Issue #962 Business

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Issue no: 962/86

• JULY 11 - 13, 2017

• PUBLISHED TWICE WEEKLY

PRICE: GEL 2.50

In this week’s issue...

Georgia Refuses to Grant Refugee Status to Detained Turkish College Manager NEWS PAGE 2

FOCUS ON THE 6 MILLIONTH TOURIST We interview the lady behind the award-winning tourism campaign

PAGE 9

SOURCE: Windfor's

Recycling: Gov’t & NGOs Start Extended Producer Reponsibility Campaign

BY DAVID MONGAZON

F

ew people in Georgia think of what happens when they throw something out in the trash. Two decades ago, waste wasn’t a big issue, since nothing was wasted because everything was valued. But with Georgia’s quick economic development has come rising awareness of the risks associated with poorly disposed of products- and Georgia finds itself far behind many others in seeking solutions to the challenge.

Continued on page 6

Bank of Georgia Supports Welcome to Georgia!

National Tourism Awards as Official Sponsor for 2nd Year PAGE 5

Nelkarisi Winery Opens in Kakheti PAGE 8

Energy Minister Officially Resigns to Run Tbilisi Mayoral Race POLITICS PAGE 10

Polish Ambassador to Georgia on Poland-EU & Georgia-NATO Relations POLITICS PAGE 11 Prepared for Georgia Today Business by

Markets As of 07ͲJulͲ2017

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

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

INDICES

Price

w/w

Price

w/w

m/m

GBP 36.74

+5,2%

+0,5%

GEOROG 04/21

104.59 (YTM 5.39%)

Ͳ0,8%

Ͳ1,1%

GBP 3.70

+4,0%

+6,0%

m/m

GEORG 04/21

BONDS

111.35 (YTM 3.61%)

Ͳ0,4%

Ͳ0,4%

GBP 16.39

+3,5%

Ͳ5,5%

GRAIL 07/22

109.43 (YTM 5.56%)

Ͳ0,7%

Ͳ1,3%

BGEOLN 07/23

101.57 (YTM 5.69%)

Ͳ0,2%

Ͳ0,3%

Price

w/w

m/m

46,71

Ͳ2,5%

Ͳ2,8%

CURRENCIES

Price

w/w

1 212,46

Ͳ2,3%

Ͳ5,8%

GEL / USD

2,3967

Ͳ0,4%

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GEL / EUR

2,7267

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+0,4%

m/m

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GEL / GBP

3,0892

Ͳ1,4%

Ͳ1,3%

FTSE 100

7 350,92

+0,5%

Ͳ1,7%

GEL / CHF

2,4861

Ͳ1,0%

Ͳ0,7%

FTSE 250

19 395,14

+0,3%

Ͳ1,5%

GEL / RUB

0,0397

Ͳ3,9%

DAX

12 388,68

+0,5%

Ͳ2,2%

GEL / TRY

0,6625

Ͳ3,0%

Ͳ2,6%

DOW JONES

21 414,34

+0,3%

+1,1%

GEL / AZN

1,4212

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+0,3%

6 153,08

+0,2%

Ͳ2,3%

GEL / AMD

0,0050

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NASDAQ

Ͳ6,1%

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140,41

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GEL / UAH

0,0920

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1 002,48

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EUR / USD

0,8772

+0,2%

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SP 500

2 425,18

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GBP / USD

0,7758

+1,1%

MICEX

1 912,48

+1,8%

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CHF / USD

0,9640

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MSCI FM

2 699,59

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RUB / USD

60,3840

+2,6%

+5,8%

GT Index (GEL)

1 133,66

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TRY / USD

3,6185

+2,8%

+1,9%

GT Index (USD)

922,38

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+0,6%

AZN / USD

1,6861

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MSCI EM EE MSCI EM

+0,5%

2

NEWS

GEORGIA TODAY

JULY 11 - 13, 2017

Georgian Youth Spends Night at Occupation Line

BY THEA MORRISON

G

eorgian students and representatives of the civil sector set up tents this weekend in Bershueti village, Gori Municipality, on the occupation line with de facto South Ossetia, in order to protest Russia’s creeping occupation that has been taking place since the Georgia-Russia August War in 2008.

The slogan of the protest rally was ‘No to Occupation – Russia is an Occupant’.

Demonstrators protested the recent illegal installation of so-called “Green Signs’ on Georgian territory in Bershueti by occupation forces, which left 20 hectares of Georgian farmers’ lands misappropriated.

The students called on the Russian Federation to stop occupation and annexation of Georgian territories. They also addressed the Georgian government to do its best to make the creeping occupation the topical issue of discussion for the international community.

Georgian law enforcers were mobilized at the dividing line to ensure safe movement of participants of the protest rally.

The police crews stayed the whole night.

The organizers of the rally claim they will protest the creeping occupation again in the near future.

“The problem of creeping occupation does not concern only the residents of the territory under the control of the de facto South Ossetia authorities; this is a problem for all Georgia and everyone should protest it," Giorgi Nadareishvili, one of the students, stated.

While commenting on the issue, the

Georgian Prime Minister, Giorgi Kvirikashvili, stated that occupation is Georgia’s top issue.

“Occupation is a very serious problem.

We have talked about it many times...

Our government has not spent even a minute without this issue being the number one topic on our agenda,” the PM said.

Kvirikashvili added that 135 villages were lost not as a result of the creeping occupation, as it is portrayed by a part of the opposition, but as a result of the occupation that the country inherited from the previous United National Movement (UNM) government [See page 9].

“I believe that the current government will take the necessary steps to solve this problem,” he added.

On July 4, Gori Governor, Davit Tsertsvadze, stated that Russian soldiers had resumed fortification efforts along the so-called border of de facto South Ossetia and moved the so-called border sign 500 meters into Georgian-controlled territory.

The governor added that due to the erection of the sign, residents of the village of Bershueti, the Chilindrishvili and the Khodeli families -have been deprived of access to 20 hectares of agricultural land owned by them.

However, the European Union Monitoring Mission in Georgia (EUMM) released a statement saying they can confirm that borderization activities took place in Bershueti on June 19, not on July 4.

Official Tbilisi condemned the illegal installation of ‘border signs’ on Georgian territory and added that the Russian Federation continues to grossly violate the principles of international law and its commitments undertaken in the Ceasefire Agreement of 12 August 2008.

Georgia Refuses to Grant Refugee Status to Detained Turkish College Manager

BY THEA MORRISON

T

he Ministry of Internally Displaced Persons from the Occupied Territories, Accommodation and Refugees of Georgia has refused to grant the status of refugee to Mustafa Emre Cabuk, the detained manager of the Turkish College, Demirel, and his family members.

The information was released by Cabuk's lawyer, Soso Baratashvili.

“We will appeal this decision at the City Court,” Baratashvili said, adding that his client is innocent.

The manager of Demirel College was arrested on May 24. Tbilisi City Court ruled on May 25 that Cabuk would stay in three-month pre-extradition detention. The decision was made the day after the official visit of the Turkish Prime Minister and Turkish cabinet members to Georgia.

Cabuk's lawyer says that his client is accused of having links to the organization FETO, registered in the United States and associated with Fethullah Gulen, who is accused of orchestrating a military coup attempt in Turkey on 15 July, 2016.

Baratashvili is sure that Cabuk was detained at the request of the Turkish government.

Sozar Subari, Minister of IDPs from the Occupied Territories, Accommodation and Refugees of Georgia, says that granting of refugee status stops extradi-

tion, but refusing the status does not mean extradition.

He also said that Georgia’s Prosecutor’s Office has received certain guarantees from the Turkish side that in case of Cabuk’s extradition, he will be placed in a European-standard cell and his rights will not be violated.

“The consular representatives of Georgia will have the opportunity to visit and check Cabuk’s health at any time if he is extradited to Turkey,” Subari added, highlighting that no extradition procedures are being discussed at present.

“The Turkish side should send the relevant materials to the Prosecutor's Office and Ministry of Justice and only after this will the issue of extradition be discussed by Georgia,” he said.

“If the right to a fair trial is violated or the risk of torture is natural, such person cannot be subjected to extradition, even if the offence committed by him is clear,” the minister added.

Tuba Cabuk, the spouse of the detained manager, addressed the Chief Prosecutor with the request to allocate state security to her family. She also asked for political asylum in Georgia, because, as she says, certain groups of people from Turkey are threatening her via social networks.

Public Defender of Georgia, Ucha Nanuashvili, stated after Cabuk’s arrest that it was very important not to make a hasty decision regarding the extradition of Cabuk.

"We met the defendant and his lawyers on the very first day. It is very important not to make a decision about the extradition until every detail is clear,” he stated.

Mustafa Cabuk denies all allegations and says that he has been only carrying out educational activities during his 15-year stay in Georgia. He thinks his arrest is politically motivated and was orchestrated by the Turkish side.

4

BUSINESS

GEORGIA TODAY

JULY 11 - 13, 2017

Electricity Market Watch FOR GEORGIA TODAY BY MARIAM CHAKHVASHVILI

S

ector research is one of the key directions of Galt & Taggart Research. We currently provide coverage of Energy, Healthcare, Tourism, Agriculture, Wine, and Real Estate sectors in Georgia. As part of our energy sector coverage, we produce a monthly Electricity Market Watch, adapted here for Georgia Today’s readers. Previous reports on the sector can be found on Galt & Taggart’s website - gtresearch.ge.

QARTLI WIND FARM ON THE GEORGIAN STOCK EXCHANGE The government announced plans for a public offering of the Qartli Wind Farm on the Georgian Stock Exchange. The 20.7MW WPP in Gori has generated 38.6 GWh in 2017 and annual generation is forecasted at 88.0 GWh. There is a 10-year PPA in place with ESCO for a guaranteed USc 6.89/kWh. Georgian Energy Development Fund (GEDF) and Georgian Oil and Gas Corporation (GOGC) are the current shareholders of Qartli Wind Farm Ltd. EBRD provided a 10-year US$ 22.0mn loan for the project. The EBRD transaction was named the best renewable energy transaction of 2016 by EMEA Finance. Details of the public offering will be announced in the coming months.

SHUAKHEVI- THE LARGEST HPP CONSTRUCTED IN GEORGIA IN THE LAST 50 YEARS Adjaristsqali Georgia LLC has completed the construction of the 187MW Shuakhevi HPP. The expected annual generation of 450.0 GWh will contribute positively to Georgia’s electricity trade balance and increase energy independence and security of supply. This is the largest HPP constructed in Georgia in the last 50 years, boasting the world’s second longest hydropower tunnel (37.5km).

gian Urban Energy (69.8% of total), owner of the 89MW Paravani HPP, and Adjar Energy 2007 (22.5% of total), owner of the newlycommissioned47.5MWKhelvachauri HPP. Electricity exports to Russia decreased 22.6% y/y and accounted for 31.6% of exports, while exports to Armenia posted a 14.1% y/y increase and accounted for 25.8% of total. Azerbaijan accounted for the rest (0.5%). ESCO was the sole exporter to Russia and Azerbaijan, while export to Armenia was split between GIEC (51.0%) and ESCO (49.0%), which exported electricity in exchange for the electricity imported during Feb-Apr from Armenia.

Total investment amounted to US$ 420.0mn, with 40.5% in equity financing

by Norway’s Clean Energy Invest AS, India’s Tata Power, and IFC Infraventures. The remaining 59.5% (US$ 250.0mn) was financed by loans from EBRD, ADB, and IFC. Company’s social responsibility program encompasses more than 70 social projects, including education in energy and construction sectors and infrastructure and local business development.

ELECTRIC VEHICLE (EV) CHARGERS THROUGHOUT GEORGIA BY END-2017

HPPS SATISFIED ELECTRICITY DEMAND

Electric vehicle (EV) chargers will be installed throughout Georgia, enabling hybrid and electric cars to cover the distance from Telavi to Batumi on a single charge. The project was initiated by E-Space and supported by m2 Real Estate.

20 charging stations are already in place in Tbilisi, Kutaisi, and Batumi. EUR 100,000 in capital expenses will be covered by m2 Real Estate’s corporate social responsibility program, expressing the company’s dedication to Georgia’s green development. By end-2017, E-space plans to install up to 100 EV chargers at gas stations, hotels, and supermarkets owned by partner organizations. The charging stations can be used free of charge through the end of the year, while minor fees, covering variable and maintenance costs, will be applied starting in 2018.

COVENANT OF MAYORS FOR CLIMATE & ENERGY Fourteen municipalities of Georgia have signed the Covenant of Mayors for Climate & Energy. The covenant is a EUinitiated program, connecting local and regional governments with the aim to increase renewable energy usage and energy efficiency and decrease CO2 emissions. Over 7,500 local municipalities have joined the initiative since 2008.

The Georgian municipalities who have signed the covenant have voluntarily taken on the obligation to meet the goals

set out in their action plans by 2020.

Actions to be taken include modernizing municipal buildings and public transport.

Being a signatory of the Covenant of Mayors opens up new credit lines and grant opportunities from various organizations and international banks for projects aimed at decreasing CO2 emissions and increasing energy efficiency.

INTER RAO AGAINST GOG Inter Rao has filed a dispute against GoG in the international court of arbitration.

Inter Rao owns 75% of JSC Telasi and 100% of Khrami 1 and Khrami 2 HPPs through two separate subsidiary companies based in the Netherlands. There is a Bilateral Investment Treaty in place between Georgia and the Netherlands, which protects the interests of foreign investors. Inter Rao claims that exchange rate fluctuation, which negatively affected its revenues, was not taken into account

by GNERC in its 2016 tariff calculation.

Generally, the tariff methodology in Georgia does not factor in losses due to exchange rate movements. Before filing the dispute, Inter Rao submitted a list of claims to the Georgian government, but the parties were unable to reach an agreement. According to preliminary information, the investor is suing for US$ 125.0mn in damages.

10 Galaktion Street

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

ELECTRICITY CONSUMPTION AND GENERATION – MAY 2017 Domestic consumption increased 1.3% y/y in May 2017. Consumption of distribution companies increased 6.0% y/y in May: consumption was up 6.8% y/y by Telasi, 5.5% y/y by Energo-Pro, and 6.2% y/y by Kakheti Energy Distribution. The Abkhazian region’s electricity usage was up 7.7% y/y and accounted for 12.5% of domestic consumption. The low overall growth in domestic consumption (1.3% y/y) was largely the result of a 26.6% y/y decrease in direct consumption (-4.1ppts. The top export destination was Turkey (42.1% of total), posting a 38.1% y/y increase, albeit from the low base in 2016 (-29.7% y/y).

The top exporters to Turkey were Geor-

Electricity demand was satisfied largely by hydro generation, with 99.1% in the supply mix. The new wind power plant accounted for 0.7% of total electricity supply, while imports and TPPs together comprised only 0.2%. 19.0% of domestic generation was exported. Total hydro generation was up only 1.3% y/y. Deregulated HPPs posted a 38.7% y/y increase in generation, with 29.5ppts due to the addition of new large HPPs – Dariali HPP (108.0MW) and Khelvachauri HPP (47.5 MW) – and the remaining 9.2ppts attributed to good hydrological conditions in May 2017. However, generation was down 1.7% y/y by Enguri/Vardnili and 10.0% y/y by other regulated HPPs due to the low water levels in reservoirs resulting from bad hydrological conditions in the winter (Oct-16 to Apr-17).

The guaranteed capacity fee was up 12.9% y/y to USc 0.64/kWh, with guaranteed capacity provided by most of the sources for the entire month. Block 3, which was under maintenance for the month, was the exception.

ELECTRICITY PRICES IN GEORGIA AND TURKEY Wholesale market prices in Georgia decreased 16.8% y/y to USc 3.9/kWh. Only 7.2% of total electricity supplied to the grid in May 2017 was traded through the market operator, with the rest traded through bilateral contracts. The average price of electricity exported from Georgia was USc 3.4/kWh (+2.0% y/y), 22.7% below the Turkish market clearing price.

The average monthly market clearing price in Turkey was USc 4.4/kWh (+4.4% y/y), 12.5% above the Georgian wholesale market price in May 2017.

BUSINESS

GEORGIA TODAY JULY 11 - 13, 2017

5

Fire Destroys 70 Shops at Poti Market

BY THEA MORRISON

E

xtensive fire burned around 2000 square meters of the territory of Poti Market, West Georgia, last night.

A total of 70 shops were destroyed in the blaze of a total 150 located at the market.

“A total of nine fire rescue brigades worked to extinguish the fire, of which five were from Poti and the remainder from the neighboring districts,” said Head of the Emergency Management Agency of Samegrelo-Zemo Svaneti region, Tamaz Ubilava.

Poti Mayor, Irakli Kakulia, went to the scene and announced that a special commission would be set up to assess the damage.

“The situation is very grave.

Around 2000 m2 have been burned,” he said, add-

ing, “I wonder why fires are breaking out at various markets recently”.

Fire-affected traders suspect the fire at Poti market was deliberately set and are asking the government for assistance.

This is the third fire to burn within the largest markets in the country, raising ques-

tions with some members of society regarding health and safety standards. Earlier this month, fire ripped through part of Eliava Market in Tbilisi, burning 2300 m2 while on January 30, fire totally destroyed one of the largest shopping malls in the capital – Children’s World, leaving around 1000 vendors without an income.

Bank of Georgia Supports Welcome to Georgia! National Tourism Awards as Official Sponsor for 2nd Year

F

or its second year of partnership, Bank of Georgia created two special categories within the Welcome to Georgia!

National Tourism Awards pro-

ject.

Growth is the main element for the development of any business and for the country’s economic improvement. One of the most important segments which contributes significantly to the development of the Georgian economy is the SME segment. Due to this, Bank of Georgia, within the Welcome to Georgia!

Award, is presenting a special category - THE FASTEST GROWING COMPANY OF THE YEAR IN THE SME SEGMENT AWARD– to encourage and motivate companies working in the tourism and hospitality industry, SME segment. The only criteria for participation in this

category are that the company’s annual turnover be within 12 million GEL and the companies should be achieving significant success in 2017.

Bank of Georgia also developed a very special category - THE BEST WOMAN ENTREPRENEUR IN THE TOURISM INDUSTRY AWARD. This category was created specially by the Bank of Georgia to encourage and motivate female leaders in business. This nomination is for those women who have dedicated their career to the development of Georgian tourism and the hospitality industry.

To participate in the Welcome to Georgia! National Tourism Awards project, those interested can register from 14 June to 1 September at www.awardstourism.com for the chance to be recognized as the BEST in the tourism industry of Georgia!

6

BUSINESS

GEORGIA TODAY

JULY 11 - 13, 2017

Recycling: Gov’t & NGOs Start Extended Producer Reponsibility Campaign Continued from page 1 The path to a very large and complete recycling management, such as that of northern European countries, is still far off, but institutions, including the Ministry of Environmental and Natural Resources of Georgia, the United Nations Development Program, the Government of Sweden and the Georgian Environmental Organization, have begun a campaign on Extended Producer Responsibility (EPR). Contrary to the traditional recycling process, EPR consists of making the producer of a good responsible for it even after it is consumed; the producer in that way being made responsible for the full life of what it produces.

The campaign concerns strategic waste, including electronic waste, batteries, end-of-life vehicles, oil, tires and packaging. These six categories of products

carry a strong benefit in being reused to preserve natural resources and enable better environmental results for firms.

Business opportunities can also be drawn from this shift, such as in terms of product design, which firms are invited to change in order to better conform with the recycling process.

Due to low funding, for now the plan focuses efforts on raising awareness among the younger generations and civil society and in institutions involved in the change, which in the case of EPR, are mainly firms. To that extent, an EPR manual will be published at the end of 2017 explaining the related challenges.

The second objective is to plan waste management in cooperation with the concerned public to achieve the objectives Georgia has set for 2030. E-waste, including electronic waste and batteries, has been chosen as a pilot project and as a priority. A report gathering relevant

data will be published at the beginning of 2018, followed by a management scheme by spring 2018. The end of this process will be a conference on E-waste, gathering all actors, in September 2018.

Although the project is ambitious, planning, for instance, to change the share of recycled batteries from 20% by 2020 to 80% by 2030, the main problem for Georgia remains its lack of precise data about waste. For example, according to the OECD, one third of waste corresponding to EPR programs is electronic waste, which represents a lot of opportunities. However, this data hides a spectrum of different products that can be recycled, along with the very different processes of recycling said products.

This is why program organizers are calling on numerous institutions to contribute to this waste management change and to gather such data.

Georgia does not produce electronic

According to the OECD, one third of waste corresponding to EPR programs is electronic waste, which represents a lot of opportunities. Source: Monterey Regional Waste Management District

devices but hosts many companies that sell them. Such companies could be invited to submit proposals based on their international experience. The EPR program, supported by the Georgian government, plans to work with experts

from western Europe, which have a greater experience in waste management, and from eastern Europe, which have introduced this shift more recently, and are thus in a familiar enough situation to provide insight for Georgia.

BTU Launches New Phase of Digital Citizen Project

BY NINO GUGUNISHVILI

T

he Business and Technology University of Georgia (BTU) has announced the start of a new phase of its Digital Citizen project, an online global platform for employment aimed at offering digital retraining for

people living in the regions of Georgia, with the possibility of being added to global employment platforms in the future.

The innovative employment platform has access to 15 million vacancies globally, enabling specific job searches.

The BTU aims at establishing new existing trends on the world employment market in Georgia, while digitally retraining potential job seekers through-

out the country.

Retraining sessions are planned in Akhaltsikhe, Adigeni, Borjomi, Lanchkhuti, Ckhorotsku, Telavi, Kvareli, Signagi, Chiatura, Samtredia, Khoni, Gori, Kaspi and in all techno parks on the territory of Georgia.

The trainings for project beneficiaries will kick off on September 18, while registration will be open from August 1 to September 1.

8

BUSINESS

GEORGIA TODAY

JULY 11 - 13, 2017

Nelkarisi Winery Opens in Kakheti

BY NINO GUGUNISHVILI

N

elkarisi Winery has opened near the village of Shilda, in Kakheti region, uniting a wine factory, wine shop, restaurant and wine cellar.

JSC Friends cellar was built in 2014 financed with $600,000 in the framework of the United Agro Project, with an overall investment budget of $4 million. The company produces 150,000 bottles of wine per year, selling it on the local market as well as exporting to Azerbaijan,

European countries, the US and Great Britain.

Nelkarisi Winery is built on the territory of the ancient, 1st century A.D. city of Nelkarisi.

“This is a place of historic significance, the home of winemaking in Georgia,” said Georgia’s Prime Minister Giorgi Kvirikashvili at the official opening. He went on to express his hope that the place will be of great interest for tourists, becoming one of the most important touristic destinations in the country.

The Nelkarisi Winery opening is regarded as a successful example of state-private partnership.

The PM highlighted that the State aims to support such private initiatives.

Students Support Social Entrepreneurship

BY THEA MORRISON

S

tudents for Support of Social Entrepreneurship is a student competition initiated by the e Center for Strategic Research ch and Development of Georgia rgia (CSRDG) in 2012.

This year, the competition covered the whole of Georgia, and more than 100 students from the universities of Kutaisi, Telavi, Akhaltsikhe and Tbilisi participated.

The competition aims at promoting the concept of social entrepreneurship in young people.

The students were not given an easy task as they had to create a marketing plan for four social enterprises in Georgia, with a CSRDG grant of GEL 1500 for implementation of their plans.

Salome Tsikvadze, student and participant of the competition, says that she decided to participate as it is a very good opportunity to present and develop one’s skills.

“This project has offered us great experience.

The most exciting thing is when you see the result of your work,” she added.

Four companies were involved in the project: Ethno Design, Arabian Arthouse, Mustherpian Center Open Studio and Pareshavangi.

Advisors, Tako Rodonaia (Geocell), Akaki Gogichaishvili (Rustavi 2), Ekaterine Jojua (Administration of the Government of Georgia), Eldar Pirmisashvili (Peritus Group) were on hand to help the

students with their work.

Nino Arabuli, founder of the company Arabian Arthouse, says participation in the project was of great importance for her enterprise.

“This competition has brought our company economic benefits: new products n were created, awareness of marwe keting and PR campaigns increased, we h held ld many exhibitions and acquired long-term partners and many friends,” she claimed.

The competition is being held within the framework of the three-year project ‘Social Entrepreneurship-Innovative Approach for Economic and Social Change,’ which will continue until January 31, 2019.

Head of Social Entrepreneurship Youth Program, Goga Chitishvili, says that the Center for Strategic Research and Development of Georgia has been trying to promote development and the strengthening of society for the 22 years of its existence.

“This project, which is supported by social enterprises, has been going on since 2012 and today we believe that the involvement of supporters, partners and youth has exceeded all expectations,” he added.

Supporters of the event are: Poti Sea Port, Lutecia, Dry Fruit Production Georgian Company Kareli Fruit, Company Sarajishvili and QinQi - Kink design.

The band ‘Mixer’ and social enterprise ‘Mustrapia’ provided music for the event.

Media partners of the event are: Program-Business Dila; news agency publicity.ge; Tabula; Liberal and Georgia Today.

BUSINESS

GEORGIA TODAY JULY 11 - 13, 2017

9

Meet the Executive Producer of the “6 Millionth Tourist” Campaign Hammer (another advertising award). But when we knew we were in the selection for Cannes, I told myself we would win. Because last year we were in selection, so it was sort of a continuation.

I guess I was more excited by the challenge than really surprised.

WHAT DO YOU SEE AS MAKING GEORGIA SO ATTRACTIVE RIGHT NOW?

INTERVIEW BY DAVID MONGAZON

N

obody will have missed the 6 Millionth Tourist campaign and the main character in it, Jesper Black, who suddenly became a celebrity in Georgia. The campaign was even selected this year in Cannes Lions, one of the most famous advertising awards in the world, in the categories of Public Sector, Territorial Marketing and Events.

There, it won two Bronze and one Silver award, a first for Georgia. But who knows about the main producer of the campaign, Ringaile Lešcinskiene?

This Lithuanian-born woman has been in Georgia for four years and worked with a lot of advertising companies here before this recent campaign. She also produces movies through her own company.

We met her to talk about the campaign, her future plans and get her feelings about Georgia.

WHY DID YOU COME TO GEORGIA? My husband came here to open a business four years ago. And after two years here, I thought it would be interesting to get involved rather than be an ‘at home mum’. My daughter was really small at the time and we went everywhere together.

Windfor’s, the company with whom I did the 6 Millionth Tourist campaign, invited me to start with them. Last year, I was also nominated in Cannes with this same company. And this year we had three Lions, including one Silver, the first one in Georgia and Lithuania, too, and two Bronze awards.

WERE YOU SURPRISED ABOUT THE AWARD? Yes- you are always surprised! We were expecting

As a producer, I already worked in Lithuania, Belarus, Romania, and Latvia, but in Georgia, the clients are always open; they love nice commercials and have bigger budgets. In Lithuania, companies just need to sell the products and don’t care a lot about creativity. In Georgia, clients say “we need to do the best” in terms of quality and everything. I love Georgia in this way. Also, in terms of life here; I’ve travelled a lot, I love the food and I love the people because they are really open and friendly. I never really know my plans when I get up in the morning. I like this spontaneity here. I’m always travelling and all my friends coming here are excited as me.

IN THE 6 MILLIONTH TOURIST CAMPAIGN, YOU EMPHASIZE THE HOSPITALITY OF THE GEORGIA YOU DESCRIBE HERE. HOW DID YOU WORK? The first part of the campaign was the website hostme.ge, which is why the company was chosen by the Department of Tourism. But then we increased the project with video clips, because I like this advertising format. For the website, we worked with food stylists from Ukraine, because it doesn’t exist in Georgia, to sublimize Georgian food. Then we started with this 6 millionth tourist. The goal was to emphasize the fact that Georgia is really a European country, really open and that it has the same standards as Europe. Because everything is fashion here, and the service is very good as well.

But the project process was natural. For example, we were going to go to Batumi by train, but then we decided to take the bus, which was quite terrible. We planned the whole trip months in advance, but when Jesper was here, we changed everything to the point that at the editing part, we were sort of surprised by the result, which looked natural, but not like we planned.

THE QUESTION MANY PEOPLE ASK IS,

POLITICS

PM Criticizes Opposition Rumors of Gov’t’s Work on Occupation Issues

BY KATIE RUTH DAVIES

G

eorgian Prime Minister Giorgi Kvirikashvili has faced down accusations against his government by saying that occupation has always been and still remains the number one issue for the Georgian government.

The government has been accused of dampening the issue of occupation of the breakaway regions. "Not a single minute has passed under our government without this problem being number one on our agenda,” he said, complaining at the "absolutely groundless rumors” spread by the opposition.

The PM highlighted that the occupation was in fact the main topic of discussion during his meeting with the US Vice President. “[I told Mike Pence]: ‘Mr. Vice President, do not believe any poll that shows that the occupation or the issue of territorial integrity is of secondary, tertiary, or lower priority. No matter what happens in Georgia, or what sort of success we achieve, this will remain the number one issue in the minds of our people’”.

Kvirikashvili also highlighted that 135 Georgian villages were lost during the occupation, not dur-

ing the creeping annexation, as the opposition has been suggesting.

“The occupation is a difficult issue that my political team inherited when it came into power,” he pointed out. “We will do everything to free our future generation from this heavy legacy”.

"We will take steps that will lead to Georgia’s unity; peacefully and only through negotiations.

We will never let anyone, especially those people who have been keeping our country trapped in a vicious circle for 26 years, drag us back. It is hard, but with a clear-headed approach, we will take the necessary steps to resolve this problem”.

European Union observers last month near newly installed razor wire marking a boundary between Georgian-controlled land and South Ossetia.

Source: The New York Times

HOW DID YOU FIND JESPER BLACK? It was really simple. Weeks before, we knew the flight which the 6 millionth tourist would be on.

And when Jesper came, it was my birthday but I was literally living at the airport. We knew everybody on the flight; memorized all the names and faces. But we didn’t choose Jesper until the last moment. I didn’t know he was a blogger then and it was difficult when he started to film everything because there were cameras everywhere and I was behind him all the time, trying to coordinate everything. Plus, we had the police and prime minister’s security, so it was really challenging to keep

the campaign secret. We never knew how the campaign would look until the end.

ANY PLANS FOR THE FUTURE? Right now, I’m preparing a short movie based on an old Georgian tale. The scriptwriter is Slovakian but the story is Georgian. I’d like to find a good director from Georgia, and another from elsewhere. I really hope we will make a very good movie, because everybody knows Georgian film is very good. I hope we’ll go to Cannes again, but for movies this time! We expect to release it in three years.

10

POLITICS

GEORGIA TODAY

JULY 11 - 13, 2017

Trump Meets Putin but Not Russian Hopes

BY EMIL AVDALIANI

I

n politics, large gatherings of leaders, summits, etc. rarely yield immediate results.

Throughout history there were numerous famous gatherings such as the Congress of Vienna (1814-1815), Congress of Berlin (1878) or Versailles Conference (1919) following the end of the World War I. If significant results ensued these events, they were either decided beforehand by lower level diplomats or during the conferences, with only a tiny group of leaders forging out the important clauses and other details.

Last week, the world witnessed the G20 event in Hamburg and many thoughts were propounded as to what impact it would have on climate, economics or crises across the globe from Syria to North Korea. However, here, again, the gathering of the world leaders did not produce any tangible results.

As a token of fatigue was the much greater interest the world had in the planned meeting between the Russian and US presidents rather than the summit declaration or speeches on military or economic problems of the world.

Indeed, the Putin-Trump meeting was a highlight, with politicians, pundits and even psychologists studying every gesture and move of the leaders.

The two spoke for more than the expected 30-40 minutes and after the two-hour, 15-minute discussion some details were revealed. Putin and Trump agreed on establishing a ceasefire in south-west Syria, hailed as a start of the cooperation between Moscow and Washington. Although details about the agreement and how it will be implemented weren't immediately available, the cease-fire was set to take effect July 9 at noon Damascus time.

Putin himself later, at the beginning of his meeting with Shinzo Abe, the Japanese Prime Minister, noted that he and Trump discussed Syria, Ukraine, counterterrorism and even measures to counter world cyber-crime. Moreover, Russian FM Lavrov and US Secretary of State Tillerson said that the presidents also touched upon the very sensitive issue of alleged Russian interference in the US presidential elections in 2016.

But how far could this seeming cooperation between the two countries go? The start for that is a ceasefire in Syria, but we have witnessed numerous times over the past years how shaky announced ceasefires in Syria have been. Could the détente spill over into

Source: New York Post

Eastern Europe and the South Caucasus?

In fact, to decode the real atmosphere we need to look not at the statements and handshakes or even the Syria decision during the summit, but what happened before and after the summit. As I wrote several days ago, any real cooperation between Moscow and Washington would be hampered by those geopolitical constrains which drive the two countries in Eurasia. Those interests are at odds in Ukraine, Eastern Europe, South Caucasus and Syria. Even if some serious steps are taken towards conflict resolution, this will only be possible if one of the two actors sacrifices its core interests. Thus, this makes it very unlikely that the Trump-Putin meeting (with the ceasefire agreed in south-western Syria) will translate into something more than a good attempt.

In fact, what happened before and after the summit was more revealing about the US stance towards Russia. For instance, just before Trump joined the G20 Summit in Hamburg on July 7, he visited Poland where in an address in Warsaw he urged Russia “to cease its destabilizing activities in Ukraine and elsewhere”. He also reaffirmed Washington's commitment to NATO's Article 5.

In addition, a day later the Polish government announced that the US was ready to sell another eight sets of Patriot systems. This will be added to what Poland already purchased from Washington from 2010 for the defense of its border with the Russian Kaliningrad and against Iskander systems.

Yet another powerful gesture by Washington was made following the summit when on July 9, Tillerson visited Ukraine and delivered a harsh statement on Russia that it is the Kremlin that must take the first step to ease tensions in Ukraine. Tillerson even added that the war in Ukraine was "planned and launched from Moscow." Later on, Trump tweeted that no moves on sanctions would be made unless Moscow exerts positive influence on breakaway entities in eastern Ukraine and Syria.

This again attests, as previously written, to the fact that despite rhetoric, Russian and US interests are in fact nearly incompatible in the former Soviet Union space and elsewhere. For Russia, the growing US military posture in Eastern Europe is unacceptable from the security side which will make Moscow pursue militarization of its western parts of the country. While each side will try to find a common ground and negotiations and meetings will take place, a protracted US-Russia confrontation is likely to continue.

Energy Minister Officially Resigns to Run Tbilisi Mayoral Race

BY THEA MORRISON

K

akha Kaladze, Vice-Premier and Energy Minister of Georgia has officially stepped down in order to take part in the Tbilisi mayoral elections scheduled for this autumn.

Kaladze is the candidate of the ruling Georgian Dream (GD) party and Prime Minister Giorgi Kvirikashvili believes that he has no rivals in the upcoming elections.

The PM thanked the former Energy Minister for his activities during his term and wished him success in the elections.

Kvirikashvili claimed that numerous important projects were implemented during his tenure. Projects worth $1 billion and 200 million of foreign

direct investments have been carried out: construction of 18 hydroelectric plants, 2 thermal power plants and 1 wind energy power plant.

“I am sure that Kakhi will successfully cope with the new and important challenge of being a city mayor. I would like to thank him once again and wish him success in reaching new heights," the Prime Minister stated.

Kaladze said that a “new stage” was starting in his life.

“If I’m elected, I will do my best to make our capital, our Tbilisi, successful. I believe Tbilisi will support me and we will together be able to solve all issues," he added.

A former footballer, Kaladze left a successful career and moved to politics in 2012 when former Prime Minister, Bidzina Ivanishvili, set up the GD coalition. He had held the position of the Energy Minister since October 2012.

POLITICS

GEORGIA TODAY JULY 11 - 13, 2017

11

Polish Ambassador to Georgia on Poland-EU & Georgia-NATO Relations A SIMILAR POLICY WAS PURSUED BY POLAND…

INTERVIEW BY VAZHA TAVBERIDZE

It’s not my role to assess the shifting of means and sources in Georgia but from a Polish point of view, I can say that we are boosting our internal military capability.

S

trategic Partner of Georgia– few countries in Europe can be called that (not that many of them aspire to be), but Poland certainly deserves this and many other accolades for fostering and strengthening Georgia’s Euro-Atlantic aspirations from the very beginning.

However, Warsaw itself is at what you might call an all-time low in relations with the European Union, with its government accusing the Brussels leadership of an overbearing agenda and patronizing attitude. Will these tensions with Brussels have an effect on Poland’s support towards Georgia? GEORGIA TODAY and Panorama TV Show asked the Ambassador of Poland, His Excellency, Mariusz Maszkiewicz, at a meeting with students of the Black Sea International University.

DESCRIBE THE BILATERAL RELATIONS BETWEEN OUR TWO COUNTRIES. WHAT ARE THE CORNERSTONES? Polish-Georgian relations are deeply rooted in history. The 19th century and late 18th century saw many Poles settling in Georgia, having been expelled from Poland for their political activity. In Poland, there is a great deal of affection towards Georgians since we see in Poland that the history of Georgia is very similar to our own: located between great empires, trying to maintain its Christian identity, making us very strong in our desire to fight external threats. Poland always had Russia and Germany trying to divide our country, to take our freedom. Georgia was under the threat of three empires – Persian, Ottoman/Turkish and Russian. It was in a constant state of war, facing aggression from outside.

We admire the strength needed to keep identity in such circumstances. We see Georgia as very similar to us.

AND WHAT IS THE CURRENT SETUP OF OUR RELATIONSHIP? Since Georgia claimed its independence, Poland has been by Georgia’s side, supporting Georgia’s territorial integrity, sovereignty, and its ambitions to join the EU and NATO.

PM SZYDLO’S LATEST SPEECH, WHERE SHE SAYS [QUOTE] THAT “POLAND WON’T PARTAKE IN THE MADNESS OF BRUSSELS,” HAS GONE VIRAL. WHAT ARE THE CHIEF REASONS FOR THIS CONFRONTATION BETWEEN THE EU AND POLAND? It is a hot point between our relations with a number of EU institutions. Many European societies would like to make Europe a Europe for the people. More a ‘Europe for the nations’ than the ‘EU for

WITH WHAT JUSTIFICATION? Because of the threat from Russia. Let’s be open. Because of Russian aggression in Georgia and Ukraine, we decided to build up our own forces to have the potential to defend ourselves. Because we could not wait for NATO so long. It is counted that aggression from the East could last 2-3 weeks and we could hold for that amount of time. At present, with our current territorial defense system, we are capable of defending ourselves for around one month.

itself’. Left or liberal ideology makes it too much, let’s say, ideologist. The project of the 1940s, and later of Schumann, Monnet and others, was rooted in Christianity. We in Poland, Hungary and many other countries still consider the EU project as one which should be close to Christian values.

DO YOU THINK CHRISTIAN VALUES ARE UNDERMINED

BY THE CURRENT EU? Yes. Let’s take the big discussion about the European Constitution, 2005-2007.

The Constitution project was rejected by the French and Dutch societies for religious reasons. Some people say that Pope Benedict 16th took the name Benedict to remind Europe that it should be Christian because it was founded by such people, by such monks and Christian saints like Benedictus. And for us in Poland, and as I know in Germany, it was a wonder why we could not say that we are rooted in Christianity. Why should this constitution not be based on the basic values that are rooted in our European Christian history?

No, no. Polish people and society are Euro-optimistic. More than 70% of Polish society is for the EU. But still, we do not like to receive decisions from outside.

Take migration, for example. For Germany, it has had such since the early 1950s and German facilities are prepared to take in immigrants, to help them to live in Germany, to learn the German language and so on. For Poland, the problem of immigrants is very new and we found ourselves unprepared to suddenly receive thousands of people from outside, from other cultures. And we were against this command that we should do so because Berlin or Brussels decided instead of us.

POLAND IS SEEN AS A CHIEF SUPPORTER OF GEORGIA’S

EURO-ATLANTIC INTEGRATION. WITH MONTENEGRO BECOMING THE 29TH MEMBER OF THE ALLIANCE, MANY IN GEORGIA ARE ASKING HOW This is an issue not solely dependent on each NATO member capital. The decision to become a NATO member, in Poland’s case made over 18 years ago, lies in Washington, the most powerful NATO member. The US provides security in the great area of Europe and further afield. So, we have to count what is in the interests of the US.

THE GEORGIAN GOVERNMENT ANNOUNCED PLANS TO DOWNSIZE THE MILITARY CONTINGENT IN AFGHANISTAN AND FOCUS MORE ON STRENGTHENING ITS OWN DEFENSE CAPABILITIES.

My assessment is that the Ministry of Defense is doing its best to boost its military capabilities and army’s opportunity of defense and they are very active in this. Downsizing contingents in Afghanistan might be justified. I’m not aware of this internal decision but I have noticed a lot of visits, high ranking politicians from Tbilisi, in Washington. It is assessed in Warsaw that Georgia is very active in relations with the US. Such is key to opening the hearts of many members of NATO, to being closer to NATO. It’s key to accelerating the process of membership.

EUROPEAN LIBERALS SAY THAT LIBERAL VALUES ARE CHRISTIAN VALUES Yes. In Christianity, a man as an individual is essential. In the Soviet Union, we had collectivism, and we are afraid of such collectivism in constructing the new Europe. And we don’t like to get decisions made for us in Brussels as it was in previous times when we were pushed to take the decisions coming from Moscow.

BRUSSELS SAYS THE POLISH GOVERNMENT APPROVED SOME REFORMS THAT THE EU DEEMED “UNDEMOCRATIC”.

BRUSSELS AND WARSAW ARE ENGAGED IN A SERIOUS

PUBLISHER & GM

George Sharashidze COMMERCIAL DEPARTMENT

Commercial Director: Iva Merabishvili Marketing Manager: Mariam Giorgadze

GEORGIA TODAY

TRIAL OF STRENGTH. DO YOU FORESEE SOME KIND OF “PEXIT”?

YET MANY IN GEORGIA CRITICIZE THE DOWNSIZING OF ITS MILITARY PRESENCE IN AFGHANISTAN AND BOOSTING ITS OWN MILITARY CAPABILITIES AS “PRORUSSIAN,” SEEING GEORGIA “TURNING ITS BACK ON THE WEST”. WOULD YOU AGREE?

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