Page 1 georgiatoday

Issue no: 1028/119

• MARCH 6 - 8, 2018


In this week’s issue...


Ministry: 1280 m3 Trees Illegally Felled in Georgia in February

ON WOMEN'S DAY A special message from the UN Secretary General




What Georgia Can Teach Sweden About Energy Efficiency ISET PAGE 4

TSU 100 Years: Pride & Dissatisfaction BUSINESS PAGE 6

Photo source: Getty Images/Design: Ashley Britton/SheKnows

NGO Says Budgetary Expenditures for Gov’t PR Increased

CIS Economic Council Discusses Agreements & Future Cooperation BUSINESS PAGE 9



n 2012-2017, the government spent 50.4 million GEL on the salaries of PR employees, of which 49.75 million was spent in 2013-2017 after the Georgian Dream (GD) came into power. The information was released by the NonGovernmental Organization (NGO) Transparency International (TI) Georgia, which said that their survey is based on data sent from 121 state agencies. In total, the request for information was sent to 133 public agencies; however, according to the organization, 12 government agencies, including the Georgian government's administration, the Revenue Service and the Justice Ministry, did not provide them with the information. Continued on page 2

Georgian Parliament to Discuss Resolutions against Russia POLITICS PAGE 12 Prepared for Georgia Today Business by

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MARCH 6 - 8, 2018

Chinese Investors to Restore Tea Plantations in Georgia BY THEA MORRISON


Ministry: 1280 m3 Trees Illegally Felled in Georgia in February BY THEA MORRISON


n February 2018, 1280 m3 trees were illegally felled in Georgia, the Ministry of Agriculture and Environment has stated. According to the Ministry, 573 cases of illegal tree-felling and transportation have so far been revealed, including 35 cases containing criminal offenses. The evidence has been sent to relevant agencies for further investigation. The cases of illegal tree-cutting in the regions of Georgia are as follows:

welve thousand hectares of tea plantations are to be restored in western Georgia by Chinese investors, who plan to invest $500 million over 12 years. The information was released by media outlet, which reports that the Head of the state-led Partnership Fund Davit Saganelidze has said the Chinese companies will restore tea plantations in Guria, Imereti, Adjara and Samegrelo, providing the local population with employment. “We have started a very large joint tea project, which implies development of the Georgian tea industry, trade, culture and tourism, and restoration of tea cultures in Georgia. The investors are also considering building tea factories where tea raw materials will be processed,” Saganelidze stated. He added the tourism component will also be developed at the plantations. “Tourists will have the opportunity to come and look around the plantations and taste Georgian tea

there,” he noted. Saganelidze explained that the Chinese investors are ready to restore 12,000 hectares of plantations, which are currently state-owned. “They will start with 4-5 thousand hectares and then gradually restore the rest of the territory, which will be given to them by lease agreement. A very good pilot project was made in Tsalenjikha where tea was grown with Chinese technology and experimental samples sent to China,” he said. The Head of the Partnership Fund explained that the full amount of tea produced in this area will be processed in Georgia and exported to China. “The Chinese investors tell us they will produce the highest quality tea in Georgia and have promised they will train Georgian specialists, build Georgian factories and employ Georgian people. This is a very good deal,” said Saganelidze. The Memorandum of Understanding on Tea Industry Development in Georgia was signed between the Partnership Fund, Ministry of Agriculture of Georgia and Chinese Companies - Beijing Jinfenghengye Agricultural Development Co. LTD and Xinjiang Hualing & Trade (Group) Co. Ltd in 2016.

Kakheti - 206 cases Samtskhe-Javakheti - 90 cases Samegrelo-Zemo Svaneti - 61 cases Kvemo Kartli - 50 cases Imereti - 45 cases Shida Kartli - 42 cases Racha-Lechkhumi - Kvemo Svaneti - 26 cases Adjara - 21 cases Guria - 10 cases According to the Ministry, 46 cases of violation of the Sawing Law were also recorded. 26 unregistered mechanical sawing units were removed from factories and taken to the Finance Ministry.

NGO Says Budgetary Expenditures for Gov’t PR Increased Continued from page 1 According to the survey, the number of people employed in the press agencies of public institutions and their salaries have sharply increased since the Georgian Dream government came into power as a result of the 2012 parliamentary elections. The report reads that in 2012, state agencies paid 6.4 million GEL to PR specialists, while in 2013 the budgetary expenditures amounted to GEL 7 million and in 2014 - 9 million GEL. In 2015, the government paid 10 million GEL for PR services while in 2016, 12.4 million GEL was spent from the budget on press services, almost twice the amount of salaries paid in 2012. However, last year, expenditure was reduced to 9 million GEL, though it should be noted that the 2017 statistics do not contain the data of November and December. According to the official data, from year to year, the government increases the number of people working in the PR services of various governmental agencies. Where 423 people were employed in 2012, in 2016 this number increased to 690, and in 2017 it was reduced to 643.

Among the ministries, the Interior Ministry spent the most budgetary money on PR, setting a record in 2016 by spending 1,343.887 GEL on the Public Relations Department. The Interior Ministry is followed by the Defense Ministry with outgoings of 848,470 GEL, and Ministry of Health, which in 2016 spent 907,565 GEL on PR. Salome Tsetskhladze, TI Georgia representative, stated that in 2013-2017, the Interior Ministry spent 5.3 million GEL followed by the Ministry of Defense - 3.8 million GEL and Health Ministry -3.6 million GEL. “Moreover, compared to 2012, in 2016 the number of PR employees in state agencies grew by 63% and the expenditures by 94%,” she added. Mamuka Andghuladze, Program Manager of TI Georgia, notes that the government's administration did not provide data on expenditures during 2013-2017. He added if they are again denied the information, they will apply to court. “In comparison to 2012, the peak was 2016, in terms of salaries and the number of employees. We suppose this is related to the parliamentary elections held in 2016," he said.




Message From The Secretary-General On International Women’s Day FROM THE SECRETARY GENERAL OF THE UN, ANTÓNIO GUTERRES


e are at a pivotal moment for women’s rights. The historical and structural inequalities that have allowed oppression and discrimination to flourish are being exposed like never before. From Latin America to Europe to Asia, on social media, on film sets, on the factory floor and in the streets, women are calling for lasting change and zero tolerance for sexual assault, harassment, and discrimination of all kinds. Achieving gender equality and empowering women and girls is the unfinished business of our time, and the greatest human rights challenge in our world. The activism and advocacy of generations of women has borne fruit. There are more girls in school than ever before; more women are doing paid work and in senior roles in the private sector, academia, politics and in international organizations, including the United Nations. Gender equality is enshrined in countless laws, and harmful practices like female genital mutilation and child marriage have been outlawed in many countries. But serious obstacles remain if we are to address the historic power imbalances that underpin discrimination and exploitation. More than a billion women around the world lack legal protection against domestic sexual violence. The global gender pay gap is 23%, rising to 40% in rural areas, and the unpaid work done by many

women goes unrecognized. Women’s representation in national parliaments stands, on average, at less than one quarter, and in boardrooms it is even lower. Without concerted action, millions more girls will be subjected to genital mutilation over the next decade. Where laws exist, they are often ignored, and women who pursue legal redress are doubted, denigrated and dismissed. We now know that sexual harassment and abuse have been thriving in workplaces, public spaces and private homes, in countries that pride themselves on

their record of gender equality. The United Nations should set an example for the world. I recognize that this has not always been the case. Since the start of my tenure last year, I have set change in motion at UN headquarters, in our peacekeeping missions and in all our offices worldwide. We have now reached gender parity for the first time in my senior management team, and I am determined to achieve this throughout the organization. I am totally committed to zero tolerance

of sexual harassment and have set out plans to improve reporting and accountability. We are working closely with countries around the world to prevent and address sexual exploitation and abuse by staff in peacekeeping missions, and to support victims. We at the United Nations stand with women around the world as they fight to overcome the injustices they face – whether they are rural women dealing with wage discrimination, urban women organizing for change, women refugees at risk of exploitation and abuse, or

women who experience intersecting forms of discrimination: widows, indigenous women, women with disabilities and women who do not conform to gender norms. Women’s empowerment is at the heart of the 2030 Agenda for Sustainable Development. Progress on the Sustainable Development Goals means progress for all women, everywhere. The Spotlight initiative launched jointly with the European Union will focus resources on eliminating violence against women and girls, a prerequisite for equality and empowerment. Let me be clear: this is not a favor to women. Gender equality is a human rights issue, but it is also in all our interests: men and boys, women and girls. Gender inequality and discrimination against women harms us all. There is ample evidence that investing in women is the most effective way to lift communities, companies, and even countries. Women’s participation makes peace agreements stronger, societies more resilient and economies more vigorous. Where women face discrimination, we often find practices and beliefs that are detrimental to all. Paternity leave, laws against domestic violence and equal pay legislation benefit everyone. At this crucial moment for women’s rights, it is time for men to stand with women, listen to them and learn from them. Transparency and accountability are essential if women are to reach their full potential and lift all of us, in our communities, societies and economies. I am proud to be part of this movement, and I hope it continues to resonate within the United Nations and around the world.




MARCH 6 - 8, 2018


The ISET Policy Institute (ISET-PI, 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.

What Georgia Can Teach Sweden About Energy Efficiency

Common sight around Tbilisi with clothes hanging outdoors. Source: Private photo.




believe we all are bound by the notion that technology is the thing. We might be convinced it’s a sign of progress. Those very clever engineers have finally saved humanity, not just by envisioning what will save the masses from wasting their minutes and seconds, but they also help to propel all sorts of time-saving devices. There are, of course, good reasons to argue for how important technological advances are. They can be used as a means of promoting youth employment, or to assist an individual suffering from mobility concerns with vacuum cleaning. Or why not launch a space rocket floating around our solar system? Still, I strongly believe that there are some gadgets that we could assuredly live without. The one currently occupying my mind I became aware of while strolling the streets of Tbilisi. The perks of being newly introduced to a city such as Tbilisi is that you can easily lose yourself strolling down one of the many narrow lanes in the city. They showcase peculiar looking houses, yards and gardens filled with all sorts of kits. What also manifests itself is the visibility of newly washed laundry neatly parading on a wire, left outside to dry in the wind. I am not going to gush over the often colorful prints of bed linen or wears but rather point out the frequency of using outdoor air for drying clothes. Something that is not very often on display in cities in Sweden. Pretty much at the same time as I realized the regularity of this (during chilly December days), the Swedish Energy Agency released the results of a study where they compared methods of drying clothes in the most energy efficient way. So, what did the study say about the use of appliances?


Capacity (kg)

Table 1 compares different types of drying appliances, considering capacity, energy use in kWh/kg, time duration, and lastly, energy use by percentage in different appliances, compared with the most energy efficient machine. As can be seen, the most energy efficient gadget one could use to dry clothes is the tumbler with heat pump. However, this is not the whole story. Dryers need to be classified as A+ or A++, which tells you how energy efficient it is (currently classification of new tumblers spans from A+++, the most effective, to C, and stretches to D for older ones). It should also be installed with a heat pump within the body of the tumbler, which recycles heat, leading to even more effective use of the heat already circulating within the machine. So, what has this to do with Georgia?

ENERGY EFFICIENCY IN GEORGIA Before I answer what this has to do with the Georgian manner of drying clothes, I would like to refer to a 2014 study conducted by USAID, assisted by AYPEG . The report mapped out household energy use in Georgia. Surveying 1,081 households, with a more or less equal distribution between rural and urban respondents, interesting themes were raised that exposed attitudes about the use of energy efficient equipment in dwellings. When asked about energy efficiency, it turns out (maybe not as a surprise for some) that 72 % of the rural and 64 % of the urban interviewees did not know the meaning of the term (Figure 2). At the national level, 25% of respondents were familiar with the meaning of the term, and about the same number of households used energy efficient light bulbs for indoor use (Figure 3). In the USAID study, those who did not have an initial understanding of the term Energy use (kWh/ kg)

Drying time (hours, minutes)

were offered an explanation by the researchers. They gave examples of areas where energy efficiency could be applied, such as the usage of appliances that are marked as energy efficient. After establishing this, the respondents were asked what energy efficient actions they envisioned in the future. As explained in Figure 4, a central heating system had a slightly higher response than the runner up, but most interestingly, 13.7 % were willing to upgrade to an energy efficient appliance (USAID, 2014). Obviously, given the earlier response to the question in the report, one could not jump to the conclusion that this has anything to do with tumblers. But it gives a hint that there is not just an existing awareness (27 % used energy efficient light bulbs), but there also seem to have been some openness to new technology. Especially bearing in mind that of those who did not have a washing machine, 48 % were actually considering buying one within three years. With the right incentives and information, these future customers could as well buy an energy efficient washing machine, which may have a spillover effect on similar or other household activities, including clothes drying.

Figure 2. Source: USAID, 2014.

regarding ownership of a tumble dryer (52 % each, Germany in third place with 47%). Finland, facing the same sub-arctic climate as Sweden, comes at fifth place but is, as noted in the Figure 5 below, one of the countries least likely to use tumble dryer. Interestingly, Finland top the use of heated rooms (a method that uses three times more energy

TUMBLER VERSUS TRADITIONAL METHODS So, let’s go back to what the Swedish report concluded. Although using a tumbler marked A++ with an installed heat pump could help save energy, relative to other alternatives, the ultimate way of saving energy remains using what Mother Earth keeps providing - sun and wind. Despite all the advanced gimmicks that are on the market, claiming to help us save time while consuming as little electricity as possible, nothing can really beat the old trick of using blustery weather. Moreover, according to existing research (e.g. Anderson, 2016), it surely leaves a question mark whether or not we save that much time by letting a tumbler do the job. Whatever the reason (my opinion is that the main attraction of tumblers is that they save space as, drawing from my own experience, many people are living in comprised apartments with a minimum of utility space), of the 10 European countries surveyed by Schmitz & Stamminger (2014), as shown in Figure 5, Sweden is at the top in the use of tumblers. Sweden and the UK are both also at the top

energy with respect to clothes-drying, in all seasons. Therefore, the most effective way to promote energy efficiency in this area could simply be to advertise the benefits of line-drying before consumption preferences change and the transition to tumblers takes place. After all, “an ounce of prevention is worth a pound of cure.” And Sweden? In our case, instead, perhaps we could move beyond the promotion of more efficient (oftentimes hi-tech) dryers to the promotion of the “Georgian model.”


Figure 3. Source: USAID, 2014.

than tumbler dryers on average per year per household).

LESSONS FROM GEORGIA So where does this leave us with regard to Georgia and Sweden? The lead point of this blog post is that Georgians already use the most efficient way of saving

Figure 4. Where Georgian participants would like to save energy. Source: USAID, 2014.

Anderson, B. 2016. Laundry, energy and time: Insight from 20 years of time-use diary data in United Kingdom. Energy Research & Social Science 22, 125-136. USAID. 2014. Household Energy enduse survey. Hydro Power and energy planning project (HPEP). Schmitz, A., Stamminger, R. 2014. Usage behavior and related energy consumption of European Consumers for washing and drying. Energy Efficiency, (7), 937-954. Environment and Energy Policy Research Center, ISET-PI - SIDA Bilateral Associate Expert


Figure 5. Use of drying practices of clothes in 10 European countries (2011). Source: Schmitz & Stamminger (2014).

Energy use in % between other appliances and tumbler dryer with heat pump

Tumbler dryer with heat pump




Condenser tumbler dryer










Drying cabinet with heat pump





Drying cabinet with dehumidifier





Drying cabinet with (exhaust) outlet channel





Table 1. Adjusted table showing results of energy efficient appliances for drying clothes. Source: The Swedish Agency, 2017.

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Number of Travelers in Mountainous Adjara up by 98% BY THEA MORRISON

I Ministry of Economy Fixed on Pension Reform BY NIA PATARAIA


he Georgian government says it will not take expert advice about the Accumulating Pension Program. Deputy Minister of Economy, Eka Mikabadze, made a clear statement on the TV program ‘Analytics,’ to the effect that the government will not

consider reviewing the obligatory pension system. “Income tax reduction and review of the system's obligations will not happen,” Mikabadze said, highlighting that pension contributions are not taxes, neither by the definition of the Organization for Economic Co-operation and Development (OECD) nor by the Georgian legislative framework. “The pension contribution should not be considered a tax. It is a means for

employees to make savings, which will later be used for his/her own good," she said. Mikabadze went on to note several reasons why the pension contribution should not be considered as a tax, in particular that the pension contribution will be transferred directly into property and that it will be reflected on a person’s own bank account - accordingly, it will not be merged with the budget or treasury.

n 2017, the number of visitors in mountainous Adjara increased significantly. Last year, 46,592 tourists visited family-guest houses, tourist sites and museums on the popular tourist routes of mountainous Adjara, which is 98% more than the data of 2016. The Department of Tourism and Resorts of Adjara reports that the most visited places in mountainous Adjara were Keda –204% increase, Khulo –up by 7% and Machakhela –71% increase. “Most people, 29,298 tourists, visited wine cellars and tourist places in Keda, 18,626 visitors went to Khulo and 7,668 to Machakhela,” the Department reports. According to statistics, one of the most visited places in the Adjara region was

museums, where the number of visitors increased by 32% in 2017 compared to 2016. As reported, 15,286 visited Adjara’s museums last year. The number of visitors also increased in food and tourist facilities. The Head of Adjara’s Tourism Department, Sulkhan Glonti, said that last year the office organized 12 info tours and introduced Adjara’s touristic potential to about 180 people, excluding trade fairs and other programs abroad. “Also, we organized trainings for guides, which brought positive results. This year, we are going to continue working in this direction and we hope that the number of travelers in mountainous Adjara will further increase,” he added. The statistics of the Department of Tourism and Resorts of Adjara is based on the data provided by family-guest houses, cellars, catering facilities, museums and folk ensembles.

Photo: Mountainous Adjara. Source:




MARCH 6 - 8, 2018

TSU 100 Years: Pride & Dissatisfaction OP-ED BY ARCHIL SIKHARULIDZE


n February 8 Ivane Javakhishvili Tbilisi State University (abbr. TSU or Tbilisi State University) marked its 100th anniversary under the patronage of UNESCO. The National Bank of Georgia even issued a collector coin in denomination of 5 GEL to mark the event. Georgia’s highest officials as well as prominent local and foreign figures praised Tbilisi State University for its history and contribution. On the other hand, some of the university’s current students and alumnus criticized the anniversary ceremony as a huge waste of money for an institution facing serious challenges. The negative backlash was so strong, especially in social media, that some representatives of TSU’s academic staff expressed their disappointment and confusion. And while we should definitely celebrate the 100-year achievement, the criticism is not entirely baseless. The Ivane Javakhishvili Tbilisi State University, the first-ever national university in the Caucasus, was established on February 8, 1918. The university’s founding fathers were prominent Georgian scientists who had the aspiration to found a European-type higher school in Georgia, based on Georgian educational traditions. The Council of Professors appointed Petre Melikishvili, a Georgian chemist, as the first rector. Tbilisi State University has changed its official name two times: Comrade Stalin Tbilisi State University (from June 9, 1938 to June 7, 1989) and Ivane Javakhishvili Tbilisi State University (from June 7, 1989 to present). Currently, TSU is the leading research university in the Caucasus. Times Higher Education data shows that TSU is the only Georgian university to have been included in the TOP 1000 best universities in the world. In 2017 it was ranked as >800, in 2018 – 1001+. TSU’s full data is following (from 100): teaching score – 16.2%, research – 8.7%, citations – 2.7, industry income – 32.3, international outlook – 40.9. According to QS World University Rankings, no Georgian university has ever been included in the TOP 959. The beginning of the twentieth century was full of turbulent political events and it was an outstanding achievement for

any country to be able to establish a university. So far, it has been a pleasure for Georgia to host the oldest academic/ research institution in the Caucasian region. At the same time, it is important to ensure that not only history makes it special but also a strong academic profile and the capability to move the country’s science forward. And here is the main reason for the abovementioned backlash. Let’s outline at least a few critical flaws of Tbilisi State University that are causing sincere confusion, anger and aggression from its current students and alumnus. There is no doubt that Tbilisi State University is a leading institution in the Caucasus. Furthermore, it is the most respected and recognized research university abroad in the region. It attracts Georgia’s brightest minds and hosts plenty of foreign researchers working on various topics. All in all, graduating from TSU is a great honor for the representatives of each generation in the country. But, paradoxically, these facts are not reflected in its mostly low, according to statistics, academic profile. There are all necessary variables in place to make the university internationally competitive, but somehow it fails to do so. The question is raised as to why? We may openly argue that there are wellknown internal systemic gaps that, unfortunately, some of TSU’s current students and graduates think are not respectively challenged by the university’s administration and academic staff for objective and, frequently, subjective/mercantile reasons.

FINANCES TSU might be the best example of a research university without actual research. When we speak about “research” we mean coming in accordance with existing international standards. These standards have evolved over the years and currently, inevitably, demand respective financial resources to be allocated. Simply, you cannot conduct high-level academic projects if you do not have money to pay staff and undertake at least a minimum amount of so-called field works. But Tbilisi State University is out of money. It is a paradox that the leading research institution in the Caucasus does not have even scientific grant schemes to finance research projects. It is totally dependent on external support from, for example, the Shota Rustaveli National Science Foundation, SOROS Foundation

Georgia, various embassies and other agencies. At present, we have a research university without the ability (or, maybe the willingness) to accumulate internal financial resources to support its postgraduate students (especially, PhD) and, thus, execute the institution’s highest goal – promoting science in the country. A research university without finances does not exist as well as, generally, science. As a result, students applying to Tbilisi State University hoping to become scientist-researchers are often disappointed.

NEGLIGENCE Students coming to TSU will be surprised not only to find that the university is actually out of money but also by existing attitudes among administration members and academic staff. These attitudes can be clearly defined as negligence. It is no secret that representatives of the university have serious issues with motivation to support and guide students. And this feeling only grows over years. By the end of studies, the only thing a TSU student is sure of is

that neither the university nor his/her lecturers care about future perspectives of their alumnus. There is serious lack of understanding among them, especially academic staff, that students represent, first of all, the institution itself. We may argue that this is the reason behind the financial negligence, too. Tbilisi State University is trying hard to avoid investing in its own students and graduates. Probably, that is why TSU’s prominent alumnus were so angered by the fact that the university administration decided to pay more than 60,000 GEL to the Public Broadcaster for advertisement rather than finance student-oriented activities, especially in research areas.

ACADEMIC STAFF Probably the most sensitive and painful issue is related to TSU’s academic staff. In theory, these people should lecture and guide students, but in fact we often see the opposite. There is no sense among TSU’s students that their lecturers really care. Moreover, once you face the challenge of writing a Master’s paper, you realize that there is pretty low motiva-

tion among academic staff members to supervise and guide you. This is even more evident if you apply for a PhD program. Once you are enrolled, you might find that your supervisor is often keep exceedingly busy by activities that have nothing to do with university or science at all. The lion’s share of TSU’s academic staff members are also active members or even founders of other research institutions, NGOs and movements. Working at TSU is not a full-time job for them but rather a source of secured minimum financial income and high social status. All in all, it is a significant achievement to have a century-old university that is highly praised by the international academic society. But TSU in practice does not satisfy the international standards to be a globally competitive research institution. Moreover, it does not generally provide its own students and graduates with respective financial and academic support. These challenges must be faced and dealt with to ensure that history is not the only thing that we can be proud of with regards to Tbilisi State University.

German Environmentalists Threaten to Take Nord Stream-2 to Court BY DIMITRI DOLABERIDZE


erman environmentalists have decided to prevent the construction of Nord Stream-2 in the territorial waters of Germany. The move was announced by representatives of the environmental association NABU, a German non-governmental organization (NGO) dedicated to conservation at home and abroad, including the protection of rivers, forests and individual species of animals. The NGO plans to go to court because they see danger in the pipeline passing through marine nature protection zones, “threatening the safe existence of marine animals,” writes Spiegel magazine. According to Nabu expert Kim Detloff, gas supplies via the new gas pipeline will lead “only to the fact that there will be competition for renewable energy sources for decades but to the detrimant of achieving agreed climate goals.” German Federal Chancellor Angela Merkel had previously stated that Ger-

many supported the project and did not consider it a political one. On February 16, she reiterated support for the construction of the gas pipeline, stating that Nord Stream-2 “does not threaten the energy security of Europe.” On February 28, Chancellor of Austria, Sebastian Kurz spoke about his own

country’s support of the project following a meeting with Russian President Vladimir Putin. “The Nord Stream-2 project, which concerns not only Austria, but also Germany and other states, is also supported by the Austrian Federal Government,” he said. The Russian leader said that the Nord

Stream-2 gas pipeline project is depoliticized, “this is not an alternative to even the Ukrainian route: this is an economic and, moreover, a commercial project. The participants of this project have considered their profits and economic gains from its implementation, and have come to the conclusion that

implementation is expedient,” President Putin said. “If Ukraine presents economically justified parameters for the use of its gas transportation system, we have nothing against continuing cooperation with Ukraine. The question is only the volume to pump,” Putin added. At the same time, Kyiv continued to be vocal about the “danger of the project for the energy security of the EU.” On February 23, Ukrainian expert Andrei Chubik invited the authorities of the country to demand compensation from the EU for the construction of the gas pipeline. Earlier, Raiffeisenbank's analyst for the oil and gas sector, Andrei Polishchuk, said in a commentary to Ridus that the project is moving forward mainly thanks to Germany, which supports it as its main consumer. “I think Gazprom will manage to get all the permits necessary for the construction of Nord Stream-2, and most likely the project will be implemented,” the expert said, going on to note that political risks always exist in the implementation of such large and significant projects.




MARCH 6 - 8, 2018

33 million GEL Allocated to Support Startups


BC’s ‘Starter’ Initiative sees 33 million GEL to support Start-Up Businesses. 12,000 participants have received different benefits from the TBC Bank program 'Startuper' launched a year ago aiming to support start-up companies in Georgia.TBC was the first bank in Georgia to offer startups and non-financial organisations this type of assistance. For over a year, more than 500 start-up companies attended training and master classes organized by TBC’s Starter. More than 200 articles, blogs, TV reports and videos were published for media and social networks on the initiative. Today, Starter consists of four main directions: Startups, Startup-products, Training / Master Classes and Media Support. Representatives of start-up companies offered financial and non-

financial services have already achieved success in different sectors. They include: the construction sector, shoe and clothing manufacturing, transportation, logistics, healthcare, technology, tourism and agriculture, among others. The program has recently added two more directives – Support for Agricultural and Hotel/Tourism start-ups. As a result of partnerships with various large companies, Starter has created special start-up products that offer new company representatives access to the resources they need and offers a discount on said resources. Starter will be assisted by companies Socar, Geocell, Silknet and TBC Insurance for 1 year. Further partnerships are planned with several companies in the near future. Detailed information on all directions of the program can be found on the Starter's website

this was later pushed back to December. As far as I can tell, it has still yet to be finished, and nobody seems to be living there. I hesitate, of course, to conclude that they have run out of money because nobody can afford their apartments, but with that in mind, I cannot help wondering who on earth these buildings are supposed to cater to. It’s a consistent gripe amongst Tbilisi residents that more and more people from the outlying regions are flocking to the city, but I can’t imagine a Kakheti farmer or Svaneti mountain man kicking up his feet in a building wherein the cheapest (and smallest) of apartments is $120,000 (with the gym and pool not included, which I thought damned unfair). Nor is Tbilisi a favorite expat destination for wealthy foreigners; the Arab oil

barons and Russian oligarchs seem happy enough where they are, with their condos in London and New York, and mansions in their own lands. The population of this city is increasing at rather an alarming rate, but I don’t think the answer to the claustrophobic city center is the construction of buildings that nobody can afford. Seeing as the banks were hesitant enough with me, a man who is more than aware how lucky he is to work where he does, I dread to think what they would say to people earning rather less and still hoping to buy somewhere to live. There are wealthy Georgians, of course, but precious few in comparison with the majority, and I don’t think it’s impossible that these fancy new buildings might one day become fancy new empty husks.

Who’s It All For? OP-ED BY TIM OGDEN


nyone active on social media will probably have noticed that Tbilisi residents are less than happy with many of the new building projects that have been proposed or are already under construction. One can see their point; although the outskirts of the city are little more than a concrete jungle of standard grey Soviet blocks, the center is mercifully different, with its French-style boulevards and old buildings with verandas that always make me think of the American Old West. To be fair, the new projects are hardly as ugly and brutal as Stalin’s contributions to the cityscape, what with their shiny exteriors and tall, imposing designs, but they will still apparently destroy much of what remains of Tbilisi’s green areas. Still, when I look at all these new modern designs, I can’t help but wonder who the hell can afford these things. About three years ago, I looked into buying a house myself – nothing fancy, just one or two bedrooms of about 85 meters squared. My trips to the banks were interesting; the first interview with the financial advisor felt rather like being a prisoner of war accused of plotting to escape and assassinate the enemy head of state. He plainly didn’t believe that I earned 1100 USD per month, and reacted with an angry stare when I suggested he look at my transaction history. Furthermore, he was plainly unhappy that the girl sitting next to me was not my wife; the fact that we were engaged to be married in four months’ time did not mollify him one bit, nor was he impressed

when she provided proof of her own salary of 800 Euros per month. In his eyes, clearly we were con-artists intent on using the house for drugs parties, prostitution, and epic marathons of Friends (although you could see in his eyes that he wished he could come, too. Fat chance). I’d have put this down to the cynical suspicions of yet another Georgian man unhappy with the idea of a countrywoman being with a foreigner, but our happy friend from the bank was not alone in treating us with borderline hostility: one woman said that I could not have a mortgage because I was not a Georgian citizen, and when I produced my citizenship ID she stared at it as though she simply could not believe it; she even shook her head at the thing, mouth and eyes wide open, as though I had suddenly produced a rattlesnake. She then retreated into safe territory by saying that we could not buy anything together because we were not married (and that was another facer, too: my mother and step-father were together for fifteen years before marrying and bought five homes together. I’d really imagined that Georgian banks would be professional enough to be above that sort of cultural influence, but there you are). That, then, is my first point – the wife and I are lucky enough to make far above the national salary of 500 GEL per month, but for reasons that are still beyond us, we were treated with suspicion by people who could have checked exactly how much money we have and earn (to allay any ideas you might have of your own, you may be sure I wore my suit to every meeting we have with representatives from three banks, and the reactions were almost all the same). I next flirted with the idea of buying

a home last year, when on an impulse I emailed the King David Residences and the Axis Towers project. The former is close to Heroes’ Square, a glassfaçade two-building complex in the style that Tbilisi architectural traditionalists have come to hate, while the latter is an usual design of twin twisted towers in Vake. Both will apparently have restaurants, a fitness center, and a swimming pool all within, which appealed to me since I am rather more snobbish than penniless Spanish aristocracy, but as you can imagine, the prices for even the smallest of apartments in either cost a fortune. I was in contact with the King David people last May, and they assured me that the towers would be ready for inhabitation in August; on their website,



CIS Economic Council Discusses Agreements & Future Cooperation BY DIMITRI DOLABERIDZE


n March 2, the 77th meeting of the Economic Council of the Commonwealth of Independent States was held in Moscow. The members of the CIS Economic Council approved the drafts of a number of documents that will be submitted to the Council of CIS Heads of Governments. These include drafts of the Agreement on the Formation and Development of the Intellectual Property Market of the Commonwealth States, the Agreement on the Distribution of Documents on Interstate Standardization, the Concept of Cooperation of the CIS Countries in the Field of Innovative Energy Development, the Development of Advanced Energy Technologies and the Plan of Priority Actions for its Implementation, and the Joint Action Package for CIS countries on the Prevention and Control of Rabies until 2025. The Economic Council decided to form a highlevel working group of ministers of the Economy of the Commonwealth States for further work on the draft Agreement on Free Trade in Services and approved the schedule of its meetings for 2018. Participants of the meeting approved the Program of Scientific Research on the Kazakhstan Materials Science Tokamak for 2018-2020.

The Economic Council ruled that the Russian Federal Center for Nuclear and Radiation Safety would be given the status of “basic organization� of the CIS member states on the management of spent nuclear fuel, radioactive waste and the decommissioning of nuclear and hazardous radiation facilities. Having considered the submission of the Jury of the competition for the Prize of the Commonwealth of Independent States in 2017 for achievements in the field of quality of products and services, the Economic Council decided to award the titles of laureates and diplomats of this prize to a number of enterprises and institutions of the Commonwealth countries. In addition, a number of budget, financial and organizational issues were discussed. The next meeting of the CIS Economic Council is scheduled to be held this June in Moscow. At the meeting of the Economic Council, the vicepremiers and ministers of the CIS countries discussed cooperation in several sectors. The main topics at the forum were the development of free trade on the territory of the Commonwealth, improvement of the intellectual property market, and innovative cooperation. Within the framework of scientific research, the number of participating countries and financing of the energy technology of the future - thermonuclear fusion - was approved, including the future thermonuclear reactor in Kazakhstan.

February Inflation Rate at 0.2% in Georgia BY THEA MORRISON


n February 2018, the monthly inflation rate in Georgia amounted to 0.2%. Compared to the same period of the previous year, the Consumer Price Index change (CPI - annual inflation rate) posted a 2.7% increase. The data was presented by the National Statistics Office of Georgia (Geostat), which claims that the monthly inflation rate was most heavily influenced by price changes for food and non-alcoholic beverages. In February, prices for said items increased by 0.4% and contributed 0.13 percentage points to the overall CPI change. Geostat says that prices were comparably higher for the following subgroups: fruit and grapes (10.4%), vegetables (2.9%), fish (1.5%). Meanwhile, prices decreased for milk, cheese and eggs (-2.3%) and

for sugar, jam, honey, chocolate and confectionary (-1.6%). Moreover, prices in the group of Restaurants and Hotels increased by 2.1%, contributing 0.09 percentage points to the overall CPI change. The prices were also up in the group of alcoholic beverages and tobacco by 1.2%, but down for clothing and footwear by 22%. Annual inflation was mainly influenced by price changes for the following groups: Food and non-alcoholic beverages - prices increased 3.4%, contributing 1.04 percentage points to the annual inflation. Transport - prices in the group increased 2.9%, contributing 0.41 percentage points to the annual inflation. Alcoholic beverages and tobacco prices increased by 7.4% with a relevant contribution of 0.49 percentage points to the overall CPI. Health - prices were up 4.3%, which resulted in a 0.35 percentage point contribution to the overall annual inflation.





MARCH 6 - 8, 2018

7-8% of Georgia’s GDP to be Transferred to Regional & Municipal Budgets by 2025


Peace Over War: Protest against Russian Occupation BY NIA PATARAIA


n March 4, a peaceful demonstration was held against Russian occupation. Citizens of Georgia expressed solidarity to the death of soldier Archil Tatunashvili, who was killed whilst in custody of the de facto Republic of South Ossetia, currently occupied by Russia. The protest’s main goal was to express the position of Georgian citizens as true patriots of their country

without any political motive “We want you to follow us, because today it is important to tell the whole world that we will not sit in silence, that we do not approve of the Russian occupation. We encourage everyone to join this campaign”. The main motto of the demonstration was: “Peace is More than War”. People gathered on Liberty Square and once again condemned Russia’s violating policy. They stood for one minute in silence with their flashlights on, to honor the memory of Archil Tatunashvili. Citizens brought flowers and lit candles. More than 100 private companies and 20 bars closed for two hours to express their solidarity.

he Parliament and Government of Georgia presented a new national vision of decentralization and local self-governance, which increases decisionmaking powers and financial resources of the regional and local authorities, empowering them to better address the needs of citizens. The document was made public on 5 March 2018, by Irakli Kobakhidze, Georgian Parliament Speaker, and Giorgi Kvirikashvili, Prime Minister of Georgia. Niels Scott, Head of the United Nations Development Program (UNDP) in Georgia; Arad Benkö, Ambassador of Austria to Georgia; Lukas Beglinger, Ambassador of Switzerland to Georgia; and Kakha Kaladze, Mayor of Tbilisi and President of the National Association of Local Authorities of Georgia, joined the Parliament Speaker and Prime Minister in their address to representatives of the Georgian government, Parliament, civil society, diplomatic community and international organizations. In his keynote speech, Kobakhidze focused on the legislative changes that will follow the adoption of the new vision. “Fiscal decentralization and delegation of competencies will increase the local budgets, enabling local self-governments to effectively exercise their competences, raise the professional standard of civil servants and offer wider and better services to citizens,” he said. PM Kvirikashvili stressed that the new vision marks a strategic shift to effective local self-governance and citizen participation in local decision-making. “A wide range of competencies and resources will Be transferred from the national to local authorities by 2025. This includes 7-8% of GDP which will be allocated to the municipal budgets. This substantial

reform will equip local self-governments with the powers, skills and resources necessary for resolving local economic and social issues,” Kvirikashvili said. The new national vision of decentralization and local self-governance is part of the ongoing regional and local development reform, supported by Georgia’s international partners, including UNDP and the governments of Switzerland and Austria. “Local self-governance must be capable of bringing decisions and services close to citizens, adapting them to people’s needs, and making citizens the active owners of the governance process. With this new national concept, Georgia is making a huge step forward to achieving this standard,” Niels Scott said. The presentation of the national vision for decentralization and local self-governance will be followed by the development of the national strategy and action plan to be adopted by the Parliament of Georgia in 2018.

Parliament Speaker: Georgia, Moldova & Ukraine Face Similar Challenges



eorgian Parliament Speaker Irakli Kobakhidze said Georgia, Moldova and Ukraine have similar aspirations and face similar challenges, including increasing regional instability and external attacks against their sovereignty and territorial integrity. Kobakhidze made the statement while delivering a speech at the international conference 'Georgia, Moldova and Ukraine: Eastern Partnership and Current Security Challenges,' held in the capital of Moldova, Chisinau, on Friday. The Speaker expressed hope that Georgia, Moldova and Ukraine will address the challenges and achieve their common goals. “We are determined to remain independent in choosing our future, preserving our national borders and joining the European family of nations. Our common statement expresses the will and opinion not only of our national Parliaments but also of our peoples,” Kobakhidze said. He also added that Georgia is stronger and more stable today than ever and is equipped to address

both domestic and external challenges. “Therefore, we need to strengthen our ties with our foreign allies and partners, first of all with the European Union and the United States,” he added. “By standing together with our closest friends and partners, such as Moldova and Ukraine, we can accomplish our national interests and, ultimately, achieve enduring, democratic regional peace and stability,” Kobakhidze said. At the conference, the Speakers of the Georgian, Moldavian and Ukrainian parliaments made the joint statement that EU integration is the most effective mechanism for security, welfare and longterm and stable democratic development. They condemned the deterioration of the security and humanitarian situation in the region and the facts of systematic violation of human rights. The Speakers called on the executive authorities of the countries to elaborate a joint plan for the enhancement of cooperation in defense and security, and called on international partners to continue supporting the three countries. Following the conference, Irakli Kobakhidze met with the Prime Minister of Moldova, Pavel Filip. Bilateral relations and common goals, as well as cooperation in the economic, education and culture spheres, were the key issues of the meeting.




Georgian Parliament to Discuss Resolutions against Russia BY NIA PATARAIA


n March 1, Georgian Parliament received two resolution projects, both of which find the Federation of Russia responsible for Archil Tatunashvili’s death. One resolution was provided by the Georgian Dream party and the other by European Georgia. According to the resolution formulated by European Georgia, sanctions against Russia should be deliberately and carefully put into action. The resolution itself requires making the “OtkhozoriaTatunashvili list”. Sanctions will affect those who

are found guilty for kidnapping and taking the lives of Georgian citizens under Russian military occupation. They should not be able to travel, perform banking activities or benefit from any privilege given to them by Georgia. Yet the majority of Georgian Parliament is pushing for a softer policy. The resolution presented by Georgian Dream suggests allowing the EUMM monitors to enter South Ossetia and Abkhazia according to the Six Point Ceasefire Agreement. As stated in the resolution, Russia should stop its destructive actions and be effectively involved in the Geneva International Talks. Other opposition political parties like United National Movement strongly support the stricter policy and sanctions against Russia.

OSCE Reacts to Tatunashvili Case



n March 1, a Georgian delegation reported to the Organization for Security and Co-operation in Europe (OSCE) about the latest incidents in the region of Tskhinvali by which, under the Russian illegal occupation policy, two Georgian citizens were arrested and one killed. The representative of Georgia in the OSCE spoke about the unacceptable conditions affecting human rights throughout the occupied territories. The Georgian delegation condemned Russia’s offensive actions which “interfere in relations between the two countries,” Furthermore, the

Georgian delegation called on the international community to take necessary measures regarding the Tskhinvali de facto authority’s refusal to return the body of Archil Tatunashvili to Georgia proper. Supporting statements were made by the EU, US and Moldova representatives in the OSCE. The delegations found Russia’s actions unacceptable and incorrect. The EU announced that EU Monitoring Missions will be a great contribution to solving the Tatunashvili case. The EU once more expressed its unwavering view on Georgia’s sovereignty and territorial integrity. The US called for Russia to fulfill its obligations under the 2008 Ceasefire Agreement and withdraw its troops before the conflict worsens, and guarantee access to humanitarian aid in these regions.



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Profile for Georgia Today

Issue #1028 Business  

March 6 - 8, 2018

Issue #1028 Business  

March 6 - 8, 2018