Issue #934 Business

facebook.com/ georgiatoday

Issue no: 934/72

• APRIL 4 - 6, 2017

• PUBLISHED TWICE WEEKLY

PRICE: GEL 2.50

In this week’s issue...

MIA Reveals Latest Road Accident & Crime Statistics NEWS PAGE 2

FOCUS

ON COOPERATIVES

The ENPARD support is drawing to a close. How will the cooperatives survive?

Joint Marketing – A Key to Success?!

ISET PAGE 4

The Biltmore Hotel Tbilisi Joins Earth Hour Movement

PAGE 4

MIA Reveals Latest Road Accident & Crime Statistics Two 18-year-olds Aim to PAGE 7

BY THEA MORRISON

T

he statistics of the Ministry of Internal Affairs (MIA) of Georgia, provided by the non-governmental organization Georgian Alliance for Safe Roads, show that in JanuaryFebruary 2017, 905 traffic accidents were recorded, which left 84 people dead, among them five teenage victims.

During those two months, in total 1,277 people were injured in car accidents; 265 were pedestrians, among them 136 teenagers.

Continued on page 2

Fix the E-Waste Problem in Armenia PAGE 11

Georgia Marks 10th Anniversary of NATO Days POLITICS PAGE 14 Prepared for Georgia Today Business by

Markets As of 24ͲMarͲ2017

STOCKS Bank of Georgia (BGEO LN) GHG (GHG LN) TBC Bank Group (TBCG LN)

COMMODITIES Crude Oil, Brent (US$/bbl) Gold Spot (US$/OZ)

INDICES

Price

w/w

m/m

Price

w/w

m/m

GBP 31.21

+1,8%

+9,0%

GEOROG 04/21

105.31 (YTM 5.28%)

+0,1%

Ͳ0,2%

GBP 3.60

+2,2%

Ͳ2,7%

GEORG 04/21

BONDS

110.73 (YTM 3.97%)

+0,1%

Ͳ0,7%

GBP 14.68

Ͳ1,9%

+3,3%

GRAIL 07/22

110.56 (YTM 5.42%)

+0,2%

+0,1%

BGEOLN 07/23

101.06 (YTM 5.80%)

Ͳ0,1%

Ͳ0,9%

Price

w/w

m/m

50,80

Ͳ1,9%

Ͳ9,3%

CURRENCIES

Price

w/w

m/m

1 243,57

+1,2%

Ͳ1,1%

GEL / USD

2,4400

Ͳ1,8%

Ͳ5,4%

GEL / EUR

2,6345

Ͳ1,1%

Ͳ3,3%

Price

w/w

m/m

GEL / GBP

3,0432

Ͳ1,2%

Ͳ5,4%

FTSE 100

7 336,82

Ͳ1,2%

+1,3%

GEL / CHF

2,4612

Ͳ1,1%

Ͳ3,9%

FTSE 250

18 980,44

Ͳ0,6%

+2,1%

GEL / RUB

0,0428

Ͳ1,4%

Ͳ3,4%

DAX

12 064,27

Ͳ0,3%

+2,2%

GEL / TRY

0,6754

Ͳ0,9%

Ͳ5,6%

DOW JONES

20 596,72

Ͳ1,5%

Ͳ1,1%

GEL / AZN

1,4319

Ͳ1,6%

Ͳ0,5%

5 828,74

Ͳ1,2%

Ͳ0,3%

GEL / AMD

0,0051

Ͳ

NASDAQ

Ͳ3,8%

MSCI EM EE

149,18

+0,7%

+0,9%

GEL / UAH

0,0900

Ͳ2,4%

Ͳ6,1%

MSCI EM

969,13

+0,4%

+2,7%

EUR / USD

0,9261

Ͳ0,5%

Ͳ2,2% Ͳ0,1%

SP 500

2 343,98

Ͳ1,4%

Ͳ1,0%

GBP / USD

0,8018

Ͳ0,6%

MICEX

2 039,77

+0,1%

Ͳ2,5%

CHF / USD

0,9914

Ͳ0,7%

MSCI FM

2 591,97

+0,2%

+0,8%

RUB / USD

56,9344

Ͳ0,4%

Ͳ2,5%

GT Index (GEL)

1 177,93

Ͳ

+0,1%

TRY / USD

3,6119

Ͳ0,7%

+0,1%

GT Index (USD)

887,17

+2,3%

+5,1%

AZN / USD

1,7050

Ͳ1,1%

Ͳ5,0%

Ͳ1,6%

2

NEWS

GEORGIA TODAY

APRIL 4 - 6, 2017

MIA Reveals Latest Road Government Points to Positive Tendencies Accident & Crime Statistics in Country’s Economic Growth

BY NINO GUGUNISHVILI

P

Continued from page 1 Last year’s official crime statistics, released by the deputy Interior Minister, Shalva Khutsishvili, show that in 2016 a total of 35,997 crimes were reported in the country and of these, 20,661 (57.4 percent) were solved. The rate of solved crimes decreased by 2.94 percent in 2016 compared to 2015.

The presentation of the above information was held on Friday at the Joint Operations Center in Tbilisi. The event was attended by the non-governmental sector and journalists.

The report reads that 40.5 percent of crimes took place in the capital, 8.3 percent in Kvemo Kartli, 3.1 percent in Guria, 10.8 percent in Adjara, 8.9 percent in Samegrelo-Zemo Svaneti, 10.5 percent in Imereti, 3.2 percent in RachaLechkhumi and Kvemo Svaneti, 5.4 percent in Shida Kartli, 6.5 percent in Kakheti, 2.7 percent in Mtskheta-Mtianeti and 0,1 percent in Abkhazia.

The Interior Ministry says that the number of certain categories of crimes increased in 2016. According to the official information, the number of robberies, burglaries, premeditated inflictions of injury to human health, illegal pur-

chases or possession of firearms, hooliganism and suicide attempts decreased in 2016 compared to the statistics of 2015.

The cases of domestic violence, theft, purchase, possession or selling of drugs, cyber-crimes, murders and possession of cold weapons increased last year.

The five most commonly reported crimes of 2016 in Georgia were: Crime against property, drug-related offences, crime against health, transport crime and crime against normal government functionality.

The rate of crimes committed by foreign citizens on the territory of Georgia decreased in 2016 compared to 2015, from 943 in 2015 to 661 in 2016.

The top ten list of oreign nationalities who committed crimes in Georgia in 2016: 1. Turkey – 25 percent 2. Russia – 16 percent 3. Azerbaijan – 15 percent 4. Armenia – 14 percent 5. Iran - 5 percent 6. Uzbekistan – 4 percent 7. Ukraine – 3 percent 8. China – 2 percent 9. Nigeria – 2 percent 10. Bangladesh – 1 percent The Ministry of Internal Affairs presents the annual crime statistics every spring.

rime Minister of Georgia, Giorgi Kvirikashvili, noted during the government meeting held last week that 2017 has started with positive trends in the country’s economic growth.

Following the rapid estimates of economic growth for February 2017, the data recently published by the National Statistics Office of Georgia (Geostat), showed that the estimated real Gross Domestic Product (GDP) growth rate was 4.4 percent in February this year,

equaling 4.8 percent for estimated real GDP average growth for January and February 2017, while in the month of January, according to the Geostat data, GDP growth rate amounted to 5.2 percent.

As PM Kvirikashvili noted, the economic growth is defined by positive dynamics in various directions, such as enterprise turnovers, considerable export growth, increased tourist numbers and remittances.

“These numbers show that the Government’s four stage plan is working in its fiscal and structural reform parts and that the budget planned for this year is absolutely realistic. The fact

that we have successfully finalized negotiations with the International Monetary Fund and that today we have a green light to receive financing from international financial institutions means that our plans are realistic and we’re moving on towards their implementation,” the Prime Minister said.

The manufacture industry saw 9 percent growth, transport sector 8.7 percent, construction 12.5 percent, trade 6.1 percent, export of goods 27 percent; tourism revenues increased by 20.4 percent, wine export by 61.4 percent, medical goods export by 88 percent, mineral water export by 27.5 percent and alcoholic beverages by 35 percent.

New York Based Designer Vicente Wolf on Tbilisi Gardens Concept and Design where you can relax. Of course, design plays a crucial role here- from the wall colors, floor coverings and kitchen to a comfortable bedroom. We’ve aligned all of it to our concept and created our line: light pastel colors, a refined and sophisticated atmosphere, top quality materials - all of this to be found in the style of Tbilisi Gardens. Every detail here is well-thought out.

In general, there are several waves characterizing the architecture of Tbilisi.

Some of the buildings and districts are filled with a distinctly Asian spirit. The second wave is the architecture of a later period which brings the atmosphere of a European city, and then there’s the third wave with mixed chaotic constructions. I think what is lacking is greenery and with Tbilisi Gardens we’ve worked to create such an environment. This will not be a tall building lost among other buildings of different sizes, where you’re unable to breath and there’s no space.

WHAT ELSE DISTINGUISHES TBILISI GARDENS FROM OTHER COMPLEXES?

H

ouse Beautiful and Interior Design Magazine named Vicente Wolf one of the ten most influential American designers. Wolf has founded two interior design companies: VW Home by Vicente and Wolf and Vicente Wolf Associates and works on furniture design, and the designing of hotel and private home interiors.

Right now, Wolf is working on the Tbilisi Gardens apartment concept and

design. We met him to find out more.

HOW DID YOUR COLLABORATION WITH GEORGIA BEGIN? Everything started four years ago, when I was offered the chance to get involved in the Tbilisi Gardens project. Since then, I’ve become better acquainted with the lifestyle of Tbilisi citizens, aiming to know what I can propose in particular.

WHAT IS THE CONCEPT OF YOUR DESIGN? Together with the Tbilisi Gardens project manager, we created the concept Light and Space, combining the idea of a green park and an airy sky-scraper. It was truly difficult to create something like this in a city already overloaded with buildings. In the evening, when you get home feeling tired, it’s important to have a comfortable atmosphere where you can easily forget your everyday problems,

Apart from magnificent views, it has four hectares of green land. Exceptional tree species planted by Italian designers will bring a feeling of tranquility, healthy air, and proximity to nature. The inhabitants of Tbilisi Gardens can simultane-

Every detail here is well-thought out

ously live in the center of the city, in its chaos, and at the same time breathe fresh air and enjoy the beauty of nature. Tbilisi Gardens is not just a multi-floor apartment building. The territory is enclosed and the space is safe. There’s a lobby for meetings, while an event hall and a terrace are ideal places for larger gatherings. Tbilisi Gardens will have a swimming pool of Olympic standard and a gym. The project also considers a kindergarten and underground parking.

WHEN IS THE PROJECT DUE FOR COMPLETION? The first inhabitants can move in from 2018, and for full finalization of the project we’ll need six years. Tbilisi Gardens is a very special project for me, one which changed my plans radically and linked me forever to Tbilisi. I’m sure this product will bring changes to the locals, too, and encourage them to want to live differently. ∏

Tbilisi Gardens The First New York Style Skyscraper in Tbilisi 6 Asatiani Str. | +995 322 230 020 | gardens.ge

Safe Environment

Fitness Center

Event Hall

Swimming Pool

Green Area

Kindergarten

For the safety of residents, the whole territory of Tbilisi Gardens is fenced and controlled by security staff.

A 25-meter and children’s pool are located within a total area of 1100 m2, where you can relax and enjoy a healthy lifestyle the whole year through.

A 375m2 fully equipped gym with experienced trainers is available 24/7.

Italian designers have been working to create the green area of Tbilisi Gardens. The location of the building in the garden is idyllic, while the selected trees guarantee the quietness and green environment.

An event hall and magnificent terrace is the right place for louder events and meetings.

A colorful space and caring teachers will always be there for the smallest residents of Tbilisi Gardens.

4

BUSINESS

GEORGIA TODAY

APRIL 4 - 6, 2017

THE ISET ECONOMIST A BLOG ABOUT ECONOMICS AND THE SOUTH CAUCAUS

www.iset-pi.ge/blog

The ISET Policy Institute (ISET-PI, www.iset-pi.ge) is an independent think-tank associated with the International School of Economics at TSU (ISET). Our blog carries economic analysis of current events and policies in Georgia and the South Caucasus region ranging from agriculture, to economic growth, energy, labor markets and the nexus of economics, culture and religion. Thought-provoking and fun to read, our blog posts are written by international faculty teaching at ISET and recent graduates representing the new generation of Georgian, Azerbaijani and Armenian economists.

Joint Marketing – A Key to Success?!

BY SALOME DEISADZE, IRAKLI KOCHLAMAZASHVILI, PHATIMA MAMARDASHVILI

B

ack in 2013, the Government of Georgia (GoG) approved a new law entitled “On Agricultural Cooperatives.” The primary goal of this legislation was to support agriculture and rural development in the country by strengthening agricultural cooperatives. Since then, agricultural cooperatives have been springing up like mushrooms; 13,000 farmers have already been registered in 1,500 cooperatives.

In order to strengthen their capacity, donors led by the European Union have been providing financial assistance as well as trainings and advisory services to cooperatives and their members. According to ENPARD (European Neighborhood Program for Agriculture and Rural Development) 250,000 people have received advice on farming through 59 information and consultation centers, and more than 8,000 farmers have received EU-funded training in agriculture and business administration.

Moreover, the ENPARD cooperative development component, implemented by five consortia led by CARE, Oxfam, Mercy Corps, PIN, and UNDP, has allowed 260 cooperatives to benefit from direct

EU funding. To track the development of these 260 cooperatives, an Annual Cooperative Survey is conducted by the Monitoring and Evaluation working group led by ISET (a partner within CARE consortium). The most recent year’s development of these cooperatives has shown a positive trend in profit generation. In particular, compared to 2014 (the baseline year), the profit of cooperatives increased by 21% on average in 2015 (ENPARD annual cooperatives survey).

While these numbers are impressive and the primary goal – the quantity (a large number of agricultural cooperatives being established) has been achieved, agricultural cooperatives in Georgia still face a lot of challenges. This is the final year of ENPARD support for cooperatives (as we already discussed in a previous blog), which gives rise to the question: who will survive in the long-run?

CONSTRAINTS ON THE SUCCESS OF COOPERATIVES According to the survey, the progress of Georgian agricultural cooperatives is mainly constrained by lack of access to credit, to capital and to markets.

While access to finance and capital is the most discussed problem related to farmers’ cooperatives, little attention has been paid to the issue of access to markets and the constraints that farmers face with product branding, selling and realization.

Figure 1. Constraints on the Success of Cooperatives (Scaled score by number of responses and priorities)

Source: ENPARD Annual Cooperatives Survey Results

Returning to our question, a cooperative, like any other business, will first of all survive if it is profitable. In order to survive as a business, one of the most important components is to have access to markets and sell products. According to the ENPARD annual cooperatives survey, 64% of surveyed cooperatives sell their products inside their region at local markets, 32.5% sell outside of their regions, and only 3.5% export (directly or via exporter). In addition, there are two main channels of marketing: cooperatives sell their products to wholesalers or/and to local consumers (directly).

Buyers often face problems interfacing with small farmers because of their small sizes, the heterogeneous quality of supplied products, and poor organization and communication, leading to high transaction costs. The absence of institutions (groups) and services, deters farmers from overcoming these challenges and creating a win-win situation. From a business standpoint, weak vertical coordination can be a pre-determinant for a cooperative’s market failure that will probably be transmitted through the value chain and adversely affect farmers.

WHERE ARE THE GEORGIAN COOPERATIVES NOW? Nowadays, the most common types of agricultural cooperatives in Georgia are production cooperatives. This is not very surprising, as at the very beginning of the cooperative movement, the main emphasis was on production; farmers were given mini-tractors and inputs such as bee-hives. In contrast, most of the western-style cooperatives that are successful examples operate in the service sector (agricultural service cooperatives), not in the production sector. In a service cooperative, members carry out their production activities independently, and the cooperative provides them with a range of services - machinery, input purchasing, packaging, distribution, marketing, etc. (Lerman, 2013). Through economies of size, service cooperatives manage to achieve lower costs in input purchasing (they make bulk purchase of inputs) and members benefit from the service cooperative, as they have a price advantage for the integrated sale of members’ products.

The difference between those two types of cooperatives were not well-understood in the beginning of this movement, starting with policy-makers (not even the law about agricultural cooperatives reflects it) and moving down the line to farmers. In the meantime, the first steps towards forming service cooperatives has already been made with ACDA starting to support the sector’s specific and targeted initiatives (though the implementation of such programs are still questionable); furthermore, the main emphasis is moving from production cooperatives to service cooperatives.

MARKETING COOPERATIVES, MAYBE? How can Georgian cooperatives overcome the constraints they face with selling their products and have better access to markets? One solution could be to establish marketing cooperatives (these are a subcategory of service cooperatives): “Cooperatives that collect and prepare members’ produce for sale, truck it to the market, and arrange for

Figure 2. Geographical Area Where the Cooperatives Sell Their Products / Services

Source: ENPARD Annual Cooperatives Survey Results

actual sale at prices that are higher than what would be normally attained by the farmers themselves.”

(Lerman, 2013) Cooperation in marketing allows farmers who produce the same or similar products to cooperatively market and sell their products.

In Georgia, the marketing system has a largely informal character; most cooperatives cannot reach the markets as they do not have sales channels for market products (some cooperatives also lack transportation equipment). In order to sell the produced products, informal markets are established after the harvest. The creation of well-functioned marketing cooperatives will present agricultural producers with the opportunity to create more possibilities on the market, and they will be better integrated in the value chain. As a result, the farmers will improve their bargaining power against processors, traders and other actors in the chain; they will have greater control over their own products, and their gain will also be greater. Furthermore, through marketing cooperatives, farmers could get contracts with large supermarket chains, hotels and restaurants, to supply a substantial quantity of their produce on a regular basis. Marketing cooperatives give producers the opportunity to obtain market authority, and aid them in the equal distribution of risks and expenses. Such cooperation effectively utilizes available resources for satisfying consumer requirements, and therefore, cooperative members will have stronger incentives to collaborate.

Thus, providing incentives for farmers and cooperatives to create marketing cooperatives (either first or second level of cooperation) would be a good strategy to be considered for further development of cooperatives in Georgia. Perhaps farmers will perceive marketing cooperatives as a business opportunity (not as a legal entity that can bring to them grants and subsidies) and see the benefits from cooperation. And, again, who will survive in the long run? Apparently, only cooperatives with a strong business spirit will manage to pass through the fire.

6

BUSINESS

GEORGIA TODAY

APRIL 4 - 6, 2017

WTO, EU on Dumping Know-How & Why Georgia Needs to Counter It INTERVIEW BY VAZHA TAVBERIDZE

W

ith visa liberalization at full steam ahead and skeptics left twiddling their collective thumbs waiting for the "horde of Georgian wannabe criminals" to approach European borders (not least dispirited by the PM’s announcement of a EUR 3000 fine upon return), there are still a great many things Georgia can do to turn its European aspirations into reality.

When asked what the next step in Georgia’s European integration might be, Tbilisi and Brussels both point to the Association/DCFTA Agreement and its successful implementation. For that, Georgia has to harmonize its legal codes to that of the EU, which is an arduous process in its own right. One of the sectors where Georgia falls short of European standards is the anti-dumping legislation privy to the EU’s internal market.

And dumping has become an aggravating problem lately – three huge court cases are enough of a proof of that. What dumping is, why it is bad and how the state can counter it were the questions PANORAMA Talk Show and GEORGIA TODAY asked the EU Deputy Ambassador to Georgia, Mr. Carlo Natale.

HOW DOES THE ANTIDUMPING LEGISLATION WORK IN THE EU AND HOW IS PRICE FIXING AVOIDED IN THE MEMBER STATES? Dumping happens when a product is exported to the market below its normal price. The normal price is established on the basis of the cost of production, or costs applied to that product by the exporting domestic market. So, when this situation happens, companies, groups of companies or EU member countries may lodge a complaint with the Commission authorities, the Director-General of the European Commission for Trade, and an investigation is conducted to establish the normal price and analyze the commercial practices. If the investigation concludes that there was dumping, the Commission would propose to adopt specific import duties. These duties would affect certain exporting companies or countries. Companies that engage in dumping will become subject to special duties if they want to export to the EU market.

Also, it is important to consider that the WTO has established some principles and guidelines on “trade safeguards” which should be incorporated into national laws. This includes anti-dumping and counter-duties, and what the WTO says is that there are some principles which all legislations in all countries apply to avoid anti-dumping meas-

IS WORKING ON THAT. BUT WHAT HAPPENS TO THOSE COMPANIES WHICH HAVE SUFFERED SUBSTANTIAL FINANCIAL LOSSES DUE TO DUMPING MEANWHILE – ARE THEY ELIGIBLE TO DEMAND COMPENSATION FROM THE COURTS?

ures and prevent trade safeguards turning into a protectionist mechanism rather than a mechanism of protection from unfair trade practices.

HAS THE EU RECOMMENDED GEORGIA ADOPT ANTIDUMPING LAWS OR IS THERE ANY TIMELINE FOR THEIR ADOPTION? There is no timeline; but if it is passed, it must correspond to principles established by WTO rules. So, when Georgia started preparing an anti-dumping law in 2015, we were asked and we provided comments for the draft law, but this process of preparation is still ongoing.

WHAT WAS THE CONTENT OF THESE COMMENTS? I can only confirm that we are ready to provide expert advice to Georgia on legislation that is fully compliant with WTO rules. We have done it and we continue to be ready to help if needed as it may become necessary as Georgia develops its manufacturing industries in the future.

We dully followed Mr. Natale’s advice and contacted the World Trade Organization in Geneva, where the Director of External Relations Division, Mr. Keith Rockwell, was only too glad to provide us with a WTO perspective on dumping and anti-dumping measures.

"What does dumping mean? Generally speaking, what it means is that the goods are being sold in the market to which they are being imported, in a neighboring country, perhaps, at a price that is below what we call “normal value”. So you’re selling it at a discounted price compared to what you would at your home market, or perhaps you are even losing money on that product – you are not covering your costs, you are not generating any profit, but you’re still selling them. That is called dumping.

Governments are permitted under WTO rules to counteract these kinds of practices by applying anti-dumping duties or a tax at the border which would offset

Carlo Natale, EU Deputy Ambassador to Georgia: “When Georgia started preparing an anti-dumping law in 2015, we were asked to provide comments for the draft law”.

this margin. But you have to follow the rules when you do this. And the rules are very straightforward: you have to determine, as I suggested before, whether the price of the product is below normal value. Then you have to show that by doing this, the exporting country is injuring the domestic industry. And if it can be proved that those dumped import goods are causing injury to the domestic market and that the cause of the injury to the sector is those imports’ belownormal prices, then the importing country can apply these duties. It’s a complex thing; it has to be done in a certain way; it has to be done in a transparent way, with the importing country notifying and saying “we’re now going through an investigation”; they have to share any evidence that they get and they have to go through the process whereby they don’t carry this on indefinitely. If the dumping process stops, then the antidumping duties should be withdrawn."

ONE OF THE ASPECTS OF DUMPING THAT CONFUSES MANY IS THAT THEY THINK – WELL, IF SOMEBODY IS SELLING GOODS AT A CHEAPER PRICE, THAT MUST BE GOOD! COULD YOU EXPLAIN WHY THIS IS NOT THE CASE?

When governments craft their trade policy, there is always a very careful balance they must strike between the interests of producers and the interests of consumers.

You’re absolutely right in saying that consumers want goods to be as cheap as they can be, but if producers feel as though they have to go up against what they consider unfair competition, they consider it to be a practice that should not be permitted to take place. And so the governments need to make this calculation.

AND THEN IN COMES THE ASPECT OF THE SO-CALLED PREDATORY PRICING That is what producers would say about this sort of thing. There have been cases where you might find a specific industry selling products below market value and in so doing, driving their competitors out of the domestic market.

WHICH IS A CRIME, RIGHT? Well, if you engage in the sale of products at prices below the normal value, it is something which could be actionable – that is to say, the importing government can respond with taxes. And the rules of WTO allow this, provided it is done in a way which is within the scope of the rules.

YES, AND IF I UNDERSTOOD YOU CORRECTLY, UNTIL THIS DOMESTIC LEGISLATION ON DUMPING IS ADOPTED – AND THERE ARE DOMESTIC COMPANIES THAT HAVE SUFFERED FROM IT – THEY SHOULD TRY AND ADDRESS THE COURTS? Frankly, it depends on what the legal system in Georgia says on this matter.

ANOTHER NARRATIVE IS USED TO COUNTER AND DENY DUMPING ACCUSATIONS, USUALLY VOICED BY IMPORTERS, IS THAT SUCH POLICIES SCARE INVESTORS AWAY. FOR A COUNTRY THAT IS SO EAGER TO ATTRACT FOREIGN INVESTMENT, ISN’T THIS A KIND OF INDIRECT BULLYING? It very much depends on what’s actually going on. What I can say is that rules do allow addressing what is considered unfair practice through a “trade remedy”, to use our jargon.

Keith Rockwell, Director of External Relations Division, World Trade Organization in Geneva: “How the Georgian government would respond to something like this is for them to decide”.

GEORGIA, BEING A WTO MEMBER COUNTRY, IS OBLIGED TO HAVE ANTI-DUMPING LEGISLATION AND THE GOV’T

ROUTING

TBILISI ISTANBUL ATATURK AIRPORT ISTANBUL ATATURK AIRPORT TBILISI TBILISI ISTANBUL SABIHA GOKCEN AIRPORT ISTANBUL SABIHA GOKCEN AIRPORT TBILISI BATUMI - ISTANBUL ISTANBUL - BATUMI

10 Galaktion Street

The way the rules are constructed, the WTO itself does not take action. It’s up to the individual member countries. If a country does take action against dumping practices, then that could be the subject of a dispute from another country. It would not be the WTO’s job to respond to the kind of scenario you outlined; it is up to the domestic government to decide on the manner in which it would respond.

How the Georgian government would respond to something like this is for them to decide. And as I said, Georgia would not be unique in terms of having to craft a policy in response to injured industries, whether they have been injured by fair or unfair trading practices. They can respond; they can levy a tax at the border on those products coming in. The rules permit this. Now, in many instances we find, particularly with developing countries, that they have not been able to implement domestic legislation that would allow them to do this. Borrowing a line from you, I’d say that now in Tbilisi they are developing these kinds of laws to allow them to respond to what the Georgians believe to be unfair trading practices. Am I right?

Tel: (995 32) 2 45 08 08 E-mail: info@peoplescafe.ge

FLIGHT NUMBER

TK 387 TK 385 TK 383 TK 386 TK 384 TK 382

WEEK DAYS

DEPARTURE

ARRIVAL

EVERYDAY

05.50 11.45 18.10 01.40 07.30 13.55

07.25 13.25 20.00 04.55 10.50 17.15

07.40

09.00

20.45

00.10+1

17.50 13.55

19.10 16.55

TK 381 EVERYDAY TK 380 TK 393 TK 392

EVERYDAY

BUSINESS

GEORGIA TODAY APRIL 4 - 6, 2017

Street Inspectors Appear in Tbilisi to Prevent Pollution

7

The Biltmore Hotel Tbilisi Joins Earth Hour Movement

BY THEA MORRISON

F

rom this week onwards, street inspectors of the ‘Tbilservice Group’, a company responsible for waste management and the proper functioning of infrastructure in the capital, will be patrolling in Tbilisi to prevent pollution of the city.

The inspectors have undergone a special training course and they are authorized to fine those individuals or legal entities they catch polluting the city.

Tbilisi City Hall reports that the street inspectors attended a meeting at the head office of ‘Tbilservice Group’, where they were given detailed information and instructions concerning their job.

“During the first two weeks, the inspectors will only inform citizens who violate the law and warn them about the coming sanctions and suggest they pick up and throw their waste in the bin,” the Tbilisi City Hall statement reads.

After two weeks, inspectors will then be eligible to fill out a littering form and give a corresponding fine.

For leaving pet excrement in the street, the owners of the pets will be fined 50 GEL. For dropping rubbish up to 2 kg, the

O fine will be 80 GEL, while for dropping more than 2 kg rubbish, the fine will amount to 150 GEL. For throwing up to 2kg trash from a window or balcony the fine is 100 GEL and for throwing more than 2 kg trash, the fine increases up to 500 GEL. More-

over, for leaving up to five car wheels in the street the fine is 150 GEL and for more wheels the violators will have to pay 500 GEL. Individuals who drop dangerous waste will have to pay a 400 GEL fine, while legal entities will be charged 1000 GEL for such violations.

n March 25, global environmental campaign Earth Hour took place around the world. Georgia first joined in the ecological activity nine years ago. Since then, every year the main attractions throughout the country have annually switched off their lights, and made noise in support of climate change action.

Earth Hour is a worldwide movement organized by the World Wide Fund for Nature (WWF). The event is held annually to encourage individuals, communities, households and businesses to turn off their non-essential lights for one hour, from 8:30 to 9:30 p.m.

This year, the event in Georgia was even larger scale, with many non-governmental buildings, as well as business buildings, switching off their lights. One of the most spectacular parts was played

by Georgia’s first skyscraper - The Biltmore Hotel Tbilisi. During Earth Hour, all lights in the 32 story building were turned off except for emergency ones.

By doing this, the hotel’s staff expressed its support toward the global initiative of protecting nature and the planet we live in. The hotel employees also gathered in the historic lobby of IMEL building (now part of the hotel) and symbolized 60+ by holding lit candles.

“The Biltmore Hotel Tbilisi opened almost a year ago,” said Moine Kandil, General Manager at The Biltmore Hotel Tbilisi. “For us, it’s the first Earth Hour activity and we are very proud to take part in it. Unfortunately, in the 21st century, environmental problems grow bigger in scale by the year. By raising awareness about the issues we have, we encourage people to think more about the environmental problems and take actions against them. The Biltmore Hotel Tbilisi will switch off its lights every year”.

Earth Hour started as a onetime lightsoff event in Sydney, Australia, in 2007 but since then it has grown to engage more than 7,000 cities and towns across 172 countries worldwide.

8

BUSINESS

Maia Rchuelishvili, and Rusudan Kervalishvili.

Source: fmabkhazia.com

Biggest Construction Scandal in Georgia – The Center Point Case

BY THEA MORRISON

T

bilisi City Court has sent the founders of the Center Point Group construction company, former ViceSpeaker of Parliament Rusudan Kervalishvili and her sister Maia Rcheulishvili, to prison for four years for embezzlement and misspending of client money.

The case has been in progress for more than four years and in the present case, the sisters are accused in misspending $5,548,341 and GEL 20,692,408.

The Prosecutor’s Office of Georgia (POG) reports that Rcheulishvili and Kervalishvili obtained clients’ money in a fraudulent manner through embezzlement schemes, and were accordingly sentenced to six years in prison, which was reduced by 1/3 by application of the Amnesty Act of Georgia adopted on December 28, 2012. They are now expected to spend four years in prison.

“As a result of the fraud, around 6200 families were affected,” POG says.

The affected developers are not happy with the court’s decision, which many of them consider “minimal”. They are demanding their money back.

The POG suggested the Defense strike a plea bargain for a conditional sentence, if the losses of all victims are compensated.

Mariam Tsustkiridze, lawyer to Rcheulishvili and Kervalishvili, says that they are ready to start negotiations with the POG over the plea bargain.

“The Center Point property is enough to compensate the losses of the all affected developers,” she said.

However, the lawyer underlined that no monetary compensation will be paid to the victims.

“Compensation means completion of

construction of the apartments purchased by the victims. Paying money to the affected people is not on the agenda,” she said.

At present, Tbilisi City Court is also conducting hearings on two other cases of criminal prosecution of Maia Rcheulishvili as separate counts, regarding embezzlement of large funds owned by developers and appropriation by deceit.

Her son Guram Rcheulishvili is also detained regarding the case.

The Center Point Case was named as the biggest construction scandal in Georgia. In 2012, non-governmental organization Transparency International (TI)Georgia prepared a report on the case, saying that, in total, the Center Point Group had mishandled $310 million paid by around 6,200 customers for the construction of their houses.

Center Point Group was established in 1999 aiming to raise capital from citizens and implement construction projects. It was a conglomeration of 70 companies, 55 Limited Liability Companies (LLC) and 15 individual partnerships, owned by the three well-known people in Georgia: Vakhtang Rcheulishvili, Maia Rchuelishvili, and Rusudan Kervalishvili.

The company went bankrupt following the 2008 war. Dexus, a company managing Center Point Group’s assets since September 2010, pledged to finish suspended constructions within three years.

The company was established on 23 August 2010, just two weeks before undertaking the management of Center Point Group’s construction projects.

However, Dexus has worsened the initial conditions for the affected customers by asking them to pay burdensome taxes and additional costs for their houses.

According to NGO TI-Georgia, Dexus became involved in an allegedly illicit deal through which the founders of the Center Point Group claimed valuable property of the affected customers.

GEORGIA TODAY

APRIL 4 - 6, 2017

Without Europe There Will Be No Gazprom

BY DIMITRI DOLABERIDZE

T

he next concessions of the European Commission to Gazprom show who is actually running the affairs in Brussels.

Russia has confirmed the primacy of Nord Stream, a natural gas pipeline through the Baltic Sea, in its efforts to replace Ukrainian transit routes for gas exports to Europe, diminishing the likely role to be played by its southern counterpart, Turkish Stream.

The European Commission wants to know the views of EU members on the development of the Nord Stream project.

The main condition is that it coincides with the position of the Brussels officials.

And they have already decided that Gazprom will get permission to lay a new pipe on the bottom of the Baltic Sea. This is likely to be followed by new permits for new gas pipelines, which will replace the main route of gas supplies from Russia now passing through the territory of Ukraine.

In this insanity, logic is found, and when it is not known what the matter is, it seems that the matter is in the money.

And in big money: they are hoping to get the main allies of Russia in Brusselsthe Germans and Austrians. Concerns from these countries actively cooperate with Russia, have shares in the fields, participate in production and so on.

Recently, Putin met with the head of BASF, the German chemical giant and key partner of Gazprom. It was, of course, about the project "Nord Stream - 2", claimed official reports. According to unofficial information, the Germans received certain concrete promises in exchange for their help in Brussels. The active lobbying of the Russian project is the payment of debt to the Kremlin, which kindly allowed them to divide up their huge raw pie.

The same can be said about the Dutch company SHELL, which is cooperating with Gazprom, in particular in shale deposits. This is not too publicized,

because at the official level, Russian shale gas is criticized.

Why are businessmen dazzled by money, unprincipled in extolling Russian gas, and why are they trusted by European politicians? The answer to this question is not so easy. I believe that they are poorly versed in the topic and simply do not want to deepen their knowledge.

If they wanted to do this, they might be surprised to find that the presence in Europe for the Russian state concern is a matter of life and death. This is its most important market, which provides Gazprom with the lion's share of its profits. Without Europe, the concern

would lose its sense of existence.

Last year, Gazprom sold 179.3 billion cubic meters of gas in Europe, with a total export volume of 220 billion cubic meters. The share of the Kremlin-controlled group is 34 percent on the EU market, and exports to Europe brought $ 30 billion in cash currency per year even at low energy prices.

All these arguments could allow the European Commission to demand from Russians competitive prices and fair contracts, but they are not in a hurry to do so. Since the beginning of the year, thanks to the purchases of Germans, Austrians and recently Italy added to the gas pie, gas supplies from Russia have increased by 21 percent. Germany, the main customer of Gazprom, increased the volume of purchases by 24 percent year-on-year. It is not surprising that Gazprom expects this year to increase its market share to 36-37 percent and earn $ 35 billion.

Brussels officials should also know that the cost price of gas production from Gazprom is one of the lowest in the world, so it can safely reduce prices for "its" obedients, and raise it for the rebellious - Poland or The Baltic States.

Brussels should also recall that Gazprom has lost its biggest client, Ukraine, and is now trying to fill this loss. In 2006-2007, Kiev bought from Russia 56-57 billion cubic meters of gas. No one has since achieved such import volumes. Germany last year bought 45 billion cubic meters.

The Russians say that the new branch of the Nord Stream gas pipeline will increase security of supply, as Ukraine is unstable. Do not they know in the European Union who creates and fuels these conflicts?

The Russians also argue that the more Russian gas pipelines appear, the cheaper the gas for the EU will become, and more competitive Gazprom will be in this market. Such an argument shows that the concept of "competition" to Russians is completely alien.

Most of the EU members said "no" to the Nord Stream-2 project, which will be a huge loss for the German, Austrian, Italian and Dutch businesses that cooperate with Russia. Only blocking the next Russian projects will allow there be real competition in the European gas market and will show Moscow that Brussels will not be fooled.

GEORGIA TODAY APRIL 4 - 6, 2017

BUSINESS

9

10

BUSINESS

GEORGIA TODAY

APRIL 4 - 6, 2017

Georgian FM Thanks US Senators for Supporting Georgia’s Territorial Integrity with Resolution

BY THEA MORRISON

G

eorgia’s Foreign Minister Mikheil Janelidze thanked the Helsinki Commission Chairman Senator Roger Wicker (MS) and Ranking Commissioner Senator Ben Cardin (MD) for introducing a resolution supporting the territorial integrity of Georgia to the United States (US) Senate on March 30 in the tweet.

The resolution condemns the ongoing military intervention and occupation of Georgia by the Russian Federation, as well as Russia’s continuous illegal activities along the occupation line in Abkhazia and the Tskhinvali region (South Ossetia).

The bill also urges Russia to fulfil its commitments under the Helsinki Final Act, which calls upon signatories to respect the territorial integrity of each of the other participating States of the Organization of the Security and Cooperation in Europe (OSCE).

Chairman Wicker stated that Russia has tried to undermine Georgian sovereignty and territorial integrity for far too long.

“It is time for the United States to make it clear once again that we do not recog-

nize Russian land grabs within its neighbors’ borders. Russia should adhere to the cease-fire agreement it signed in 2008, withdraw its troops from Georgia, and allow international monitors and aid workers access to occupied regions,” he stressed.

Commissioner Cardin stressed that Russia’s violation of the territorial integrity of Georgia is a “blatant breach” of one of the guiding principles of the Helsinki Final Act, and it reflects a broader pattern of disregard by Putin’s regime for transatlantic security norms and democratic values, which the US and its allies must stand against with resolve.

“Georgia is a strong partner of the United States and continues to take important steps to further integrate with the transatlantic community. Georgia recently concluded an agreement on visa free travel with the European Union, for example. This significant development shows that constructive interaction is possible and welcome,” Cardin stated.

The official web page of the Helisnki Commission says that the resolution mirrors a similar measure introduced in the House (H.Res. 660) in September 2016, and demonstrates that the sovereignty and territorial integrity of Georgia enjoy bipartisan support from both chambers of Congress.

BUSINESS

GEORGIA TODAY APRIL 4 - 6, 2017

11

Two 18-year-olds Aim to Fix the E-Waste Problem in Armenia

BY KATIE RUTH DAVIES

E

ven though they come from different countries, Cedric Solms from Germany, 18, and Mikhail Zamskoy from Russia, 18, both shared the same goal: to get the international education and experience necessary to be able to make the world a better place. That is what the United World College (UWC) movement empowers its alumni to do through education, which evolves both ability and talent. Every year there is a vivid selection process. Among hundreds or, in some cases, thousands of those applying, only a few of students receive acceptance letters in their mail boxes, and Cedric and Misha were among those lucky few. They say that their experience has been so transforming and inspiring that they have never had any regrets about spending two years in the world of UWC. The IB Diploma is said to be a highly involving educational program which broadens students’ perspectives on how they perceive the world around them.

In the IB Diploma, students usually take three subjects at Higher Level and three at Standard. Students have an opportunity to choose subjects from six different groups in order to best accommodate their interests, talents, and goals.

Pursuing the topic of goals, Cedric and Misha hope to continue their trip on their educational paths by deepening their knowledge about how societies work, and by learning more about leadership, challenges, and economic models.

They have a strong belief that their UWC

experience and university level education will enable them to work on socially important and beneficial projects. That is why both of them are studying Economics and Math at Higher Level to expand their knowledge on how the life of society is built in terms of economic and mathematical ideas. In addition to these subjects, Cedric decided to study Global Politics to learn how governments work in the 21st century, while Misha decided to learn from the past to avoid mistakes and implement successfully piloted models and decisions by studying History at the Higher Level. Cedric and Misha also study Physics, English Language & Literature, and German.

While UWC Dilijan itself offers the height of sophisticated technology and comfort, the town and surrounding country is still struggling to overcome the low years following the collapse of the Soviet Union. One issue the boys noticed was waste management. They had a choice between spending two years of UWC life in ignorance or taking on a challenge and trying to change the world around them. The chose to take the challenge and in only a few months had established a formal charitable foundation with a Board of Trustees counting a number of international figures: Veronika Zonabend (international philanthropist and entrepreneur, RVVZ Foundation), His Excellency Matthias Kiesler (German Ambassador in Armenia), Nadezhda Rodicheva (Inclusive Ventures), Maximilian Count of Solms-Laubach (Solms Consulting), Alexey Komov (RVVZ Foundation), David Yang (ABBYY and Ayb Schools) and Martin Galstyan (Central Bank of Armenia).

“I was inspired by the students’ idea,”

Ambassador Kiesler told us. “When I first visited UWC Dilijan and met young people who want to do something about electronic waste, I agreed immediately to the offer of becoming a member of the Board of Trustees”.

The boys have challenged themselves to raise enough money to fund a publicity campaign and are punching well above their weight. They’ve had major successes so far, influencing politicians, establishing bridges of communication with schools, forming links with other organizations, and establishing electronic-waste, plastic, and aluminium storage and collection methods. They are also hoping to receive funding from UNDP and the GEF Small Grant Program, as well as from Inclusive Ventures, an impact investment group, to establish the first Armenian electronic waste, plastic, and aluminium dismantling and recycling facility.

We asked them how the Armenian authorities had reacted to the initiative.

“First, they were surprised to hear such ambitious plans from 18-year-old foreign high school students,” Cedric says. “But then the whole Re-apaga team convinced them that we will succeed, and now Reapaga is well supported by the government”.

The Municipality of Dilijan became a partner of the foundation and donated storage space for electronic waste, aluminium, and plastic in the city center.

The Ministry of the Nature Protection also declared their support for the initiative, confirmed by First Deputy Minister Simon Papyan. Cedric and Misha say that it is just the beginning of their dialogue with the Armenian government as they hope to connect to many more governmental institutions, along with

other organizations and individuals, and work together not just to develop the project, but to influence national policy as well.

“UWC Dilijan not only teaches you how to change the world, but also helps you to do so,” says Misha. “Here, we met mentors, advisors, and potential investors”. However, the boys also showed the ability to work independently and found many other supporters outside the school walls.

“This initiative can spread throughout Armenia. The charm of it is that the students found ways to realize their idea on their own,” says Veronika Zonabend.

“This initiative was born from an idea, and I hope that it will grow into a big movement. The students received substantial help from the Dilijan Community Center, where the main topics and project goals were formed, and intend to involve a large number of young people in the initiative in the course of this year by visiting other schools and universities,” she adds.

Cedric and Misha say that this project is not just an extra-curriculum activity, nor is it just a plan for the gap year; it is a long term initiative which will connect them to Armenia throughout their lives.

They hope to establish a facility which will become a real model of sustainability. The plan is to develop a system of waste collection, dismantling, and recycling all over the country and they believe it might take up to five years to finish

the project.

“This initiative has all chances to spread throughout Armenia. This is a huge problem, relevant not only for Armenia, but the entire region and humankind as well,” says Zonabend. Ambassador Kiesler agrees, “It is unfortunate that environment protection is not a priority in Armenia. However, it inspires hope that such initiatives are created to raise awareness among people. I believe it is my duty to create ties and look for benefactors for this initiative. Germany also has a problem with e-waste, but communities there already have special centers where people can leave their electronics, - TV sets, old phones, etc.”

After graduating from UWC Dilijan, Cedric and Misha plan to spend a lot of time in Armenia working on Re-apaga, while enrolled at university. And after finishing the project, they hope to gain valuable experience from both working and studying and then enlarge their knowledge by pursuing education at one of the world’s leading business schools.

Cedric and Misha are dreaming about INSEAD, Harvard, Yale, or Wharton.

They believe that this combination of experience and knowledge will enable them to start new socially important initiatives all over the world. They believe that UWC Dilijan did not just connect them for two years of high school, but created a friendship for life, and the bond they share has the potential to change the world.

12

BUSINESS

GEORGIA TODAY

APRIL 4 - 6, 2017

Air Arabia Jordan to Start Flights to Tbilisi

BY NINO GUGUNISHVILI

L

ow-cost airline, Air Arabia Jordan, is to launch Amman-Tbilisi-Amman flights from the end of April until the end of the summer season (26.10.2017), the Georgian Civil Aviation agency has announced.

The twice weekly flights every Tuesday and Friday will be operated by Airbus A320 aircraft.

After successful consultations, a final meeting between the Georgian Civil Aviation Agency and Air Arabia Jordan company representatives was held on March 14, at which the technical and organizational details for the upcoming flight operations were discussed.

Air Arabia Jordan received authorization for regular flights to Georgia’s capital on March 24.

Aside from bringing tourists from Jordan to Georgia, the new Amman-Tbilisi-Amman flights will be oriented to attracting Georgian passengers to Jordan and Middle East destinations.

Georgia, Azerbaijan & Kazakhstan Sign TransCaspian Transport Corridor Protocol

BY NINO GUGUNISHVILI

T

he Trans-Caspian Corridor Protocol was signed by Chairman of Georgian Railways, Mamuka Bakhtadze; Chairman of Azerbaijan Railways, Javid Gurbanov; Chairman of Azerbaijan Caspian Shipping CJSC, Rauf Valiyev; President of Kazakhstan Railways, Kanat Alpysbayev; and the heads of Georgian, Azerbaijan and Kazakh ports, as part of the Union of Legal Entities of the Trans-Caspian International Transport Route

Association meeting held in Baku, Azerbaijan, on April 1.

Approved during the meeting were the Association membership regulations, the working group, an action plan for 2017, the union charter, and the logo.

The Trans-Caspian International Transport Route Association is aimed at deepening and strengthening trade connections and transportation of goods to China, Kazakhstan, Azerbaijan, Turkey, Ukraine and EU countries.

The agreement on establishing the Association was signed by Georgia, Azerbaijan and Kazakhstan in 2016.

Protocol Signing Ceremony, Trans - Caspian Corridor. Source: Trend News Agency

POLITICS

GEORGIA TODAY APRIL 4 - 6, 2017

13

Article 50 & EU Security

BY TIM OGDEN

T

heresa May's triggering of the formal procedure for Britain to leave the European Union has done little to make the fates of the UK and the EU any clearer; in fact, the waters have only become further muddied.

Arguments over the sovereignty of Gibraltar, the potential independence of Scotland, future economic relations and even security issues have arisen, all in the shadow of France's upcoming presidential elections.

Spain has long set its sights on Gibraltar, with its tenuous claim to The Rock proving a major point of contention between London and Madrid. Debate became so heated in recent years that a Royal Navy frigate was deployed to the strait to reassure residents that Britain will not cede control to the Spanish; hardly the mark of the spirit of continentwide cooperation and fraternity that Brussels claims the EU is made of. Comments made recently by Michael Howard comparing Gibraltar to The Falklands were derided as aggressive and provocative by some, but the parallels are too close for his remarks to be dismissed as mere small-minded, xenophobic jingoism. Should the European Union truly wish to embark on a productive future trade relationship with the United Kingdom, it would be well advised to leave Gibraltar out of negotiations.

Issues surrounding Gibraltar's sovereignty aside, however, it is remarkable that security has become a theme in the Article 50 negotiations. EU officials have expressed concern that an independent

Source: Real Business

Britain will not contribute to European defence, especially in the ongoing shadowy information war against Vladimir Putin. Since security is the province of NATO and the UK has made no move to leave the alliance, this is surely a sign that emotions are running rather high in Brussels, and this fear over Britain's withdrawal from continental security might stem from the EU itself bringing outside issues into the negotiations. The United States maintains a sizeable military presence throughout its own bases in the European Union as the chief member of NATO, and

so for security matters Britain should be treated as another overseas NATO power such as the US or Canada.

However, at this time it is in the interest of Brussels to play its most aggressive cards. Nicola Sturgeon is pushing the British Prime Minister for another Scottish independence referendum, forcing Theresa May to fight a war on two fronts, and perhaps some hawks in Brussels are hoping to keep Downing Street off balance and make life uncomfortable enough that London is forced to cede to some of the EU's demands. In addition, should

Marine Le Pen prove victorious in France's presidential elections this month, she will likely begin steps to withdraw France from the Union, thereby granting Britain an ally in the form of another powerful exile and throwing the future of the EU into outright doubt.

In many ways, Britain's relations with Brussels and the survival of the European Union rest on the shoulders of the French public. While it would be tragic if the Union collapses so quickly after Georgia has finally made steps towards membership, Tbilisi should not make the same

mistake as officials in Brussels and assume that the destruction of the EU would spell an end to continental security. The idea that Russia would benefit from a breakdown of the EU in a military and intelligence context is based in feeling rather than fact, since fears over NATO's future stem from the other side of the Atlantic.

Rather than being a chip to bargain with at the negotiating table, security should in truth be the glue that binds Britain and the democratic continent together, regardless of the existence of an economic union-turned supranational state.

Welcome to Indian Punjabi Restaurant Sanjha Chulha 1 Mobile +995 596 56 13 13 Phone +995-322-95-96-14 Skype: SANJHA CHULHA Facebook: sanjha chulha indian restaurant mail: order@sanjhachulha.ge Website: Sanjhachulha.ge Agmashenebeli Avenue 130, Tbilisi 0112 Georgia Delivery service are available

14

POLITICS

GEORGIA TODAY

APRIL 4 - 6, 2017

Georgia Marks Russia Absorbs Military Units 10th Anniversary of of Breakaway Abkhazia NATO Days

BY THEA MORRISON

I

BY THEA MORRISON

G

eorgia is hosting the North Atlantic Treaty Organization (NATO) Days for the 10th time this year.

NATO Days 2017 will last until April 11 and will feature a number of educational and cultural events to raise NATO awareness in Tbilisi and in other regions of the country.

The celebrations were launched on Sunday at the Information Center on NATO

and European Union (EU) in Tbilisi.

The Open Door Days were opened by the European and Euro-Atlantic Integration Minister of Georgia, Victor Dolidze, and NATO-EU Information Center Director, Nino Bolkvadze.

The guests were presented a special exhibition of posters, as well as an exhibition of military equipment and photos.

The Ministry of Internal Affairs and Ministry of Defense also participated in Open Door Days at the Information Center on NATO and EU. NATO-Georgia Diplomatic Forum will wrap up the program of activities.

ndividual units of the Armed Forces of the so-called Republic of South Ossetia, Georgia’s breakaway region, are to join the Armed Forces of the Russian Federation.

The “Interagency Agreement” between thetwosideswassignedbyRussia’sDefense Minister, Army General Sergei Shoigu, and so-called Defense Minister of South Ossetia, Lieutenant-General Ibrahim Gasseev, in Moscow on March 31.

South Ossetian state news agency PEC reports that the Agreement was signed in accordance with the “Treaty of Alliance and Integration” between the Russian Federation and the “Republic of South Ossetia” signed on March 18, 2015.

The two sides also signed an Agreement on cooperation in the field of a courier-postal service.

Russian Defense Minister Shoigu highlighted that the 4th Russian military base is located on the territory of South Ossetia to “ensure the security of the republic and southern borders of Russia”.

Gasseev thanked Russia and its Armed Forces for assistance to South Ossetia and for “maintaining peace and stability”.

Under the agreement, the integration of South Ossetian units into the Russian Armed Forces involves recruiting citizens for military service in the Russian Armed Forces and sending them to Russian military bases to prepare for active duty.

The deal allows the Russian military to recruit South Ossetian soldiers as contractors after they have been dismissed from active duty by South Ossetia.

South Ossetian Armed Forces.

Source: cominf.org

The treaty also envisages the promotion of social, economic, humanitarian and foreign affairs, and defense and security cooperation between the two countries. It also includes forming a common defense and security space between Russia and breakaway South Ossetia.

Officials in Tbilisi believe the treaty is illegitimate.

Georgia’s Ministry of Foreign Affairs (MFA) released a statement condemning the signing of the so-called military deal, saying it represents another step towards the annexation of Abkhazia and South Ossetia (Tskhinvali) regions, which is a total disregard for the fundamental principles and norms of international law.

“This provocative step and unambiguous aggression against Georgian statehood on the part of the Russian Federation is directed towards destabilization of the situation in the region and the ultimate destruction of the European security system. In this way, the Russian Federation is seriously harming the Geneva International Discussions and is intentionally obstructing any potential progress in the peace process,” the state-

ment of the MFA reads.

The Georgian side believes that against the background of integration of Georgia’s occupied regions into the military system of the Russian Federation, it is more disturbing that Moscow still declines the non-use of force commitment and impedes the creation of international security arrangements in Abkhazia and the Tskhinvali regions.

The MFA is calling on the Russian Federation to desist from the practice of provocative actions, to comply with the provisions of the 12 August 2008 Ceasefire Agreement and withdraw its military units from the territory of Georgia.

“We appeal to the international community to duly assess the aggressive steps by the Russian Federation and take the necessary measures in order to effectively react to the situation in Georgia’s occupied regions,” Georgia’s Foreign Ministry stated.

South Ossetia broke away from Georgia in a war in 1991 after the collapse of the Soviet Union.

In August 2008, Russia sent in troops, saying it was protecting civilians in South Ossetia from attack by Georgian forces.

After a brief war, Russia occupied 20 percent of Georgian territories and recognized South Ossetia and Abkhazia as independent states.

Only Russia, Nicaragua, Venezuela and Nauru recognize the occupied regions of Georgia as independent states. The remainder of the international community has been calling on Russia to duly fulfill its obligations under the ceasefire agreement, withdraw its troops and reverse its recognition of Georgia’s breakaway regions, but in vain.

POLITICS

GEORGIA TODAY APRIL 4 - 6, 2017

15

Reception Held in London to Mark Visa Free Regime with the EU

A

mbassadorofGeorgiaTamar Beruchashvili and High Commissioner of Malta, Norman Hamilton, on behalf of the Presidency of the Council of the European Union, hosted a reception to mark Georgia's visa free regime with the EU on March 30 at the Europe House in London.

Representatives of the diplomatic corps and of the UK Parliament, including the Head of the All Party Parliamentary Group on Georgia, Jonathan Djanogly, attended the reception. Guests also included the representatives of think tanks, academia, and Georgian diaspora, the Georgian Orthodox Church in London and the Members of Georgian Parliament Eka Beselia and Irakli Sesiashvili.

The Ambassadors of the EU Member states congratulated Georgia on this historic date and reinstated their support to Georgia’s European way. They particularly underlined the importance of this positive development for the European Union, taking into consideration the challenges posed by Brexit.

In her speech, the Ambassador of Georgia congratulated Georgia and the EU on this success and underlined the historic importance of the visa waiver for citizens of Georgia in the context of the country’s European integration process.

She thanked the EU institutions and EU member states for their unanimous support in this regard.

She went on to highlight that the visa free regime with the EU is an important step on Georgia's European way, bringing Georgia ever closer to Europe.

She stated that visa-free travel will bring tangible and concrete benefits to the citizens of Georgia and promote closer people-to-people contacts, tourism, educational, cultural and business ties between the societies, thus facilitating the successful implementation of the EU-Georgia Association Agreement.

On behalf of the Presidency of the

Council of the European Union, the High Commissioner of Malta congratulated Georgia on this significant step forward and underlined the importance of the

PUBLISHER & GM

George Sharashidze COMMERCIAL DEPARTMENT

Commercial Director: Iva Merabishvili Marketing Manager: Mariam Giorgadze

GEORGIA TODAY

EDITORIAL DEPARTMENT:

Editor-In-Chief: Katie Ruth Davies

visa free regime for Georgia, as well as for the EU. The guests were then treated to Georgian wine and refreshments.

Journalists: Tony Hanmer, Zaza Jgarkava, Maka Bibilashvili, Dimitri Dolaberidze, Maka Lomadze, Tim Ogden, Joseph Larsen, Vazha Tavberidze, Nugzar B. Ruhadze, Nino Gugunishvili, Thea Morrison Photographer: Irakli Dolidze

Website Manager: Tamzin Whitewood Website Copy-Editor: Gabrielle Guerrier Layout: Misha Mchedlishvili Webmaster: Sergey Gevenov Circulation Managers: David Kerdikashvili, David Djandjgava

ADDRESS

1 Melikishvili Str. Tbilisi, 0179, Georgia Tel.: +995 32 229 59 19 E: info@georgiatoday.ge F: GeorgiaToday ADVERTISING & SUBSCRIPTION

+995 595 279997 E-mail: marketing@ georgiatoday.ge

Reproducing material, photos and advertisements without prior editorial permission is strictly forbidden.

The author is responsible for all material. Rights of authors are preserved. The newspaper is registered in Mtatsminda district court.

Reg. # 06/4-309