperson the Working Group and another member of the delegation. “In addition to engaging in a constructive dialogue with various government ministries and agencies, we will meet a range of civil society actors, human rights defenders and trade unions, as well as representatives of business enterprises and industry associations,” she noted. During their visit to Georgia, the experts will hold meetings in Tbilisi and in different locations of the Imereti region and the Autonomous Republic of Adjara. The Working Group will present a full report of its findings and recommendations to the Human Rights Council in June 2020.

Deputy Minister of Economy Talks about DCFTA in Strasburg Continued from page 1 After the Parliamentary session, Arveladze briefed reporters, saying "We talked about the activities to be undertaken in 2018, as well as the challenges that we see in the next few years.” He noted plans to focus especially on small and medium businesses in the agriculture sector, and to introduce regulations and laboratory studies, as well as focus on the quality of infrastructure. He also shared plans to increase the market supervision of

industry and consumer products – a major topic of concern among Georgian consumers, and necessary for increasing Georgian exports to the European Union. Arveladze also updated Parliamentary Committee members on recent changes in Georgia’s customs policies and regulations, and the introduction of geographical indications on products including Sulguni cheese, Tushetian Guda, and matsoni. “We have also provided information on the legislative amendments that have been implemented in the direc-

tion of labor security and related reforms planned by the end of the year,” he said. The Ministry of Economy measured 2018 as the most robust for trade between Georgia and the EU. Georgia exported an unprecedented $730 million worth of products to the EU last year. Arveladze predicted that the trend will continue as Georgian products become increasingly recognized by EU consumers, and their market share can grow. The EU-Georgia Association Agreement Committee of the Parliament of

Europe is composed of members of the Parliament of Georgia and the Parliament of Europe. The body serves as one of the institutional frameworks that the Association Agreement establishes for co-operation between the EU and Georgia, along with the Association Council and Associate Committees operating within the Executive Authority. Its main objective is to supervise the implementation of the Association Agreement and promote Georgia's integration into Europe, explains the Ministry of Economy.

Within the framework of Arveladze’s visit, the Committee discussed more broadly relations between Georgia and the EU and the Association Agreement implementation process. They touched on Georgia’s progressonissuesofdemocracyandhuman rights, challenges in the country’s EU visafree process, and the impact of the DCFTA on the economy as a whole. Fellow Deputy Minister Natia Turnava accompanied Arveladze to Strasburg, and both participated in the Parliamentary Committee session.


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BUSINESS

GEORGIA TODAY

APRIL 2 - 4, 2019

March Agri Review: GDP & Employment in Agriculture

A

ccording to GeoStat’s preliminary data for 2018, Georgia’s economy grew by 4.7%- the same rate as in 2017. As 2017 was a challenging year for Georgian agriculture, the sector experienced -3.8% negative growth. Unlike 2017, agriculture in 2018 had a positive and rather modest growth rate of 0.7%. As expected, agriculture keeps proportionally shrinking within the country’s overall GDP- it stood at 7.7% in 2018 compared to 8.0% in 2017 (Figure 1). The weak stake of agriculture in the overall GDP is not necessarily an issue, given that the world average was 6.4% in 2017 (CIA estimate). The figure is even lower in developed countries, which vary

opportunities in other sectors. Additionally, most “farmers by default” cannot meet the labor market’s requirements, in terms of skills or education, even for the existent jobs. Thus, high employment figures in agriculture, paired with the declining share of agriculture in GDP, signal a need for better vocational education and subsequent structural changes.

Figure 3. Live sheep imports and sheep meat exports

DOMESTIC PRICES On a monthly basis, Georgian price levels remained relatively steady; the Consumer Price Index (CPI) in February 2019 increased slightly, by 0.3%, compared to the previous month. While, monthover-month prices hardly changed (0.1%) in the category of food and non-alcoholic beverages. In comparison to January

Figure 1. Employment in Agriculture vs. Share of Agriculture in GDP Source: MoF data

Source: National Statistics Office of Georgia (GeoStat), 2019. *Preliminary data. World Bank estimate, 2019

between 1% and 3%. Thus, the decline would not be harmful to the Georgian economy, if not for the fact that around 40% of the labor force is still employed in agriculture. According to the World Bank estimate (2018), the world average employment in agriculture is 26%, though it does not exceed 5% in the developed world (OECD countries). With such significant employment in agriculture (nearly 40%), Georgia is comparable to countries like Gabon, Ghana, Haiti, India, Kenya, Morocco, Nigeria, Pakistan, Vietnam, etc. Drawing a comparison from the 2018 World Bank estimate, Georgia’s four neighboring countries each have lower employment in agriculture: Azerbaijan (37%), Armenia (33%), Turkey (19%) and Russia (7%). Considering that most Georgian farmers are so-called “farmers by default” rather than “farmers by vocation”, the high employment rate in agriculture is exacerbated by a lack of employment

2019, the CPI experienced a 2.3% increase. On an annual basis for food and nonalcoholic beverages, the prices increased by 2.9%, contributing to a 0.9 percentage change in the total CPI. In February 2019, the sharpest price fluctuations on an annual basis were observed within the following subgroups: fish (12.5%), bread and cereals (10.2%), vegetables (7.6%), meat (4.3%), fruit and grapes (-23.6%), sugar, jam, honey, chocolate and confectioneries (-3.4%).

WHEAT FLOUR - IN THE SPOTLIGHT Over the last few months, the prices of wheat bread and cereals have been particularly notable. Starting in November 2018, the products in this category have been, on average, trading above last year’s prices. In February 2019, the price of wheat bread and cereals increased by 10.2% compared to February 2018. Within the same period, the price of wheat bread

Figure 2. Annual Changes in Wheat Bread and Wheat Flour Prices

increased by 15%, reflecting the increased price of wheat flour (an 8% increase on an annual basis) (Figure 2). According to the trade data for February 2019, imports of wheat flour to Georgia amounted to 1650.70 tons- 4% higher than in the previous year (1588.31 tons). Projections for wheat production in 2019 do not seem promising. According to the United States Department of Agriculture (USDA), the projected world output of wheat will be 734.75 million metric tons, 4% lower than the respective indicator from the previous year (763.18 mln. metric tons). Whilst, the projected total use of wheat will be 747.23 mln. metrictons, therefore higher than the projected output. This implies that the end stocks for 2019 will be lower than the previous year. Remarkably, Russian wheat production is expected to be lower by 16%, while the corresponding change in Russia’s wheat export may decrease by 11%. Considering that Georgia is a net importer of wheat flour and Russia is the main importing country (Russia provides approximately 90% of Georgia’s wheat imports), Georgian consumers might expect further price increases in wheat and wheat products in 2019.

INTERNATIONAL PRICES International prices increased in February 2019. The Food Price Index, measured by the Food and Agriculture Organization (FAO), increased by 1.7%, compared to January 2019. On an annual basis, international prices maintained a downward trend: the FAO Food Price Index has decreased by 2.3% since February 2018. The main drivers were the weaker prices of vegetable oil, sugar, and meat. The FAO Vegetable Oil Price Index, in February 2019, experienced the sharpest decrease of 15.5% from the previous year, and, during the same period, the price of sugar and meat reduced by 4.7% and 4%, respectively. Whereas, the FAO Cereal Price Index increased by 4.7%. The FAO Dairy Price Index also increased, but only slightly by 0.7%.

TRADE HIGHLIGHTS Source: GeoStat, 2019

In February 2019, Georgia’s agricultural

exports (including food) equaled approximately 57 mln. USD, almost 27% of the total Georgian export value. When comparing this indicator to February 2018, the share remains practically unchanged. As to imports for February 2019, Georgia’s agro imports exceeded 79 mln. USD, which is roughly 15% of all Georgian imports. Year-over-year (compared to February 2018), agricultural imports declined by 6%.

SHEEP PRODUCTS AND MEAT - IN THE SPOTLIGHT The beginning of 2019 was active for the sheep trade in Georgia, although the key imported and exported sheep products differed significantly. The official trade data, by GeoStat, suggests the country was actively buying live animals and selling the meat in return. Though the beginning of the year is not the high season for live sheep (HS code 010410) imports (there were no imports in January or February of 2014 and 2017 at all), over the last two months Georgia spent more than 1.5 mln. USD on live sheep on the international market- over twice the expenditure of January-February 2018. The import of these animals has gained particular influence over the last three years, with 2018’s total imports (7.5 mln. USD) surpassing the 2014 record value with a 3.4 mln. USD margin. The export of sheep meat also boomed in the first two months of 2019, and the dynamics were more striking than with live sheep imports, in absolute as well as relative terms. Interestingly, Georgia started to sell fresh and chilled sheep meat (lamb carcasses and half-carcassesHS code 020410) to foreign countries for the first time in 2017, and that year reached annual sales of 14 mln. USD, and subsequently managed to double annual sales over the following 12-month period (31 mln. USD in 2018). Thus far, the data for 2019 is also promising, and according to GeoStat, for this January and February combined the exports of fresh or chilled sheep meat (lamb carcasses and half-carcasses) amounted to 2.1 mln. USD, which is 0.7 mln. USD (approximately +47%) greater than the corresponding figure from 2018.

Ruling out re-exports, or re-imports, it is noteworthy that in January-February 2019 live sheep exports were only worth 0.1 mln. USD, while fresh and chilled sheep meat (lamb carcasses and halfcarcasses) was not imported to Georgia at all. For a further breakdown of the monthly data, see the Figure 3.

POLICY WATCH The APMA Program for Co-financing Agricultural Machinery Purchases The Agricultural Projects Management Agency (APMA) has started a new program for co-financing purchases of agricultural machinery. APMA co-financing for one beneficiary cannot exceed 50% of the cost of the agricultural equipment to be purchased, with a limit of 150,000 GEL. The co-financing may be less than 50%, if the value of the applicant’s submitted project exceeds 300,000 GEL. The agricultural equipment to be purchased should be new and meet the following two requirements: 1) the agricultural equipment must be manufactured no more than 2 calendar years prior to purchase; 2) at the time of the purchase, it must be subject to warranty conditions. Beneficiaries of the program are required to be a citizen of Georgia, a natural entity, or an individual entrepreneur or a registered commercial legal entity (including agricultural cooperatives) in which the state does not own a share/interest. For more information: http://apma.ge/ projects/read/mechanization/ Petition for Georgian Wheat to be Included on the UNESCO Safeguarding – Intangible Heritage List Georgia is petitioning for Georgian wheat to be placed on the UNESCO Safeguarding – Intangible Heritage List. The application was signed by the Minister of Environmental Protection and Agriculture of Georgia, and the Minister of Education, Science, Culture and Sport of Georgia. Georgian wheat is divided into 14 species and 188 varieties. Previous archaeological studies confirm that it dates back 800 years. For more information: http://agenda. ge/en/news/2019/869


BUSINESS

GEORGIA TODAY APRIL 2 - 4, 2019

Image source: PM’s Press Office

Large-Scale Reservoir to Be Built in Kaspi BY THEA MORRISON

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eorgia is to have the largest reservoir built since the 1950s, to be located in Kaspi Municipality, Central Georgia, on the River Tedzami. The Tedzami Reservoir will provide drinking water to 5 villages, water to 22, and a Hydro-electric Power Plant is to be built on the dam. The Georgian Prime Minister’s Press Office reports that the project has a minimal impact on the environment. Works will launch this year and be completed within 47 months. Georgian Prime Minister Mamuka Bakhtadze, opened the Tedzami Reservoir project, stating that it is “a historic project,” and adding the empowerment of Georgia's villages is the main goal. “Stronger Georgian villages mean stronger Georgian regions, and stronger Georgian regions define a stronger Georgia. The development of Georgia's villages has been one of our top priorities. Agricultural development requires strong irrigation systems. No such reservoirs have been built in Georgia in the past 50 years,” said Bakhtadze. He added that in 2012, Georgia's irrigation systems covered only 40,000 hectares and within the past six

years, they have been increased to 110,000 hectares. The PM explained that the Tedzami River Reservoir will serve nearly 10,000 citizens and irrigate 7,000 hectares of land, which to date was almost abandoned. "It is a truly unique project that will breathe new life into Shida Kartli, namely the Kaspi region. Water and its resources are Georgia’s wealth. Accordingly, tapping into water resources is of vital importance for the success of our national economy," the PM noted. “Such projects will significantly improve the social and economic conditions of households involved in agriculture, while also helping us to ensure inclusive growth in Georgia, to achieve a type of growth that will impact every Georgian family. Overcoming the most painful challenge of poverty is the key priority of our economy,” the PM said. He added that the construction of the reservoir offers an opportunity to implement systemic and consistent infrastructural and agricultural projects, and to turn the reservoir's surrounding area into a tourist destination, which will be an additional advantage of the project. “I am convinced that such projects stand for a strong country, a strong Georgia and enable us to achieve progress in the regions,” Bakhtadze noted. GEL 71 million will be invested in the Tedzami Reservoir project and it will employ 500 locals from the municipality.

CSRDG Runs Media Training on CSR & the Role Media Reps Can Play in Promoting It BY KATIE RUTH DAVIES

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n March 29-30, the Center for Strategic Research & Development of Georgia (CSRDG), within the frames of the EU project ‘Georgian Civil Society Sustainability Initiative,’ held a training for 16 regional media outlet representatives from Tbilisi and Imereti. A further training is to be held in the Ajara region next week. The Sairme Hotel and resort played host to the occasion, making a pleasant and snowy mountain backdrop to a very valuable two days of learning. The subject? Corporate Social Responsibility (CSR). Most of the journalists and editors present had a good understanding of the topic (up from the mere handful who knew about it at the last training we attended three years ago), yet weren’t quite sure how and where it could be applied and the vital role the media could play in spreading the good word. Through a comprehensive and entertaining mix of informative material- including PPT, video, discussion points and group-projects, CSRDG’s trainer Lela Khoperia guided those present from the basic concepts of CSR embraced worldwide, to what CSR can involve, how it can be misunderstood and how it has been successfully employed both abroad and locally. In December, the very same CSRDG organized and held the award ceremony of Georgia’s Responsible Business Award ‘Meliora’ within the above EU-funded project. 41 Georgian companies with 76 CSR projects/ initiatives participated in Georgia’s Responsible Business Awards, with the winners announced as: Micro-Finance Organization ‘Crystal’ in the category ‘Best Responsible Large Company of the Year;’ the Bank of Georgia, which was awarded in the Best Green Initiative category for the project ‘Gzad;’ the small and medium company TRC for the project ‘Do not dump what can be recycled;’ Policy and Management Consulting Group (PMCG), which was acknowledged in the category ‘Responsible

Employer’ for its ‘Employee Development Program;’ GPI Holding, which was named the best in the ‘Responsibility in the Marketplace’ category for its support to small and medium businesses; TBC Bank, awarded for ‘Supporting the Community’ with its project ‘Tsereqartulad’ (Write in Georgian); small/medium company ACT, which was awarded for its support to social entrepreneurship; Natakhtari, recognized for its ‘Care about the Future;’ advertising company Holmes&Watson, which was acknowledged for the project #argambolo in the ‘Best Creative CSR’ category and the Palitra Media Holding, whose project ‘Makuliteratura’ was awarded in the special category of ‘Waste Management Initiative.’ The take-away from the media training this weekend was that Georgian media representatives should not only themselves aim to take on a socially responsible role in their everyday workings (taking into account social, ecological, economic impacts), but to hold the companies they encounter up to and above the internationally recognized standards of good CSR: to not only highlight and report on the good that is being done in the singular charitable act that may be promoted by a particular company or organization, but to ask: is it sustainable CSR? Are they doing enough? And could they do more? More on this topic in next week’s GT Business.

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BUSINESS

GEORGIA TODAY

APRIL 2 - 4, 2019

Startup Grind Presents: Tamaz Giorgadze, ‘Raisin’ EXCLUSIVE INTERVIEW BY KYRA DEVDARIANI

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he series on Startup Ecosystem in Georgia has been in the works for quite some time, with a motley crew of players in the field: the relevant government agencies working with/for the startups, like GITA and Enterprise Georgia; Startup Grind - the brainchild of Colin Donohue, whom I’d loosely brand “a facilitator” (he’s a CEO of the SG Tbilisi chapter); and TBC and BOG. With more installments of the series to follow, today, we present the star of the latest Startup Grind event that took place on March 23 at the Rooms Hotel in Tbilisi. Tamaz Giorgadze, a founder and CEO of the German startup Raisin GmbH, sat down with us for a chat while the startup crowd networked in anticipation of the official event. A native of Kutaisi, western Georgia, Giorgadze has a trademark quick wit and a dry sense of humor, but none of the boastfulness or overinflated ego that is almost expected of a successful entrepreneur who raised $114 million in Series D funding, whose company operates in 30+ countries and who just bought a German MHB Bank (regulatory approval underway). Giorgadze was a “wunderkind,” a child prodigy who graduated from high school at age 12 and was trained to become a future chess star (chess was hugely popular in Georgia, producing grandmasters and world champions aplenty, albeit on the female side). As a teenager, he moved to Tbilisi to study economics at the state university, graduated, had a brief gig as a Presidential Aide in foreign policy mentored by legendary Gela Charkviani, whose input Giorgadze appreciates to this day, but went abroad shortly thereafter. In Germany, he studied some more, earning a degree in Law and a PhD in Economics, and eventually ended up at McKinsey – a global management consulting firm that gave him exposure to retail banks across Europe and Asia. Giorgadze credits a decade spent at McKinsey for the many skills that proved useful later on: an ability to listen to clients/counterparties and identify their needs, patience in negotiating, and a genuine interest in finding mutually beneficial solutions. His advice for startup hopefuls: before founding something, get a proper job! The recent TechCrunch article succinctly described Raisin as “the panEuropean fintech marketplace for savings and investment products,, so that’s exactly where we started our conversation. Raisin has 69 partner banks, usually on a

small-to-medium scale, that are ready to offer their clients more attractive interest rates on savings than the larger financial institutions – in total, over 250 products available at the click of a button. Raisin provides a platform connecting those banks, from Portugal to Poland, from the Czech Republic to Malta, to the customers they wouldn’t have been able to reach otherwise. The startup makes its income in the commission it charges the banks, for essentially allowing them to take full advantage of the EU-wide single financial market. This inevitably brings up the issue of Brexit.

RAISIN OFFERS PRODUCTS IN THE UK, BOTH IN GBP AND EUR. DO YOU EXPECT BREXIT TO HAVE A NEGATIVE IMPACT ON THAT PART OF YOUR BUSINESS? Not on the GBP side, no. You see, the GBP-based offers are only from locally licensed banks, so no Brexit implications there. The EUR, however, will suffer– we will be offering the product elsewhere, but the UK entities, the three banks that worked on that, would have to stop after Brexit.

DO YOU PLAN TO EXPAND INTO OTHER JURISDICTIONS? OTHER CONTINENTS, MAYBE? We’re thinking of Asia as a probable next step in expansion. Clearly, there is an interest in the service we’re offering, since we know of several copycat businesses – in India, even in Australia, but those are country-wide, nothing crossborder – unlike Raisin. At the same time, we see plenty of opportunities within the EU, and are planning to explore them. Currently, EUR 11 bln has been invested via Raisin, platform-wide, and that’s a good number, but consider this: the whole savings product market in the European Union is over EUR 12 trillion! Lots of growth to tap into!

DO YOU SEE BANKS BEING ELIMINATED BY PLATFORMS LIKE RAISIN? WHAT IS THE FUTURE OF THE TRADITIONAL FACE-TO-FACE BANKING? I’m on the Board of the Bank of Georgia [note: through McKinsey exposure, unrelated to Raisin activities], and I have to say that the banks will survive! In reality, it’s a mutually beneficial relationship: fintech startups push banks to change, to improve their services, to diversify their products. Raisin relies on the banks not just for offering competitive interest rates on savings and deposits: all of our KYC is based on the existing banking relationships of our clients. Basically, when you open an account with Raisin online, it gets tied to the account you maintain at your traditional banking

The founders of Raisin, Tamaz Giorgadze pictured on the right. Source: businessinsider.com.au

institution, so all the funds you transfer, both deposits and withdrawals, go through a regular bank that has verified who you are and where you got the money from. It’s a mandatory requirement for AML purposes: anti-money laundering regulations in the EU are very strict.

AML, KYC, RISK APPETITE – ALL OF THESE BUZZWORDS SEEM TO TRIGGER REGULATORS, AND YOU HAVE SEVERAL OF THOSE, IN DIFFERENT JURISDICTIONS. WHAT IS YOUR RELATIONSHIP WITH THEM? This brings us to the beginnings of Raisin: the whole idea of certain places offering better interest rates on deposits, and people wanting to take advantage of those high rates. Through McKinsey, I was exposed to several jurisdictions like that, plus, as a Georgian myself, I knew of the deposit rates here – very attractive to Western customers. We took this idea to the regulators in Germany, they evaluated the risks and chose not to give us the green light to proceed with jurisdictions like Russia, Kazakhstan, Georgia. So, we, the original three founders of Raisin, had to go back to the drawing board. There was some back and forth with the investors we had lined up, some changes ensued, but, after several weeks of deliberations, we were ready to offer the regulators something that agreed with the risk appetite – theirs and ours. Despite our service being completely online, we

carry very low risk. In fact, 60% of Raisin’s customers (natural persons, although we’re just rolling out the products for GmbH, in Germany only) come from AA-AAA-rated countries, like Sweden or France. There are some jurisdictions that allow non-face-to-face account opening, but in Germany, we do identification via Postal Banks or video-chat. In Spain, there are tools like reference transfer, address verification, ID upload. We keep track of beneficial ownerships, no funds from Russia or China, for example, so, yes, we’re trying to keep risks very low.

FOR MOST, THIS WILL SOUND OUTSIDE THE TEMPLATE: STARTUPS ARE USUALLY HIGH-RISK PROPOSITIONS. We found a mutual comfort zone with the regulators, and it worked out pretty well. Generally, I maintain that having an open communication with them is very important; we had to tweak our original proposal, but the underlying core idea was good – and that’s what successful startups are all about, and the team, obviously. I’m a believer in hiring senior, experienced people, but we take in those who grow with the company, too.

IS THAT OF INTEREST FOR YOU IN GEORGIA: RECRUITING FOR A TEAM? WHAT ARE YOUR EXPECTATIONS FOR THE STARTUP GRIND? I don’t set expectations, I just wanted to

see what’s out here while keeping an open mind. Bank of Georgia works with fintech startups, and I keep an eye on this sector, too. Startup Grind Tbilisi is developing, so I thought it would be interesting to meet the people, share my experiences, successful or not.

LOOKING AT RAISIN, CLEARLY, YOU’VE BEEN VERY SUCCESSFUL! I’ve made my fair share of mistakes: it took me a couple of investment errors to realize that you have to leave everything to the professionals. Just because you’re good at fintech, it doesn’t mean you’re automatically good at investing, even if you had a couple of good calls at some point.

LAST QUESTION BEFORE YOU STEP IN FRONT OF THE STARTUP HOPEFULS: WHERE DID THE COMPANY GET ITS NAME, ‘RAISIN’? IT’S PRETTY DRY FOR SUCH A “JUICY” BUSINESS! We wanted an easy word that would catch on. Originally, “raisin” meant that we were raising (raisin’) interest rates for the deposits and savings, we were raising funds… But also, the word “raisin” in French means grapes (note: Eng. “raisin” is “raisin sec” in Fr.). I’m Georgian, so grape culture is in my blood. We weren’t thinking about it back in 2013, but, if we decide to sell the domain in France, we could make good money [laughs].

Silknet Raises $200 mln in Eurobond Issue

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ilknet JSC, one of Georgia’s leading telecommunications operators, has successfully priced a debut $200 million 5-year 11% senior unsecured bonds issue (the “Notes”). The Notes were subscribed by investors from a wide range of geographies. The Notes are expected to be rated B1 by Moody’s and B+ by Fitch, in line with Silknet’s long-term issuer credit rating. The Notes are expected to be listed on the Global Exchange Market of Euronext Dublin. J.P. Morgan, UBS and TBC Capital are acting as the joint lead managers. Dentons UK and Middle East and Dentons Georgia are acting as the legal advisors to Silknet, while Latham &

Watkins and BGI Legal are acting as the legal advisors to the joint lead managers. “Today’s placement reflects the strength and the potential of Silknet, a company providing a truly comprehensive communication and entertainment offer for consumers and businesses,” said George Ramishvili, Chairman of Silknet’s Super-

visory Board and Founder of the Silk Road Group, Silknet’s parent company. “Developing Georgia’s infrastructure through Silknet is an important part of the Silk Road Group’s mission to establish Georgia as a bridge between East and West.” “Investors taking advantage of this

issuance will benefit from unrivalled exposure to Georgia, the former CIS’s most promising success story for its entrepreneurial business environment,” noted David Mamulaishvili, Silknet CEO, said. “Indeed, Georgia was ranked 6th in the World Bank’s most recent ‘Ease of Doing Business’ index. Silknet is one of Georgia's leading telecoms companies with a comprehensive offering and a truly national customer footprint.” Silknet benefits from brand recognition, customer loyalty and leverage as an integrated telecommunications provider. The company combines infrastructure, including mobile and fixed networks, and services including entertainment and broadcasting platforms, as well as

exclusive content rights. It is the country’s largest fixed network provider, successfully expanding into mobile carrier service operations including 4.5G, offering businesses and households the full range of telecommunication services, such as fixed telephony, fixed broadband based on fibre technology, IPTV and mobile. Silknet is rated B1/Stable by Moody’s and B+/Stable by Fitch Ratings. Silknet has a broad subscriber base in Georgia: • c. 1.77 million mobile customers • c. 297,000 fixed line customers • c. 278,000 fixed broadband customers • c.228,000 pay TV customers (Figures correct 31/12/2018)


BUSINESS

GEORGIA TODAY APRIL 2 - 4, 2019

7

Tbilisi Hosts International Conference NRJ, N°1 Int’l Commercial Radio Brand with over 30 on Energy Efficient Construction mln Weekly Listeners

BY SAMANTHA GUTHRIE

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n January, Prime Minister Mamuka Bakhtadze launched a new energy efficiency initiative at a joint press conference with the CEO of Signify/Philips, Eric Rondolat at the World Economic Forum (WEF) in Davos, Switzerland. Signify/Philips, one of the world’s leading companies in the lighting industry, expressed willingness to support the Georgian government to implement the new strategy. Rondolat explained in Davos that his company would focus on the energy efficient lighting of Georgia's streets and monuments, which would first be introduced in Tbilisi and later throughout the rest of the country. The energy efficiency strategy is part of Georgia’s 'Green Economy' concept, which includes other environmentally friendly policies such as the ban on thin plastic bags, promotion of electric vehicles, and standards for renewable and sustainable energy. On Thursday March 28, an international conference on "Energy Efficient Construction" was held in Tbilisi. The conference was attended by representatives of the Ministry of Economy and Sustainable Development, Tbilisi City Hall, Colliers International Georgia, the Union of Expert Sustainable Energy and Environment, Georgian Technical University, the Responsible Real Estate Investment Council, and others. The conference was organized by N1 property hub (Property Georgia) and the Responsible Property Investment Council of Georgia (RPICG), with support from Center for Innovative Business Solutions (C4IBS). The conference was co-funded by the Ministry of Economy and Sustainable Development, the Min-

Photo: Ministry of Economy and Sustainable Development

istry of Regional Development and Infrastructure, and the Green for Growth Fund, which contributes to enhancing energy efficiency and fostering renewable energies in Southeast Europe, the EU’s Eastern Neighborhood, and in the Middle East and North Africa, predominantly through the provision of dedicated financing to businesses and households via partnering with financial institutions and direct financing. The conference opened with a speech by Maia Tskitishvili, the Minister of Infrastructure and Regional Development of Georgia, who emphasized the importance of Georgia making environmentally conscious moves in its development, and the long-term value of energy efficient construction. Davit Gigineishvili, representing the Ministry of Economy and Sustainable Development, presented a draft law on "Energy Efficiency of Buildings,” recently submitted to the Parliament of Georgia. He explained that Georgia is obligated to adopt a strong legislative base since becoming a member of the energy union, and noted that the new energy efficiency norms in the construction sector will be

positively reflected in the quality of new construction. The event was attended by representatives from governmental bodies, nongovernmental organizations, international companies in the sectors of construction, development, and architecture, international financial institutions, and international education institutions. Representatives of companies participating in the conference discussed building certification models, how to build energy efficient buildings, and how old constructions can be retrofitted to be energy efficient – a major concern of home-buyers in Georgian cities, where new constructions are often avoided for their poor insulation. The energy efficiency in construction conference was the first of its kind to be held in Georgia, reflecting the government’s public commitment to improving Georgia’s environmental policies and quality of life in the country. The longterm effects of the new regulations on energy efficient constructions, assuming they are approved by Parliament, will likely take years to be fully realized.

stablished in 17 countries, NRJ/ENERGY is one of the leading entertainment brands worldwide. With the opening of six new franchised stations within the last two years, the iconic brand of the NRJGroup keeps strengthening its international footprint. Since its launch as the first commercial radio station in France in 1981, the station founded by Jean-Paul Baudecroux has been the unrivaled leader of music stations in the French radio landscape. Thanks to the power of its brand and to a unique in-house expertise, NRJ rapidly expanded internationally, through direct investments or via cooperation agreements, with the implementation of branded stations in seven countries between 1988 and 1998: Switzerland (1988), Germany (1991), Sweden (1993), French-speaking Belgium (1994), Finland (1995), and Austria and Norway (1998). Since 2000, NRJ has pursued its international development by franchising its brand and savoir-faire via Trademark License Agreements with leading media groups in Bulgaria (2005), Lebanon (2006), Russia (2006), Morocco (2016), Egypt (2017), Mauritius (2017), Georgia (2017), Cyprus (2017), Dutch-speaking Belgium (2018) and Denmark (2018). “The launch of six franchised stations within the last two years illustrates the attractiveness of the NRJ brand and its unique capacity to leverage its power in many radio markets,” said Jean-Paul Baudecroux, Founder & CEO of the NRJ Group. “We are delighted to welcome TVR Media and SBS Belgium to the NRJ family and we are confident that the con-

jugation of NRJ’s strike force together with their market expertise will once more be a success story,” said Richard Mazeret, CEO of International Activities of the NRJ Group. “We are making our own version of the world's most listened radio station,” noted Lars Nielsen, CEO & Partner at TVR Media. “The results six weeks after the launch of NRJ in Denmark are staggering and we show impressive growth week-on-week. The strength of the NRJ name and the positive vibes connected to the brand have played a massive role in these results.” “Although we could have taken one of our three TV brands, or launched a new radio brand, the choosing NRJ was a positive and conscious decision. The strength of the brand, the power of the group and the proven success made this an easy choice for Sbs,” said Peter Quaghebeur, CEO of SBS Belgium.


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BUSINESS

GEORGIA TODAY

APRIL 2 - 4, 2019

Georgia Wants To Be In Europe, But Without Eu-Style Bureaucracy BY ERIC LIVNY

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eorgian cucumbers do not always fit the EU cucumber legal class I standard. But, their crunchiness and taste are difficult to resist. In a rare about-face, the Georgian government announced today, 1 April, 2019, that it will impose a 9-month moratorium, effective immediately, on the further introduction of EU-style regulations. A new plan of regulatory approximation will be negotiated, until January 1, 2020 - but not with the EU: with the Georgian business community. The goal is to make sure that companies receive enough time – and adequate support – for successful adjustment. Sharing the stage with EU High Representative for Foreign Affairs and Security Policy Federica Mogherini, and Georgian Minister of Economic Development Giorgi Kobulia, Prime Minister Mamuka Bakhtadze assured the audience that the Georgian Dream party does not have any second thoughts about joining the European family of nations. “We can state with full confidence that our relations with the European Union are at an all-time high,” Prime Minister Bakhtadze said in his opening remarks. "We are ready to carry out a full legislative and institutional alignment, which is a mandatory requirement for the country's European and Euro-Atlantic integration,” added Bakhtadze, “however, we do not have the financial, human and institutional capacities to fulfill our obligations according to the original schedule agreed with the European Union. Rome wasn’t built in a day, and building a modern Georgia will also require more time," he emphasized. Bakhtadze’s announcement sent shockwaves through the audience. However, it should not have. Firstly, Georgia experienced similar policy reversals in its recent past, such as when hastily introducing and then annulling EU-style migration policies

in June 2015. Moreover, calls for a more measured approach to regulatory approximation with the EU became more and more audible in recent months, coming from all quarters of the Georgian society. Political pressure has been building up, and last week’s protests against the new taxi licensing requirements were but the straw that broke the camel’s back. A further surprise was provided by EU’s Mogherini. “We fully support the Georgian government’s decision to slow down the process of regulatory alignment with the EU,” said Federica Mogherini. “Let’s face it,” she assessed candidly, “Hasty copy-pasting compromises the very idea of EU integration, helping Russian disinformation efforts. Georgia has to reform its economy and institutions, but it should do so at a pace that can be sustained by its people and businesses. This would put the process of Georgian-EU integration on a much firmer foundation. If Georgia needs more time to respect its obligations under the EU Association Agreement, we are happy to grant it.” Minister of Economic Development Giorgi Kobulia shared the results of an independent study by Tbilinomics Policy Advisors showing the extent to which Georgia’s labor market is being strained by the process of regulatory approximation with the EU. Of Georgia’s total population of 3.7mln, only about 550,000 (approximately 15%) are officially employed in the modern sector of the economy. And of these, about 20,000 (close to 5% of the hired workforce) will be employed in monitoring the implementation of various regulations, from labor safety to environment to food safety and advertising. “Even if we ignore the cost of EU-style regulations for Georgian businesses,“ said Kobulia, formerly a Senior Partner with McKinsey, “diverting so many welleducated workers into unproductive inspection jobs prevents us from fully realizing our economic potential. This is not something Georgia can afford at this stage in its development.”

A WARM WELCOME BY THE GEORGIAN BUSINESS COMMUNITY The Georgian business community welcomed greater pragmatism in GeorgiaEU relations. “Better late than never,” said Fady Asly, Chair of the International Chamber of Commerce. “We will work with the Georgian government to develop a new timetable for the various approximation measures. Our goal will be to make ensure that decisions are better coordinated and businesses get full predictability as to the timelines and process of harmonization. There should be no more unpleasant surprises.” Irakli Burdiladze, General Director of m2, a major actor in Georgia’s real estate market, also supported the government’s decision to slow down the introduction of new regulations. “With the new safety regulations going into effect on January 1, 2019, we were afraid to be the “last man standing” in the Georgian construction sector. Smaller companies have a very hard time adjusting. Many are being driven into bankruptcy, reducing competition in the sector and increasing real estate prices.” According to Georgian Industrial Group’s David Bezhuashvili, the country’s mining industry is very far from being ready to approximate EU safety or any other norms. “We may be ok by Ukrainian standards, but any German inspector would refuse to enter our mining shafts and tunnels in Tkibuli,” said Bezhuashvili. “More than 2000 workers are employed in our coal mining operations, and we will be extremely happy to cooperate with the government on a gradual implementation of sound safety practices in our facilities. ‘Gradually’ is a key word here.” A similar note was struck by Nino Zambakhidze, Georgian Farmer Association’s Chairwoman, who recently met President Trump together with a group of female leaders from around the world. “President Trump believes in America First strategy,” stated Nino, “and I believe in Georgia First. Georgian farmers, members of our association, are not able to

comply with the traceability and other food safety requirements. We should not put the cart of EU regulations before the Georgian farmer’s horse. First, we should develop our agriculture and only then worry about traceability. For now, we hardly have any export-worthy products to trace.”

AND CONSTRUCTIVE CRITIQUE The only dissenting voices in the crowd belonged to a couple of civil society organizations. David Chipashvili of the environmental watchdog Green Alternative was quite blunt in his assessment: “The government is deceiving us. They say they care about jobs, but what they really care about is people’s votes. Yes, I understand that imposing EU-style environmental regulations may cause some difficulty to our manufacturers, but why should we care? Manufacturing has never been a traditional Georgian thing, and for good reasons. Our ancestors have always believed that freedom is in the mountains. We should take good care of our mountains – they are our past and our future, the ultimate guarantee of the survival of the Georgian nation. Manufacturing is based on the exploitation of workers, on slave labor. Industrial capital moves to countries with the cheapest labor, and it is perfectly fine with me – let other people work in terrible assembly line jobs, sewing clothes or packaging. This is not how we, the proud Georgian nation, see the future of our ‘good boys’ (kargi bichi).”

Gela Kvashilava of the NGO Alliance for Road Safety lamented the delay in the implementation of tougher taxi market regulations. “Any leniency in the enforcement of road safety measures, be it technical inspections or anything else, translates into additional accidents and loss of life,” Kvashilava explained his position. “If it were up to us, we would take off Georgian roads about 70% of old vehicles. Tbilisi’s city center should be declared a pedestrian zone. Let’s go back to our horse riding traditions, to our centuries-old rustic ways of life. Alexander Chavchavadze was a pioneer of European-style carriages in the 19th century, and what happened to him? As we all know, he died in a carriage accident. How can we not learn from history?” In closing, Prime Minister Bakhtadze reiterated the Georgian Dream coalition’s determination to take further steps beyond the Association Agreement, toward a deeper and more comprehensive integration, including sectoral integration. “Our decision today serves only one purpose: to allow Georgia enough time to make necessary adjustments. We want to be a part of Europe, but cannot afford EU-style bureaucracy, at least not immediately”.

ABOUT THE AUTHOR: Eric Livny is Founder and President at Tbilinomics Policy Advisors and Chair of Economic Policy Committee at the International Chamber of Commerce (ICC Georgia).

NGO: Orthodox Church Receives Greatest Financial Support from the State

Image source: Netgazeti

BY THEA MORRISON

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and totaling 1,714,822 m2 and a total of GEL 1,379,700 million were allocated in 20142018 from the State Reserve Fund for the Orthodox Church

of Georgia, which is the major confession in the country and usually receives the greatest support from the state. The information was released by the Georgia-based non-governmental organization the Human Rights Education and Monitoring Center (EMC). The organization has studied the practice of transferring financial resources

and property to the Patriarchate of Georgia from the state budget and found that in 2018 the size of immovable property transferred to the Patriarchate significantly increased compared to 2016-2017. The NGO assumes that this is related to the ongoing political processes, including the pre-election environs of the presidential race last autumn. The Patriarchate has many times stated the resources given to the Church are compensation for damages that the Church sustained during the 19 and 20th centuries under the Russian Empire and later under the Soviet Union. "Analysis of these years shows that the government continues to give financial and material resources to the Patriarchate without a legitimate public purpose. The transfer of this real estate to the Patriarchate is not usually connected with the obligation to return the historic ecclesiastical property seized in the

Soviet period," the statement reads. EMC released information provided by the National Agency of State Property. “Immovable property is usually given to the Patriarchate for a symbolic price GEL 1 or totally free of charge. The state, as a rule, never indicates the purpose of property transferal and does not indicate the market value of the property. Accordingly, it is unclear exactly how much property is given to the patriarchate each year,” EMC said. In addition, based on information from the Governmental Administration, the NGO says that apart from giving property to the Patriarchate, the government allocated GEL 1,379,700 GEL for restoration works in the Holy Trinity Cathedral that were carried out last year. According to EMC, existing practices from the state towards the Patriarchate violates the constitutional principle of secularism and creates the practice of

unjustified privilege and support of a particular religious organization. “The prerogative of a particular religious organization creates hierarchies of other religious organizations or minorities and is of a discriminatory nature,” the NGO stressed. The Georgian Patriarchate has the faith of 83%of the country’s population and is the most influential and richest religious organization in Georgia. The relationship between the Orthodox Church and the government is regulated by a constitutional agreement which was approved by Parliament on October 22, 2002. This document is considered one of the highest legal acts in Georgia after the Constitution, giving the Church privileges that are incomparable to the rights and privileges received by other religious communities. In addition to this, the Church is free from taxation.


BUSINESS

GEORGIA TODAY APRIL 2 - 4, 2019

9

Georgian Organic Producers Present at BioFach 2019 in Nurmberg BY LISA MAIER

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hemachineryrattlesthrough the factory in the suburbs of Tbilisi. Juices fill small bottles, which are packaged collected on pallets before being sent to foreign markets worldwide. Georgia's Natural Aromaproduct is one of the largest export oriented companies specialized in processed fruits and vegetables in Georgia. “We started producing juices for other global brands, then we decided to develop our own products and came up with our signature line of juices, which we've been pushing actively for two years," Vladimir Gugushvili, General Director of Aromaproducts, told GEORGIA TODAY. "We're proud that 'Georgia's Natural' is becoming a global brand. We had some doubts initially that we had emphasized too much on Georgia by using it in the brand's name, but we decided to stick with it and we've had positive feedback. Georgia is well recognized as a growing country for organic produce and we can benefit from this trend. "We export to 25 countries on five continents: European countries, China, Malaysia, Jordan, Israel, UAE, Korea, Saudi Arabia, USA, Australia and now we're starting to send to Vietnam; so, step by step it is getting better known and recognized." Aromaproduct has earned several certifications for its premium organic products, all produced and filled in Georgia. “The company philosophy is to create super healthy products which are at the

same time nice to drink! International buyers know Georgia and especially its potential for organic products. They're looking into Georgia more and more." Georgia took part in the BioFach trade fair in Nuremberg as an exhibitor for the first time in 2019. Two Georgian organic food producers were exhibiting their products and putting their companies into the mindset of international buyers. The exhibition was a great success for both 'Georgian Herbs LLC' (herbs.ge) and 'Georgia's Natural Aromaproduct' (aromaproducts), who managed to gain attention and orders from numerous international buyers. BioFach is the world's leading trade fair for organic food, held annually with the purpose of connecting organic producers from all over the world and presenting the sector's latest trends. The participating companies are beneficiaries of the International Trade Center’s “Eastern Partnership: Ready to Trade” project, funded by the EU under its EU4Business initiative. The project aims to help small and medium-sized enterprises (SMEs) from Eastern Partnership countries to integrate into global value chains and access new markets, focusing on the EU. The main support is given in producing value-added goods fulfilling international and EU market requirements. The overall objective is to enhance the international trade of SMEs from the six Eastern Partnership countries, focusing on strengthening SME competitiveness and building up value chains in each country. Besides helping companies connect to buyers and consumers, trade fairs are an important place for increasing the sales activity and strengthening the bond between them.

Georgia traditionally being an agricultural country, which has 22 micro-climates allowing a longer harvesting season, is relatively new to the field of sustainable food production. Organic farming is an ongoing and increasing trend worldwide due to consumer demands, which are characterized by a rising consciousness of the danger of pesticides and conventional farming. Georgia’s natural resources, the country’s various microclimatic zones and its rich and pesticidefree soil, mark an ideal condition for organic farming. 'Georgian Herbs LLC,' who, together with 'Aromaproducts' represented Georgia at this year's BioFach, is a leading supplier of high quality natural medici-

nal herbs, roots, seeds and berries. The brand exports 500 tons to different international partners in Germany, France, Poland, India and Morocco. Soso Kobakhidze, the General Director of the brand, shared his impressions of the BioFach 2019 with GEORGIA TODAY. “Biofach helped us to gain more international partners. We had meetings nearly every hour and created new collaborations. Macedonia is going to be a new big partner, and we made new contacts with partners in France and Germany. It was the most productive trade fair we have participated in in the last few years. "'Georgian Herbs LLC' organizes wild harvesting, cleaning, drying and cutting

of herbs, and later packs them for wholesale and export. "The company also promotes its social impact in the regions of Georgia. Before, these herbs were not collected at all. They were growing in the forests and on agricultural land as a side or even waste product of agriculture. The farmers used to pick it and throw it away because it took necessary nutrition from the main agricultural products. We trained people in the regions to collect herbs in a sustainable way. We wanted to stop the waste of a resource for the future. Now, more than 100 people are working, collecting in the fields, year round. We supported a very small subsector development in Georgia with social impacts in the regions," Kopakhidze told us. The company is also planning to produce packaged products for retail. Other future plans involve gaining more certifications like HACCP, Fairtrade, Farewell and Kosher. The trade fair showed the necessity of international recognized certifications on the international organic market. “Georgia, despite its potential, still needs to develop more organic producers and organic high-end products. Right now, it is still hard to compete with the international presence of Europe, the US, Turkey and even with other Eastern Partnership countries who have more organic companies than Georgia. But my assumption from the this year‘s trade fair is still more than positive. Georgia is definitely known for its agricultural potential, especially in the organic field, and it is step by step, through trade fairs like Nuremberg, getting better known in the international organic producer community."


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BUSINESS

GEORGIA TODAY

APRIL 2 - 4, 2019

Salaries of State Executives Exceed $60,000 BY AMY JONES

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ecades of corruption coupled with low average salaries in Georgia means the salaries of state employees are of particular national interest. Last week, Forbes Magazine Georgia listed the salaries of several directors of state organizations. During the first nine months of 2018, state organizations spent 717.3 million GEL on salaries. An audit conducted by the Budget Monitor revealed that bonus costs amounted to an additional 1% of remuneration costs and supplemental expenditure accounted for 14% more, totaling an additional 141.7 million GEL. Particular attention was paid to the newly created Pension Agency, where appointed council members should earn no more than $60,000 per year. Nonetheless, a high-ranking official earns more than this amount. Representatives at other regulatory agencies and state companies earn similar amounts. However, it should be noted that some operate independently and most generate profit.

The salaries of the 10 highest paid employees amount to $1.7 million per year. In 2017- 2018, these were the managers of state organizations who, according to Forbes Magazine, were paid the most: 1. Executive Director of the Partnership Fund – David Saganelidze In three years, Saganelidze’s salary totaled 714,000 GEL. He is also thought to have received 404,250 GEL in bonuses during this time. Over a 4-year and 3-month period, his bonuses totaled over 1.1 million GEL. 2. Director of Georgian Railway – Davit Peradze The Georgian Railway, owned by the Partnership Fund, is directed by Davit Peradze. His salary is 17,500 GEL per month or 210, 525 GEL per year. 3. General Director of the Georgian Oil and Gas Corporation – Giorgi Bakhtadze The Partnership Fund holds a 100% share in the Oil and Gas Corporation and is therefore state-owned. Bakhtadze is said to earn 14,500 GEL per month or 175,000 GEL per year. 4. Head of Georgian State Electrosystem – Sulkhan Zumburidze Sulkhan Zumburidze was Head of Electrosystem from 2017 to 2018. From 2013 to 2017, he received more than 1.4 million

GEL, making him one of the highest paid employees. His salary averaged 28,000 GEL per month, or 341,000 GEL per year. 5. General Director of Electricity System Commercial Operator (Esco) – Vakhtang Ambokadze Ambokadze is thought to have received 645,046 GEL over the past five years, averaging a salary of 11,000 GEL per month or 133,000 GEL per year. 6. Chairman of the National Energy and Water Supply Regulatory Commis-

Image source: Advokatveiledning

sion – Irina Milorava In 2018, Irina earned 151,500 GEL as Chairman compared to 165,000 GEL in 2016. 7. Chairman of the National Communications Regulatory Commission – Kakha Bekauri Bekauri is one of the highest earning chairmen in Georgia. In 2018, he earned a salary of 241,376 GEL. Over the past five years, he has earned more than 1.1

million GEL. 8. President of the National Bank – Koba Gvenetadze Gvenetadze earned 243,000 GEL as President of the National Bank in 2018, amounting to 20,250 GEL per month. In addition, Gvenetadze earned 165,000 and 78,000 GEL as Council member. His total earnings

totaled more than half a million GEL. 9. Vice President of the National Bank – Muraz Kikoria The former Vice President of the National Bank earned 137,391 GEL per year, or 11,500 GEL per month. He also earned an additional 78,000 GEL as a board member.

EU-funded Projects in Georgia Present their Achievements BY GABRIELLE COLCHEN

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or the 10th anniversary of the Eastern Partnership, Georgia organized an informal gathering with leading media representatives to discuss the results obtained through EU-funded programs. GEORGIA TODAY was among the attendees. The EU Cross Border Cooperation (CBC) Black Sea Program presented the innovative waste management practices of the Georgian city of Kutaisi. Georgian basketball player Anatolii Boisa, featured in the promotional video produced by the EU-funded project on plastic-free rivers, came to the event to support the initiative. Ketevan Tskhakaia, Executive Director of Imereti Scientist’s Union SPECTRI, is in charge of the waste management project. She explains: “We are implementing a project supporting waste management in Kutaisi. They are several official documents which have been adopted by the government, such as national strategies of waste management, and each municipality has adopted these and has its own municipal plan of waste separation. Our project is about plastic, paper and glass separation, and we collect them separately in Kutaisi. Another part of the project is composting, with a composting field for green waste to be built.” Poti is another city where waste management will be implemented for a cleaner Black Sea. The city is located on the Black Sea coast and the bank of the Rioni River, which makes it a strategic point. They will take the example of Kutaisi’s project for their own success. “We also have awareness activities such as clean up actions for school students

Image source: www.euneighbours.eu

and training for target groups or summer camps,” Tskhakaia noted, adding that she is very optimistic about the population’s motivation to take action for waste management. “Projects are already proving very successful because civil awareness is quite high.” The Eastern Partnership Territorial Cooperation project then presented its initiatives on cultural and economic cooperation between Georgia and Azerbaijan and Georgia and Armenia. GEORGIA TODAY met Tamar Tumanishvili, who is participating in the “meet

your neighbor” project which aims at uniting Armenian and Georgian people through a film-making initiative. Tamar told us: “In total, 12 films have been made with the goal to connect Georgians and Armenians. In the region where I live, which is at the border with Armenia, many Armenians live in isolation and some of them do not even speak Georgian. The existing stereotypes create difficulties in relations and we need to meet and get to know each other. In the project, there were 12 participants from Armenia and 12 from Georgia and we

were able to become friends and work together.” The EU-funded program ‘Mayors for Economic Growth’ showcased the best practices of two Georgian municipalities, Gori and Bolnisi. The goal is to use EU funds to support agribusiness and tourism development in the regions. Zviad Archuadze, the program coordinator in Georgia and Azerbaijan told us: “We help our municipalities to be more active in job creation and in the direction of local economic development. We started in 2017 and we now have 43 out

of 46 municipalities taking part in the project.” How the money is used is kept transparent. Archuadze explained that the mayors are interested in making good use of it and that he, along with the delegation, is in charge of checking how the money is spent. He stated: “What is important is that it is the first time that Georgian municipalities have received so much funding from the EU and had to manage the money by themselves, and I think that everything is going well.” The EU framework program for Research and Innovation, Horizon 2020, also presented its activities in Georgia, including the CURE project, aimed at finding solutions for asthmatic diseases. Finally, students benefiting from Erasmus+ programs shared their experiences. The programme enables bachelor students to go abroad and study there for maximum of a year, while being entirely funded by the EU. Mariam Bitsadze told us: “The competition to enter the program is very strict, but I was given the chance to study in Finland, in the University of Helsinki. I study international relations and I was interested in diplomacy. Thanks to Erasmus+, I had the exceptional opportunity to work for Georgia’s Embassy in Finland. The experience also enabled me to become a more independent person. Erasmus+ connects people and I encountered people of different nationalities who became very close friends.” Esma Gumberidze added, “I was in Germany for the first semester and then in Romania for the second. Thanks to Erasmus+, I had the opportunity to live alone. It was definitely an asset for me, giving the fact that I have a disability [Esma is blind]. In Georgia, I would not have had this kind of opportunity.” All the projects presented were inspiring and the meeting ended around a lunch and with an informal Q&A session.


BUSINESS

GEORGIA TODAY APRIL 2 - 4, 2019

Grant Thornton Georgia Welcomes A New Partner

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he number of Grant Thornton Georgia partners has increased. Grant Thornton Business Process Outsourcing head - Paata Shurghaia became Grant Thornton partner from March 2019. Vakhtang Tsabadze – Director and Managing Partner continues leading the company. Grant Thornton is one of the world’s leading professional services networks, providing independent assurance, tax and advisory services to private and public organizations. Grant Thornton Georgia was established in 2005, however the network member firms have been working on various projects in Georgia since 1999. Paata Shurghaia joined Grant Thornton Georgia as the Head of Business Process Outsourcing Department in 2016. He has multiple years’ experience working in consulting companies in Georgia and the UK. Paata is a Business Process Outsourcing professional with 10 years’ working experience in this field, which includes working for private, public and non-commercial organizations. He has been involved in large-scale global outsourcing projects in European and Asian countries. He is a PhD Candidate and has got his MBA in finance from Cardiff University, UK. He is also a member of the Authorization Council of Higher Educational Institutions and is an associate professor and an invited lecturer at a number of higher education institutions, where he delivers lectures & seminars in Financial Accounting, Managerial Accounting, Georgian Tax Legislation, International Taxation and Business Communication subjects. “Partnership is a new form of collaboration. It is a tool, a platform which should guarantee the creation of new capabilities and contribute to company’s rapid development, in response to our market” Shurghaia notes. “I congratulate Paata on his new status,” Tsabadze said. “It is of crucial importance to involve a new partner, who comes from our company, has expe-

rience of working with us, and knows the company, its culture and aspirations well. I am sure, together, we will make our company even more successful and achieve better results on the Georgian market.” 2018 was a very successful year for the member companies of the Grant Thornton International network. In comparison with the previous year, the firm recorded overall global revenue growth of 9% across the network in 2018. This is the network’s highest rate of growth recorded during the last six years. In February 2019, International Accounting Bulletin published the global results of audit and consulting companies in 2018, with Grant Thornton ranked 6th on the list. International Accounting Bulletin carries out independent research without involvement of audit-consulting companies and presents fully transparent results. Along with the global results, 2018 proved to be a successful year for Grant Thornton Georgia in terms of revenue, as well as in the respect of new projects and partners. Revenues of the company increased by 11% in Georgia, while the number of employees augmented by 20%. With the involvement of the partners, 2019 is expected to be even more successful for the Grant Thornton Georgia team.

ABOUT GRANT THORNTON Grant Thornton is one of the world’s leading organizations of independent assurance, tax and advisory firms. Grant Thornton firms help dynamic organizations unlock their potential for growth by providing meaningful, forward-looking advice. Proactive teams, led by approachable partners in these firms, use insights, experience and instinct to understand complex issues for privately owned, publicly listed and public sector clients and help them to find solutions. More than 53,000 Grant Thornton members in over 140 countries are focused on making a difference to clients, colleagues and the communities in which we live and work.

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BUSINESS

GEORGIA TODAY

APRIL 2 - 4, 2019

TBC Capital Presents Residential Real Estate Sector Analysis Results BY KETEVAN KVARATSKHELIYA

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n March 27, the representatives of TBC Bank held a presentation of the results of the Residential Real Estate Sector Analysis at the Sheraton Grand Tbilisi Metechi Palace. The decision to carry out the study was made based on the growing demand of market participant developers to have accurate and relevant information about the sector. Nino Tskhadaia, the Head of Research and Brokerage of TBC Capital, welcomed the guests and briefed them about aim of the study. “Within the scope of the research, we mostly concentrated on the capital city,” she said. “However, we clearly understand that there are many interesting regions for you, as the major players of the market, and these we will introduce to you.” Vakhtang Butskhrikidze, the CEO of TBC Bank, then took to the stage to speak about the importance of the presentation and the future plans of the Bank. “Corporate Business represents one of the main priorities of TBC and we aim to establish and enhance the long-term cooperation with this sector,” he said, adding that, “The Real Estate field is one of the fundaments of the Georgian econ-

omy.” The CEO also expressed his gratitude to Tbilisi City Hall for having delivered accurate and vital statistical data to enable them to carry out the research. He then focused on the goals of TBC Bank to facilitate the business management process for companies and the lives of customers, with the goal of having 10 million clients by 2022. At the end of his speech, Butskhrikidze announced some news regarding Silknet, the partner of TBC and one of the largest companies operating in Georgia, who has successfully placed Euro-Obligations worth EUR 200 million. The results of the TBC Capital study were as follows: The volume of the Tbilisi residential real estate market amounted to 4.1 billion GEL in 2018, of which 65% was driven by newly constructed apartment transactions. The real estate of apartments increased by 31%, contributed to by the availability of mortgage loans, as well as new regulations announced by the National Bank. The number of approved mortgage loans in January 2019 reduced by 47% in comparison with the same period of the previous year. In 2018, a major increase in demand was seen on premium and medium segment apartments. The majority of sales in the central districts of the city came as a result of the demand for apartments

with greater square-meterage, while sales of relatively small flats dominated in the suburbs. Due to the recent changes in the regulatory system of the construction field, the number of permits issued for the construction of real estate decreased by 45% compared to the previous year. Pursuant to the TBC Capital investigation, the reduction of permits will be reflected in the completion of construction by 2021. In comparison with the previous year, the average price for transactions in 2018

increased by 6%, and in 5% in USD. Mtatsminda holds the status of most expensive district of the capital city. Compared to similar cities, prices in Tbilisi are lower in the suburbs, as well as in the city center, which indicates the possibility for future growth. In the longer term, TBC Capital predicts the slow and steady augmentation of residential real estate prices, with a balanced growth to be maintained in the short-term. TBC Capital is the subsidiary and licensed brokerage company of TBC

Bank offering investment banking services to customers. Since 2017, TBC Capital has been a part of TBC Bank’s corporate and investment banking business. The main business decisions of the company are financial consultations and credit, rating services, issuance of bonds and shares, investment research and brokerage activities. After the speeches delivered the by the representatives of TBC Bank, the presentation continued in a discussion format.

HUAWEI Days at the Brand Service Center BY MARIAM MERABISHVILI

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here can be moments when, accidentally or unexpectedly, you have to suffer because of your phone. Maybe you experience some software flaws, or you drop your phone and the screen cracks: all particularly painful for smartphone owners to deal with. But when the company offers to change a damaged screen at a special rate and gift a new battery into the bargain, the pain and stress fade away.

As such, HUAWEI has great news for its customers: until April 18, you can change your smartphone's damaged screen at HUAWEI's brand service center for a special price and get a new battery for free! "A complete and undamaged screen is no less important than the functionality of its camera and durability of its battery,” says Salome Melitauri, Sales Manager at the HUAWEI Service Center. “A cracked screen is the most common damage sustained by smartphones, and the purpose of our first one-month campaign is to provide a better financial offer to consumers for changing damaged screens, with the user exempt from the

service charge and paying only the cost of the screen itself. Added to that, clients can take away a free smartphone battery with free replacement service.” HUAWEI's Brand Service Center is located at 7 Ts. Dadiani Street, on the first floor of the Karvasla shopping center. The center fully responds to 2018- 2019 world standards of HUAWEI Brand Service Centers, offering a modern design, comfortable environment, fast service, direct communication with engineers, and a customer destination zone, where you can find interesting video material on the latest products from the brand. "Customers already make good use of

our center for technical assistance,” Melitauri notes. “I can say with pride that in the course of the warranty period, requests for services are much lower compared to other big brands. This fact is clear proof of the quality of HUAWEI. We’ll have regular campaigns, with the next to be related to software updates. We’re also thinking to offer a special price on our accessories because the brand's original screen protectors, phone cases and charger devices provide HUAWEI users with device functionality and protection from damage.” HUAWEI products and services are available in more than 170 countries and

are used by a third of the world's population. According to the 2015 data, the company is at the third place at the largest smartphone market in the world. There are 16 research and development centers operating worldwide in the USA, Germany, Sweden, Russia, India and China. HUAWEI Consumer BG is one of HUAWEI's three business units, mainly focusing on Smartphones, personal computers, tablets and cloud services. The HUAWEI Global Network is based on 20 years’ experience in the telecommunications business and serves to provide innovative technologies to customers around the world.


BUSINESS

GEORGIA TODAY APRIL 2 - 4, 2019

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First ‘Golden Key’ in Georgia Awarded to Radisson Blu Iveria Concierge

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adisson Blu Iveria Tbilisi’s Concierge, Otar Bakhtadze, was honored with a Golden Key, the first such award to be given in Georgia, at the ‘Les Clefs d'Or’ 2019 Annual Meeting held this March in Sochi. Les Clefs d’Or is a prestigious union that brings together the most dedicated and skilful concierges from all over the world, who follow the motto ‘Service through Friendship.’ This year, candidates from 60 hotels took part in an annual contest presenting creative projects. Ten of them were honored with a Golden Key. Bakhtadze presented a very interesting project named `Path Sakartvelo` - a puz-

zle with a Georgian Map. “Georgia is a very small country, unique in its variety of culture. Our country attracts tourists from all over the world and offers them unforgettable experiences. Considering this, I decided to make a Georgian map puzzle. It is a unique experience to feel like a local, and this is not just a simple puzzle, but is a product consisting of 12 pieces – eleven of them regions and the twelfth piece Tbilisi, the capital of Georgia. With each piece you insert, you can see how closer you are to your goal! And then you have it- Georgia in the palm of your hand!” he explains. To make his project more interesting, Bakhtadze decided to connect it with the booking of tours for guests. In order to make the tour unique, guests have to complete a quest related to Georgian culture, capture it in a photo and show it to the concierge. In return, the guest receives the puzzle `Path Sakartvelo` as a gift.


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BUSINESS

GEORGIA TODAY

APRIL 2 - 4, 2019

New Campaign "Georgia without Tobacco Smoke" Established on Anti-Tobacco Day BY MARIAM MERABISHVILI

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n Georgia, Anti-Tobacco Day, ‘Georgia without Tobacco,’ is celebrated annually on March 29, the aim of which is to raise public awareness about the importance of a tobacco-free environment and the real threat of tobacco consumption. The event was organized by the Ministry of IDPs from the Occupied Territories, Labor, Health and Social Affairs of Georgia, the Parliament of Georgia, and the National Center for Disease Control and Public Health. It is important that Anti-Tobacco Day be devoted to a variety of priority topics annually. In connection with this day in 2019, the basis for the new public movement ‘Georgia without Tobacco Smoke’ was set. The movement, which has been joined by many well-known faces, allows any citizen to promote positive changes in the country for a healthy future and to join the campaign itself.

Presentation of a tobacco component embedded in the 112 mobile application was also held, named Tobacco Control. At the launch, those interested could find out more about the tobacco control law and how to deal with violations when seen. Participants also got information about the harmful influence tobacco has on the health and how to avoid smoking. If you see someone breaking the smoking law, you can call or message 112 using the easy mobile app. Messages will take the form of Live Chats, while, if you call, you can request to remain anonymous. The campaign launch was attended by ministry representatives, members of the Parliament of Georgia, representatives of 112, the National Center for Disease Control and Public Health, and non-governmental organizations, and supporters of the member bodies of the Governmental Commission of Tobacco Control. Tobacco consumption is one of the most acute and, at the same time, preventable problems in the public health sphere. The global tobacco epidemic kills around 7 million people annually,

including 890,000 non-smokers who die due to secondary smoke inhalation (passive smoking). Economic-losses due to tobacco consumption show that direct healthcare costs and indirect costs (premature death and smoking-related costs at work) are 824.9 million GEL, which is 2.43% of the country's annual GDP. Thanks to the execution of four priority articles on tobacco control (Taxation of tobacco products, Prohibition of smoking in public spaces, Advertising tobacco products, promotion and sponsorship, and Tobacco product packaging and marking), in 15 years it is foreseen that Georgia will have prevented 53,100 deaths, reducing the overall economic costs associated with tobacco by 3.6 billion GEL. By putting 1 GEL into the control of tobacco, the country will receive 161 GEL in 5 years and 357 GEL in 15 years as a reverse investment. In 2017, Parliament adopted a package of legislative amendments to the new generation of tobacco control (Laws on Tobacco Control, Advertising, Broadcasting, Lottery, Gambling and conduct-

ing Winning Games; Code of Administrative Offenses) , with which Georgia is becoming an advanced country in the region in the fight against the tobacco epidemic, morbidity caused by its con-

sumption and mortality rate. The results of monitoring show that the law enforcement has been running effectively since May 1, 2018 to date. The level of execution is 96% in the sector.

GUAM Could Be Turned into an Effective Bloc BY EMIL AVDALIANI

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UAM (initially called GUUAM), an organization for democracy and economic development, was established in 1997 following the collapse of the Soviet Union. It served as one of the first regional models which linked the Black and Caspian seas, and it had a primarily economic role. This was a time when the newly independent states were keen to get a geopolitical initiative in their hands. Russia was weak, while the West seemed powerful. The participant states of the project are interesting from a geographic point of view. Ukraine, controlling most of the Northern Black Sea littoral, Azerbaijan as a starting point of crucial trade and a resource corridor, and Georgia in between serving as a connection point for the two seas. At one point, Uzbekistan was a member, which potentially allowed the GUUAM (abbreviation of the participant states: Georgia, Ukraine, Uzbekistan, Azerbaijan, and Moldova) to extend to the heart of the Central Asian region. The GUUAM member states has one common aim of limiting Russian geopolitical influence through being able to dispose of/export their own resources to world markets and not to Russia. However, the project failed to work in the late 1990s and early 2000s. Though the prospective alliance came into being against the background of Russian geo-

political weakness, nevertheless, the GUUAM members were still heavily reliant on Russian economic, military and, generally, political benevolence. These circumstances limited the effectiveness of the project. The aim of the Russian state in the 1990s, when Moscow was constrained by its inner limitations, was to prevent

any western-led projects that could draw resources from the South Caucasus and Central Asia. Moreover, the Russians, quite rightly, also feared that such nascent economic projects would eventually evolve into political entities. As said, GUUAM was one such initiative and it took Moscow's constant attention to forestall its further development.

As a result, Uzbekistan withdrew from the project in 2005 and Azerbaijan, Georgia, Ukraine and Moldova, with all their weaknesses, were unable to keep up the prospects of the GUAM project. Moreover, although all member states shared an inner distrust of Russia, they still failed to coordinate their foreign policy moves with one another.

Still, as with many similar regional projects, the GUAM initiative might be weak, but it is far from dead. One of the rules for regional cooperation projects is that their effectiveness depends on foreign support and the geopolitical situation in the region. As such, a reinvigoration of the project has been seen of late, with the leaders of the member states renewing their meetings at the highest possible level. In 2017, the 20th anniversary of GUAM was celebrated, while in 2018 yet another meeting was held with the participation of high dignitaries. One might argue that the geopolitical situation in the South Caucasus and around the Black Sea now favors the reinvigoration of the GUAM initiative. All the member states, except for Azerbaijan, share difficult relations with Russia. Ukraine, Georgia and Moldova have Russian troops on their territory, while even Azerbaijan must try to balance the Russian influence. All member states now consider themselves as part of a single front to constrain Russian geopolitical moves. Moreover, in the 1990s and early 2000s, GUAM members had poorer energy and transportation links than are seen in the 2010s. The Baku-Tbilisi-Kars railway is one of those projects which allows the GUAM states to circumvent Russia. From a global perspective, GUAM could become an interesting project for the EU and the US. Both confront Russia’s moves across the Eurasian landmass and the two might view GUAM as a good basis for creating a veritable geopolitical front for Russia’s containment.

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BUSINESS

GEORGIA TODAY APRIL 2 - 4, 2019

‘Pink Space’ - Center for Oncopatient Assistance Opens in Tbilisi BY MARIAM MERABISHVILI

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he Pink Space Center for Oncopatient Assistance has been opened in Tbilisi. Pink Space represents a joint project of Europe Dona Georgia and the Avon Foundation, the purpose of which is to provide psychosocial support for oncopatients, increase their awareness of treatment financing issues, and promote the seeking of the right medication. Pink Space is an open door for patients dealing with breast cancer diagnoses. The Pink Space staff are made up of patients who themselves have overcome such illnesses, and they will help guide oncopatients in how to register with the relevant state programs, how to get aid for certain medical services and will give advice on other issues. Because Pink Space was created for charitable purposes, all consultations are free of charge. The Pink Space Hotline allows oncopatients living in the regions to get full information from the center. The Center itself is at 10 Pekini Street and is open Monday - Friday, from 10:00 to 18:00. Pink Space is funded by Avon’s Pink

Ribbon charity fund. The money received from every charity product sold by Avon is collected in the Pink Ribbon fund and is used for various initiatives in the fight against breast cancer. In 2019, the Avon Foundation allocated 50,000 GEL, which will be fully utilized to run Pink Space. Europe Dona Georgia is an organization headed by former patients who help other patients to overcome this severe disease. Europe Dona Georgia’s mission is to protect the interests of women with breast cancer and to aid their access to high quality healthcare services based on the guidelines, in order to achieve a decline in cases of breast cancer deaths and increase in recovery rates countrywide.

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15

Pope Visits the Kingdom of Morocco

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is Holiness Pope Francis had a two-day official visit to the Kingdom of Morocco this weekend, March 30-31, at the invitation of His Majesty Mohammed VI King of Morocco. Taking into consideration the religious status and spiritual responsibility assumed by the King of Morocco as the Commander of the Faithful and His Holiness the Pope, their historic meeting contributes to promoting the values of fraternity, peace and tolerance among peoples and nations and to consolidating interreligious dialogue, understanding and coexistence. The Constitution of the Kingdom of Morocco guarantees to everyone the freedom to practice one’s faith. Pope Francis is the second Pope to visit Morocco. At the invitation of the late King of Morocco, Hassan II, Pope John Paul II paid an official visit to Morocco in 1985. This visit was the first undertaken by St. John Paul II to a majority Muslim country. He was given a warm welcome on the streets of Casablanca and spoke at the stadium there, a landmark speech that emphasized the highest ideals of Islam and Christianity in the presence of 80,000 young Moroccans. The visit of Pope Francis as a "pilgrim of peace and fraternity" to Morocco, a land of coexistence, tolerance and mod-

Journalists: Tony Hanmer, Zaza Jgarkava, Maka Bibilashvili, Dimitri Dolaberidze, Vazha Tavberidze, Nugzar B. Ruhadze, Samantha Guthrie, Amy Jones, Thea Morrison, Ana Dumbadze, Ketevan Kvaratskheliya Photographer: Irakli Dolidze

eration, will contribute to promoting interreligious dialogue and to fostering peace and fraternity between Christians and Muslims. In a video message on the eve of his visit, Pope Francis thanked God for granting him the opportunity to visit Morocco. “I come as a pilgrim of peace and fraternity, in a world that greatly needs it,” the Pope said. He concluded his message with these words: “Dear Moroccan friends, I express my heartfelt thanks for your welcome, and above all for your prayers. And I assure you of my own prayers for you and for your dear country.”

Website Manager/Editor: Katie Ruth Davies Layout: Misha Mchedlishvili Webmaster: Sergey Gevenov Circulation Managers: David Kerdikashvili, David Djandjgava

During his visit, the Pope met with the Moroccan authorities, civil society and the diplomatic corps, followed by a visit to the Mausoleum of Mohammed V and a meeting with His Majesty King Mohammed VI at the Royal Palace in Rabat. His Holiness the Pope also visited the Mohammed VI Institute for the Training of Imams, Morchidines and Morchidates, had a meeting with priests, religious, consecrated persons and the Ecumenical Council of Churches in the Cathedral of Rabat, as well as with migrants on the premises of the diocesan Caritas of Rabat.

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Profile for Georgia Today

Issue #1138 Business  

April 2 - 4, 2019

Issue #1138 Business  

April 2 - 4, 2019

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