Issue #1263

Issue no: 1263

• SEPTEMBER 11 - 17, 2020 • PUBLISHED WEEKLY

FOCUS ON EFES GEORGIA

We interview the Efes CEO to find out about the company's CSR strategy, COVID and beyond

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In this week’s issue...

UK - Georgia Trade Hub, Simplifying Trade between the Two Countries NEWS PAGE 3

PAGE 8

Noble Partner & Why It Matters POLITICS PAGE 3

ISET | Business Confidence Index Q3 2020: Momentous Rebound of Business Optimism BUSINESS PAGE 6

Prospects for GUAM’s Development BUSINESS PAGE 7

Svaneti as the Switzerland of the Caucasus

Corona Update: Second Wave Kicks Off CULTURE

BY ANA DUMBADZE

O

n September 10, 57 new cases of coronavirus were confirmed in Georgia, a record high daily number for the country which brought the total number of cases seen to 1830, the National Center for Disease Control (NCDC) reported. Currently, there are 451 active cases in Georgia.

The number of recovered patients increased by 9 to reach 1334. 5882 people were in 14-day mandatory quarantine as of Thursday morning, and 390 were under medical examination.

19 people have died of the virus in the country since March.

The Interagency Coordinating Council led by the Prime Minister this week once again called on businesses and citizens to follow the recommendations of the Ministry of Healthcare, and specialists, as much as possible in order to avoid additional regulations being imposed.

Council members stressed on Monday that despite the increasing numbers, the government is fully in control of the situation in terms of limiting the spread of the virus.

ADJARA- THE RED ZONE? Marina Ezugbaia, the Medical Director of the Tbilisi Infectious Diseases Hospital, has clari-

fied details of the sources of the 57 new coronavirus cases detected in Georgia on WednesdayThursday, claiming that 27 of the 57 were detected in the Adjara region.

"Of 57 infected people, 5 are from the confectionery 'Dona' cluster, 14 were infected in Batumi, 18 are contacts of confirmed patients, four have travel history in Adjara, three are imported cases, and five are medical staff. We have eight cases for which the source is yet to be confirmed, and epidemiological studies are ongoing," she said.

On Tuesday, Ezugbaia noted that the increasing number of coronavirus cases indicates that the spread of the virus in Georgia has become intense, yet she stated that locking down Adjara is not being considered at this stage. "However, the implementation of the recommendations and safety measures should be strengthened," she emphasized.

"Adjara is now a red zone in terms of virus spread," she added.

The opening of theaters, cinemas and children's entertainment centers has been postponed by a month, until November 1, Natia Mezvrishvili, the head of the government administration, announced on Wednesday.

“The epidemiological situation is quite alarming. Effective tomorrow, the Interagency Coordination Council has decided to impose certain restrictions and tighten specific regulations,” she said.

"From September 10, cultural and sports events with the participation of more than 200 people will be banned," Mezvrishvili noted, adding that the appropriate sanctions are being imposed for non-compliance with these regulations, and that “society needs to show high civil responsibility.”

She explained that the above regulation applies to both indoor and outdoor spaces.

In order to prevent the spread of the new coronavirus, gatherings have also been banned in open space nightclubs.

"Such events carry the risk of the rapid spread of the virus," Prime Minister Giorgi Gakharia stated at Thursday’s government meeting.

It was also decided to ban social events, such as anniversaries, weddings, funeral ceremonies and other rituals, from September 10.

"Social events, such as anniversaries, weddings, funeral ceremonies and other ritual will be banned due to the epidemiological situation.

Continued on page 2

SOCIETY PAGE 9

Announcement | Eclectik Music Festival CULTURE PAGE 10

Telegraph: Georgian Rugby Team to be Added to Six Nations, Face England SPORTS PAGE 11

Prepared for Georgia Today Business by

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na

2

NEWS

GEORGIA TODAY

SEPTEMBER 11 - 17, 2020

PM's Advisor: Growing FDIs Indicate Investor Confidence in Georgia's Economic Policy

BY ANA DUMBADZE

T Geostat: Georgia Attracts $237.8 mln in FDIs in Q2 2020, UK Top Foreign Investor

BY ANA DUMBADZE

T

he foreign direct investments (FDI) in Georgia amounted to USD 237.8 million in Q2 2020 (preliminary data), up 0.5% from the adjusted data of Q2 2019, shows the latest report by the National Statistics Office of Georgia (Geostat).

Based on the report, The shares of FDI

by major foreign direct investor countries were distributed as follows: The United Kingdom (24.8%) Netherlands (22.4%) Turkey (13.3%) The share of FDI by three major economic sectors reached 57.0% in Q2 2020.

The largest share of FDI was registered in the financial sector, reaching USD 78.1 million in Q2 2020, the energy sector was the second with USD 29.6 million, followed by the construction sector with USD 27.7 million.

he Prime Minister’s Economic Advisor Beka Liluashvili states that despite the economic challenges arising from the pandemic and the spread of the virus, foreign direct investments in Georgia in the second quarter of 2020 have grown year-on-year.

These statistics are especially noteworthy in light of the UN predicting a 40% drop in global capital flows and projected investments in 2020, Liluashvili added.

“In light of the pandemic and recession, growing FDIs in Georgia is indicative of investor confidence in the country’s economic policy and a positive attitude toward Georgia’s economic revival. Besides FDIs, our economy, after a period of stabilization, has entered a phase of revival, with the statistics of the country’s economic decline gradually dropping. In June, our economic decline reached 7.7%, but dropped to 5.5% in July. Equally noteworthy are other indicators, such as remittance statistics, fiscal parameters, and expenditure data on the rise and improved economic activities in processing and mining industries, critically important real economic

sectors generating new jobs. The Government’s economic package also deserves a special mention in that it has balanced the declining consumption accompanying the crisis. Consequently, people started spending more money to

increase consumption and contribute to the economy’s rapid recovery. Accordingly, we expect rapid economic revival and good economic growth statistics next year,” the Prime Minister’s Advisor stated.

US State Dept: Previous Gov't Saw Cases of Property Transfers that Lacked Transparency

BY ANA DUMBADZE

T

he US Department of State has published report on the investment climate in 170 countries, including Georgia.

The report says that overall, business and investment conditions are sound in Georgia.

The US Department of State emphasizes the progress made in terms of property rights in the country. It notes that the state does not expropriate property, although it is highlighted that under the previous government there were frequent cases of non-transparent and forced transfer of private property.

"Expropriation disputes are not common in Georgia, although under the previous government (before 2012), reputable NGOs raised cases of illegal revocation of historic ownership rights in Svaneti, Anaklia, Gonio, and Black Sea-adjacent territories. Under the previous government there were cases of property transfers that lacked transparency and allegedly were implemented under coercion," reads the document.

The report emphasizes US support for Georgia's sovereignty and territorial integrity. It focuses on Russia's aggression against Georgia in 2008 and also emphasizes that Russia continues to occupy Georgian territories and carries out provocations along the administrative border.

It also mentions that Georgia's legisla-

tive, regulatory and oversight system operates in a transparent manner and in compliance with international norms. It is emphasized that the 2018 constitutional amendments have strengthened the role of parliamentary oversight of the executive branch.

The document notes that Georgia ranks high in the 2020 World Bank’s Ease of Doing Business index and in the Heritage Foundation’s 2020 Economic Freedom Index.

“Georgia ranks seventh in the 2020 World Bank’s Ease of Doing Business index and twelfth in the Heritage Foundation’s 2020 Economic Freedom Index.

Fiscal and monetary policy are focused on low deficits, low inflation, and a floating real exchange rate, although the lat-

ter has been affected by regional developments, including sanctions on Russia, and other external factors, such as a stronger dollar. Public debt and budget deficits remain under control. However, global challenges posed by COVID-19 and measures needed to mitigate the spread of the virus have placed significant pressure on the domestic currency and the local economy.

"The Georgian government’s “Georgia 2020” economic strategy, initially published in 2014, outlines economic policy priorities. It stresses the government’s commitment to business-friendly policies, such as low taxes, but also pledges to invest in human capital and to strive for inclusive growth across the country.

The strategy also emphasizes Georgia’s

geographic potential as a trade and logistics hub along the New Silk Road linking Asia and Europe via the Caucasus.

"Overall, business and investment conditions are sound. However, some companies have expressed an increasing lack of confidence in the judicial sector’s ability to adjudicate commercial cases independently or in a timely, competent manner, with some business dispute cases languishing in the court system for years.

Other companies complain of inefficient decision-making processes at the municipal level, shortcomings in the enforcement of intellectual property rights, lack of effective anti-trust policies, selective enforcement of economic laws, and difficulties resolving disputes over property rights. The Georgian government continues to work to address these issues and, despite these remaining challenges, Georgia ranks high in the region as a good place to do business,” the report reads.

The report of the State Department also mentions the port of Anaklia.

“Transit and logistics are a priority sector as Georgia seeks to benefit from increased East/West trade through the country. The Baku-Tbilisi-Kars railroad has boosted Georgia’s transit prospects.

The Anaklia Deep Sea Port project, however, has faced multiple delays and extensions since its initial contract in 2016.

The government terminated its contract with the Anaklia Development Consortium in 2020, asserting the consortium did not mobilize the capital necessary to implement the project. However, the government said it remained committed to the construction of a deep sea port in

Anaklia and planned to retender the project. Logistics and port management companies in Poti have started development and expansion of Poti Port, currently the largest port in Georgia. Pace Group launched a $120 million project to develop a new port terminal at the site of the former Poti Shipbuilding Factory. Additionally, APM Terminals announced plans in 2019 to create a deep-sea port in Poti,” it reads.

Over the past 10 years, there have been more than 10 investment disputes involving US citizens (as of 2019, 5 cases are pending in arbitration), although no illegal action has been taken by the state against foreign investors during this period.

The document highlights the role of investments made by the US Government, in particular, completed and ongoing projects implemented by the US International Development Finance Corporation. For instance, in 2019, funding allocated to Pay Terminal and Liberty Bank.

The political part of the report reads that street protests are rare in Georgia, however, in June 2019, when protesters attempted to invade Parliament, police used legal force to stop them.

The US Department of State's Annual Investment Climate Report includes information on the investment climate in 170 countries, prepared by economic officers from local US embassies. They analyze the economies of countries that are recipients of American investment or have the potential to attract American companies.

Corona Update: Second Wave Kicks Off Continued from page 1 This restriction was already in force in closed areas, however, from September 10, it will also apply to open spaces," Mezvrishvili said.

"Events related to Tbilisoba 2020 will not be held due to the epidemiological situation," Tbilisi Mayor Kakha Kaladze announced the same day.

Tbilisoba is an annual October festival which celebrates the diversity and

history of Tbilisi, the capital of Georgia.

He explained that this time, only concerts will be scheduled for the Tbilisoba celebration, which will be live-streamed.

"The health and safety of our citizens is of the utmost importance for us.

Therefore, Tbilisoba City Fest events will be canceled. We will work with the Culture Service to plan only livestreaming concerts,” noted Kaladze.

GOV’T DECISIONS On Monday, the Government of Georgia announced 4 new decisions in order to promote the effective management of coronavirus spread in the country.

1) Quarantine Period for Those Entering Georgia will be Reduced to 8 Days: The quarantine period for those entering Georgia will be reduced to 8 days.

If the PCR test shows negative on the 9th day, the citizens will be able to

leave the quarantine area; however, after 12 days, they will be obliged to undergo another PCR test.

2) Submitting PCR Test Answer Becomes Mandatory for All Foreigners Entering Georgia: Effective September 15, all foreigners entering Georgia, including those traveling based on the reciprocity mechanism, that is, previously entering without any restrictions, will be required to have undergone PCR testing 72 hours prior to their

arrival.

3) Studies in Batumi, Kobuleti will Resume Remotely Until October 1: The education process for schoolchildren and students in Batumi and Kobuleti, in Georgia's Adjara region, will continue remotely for the first two weeks of term, which means that children will continue their studies in classrooms only from October.

4) Tougher Control over Social Events, Rituals will be Enforced.

NEWS

GEORGIA TODAY SEPTEMBER 11 - 17, 2020

3

UK - Georgia Trade Hub, Simplifying Trade between the Two Countries

BY NINI DAKHUNDARIDZE

T

he UK market has always been and will be an important and desirable market and strategic partner for Georgia. To date, the UK is the largest investor in the Georgian Economy, while Georgia was one of the first countries to sign a free trade agreement with the UK after the latter decided to leave the European Union, and the majority of Georgian products are now free from any custom charges.

The agreement of strategic partnership between the UK and Georgia was signed in October of 2019 in London. The document entails partnership in various fields and, most importantly, a free trade regime between the two countries. For Georgian entrepreneurs and businessmen, the British market is very attractive and interesting. However, they often have to face some serious challenges.

This especially applies to small-business owners who do not have enough resources to form straight connections with British partners and distribution networks.

Having studied the contemporary demands and tendencies, the BritishGeorgian Chamber of Commerce (BGCC) and its partners created a business project titled ‘UK-Georgia Trade Hub,’ designed to unite small and mediumsized businesses interested in entering the British market and simplify for them logistical-administrative services, while helping them overcome difficulties, and cutting the costs of warehousing production.

“This project revives an agreement that practically only exists on paper right now. We were worried it could continue

to be just that, on mere paper, unless the trading was actively processed from both sides,” project creator Bachi Gabunia told GEORGIA TODAY. “As Brexit takes effect from the start of the new year, the reality stands that the United Kingdom has not signed trade agreements with many EU countries. This could work in Georgia’s favour: we can substitute the products that might become deficient on the UK market after the country leaves the EU.” “Considering the difference in the value of the Georgian Lari and British Pound, and the fact that Georgian-made goods are produced using Laris and if exported onto the UK market will be sold in pounds, Georgian entrepreneurs can make a profit even if they only sell one out of every three products they export to Great Britain,” Gabunia added.

The UK-Georgia Trade Hub consists of two hubs, one in Tbilisi and one in London, where entrepreneurs and businessmen from the two countries will be able to warehouse their production meant for export. The common warehouse cuts costs for the entrepreneurs since it gives them the opportunity to rent a minimal space for warehousing their production in the UK. The advantages of the UK Georgia Trade Hub do not end there: with this project, entrepreneurs will also be able to conduct negotiations and talks with a potential buyer online from Georgia, without having to set up a representative office in Great Britain. The management of the online platform is also taken care of by the UK Georgia Trade Hub. What’s more, the warehouse Hub will take no interest from the entrepreneur’s profit. Those willing to export

their products to the United Kingdom will only have to pay the cost of transportation, warehousing and monthly service.

True to the nature of trading, the BGCC’s new business project will also support British entrepreneurs wanting to export their products to Georgia.

The UK-Georgia Trade Hub offers different consumer packages (depending on the space they need to rent, the transfer costs, administrative and warehousing services on the spot), based on the interests and goals of the entrepreneurs.

The Hub is interested in making trade for Georgian and British entrepreneurs as easy and affordable as possible, so the production will be grouped when transferred, reducing the costs of transportation. A small-sized business owner can start shipping their production via UGTH

with as little as one pallet of their products.

The common Hub also unites Door2Door services, creating a comfortable space for companies interested in trade.

The project creators believe that the above-mentioned services will make the trading process simpler, and the production more affordable for both the producers and the customers. This will in turn help popularize the Georgian products in Britain and the British products in Georgia, overall contributing greatly to raising the goods turnover between the two countries.

The UK Georgia Trade Hub further aims to, one year after its foundation, become the main hub of trade between the two countries and create packages for every client.

While talking to us about the project, Mako Abashidze, the Founding Director of the BGCC, mentioned the supporters of the project who contributed greatly to its creation: The Embassy of Georgia to the United Kingdom, The Embassy of the United Kingdom to Georgia, Enterprise Georgia, and the EDA – Export Development Agency.

POLITICS

Noble Partner & Why It Matters

BY MICHAEL GODWIN

E

very year it’s the same; legions of American, British, French and other European soldiers flock to the plains south of Tbilisi for an annual training exercise. Russia furrows its brow and exclaims its objections, and western politicians applaud as the tankers and infantrymen slog it out in the late summer Georgian heat. To the untrained eye, it’s merely a hollow political gesture.

However, Noble Partner means so much more.

Critics write litanies about the divide between NATO’s Counter-Russian mission and Georgia’s future, but there is more at play in the hills of Krtsanisi than just military drills. What is missed by these decriers is the tactical importance of a repeated training deployment in the region. With the aggression promulgated in South Ossetia, Eastern Ukraine, and Syria, Russia has made its intentions clear.

As with many of the post-Soviet republics that have pulled themselves out from relative obscurity, Georgia has done notably well in the defense sector. With considerable contributions in the NATO operations in Iraq and Afghanistan, Georgia has modernized beyond most other Eastern European nations. Georgia has its own successful private defense sector in the form of DELTA, which produces everything from armored vehicles to highprecision marksmen rifles and are sold all over the world. With the assistance and guidance of NATO, Georgia is a rising star.

Noble Partner is the tip of a growing iceberg of cooperation with Europe and

the US. The Caucasus remains a strategically important region. With Armenia becoming more and more cozy with the Russians, and Azerbaijan remaining reluctant to swing too far to the west, Georgia is the key to stability. Despite this close friendship, Noble Partner may not be enough to keep the Georgians involved in the comprehensive defense strategy.

Just as the US forces have begun to shift into Poland and the Baltic Countries on a more permanent basis, Georgia is another key staging area in the world, and a huge deterrent to Russian and Chinese aggression. A more permanent stationing of US and European forces is necessary, and an expansion of training and support operations is vital. Gone are the days of standing by while opposing regimes with histories of territorial sovereignty abuses are allowed to sew their seeds. And as a result, Georgia is more important than ever.

Another similar model is that of NATO in the early years in West Germany. As a matter of deterrence and rapid reaction, NATO’s postings in the area acted as an insurance plan against Soviet aggression. Georgia finds itself in a similar position, including the occupation of its sovereign territory. As a result, it is imperative that there be a permanent, or at a minimum a semi-permanent, regional task force stationed in Georgia.

What would that look like? The Polish model is a working example of this type of cooperation. The US alone has elements of division level command and control units, an approximately 750-person logistics and support hub that is also connected with Lithuania, and an Armored Cavalry Regiment comprising

of just under 1,000 personnel. In addition, there are Naval and Air Force elements, with responsibilities including air interdiction squadrons as well as naval missile defense systems. This is not to mention the additional British and European forces.

The obvious reason for this size of regional force deployment is the location of the Russian forces based around the military city of Kaliningrad. But Georgia is still not so different. The Russian 4th and 7th military bases located in South Ossetia and Abkhazia respectfully already put enough pressure to warrant a NATO garrison. In addition, the massive military presence in Vladikavkaz (58th Army), Stavropol (49th

Army), and Krasnodar (7th Air Assault Division) should provide plenty of reason for a buffer element of NATO contingents.

In addition to the posting of a NATO task force garrison, the natural side effects of increased cooperation and cohesion between NATO forces and the Georgian Defense Forces are invaluable. The Poles know this is an effective strategy, and the Baltic states sleep better at night knowing that aggression from the east is far less likely with NATO nearby.

Georgia stands to benefit greatly from this knowing that any northern aggression will not be tolerated. This is not to mention the exposure of US and European troops on rotation, sharing experi-

ences of their down time in Tbilisi and the economic boost from additional US dollars and Euros going to local business.

And finally, the Government of Georgia knows they need to keep a warm relationship with the West. In doing so, they stand to come out of the situation looking better not just to their international neighbors as being a bold and decisive leader in the Caucasus, but also to the Georgian populace. The people have been looking to the President and Parliament to assurance that their way of life is secure. Bringing in NATO as a more permanent partner, and as a result a new neighbor, would only benefit the nation as a whole and usher in a new era of peace for the region.

4

POLITICS

GEORGIA TODAY

SEPTEMBER 11 - 17, 2020

Discourse (Not Only) on the Region. Part II ANALYSIS BY VICTOR KIPIANI, GEOCASE CHAIR

O

ur world is so indisputably interconnected that every global topic linked to our strategic partner and strongest supporter of our sovereignty and territorial integrity, the United States of America, becomes an important subject for analysis and discussion within Georgian political and public circles. And this interest is even more relevant and urgent if the matter under discussion is linked to relations between the United States and the world’s second global player, China.

A few words on Pompeo’s recent speech at the Nixon Library in California, which some reputable sources have dubbed the ‘Second Fulton speech’ and others have described as the beginning of a new ‘Cold War’ between Washington and Beijing.

I suppose such assessments can be substantiated, but at this stage I think that we should not read anything too exceptional in Pompeo's speech. All things aside, we must pay attention to how Pompeo’s statements will be reflected in concrete and practical actions.

We must also not forget that the US Secretary of State’s speech must be seen through the prism of the extremely complex relations that the US and China have entertained since the end of the Second World War. The thing is that the United States have referred to a ‘new Chinese policy’ several times over the years, notably following the Cultural Revolution, the rapprochement with China under Nixon and Kissinger, the establishment of diplomatic relations in 1979 and the renewed emphasis on China in the 1990s after the collapse of the Soviet Union. I would also like to mention here the most recent versions of the US National Security and National Defense strategies, which name China as a strategic competitor that is actively seeking to undermine the international order in order to gain greater regional and global influence.

If we look at developments that preceded Pompeo’s recent speech, we will see that these were largely issues relat-

ing to the two countries’ commercial rivalry, to the Trans-Pacific Partnership and to free movement in the South China Sea. And this once again to emphasize the characteristics of US-China bilateral relationship.

So what factors made many researchers assess Pompeo’s speech as a declaration of a new Cold War? I believe that the main reason was his negative assessment, as his country’s most senior diplomat, of the previous US administration’s policies vis-à-vis Beijing —‘constructive engagement’ and ‘strategic rapprochement’—and his condemnation of these policies as experiments that failed to encourage China’s democratization. Moreover, Pompeo spoke directly to the Chinese people about the need to introduce changes to their system of government. It is no coincidence that the ‘need’ he spoke of was understood by many as a call for ‘regime change’. However exaggerated this assessment may seem to us in reality, it is indicative of a fundamentally different US attitude towards China’s communist government.

The question now is: How will this approach be reflected in day-to-day US policy? And how likely is it that the White House is really preparing another larger and riskier ‘social engineering’ experiment? For now, this question may seem rhetorical, but as ongoing events develop it might become quite urgent and relevant after all. In any case, it is a fact that Pompeo’s speech outlined a ‘new’ policy for US-Chinese relations bearing some old accents. According to his speech, this policy rests upon ‘new forms of rapprochement’ with the population and ‘personal diplomacy’.

But how achievable is all this in the current pandemic and considering likely post-pandemic geopolitical rearrangements? Will the current or next US administration be able to allocate sufficient resources for the implementation of its stated policies? And how would Chinese society respond to such a policy?

It was both logical and to be expected that Chinese propaganda branded Pompeo’s speech as a ‘call to war’ and urged the Chinese people to gather round their Communist Party in order to defeat this external threat.

Considering all the above, it is clear

US Secretary Michael Pompeo speaks at the Richard Nixon Presidential Library and Museum this July. Source: sv.usembassy.gov

that, in reaction to China’s growing regional pressure on her neighbours and attempts to impose new standards that reflect her global ambitions, US political circles have begun a serious risk analysis and reassessment. Indeed, China’s growing foreign policy ambitions pose a challenge not only to those fragments of the international order that remain but also to the West’s most basic principles of relations between countries.

The nearest future will therefore show whether the US Secretary of State’s speech will go down in history as the ‘Long Telegram’ of our times or simply ‘X Article’.

SIGNIFICANCE OF THE WESTERN SOLIDARITY During a range of critical episodes in the post II World War period, the Western solidarity and common purpose has been heavily premised on the European ‘centre of power’. Indeed, we can all agree that American-European unity is of enormous importance for the correct development of global processes.

Naturally, any kind of crack or split between the two main elements of Western civilization or any break in their co-

ordinated and synchronized interaction is a determining factor for Georgia’s sustainability as a state.

Since we have already mentioned consolidation and solidarity in the West, I would like to briefly refer to a developing and indisputably historic EU process of great economic and political significance.

This is the special programme designed to palliate the economic losses the pandemic is causing thanks to 750 billion euros in loans. But it is not the amount of money being allocated that is important, but the fact that for the first time in EU history all 27 member states will be jointly responsible for the loan.

The final decision must be ratified by the national parliaments, but even at this stage it is possible to share the optimism that European unity has generated against a background of dire economic forecasts.

The optimism of some political or public figures went even further, leading them to refer to this decision as a ‘Hamilton-like’ moment for Europe. It was Alexander Hamilton, the US Secretary of the Treasury, who in 1790 employed public loans as a mechanism to encourage tighter links between the 13 colonies

as well as the process of uniting them in federal union.

However picturesque some assessments of EU renewal may be, I am of the opinion that this particular development is very relevant to our country and something we should support, especially as our main political goal continues to be full EU membership. The Union’s stability and durability are clearly in Georgia’s national interest.

AFTERWORD We are to repeat again and again that whatever the regional or international conjuncture may be, if we are to avoid risks and make full use of all the means at our disposal, we must find our own way independently. This is what history tells us and what current events push us to do. A recent speech that Condoleezza Rice gave at the Aspen Security Forum springs to mind, a speech in which she said: ‘The international circumstances may not be very propitious. But you [the Georgians] have to build your own country, have to build your own democracy, have to build your own economy”. It is difficult not to agree with the former US Secretary of State.

What is it all about?

OP-ED BY NUGZAR B. RUHADZE

D

emocracy, ostensibly purports the public domain in politics, which is good.

Seemingly, of course! It took Humankind almost two millennia to make it popular enough for the world to recognize its merits, although the flaws it has are just as easy to see. I have nothing against the people’s rule in general, but because it is indeed the rule of a big bunch of individuals, and not of a solo man or woman, it is accompanied by a lot of blah-blah, and embellished with plenty of sugared promises to the citizenry about a better life, brought around by a running politician. And a politician can join the marathon only in the arena called elections.

Elections! What is it all about?

An election is about democracy, and vice versa: democracy is about elections, and so they determine and balance each other out in compliance with the rules made valid and available by the crowd, organized into a congregation of citizens who, having been elected by the population, are allowed to make the rules of the game, known as public life. This is where my story starts: the Georgian electoral epic taking place in the country every once in a while, only that while seems like an eternity to the politicians who strive to move into the governing slot from the bench of its opposition.

Image by Marco Verch

Any politician’s wildest dream is to elbow his or her way via the thick of the public onto the ruling dais, from where, in case of good electoral luck, the viewfinder will start reflecting the people’s life and the nation’s fate like the images in a funhouse mirror. The elected legislators and executives immediately turn around so much that the second they get elected they look like a switch turned: amnesia takes over and the happy feel-

ing of bad times gone digs in for a long while. The key electoral word anywhere around the globe, including Georgia, is ‘change’, which either happens or not as a consequence of the nervous prolonged electoral process.

Elections, the strongest and the most indispensable tool of democracy, have become a natural part of our life, being one of the most prodigal spenders of our funds, squandering the money with such

an extravagance that nobody knows exactly how to account for the imposedon-us expenditure. Those who don’t spend do not get elected, this is what they say and I have heard, so the impression is that money can push forward any person with even mediocre political capabilities but smart enough to go and get the dough! Is this fair? No, it is not, but it has become a rule and we have gotten used to it.

What if I conclude that democracy will not function without elections and elections can’t work without money? If this is true, then we might think that in most cases, not the smartest and the ablest would come to the helms of the nation, because of those unavoidable financial vibes of the electoral campaigns. You cannot eschew campaigning if you want to find yourself on top of the governing machine, and campaigning means a lot of sweat and gullibility on top of the mammon devil.

I always have a question ready to tickle the wits of my potential respondent: why does it make sense to use that much physical, pecuniary, intellectual and moral energy of the nation on something that provides us with no stable guarantee that the selfsame nation will find itself in the strongest possible hands, controlled by the sharpest intellect, for all of us to be sure that our labor, freedom and security are not threatened by the stupidity of an accidentally elected individual only because somebody said that a democratically organized society is the best version for managing a human life? I understand that we are cornered in this political model, but could we at least make the best and the most adequate choice, even if we are captives of the system, the perpetuation of which is a matter of centuries? I love sarcasm, but it is not lethal enough to get rid of what is not perfect and ideal, and bring in something to more adequately fit into our routine, so let’s make use of what is available, but with enough smarts to help.

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6

BUSINESS

GEORGIA TODAY

SEPTEMBER 11 - 17, 2020

ISET | Business Confidence Index Q3 2020: Momentous Rebound of Business Optimism service (11.8 points increase). The overall Sales Price Expectations Index has decreased for both SMEs and large companies.

Around 64% of all firms surveyed do not intend to change their prices over the next three months. 21% of firms expect to increase their prices, and the remaining 15% will consider decreasing their prices in the future.

A lack of demand and limited access to financing continues to be the most significant obstacles for both large companies and SMEs. For Q3 2020 access to finances and lack of demand became more important for both types of firms, especially for large companies (in the last four quarters, on average, 30% of large companies mentioned access to finances as a limiting factor, while, 27% mentioned lack of demand), which could

A

fter a significant deterioration in the previous quarter, the BCI has increased by 17.3 points compared to Q2 2020 and reached -9.9.

Expectations in the Georgian private sector have improved by 62.2 index points, up to 20.8. As for business performance over the past three months, it has decreased, reaching -40.6 points, indicating a significant downturn in production, turnover, and sales. Compared to the previous quarter, the Sales Price Expectation Index has also decreased, showing growth in the market share of business owners who expect lower sales prices.

The BCI increased in most economic sectors, with the highest improvement in construction (39.6), followed by financial (24.2), service (18.5), and retail trade (18.4). Compared to Q2 2020, BCI

businesses' production, turnover, and sales in the past 3 months, decreased further by 14.4 points compared to Q2 of 2020 and reached its new historic low of -40.6 for Q3 2020.

A significant deterioration in performance was observed in the retail trade sector (-59.8), followed by the agriculture (-22.0), service (-17.5), and financial (-4.3) sectors. The smallest decrease in past performance is observed in the manufacturing (-1.7) sector. The decline in these sectors highlights that the weighted balance between positive and negative responses decreased compared to the previous quarter.

EXPECTATIONS The Expectations Index increased significantly by 62.2 index points for Q3 2020 and stopped at 20.8. Prospects for the next three months have improved for every sector, except manufacturing (-34.9point decrease). The decreased in the manufacturing (-12.4) and agriculture (-8.3) sectors.

Business confidence in the third quarter of 2020 has increased both for SMEs (21.8), and large firms (15.0).

PAST PERFORMANCE Businesses’ Past Performance Index, which shows the development of

44% do not predict any changes in the future, leaving 21% of businesses that believe their business conditions will worsen.

SALES PRICE EXPECTATIONS The Sales Price Expectations Index decreased further from -5.3 points (Q2 2020) to -8.3 points for Q3 2020. The index declined in every sector, except

most significant increase is observed in the financial (79.5), followed by the service (76.4), retail trade (61.7), and agriculture (9.0) sectors.

Business expectations have, on the whole, increased for both large firms (61.5) and SMEs (67.1).

71% of the surveyed businesses do not expect any changes in employment over the next three months, however, 11% of firms stated that they would hire fewer employees in the future and 19% think that they would hire more.

35% of the firms surveyed expect the economic condition of their businesses to improve over the next three months.

reflect the postCovid-19 situation that business sector is currently facing.

It should be noted that the present BCI results may be overestimated, as the survey only covers businesses currently operating and not those that have already exited the market. Firms, which exited the market are, to some extent, more likely to demonstrate a negative outlook.

BUSINESS

GEORGIA TODAY SEPTEMBER 11 - 17, 2020

7

Prospects for GUAM’s Development

BY EMIL AVDALIANI, PETER M. TASE

I

n December 2019, the Heads of Governments of GUAM (an organization for democracy and economic development) with member states Georgia, Ukraine, Azerbaijan and Moldova, held a multilateral meeting in Kiev.

During the talks, the prime ministers of Ukraine, Georgia and Moldova, Oleksiy Honcharuk, Giorgi Gakharia, Ion Chicu, as well as the Vice PM of Azerbaijan, Ali Akhmedov, discussed issues pertaining to the increase of regional cooperation. According to the joint statement, the countries agreed to expand cooperation with their partner countries and international organizations to carry out regional projects and multilateral programs of economic cooperation. More specifically, the member states expressed the need to use blockchain technologies in verifying certificates of origin for goods’ that are transported across the GUAM Member States, and ensured their mutual recognition of Authorized Economic Operators, the agreement being signed between the customs administrations of each country.

Ukraine’s PM Honcharuk stated that “two documents have been signed; these are protocols of intentions in relation to the functioning of customs agencies in our countries. Enacting these two documents by our customs agencies will significantly simplify trade between us”.

In the same vein, the Former Georgian Prime Minister Mamuka Bakhtadze stated during a summit in 2018: “It is crucial to fully utilize the potential of the GUAM free trade zone and to increase our efforts aimed at enhancing the competitiveness of the GUAM transport corridor,” while in December 2019, Georgian Prime Minister Giorgi Gakh-

aria stated that “territorial integrity is the main challenge facing Azerbaijan, Georgia, Moldova and Ukraine.”

While economic integration has been a backbone of GUAM, its members have significantly shifted their attention towards geopolitical stability and regional threats, which have direct implications on regional economic development and prop up corruption and instability in the region.

The latest gathering might be a turning point for GUAM (initially called GUUAM). Established in 1997 following the collapse of the Soviet Union, small states near the Black Sea attempted to shape a vibrant economic cooperation to lessen dependence on Russia. It also served as one of the first regional models that institutionally linked the Black and Caspian seas, and had an integration role. At one point, even Uzbekistan was a member, which potentially allowed the GUUAM (abbreviation of the participant states: Georgia, Ukraine, Uzbek-

istan, Azerbaijan, and Moldova) to extend to the heart of Central Asia.

This happened at a time when Russia experienced economic troubles and military insurgency at home, the West was powerful, and various visions were being propounded, including the reinvigoration of ancient silk roads.

Had it worked effectively, the group might have turned into a powerful geopolitical player. For example, Ukraine controls most of the Northern Black Sea and Azerbaijan plays a powerful role as the starting point of a vital trade and a resources’ corridor. In between them is the Georgian bridge. Further afield, through Azerbaijan, it would have been possible to reach out to the Central Asian region, although Uzbekistan pulled out.

The GUAM Alliance, though short of establishing a veritable alliance, without any vacillations, nevertheless shares one common objective: limiting Moscow’s geopolitical influence by enabling

the arrangement and export of their own resources to world markets, circumventing Russian territory. In the late 1990s and early 2000s, the project failed to turn into a serious economic body. Russian influence gradually regained its lost positions and quite naturally the countries were unwilling to cause Moscow’s further anger. Moreover, GUUAM, later GUAM, members were also dependent on Russian economic, military and, generally, political benevolence.

Back then, unabashed Russia played well to prevent major western-led projects that could bypass its territory and pull gas and oil from the South Caucasus and Central Asia. Uzbekistan withdrew from the project in 2005 and Azerbaijan, Georgia, Ukraine, and Moldova, with all their economic, internal politics and military weaknesses, were unable to keep up the prospects of GUAM. Distrust towards Russia was not enough to coordinate a well-oiled

foreign policy that would eliminate any obstacles towards regional economic growth and integration.

The Russians, quite rightly, fear that such an initially loosened up economic project, including GUAM’s bumpy road, could eventually evolve into a consolidated regional block.

As the recent summit in Kiev revealed, the GUAM initiative might still be weak, but it is far from dead. Perhaps transatlantic, foreign support could be a defining moment. Over the last decade, the EU and US have been more focused on confronting Russia’s moves across the Eurasian landmass; faced with these circumstances, GUAM might be a good basis for creating an interregional economic space guided by principles of western economic and political values.

This year marks the 23rd anniversary of GUAM’s existence, and it could be argued that many geopolitical developments in the Black Sea region point to a coalescing of interests among Georgia, Moldova, Ukraine and Azerbaijan. Primarily among those interests is economic cooperation. A great number of infrastructure projects have been carried out that could enable these countries to establish stronger contacts.

Another incentive is the fact that all GUAM member states share complicated relations with Russia.

Emil Avdaliani is a non-resident fellow at GeoCase (Twitter handle - @emilavdaliani)

Address: 24 Zandukeli T: 595 50 39 30 facebook.com/thaiboxtbilisi

THE NEW CRAFT OF TASTE

8

BUSINESS

GEORGIA TODAY

SEPTEMBER 11 - 17, 2020

Importance of Sustainable Development for Business & Customers 2019’ - organized by UN Global Compact Ukraine.

INTERVIEW WITH MR. ERTAN KURT, EFES GEORGIA MANAGING DIRECTOR

WHAT CAN YOU TELL US ABOUT THE COMPETITION. AND THE GEORGIAN BEER MARKET IN GENERAL?

E

fes Georgia entered the Georgian beer and CSD market in 2008, and it has steadily maintained its position as the leader of that market for the last 10 years. Efes Georgia is a part of Anadolu Group which is operating in 19 countries, with 66 production facilities in 9 sectors, and close to 80.000 employees. Most of the population of Georgia knows the company as the producer of a popular beer and lemonade called 'Natakhtari.'

We decided to find out how the COVID19 pandemic had affected Efes Georgia, and how the company sees its future: what are the prospects of business development and its role in the Georgian economy as a whole?

To discuss this, we spoke with Mr. Ertan Kurt, CEO of Efes Georgia, who has 25 years of experience working in strategic management in the FMCG sector. He has accumulated global experience in leading FMCG companies like Procter&Gamble, Nestle and Reckitt Benckiser, becoming head of Efes Georgia earlier this year, just two months before the coronavirus pandemic hit.

The Georgian beer market has a substantially higher production capacity compared to consumer demand due to too many players, which is causing high competition. Efes Georgia is the clear market leader in the beer sector. High competition is good for customers because they get better quality, and more diverse products and services tailored to their needs from companies that are in a competitive struggle.

This year has been hard for everyone, and I think that companies need to spend more time thinking about how to benefit their customers. We listen to our consumers in order to understand what they need from specific brands. With that in mind, we launched the Natakhtari limited edition series, with special packaging inspired by Shota Rustaveli’s ‘The Knight in the Panther Skin’, Natakhtari with a thermochromic label, Karva Radler - the first beer mix in Georgia with lemon and lime, as well as Lowenbrau and Staropramen produced in Georgia. We have replaced imported products with locally produced ones, including licensed beers, over the last 15 years, turning imports into local production, which is very important for the country.

WHAT MEASURES HAVE YOU TAKEN TO OVERCOME THE PROBLEMS CAUSED BY THE COVID-19 PANDEMIC? First of all, we identified three primary, clear priorities regarding the health and safety of our employees, consumers and business partners during the COVID-19 pandemic, in accordance with the recommendations and regulations of the World Health Organization and the Government of Georgia. These are: 1) Protecting the health and well-being of our employees; 2) Tightly monitoring health and safety norms in the production process; 3) Supporting Georgian society, our partners and employees.

In early March, those employees who did not need to work in the field or in production moved to remote working.

The production process became automated to the greatest possible extent, without human participation. In addition, the company reduced working hours and travel areas for field groups. External visitors were prohibited from entering the factory and administrative offices.

The complete disinfection of industrial equipment, workshops, manufactured products and vehicles took place on a daily basis, for which special mobile groups were set up. Remote thermal screening of all employees is still being conducted. Field workers, including distributors, were provided with gloves, masks, and hand sanitizers. In addition, informative posters regarding preventive measures against COVID 19 were placed in our brewery and other spaces, and special educational training was provided for the staff. These consistent measures minimized possible complications. During this period of remote work, we had several initiatives to improve communication with our employees and to keep their motivation high. I held remote 1to1 meetings with all the managers and supervisors to keep the personal touch and discuss all relevant business topics in detail. To keep the

WHAT IS THE EXPORT POTENTIAL OF THE INDUSTRY, AND HOW IS THE COUNTRY DOING IN THIS REGARD?

team spirit high and facilitate the information flow, we have regular Online Happy Hours and Online Town Hall Meetings.

APART FROM COVID-19 PREVENTION, IN WHAT WAY DO YOU HELP SOCIETY IN TERMS OF CORPORATE RESPONSIBILITY? Efes Georgia has been implementing projects in the field of corporate social responsibility since 2008. However, I think the pandemic represented another stage, a period of restart and responsible business development for our company. As for public support, we have been assisting the most vulnerable groups in the fight against COVID-19.

And when the country needed to detect the virus quickly, we tried to contribute to this as well. In total, the company has spent more than 200 thousand GEL on the implementation of pandemic support projects under the auspices of its CSR program. We provided financial assistance for the STOPCOV Fund and a 2-month supply of disinfectants to the Infectious Diseases, AIDS and Clinical Immunology Research Center. We handed over rapid tests (SARS-CoV-2) to the government for preventive measures.

In addition, the Natakhtari Fund is supporting beneficiaries (such as adolescents without parental care) according to their individual needs and supports them with psychological consultation, rent, essential medicines, and resources required for remote learning. The company financed the fund’s beneficiaries who

lost their jobs. Moreover, the company, in cooperation with the Georgian Bartender’s Association, its partner organization, provided financial assistance to bartenders. Around 500 bartenders who were left unemployed received supermarket vouchers. Efes Georgia also distributed free products to people over 70, families below the poverty line, employees of the government’s ‘Hotline 144’ Center, quarantined citizens, and our distinguished doctors.

I would like to highlight a part of our project we are especially proud of. We established the Natakhtari Fund almost 10 years ago and during COVID-19 period we increased our efforts there. The fund aims to both empower and take care of adolescents without parental care and prepare them for their independent life.

Since 2011, the fund has helped up to 600 beneficiaries, more than 300 of whom gained employment, and more than 270 of whom received an education. These results were achieved through the unique methodology used by a project implemented by the NGO Association ‘Our Home Georgia.’ An individual development plan is created for each beneficiary, and the amount is allocated according to their specific needs. According to the goals of the fund, adolescents and young people receive care until their full independence. When a beneficiary above the age of 18 does not have a shelter and/or a job, the fund grants them a scholarship to cover rent, utilities and travel expenses.

Since 2017, the Fund, in cooperation with the Coalition of Children and Youth Organizations, has been involved in a

campaign to advocate for the needs of young people out of the public care system at both national and local levels.

CARING FOR THE ENVIRONMENT IS ONE OF THE MOST IMPORTANT COMPONENTS OF RESPONSIBLE BUSINESS. WHAT IS EFES GEORGIA DOING IN THIS REGARD? In 2012, we launched a wastewater treatment plant, which provides high-quality treatment of water resources used in the production process, and significantly reduces the impact on the environment.

In addition, in 2014, we received an energy management system certificate ISO: 50001. The company regularly delivers environmental training, constantly conducting both internal and external environmental impact assessments.

Our investments in improving environmental standards and implementing an effective waste management system have borne fruit and, in 2018, we received a special CSR award in the field of environment protection, and our wastewater treatment system has become a showcase for the Georgian bottling industry. It was a good start and, in the following years, in terms of corporate responsibility, we received 3 different awards: ● Georgia’s Responsible Business Competition Meliora 2018 - ‘Cross-Sector Partnership – Shared Responsibility’ category ● CSR Award 2019 – ‘Partnership for Sustainable Development’ category ● ‘Partnership for Sustainability Award

In general, the volume of beer exports to global markets is growing every year.

Annually, Georgia exports over 4.7 million liters of beer. Currently, Efes Georgia beer and lemonade are being exported to 23 countries. The direction of exports in our company has been developing for years, both in terms of volume and number of markets, and is one of our highest priorities and most promising areas for business growth. We are going to increase investments in this direction and export Georgian products to more countries.

We are going to intensify consumer communication in existing export countries to raise awareness of our brands, thereby strengthening our market position and awareness of Georgian brands in other countries. Bringing hard currency income to Georgia is a huge benefit for the country as well as our company.

We are prepared to work with the government to further grow Georgia’s exports and brand building in international markets. We have experiences from other countries and sectors which can be beneficial to prepare a long-term strategy.

DO YOU HAVE ANY FINAL MESSAGES FOR OUR READERS? I believe the government has done a great job putting people’s health as the biggest priority during these difficult times, and I trust we will overcome this period with solidarity. We believe in the potential of Georgia, and we will continue our investments to further increase our presence both in domestic and export markets. At Efes Georgia, we will keep our focus to improve communication both internally and externally, continue supporting a more agile culture and put innovation high on the agenda to better serve consumer needs.

SOCIETY

GEORGIA TODAY SEPTEMBER 11 - 17, 2020

9

Svaneti - A Slogan of the Saakashvili Period Profoundly Changes the Architectural Heritage of the Region

Mestia - still known as the Georgian 'City of Towers'

BY STEFAN APPLIS

T

he push for the development of tourism, as currently seen in Upper Svaneti, came from the former Georgian President Mikheil Saakashvili. The World Heritage status of the village of Chazhashi from the village community Ushguli, which was achieved in 1996, was intended to attract international tourists to Svaneti.

In 2019, the number of tourists had already reached about 150,000 per year. With a controversial new building project in Mestia next to Seti Square, Saakashvili presented an architectural style that was to changed Svaneti.

THE SWISS CHALET STYLE IS RESHAPING THE SVAN ‘CITY OF TOWERS’ The relationship between tradition and modernity is generally tense in Georgia.

Mestia, the administrative center of Upper Svaneti, is a particularly harsh example in this regard. In the center, Mestia meanwhile hardly differs from other tourist base stations at the foot of the mountains of other holiday countries.

Around Seti Square, it looks like any mountain village in the Alps due to its new buildings.

The inhabitants have fully adapted to the needs of the visitors who come here for hiking in summer or skiing in winter.

Breakfast cafés and restaurants are lined up with small shopping markets, shops of day-trip operators and rental shops for hiking and ski equipment. There is a constant wooing for the arriving guests.

San Gimignano, the Tuscan city of towers, has been Mestia's twin town since 1975. In contrast to San Gimignano, classical architecture is hardly to be found in the center of Mestia today. But even in the peripheral areas, it is dwindling due to the conversion of old buildings into guest houses. The accommodation, restaurants, bars and shops is continuously increasing: in 2019, there were already more than 300 providers of accommodation.

Along the main street, buildings in the Swiss "chalet style" dominate. These consist of a ground floor built with quarry

Hotel buildings and shops in the chalet style

stone, and on the first floor wooden balconies, which are not typical for either Svaneti or Georgia. In general, it can be said that there are no limits to the builders' creativity. A lot is in flux: some roof terraces from last year already present themselves the following year as closed floors with beds for guests. However, some shell construction does not develop even after years: the interest rates for loans are astronomically high in Georgia.

If there is no noticeable success in the first year, many hopes for an income in tourism remain unfulfilled, while the heavy burden of debt remains.

FATAL DEVELOPMENTS IN SKI TOURISM IN SVANETI The Hatsvali Ski Resort had already been developed in the Soviet era with a small lift system, but it was hardly used. At that time, mainly long-distance hikers and mountaineers on cross-republic paths visited Svaneti. The fame of that time is still present in Russia today.

Despite the fact that President Putin stopped air traffic in 2019 in protest against the massive Russian-critical attitude of a new political protest movement, winter tourists from Russia still represent the largest group of visitors to Svaneti.

The journey from Central Europe doesn’t take too long either, calculated in hours. However, the way to Svaneti via motorways and tunnels, which could bring large masses of people into the high mountains, is still a long way off, perhaps fortunately for the region.

Reinhold Messner, an icon of mountain sports, visited Mestia in 2017 on the invitation of the Georgian government. He made Georgia the "generous" proposal to build a "Reinhold Messner Mountain Museum" near the top station at Café Zuruldi, with a view over Mestia, on condition that the Georgian state fully finances the museum and accepts Messner's architects along with all the plans.

There Messner said that he wanted to tell the "true story" of the Caucasus. He predicted a bright future for winter tourism in Georgia because the Alps would soon be lacking snow. However, ski tourism, as propagated by Messner in two advertising videos, will hardly be able to contribute to sustainable economic development. After all, ski tourists from

Europe appreciate not only the exceptional nature of the Svaneti mountain world and the archaic architecture, but above all the fact that skiing is cheap there.

Already for the creation of the Tetnuldi ski area in particular, enormous mass movements were necessary due to the harshness of the mountain range, which devoured large agricultural areas, fields for which the population has not been compensated to this day. For Svaneti, moreover, the same should apply as elsewhere: a ban on off-piste skiing and a sustainable transfer of income to the development of the infrastructure needed locally, with an expansion of an ecologically compatible touring ski offer.

Instead, more and more new hotels and guesthouses have been built in recent years to cater for winter tourists. There was a regular transport of skiers to Ushguli even in winter 2019/20, made possible by the expansion of the road. What skiers appreciate most about Svaneti is that nobody there regulates skiing offpiste.

But Svaneti is above all a highly sensitive high mountain region, which is one of the last refuges for long lost species of flora and fauna elsewhere, which is why skiers should actually forbid themselves from skiing off-piste, not least for the fact that the hay and pasture areas and their fragile soils are damaged, which the population urgently needs for selfsufficiency.

USHGULI - CAUSE OF THE BOOM AND PERHAPS SOON THE DECLINE OF THE TOURIST ATTRACTION OF SVANETI The international tourism industry regards Ushguli as an ideal image of Svan mountain villages. In Ushguli, you encounter a cultural area in which, as described in the UNESCO award, the architecture of medieval origin is combined with an impressive, authentic mountain landscape in a unique way. All this has been preserved since the people there still practice traditional mountain farming. However, the UNESCO award has led to a change in this cultural area due to the influx of tourists.

Using the village community of Ushguli as an example, a comparison of the few surviving photographs, which presumably date from the late 1960s and early 1970s, shows that the intervention during the Soviet era was the most significant, especially in the villages of Chvibiani and Zhibiani, while the village of Chazhashi was protected as the Ushguli-Chazhashi Museum from 1971 onwards. Due to the structural changes during the Soviet era, UNESCO refused to include the entire village community on the World Heritage List. Nevertheless, according to the World Heritage Commission, structural changes in Murkmeli, Chvibiani and Zhibiani may only be carried out with state permission, as they belong to the buffer zone around Chazhashi.

Even if no precise restrictions are set, the UNESCO Commission points out in the existing documents that structural alterations generally jeopardize the World Heritage status. This would ultimately affect the entire mention of Svaneti and Georgia within the UNESCO system.

Svaneti itself does not have World Heritage status. Besides, most of the remaining towers outside the UNESCO district of Chazhashi are in danger of collapsing.

In August 2019, some inhabitants of Ushguli blocked the road to Mestia for the first time to protest against the government's inactivity. The village community was not accessible for tourists for hours. Svaneti, they said, was advertised by the government as a tourist development region, but on the other hand, the families were not supported in preserving the architectural, cultural heritage.

Meanwhile, in Ushguli, both the architectural heritage and the cultural landscape surrounding it have undergone such drastic changes within a few years

Reproduction of an undated Photo of the 1960s showing Chvibiani and Zhibiani and taken from a room of the Solomon guest house in Chvibiani, which captures the principal phase of reconstruction during the Soviet period, during which, following the elder interlocutors, over half of the uninhabited towers were demolished for building materials

that there are apparent differences between the situation on-site and UNESCO's justification for the allocation of World Heritage status. It would not be the first time that the UNESCO Committee would be in the position to limit the scope of the World Heritage Site in Georgia, or to withdraw it from an entire ensemble of buildings. Such an attitude on behalf of UNESCO was evident in the dispute over the restoration of the Bagrati Cathedral in Kutaisi.

To date, the Georgian state has not developed a sustainable management plan that would guarantee the preservation of the buffer zone (buildings, landscape conservation, sustainable agriculture) by involving the local administration and the needs of the local population. This challenge cannot be met by the inhabitants of Ushguli alone without external financial support. After all, this buffer zone includes all other villages and a considerable part of the cultural landscape surrounding them.

Thus, what in remote high mountain regions in general and elsewhere in the Caucasus is seen as development potential against the background of a rich cultural and ecological heritage, could turn into its opposite in Ushguli. Hiking

and cultural tourism, which, also attracted by the World Heritage status, flows to Svaneti, has been leading to a revival of old villages for some years now, at least in summer. It is precisely this tourism that could also lead to the removal of the World Heritage status.

Finally, most holidaymakers lack information about the real economic, social and also ecological conditions on-site to make a sustainable choice and the use of a sustainable service possible. Without summer and winter tourism, there will be no development in the region in the long run. But as long as only the local providers profit economically, who are already better off, we will hardly see the whole region being able to recover from the effects of tourism.

A neo-liberal tourism policy without supportive state intervention has led to the fact that most families can only operate tourism as an extended subsistence economy. Accommodation prices are far too low for small providers to be able to preserve the medieval architecture.

Stefan Applis is a professor of geography in Germany and has been working in Svaneti since 2015, working together with Nino Tserdediani, the director of the Svaneti Museum of History and Ethnography.

The same view, taken today; a check at the site confirms that since the previous photo was taken, only one further tower has been lost, to collapse

Many residents do what they can, but here too the chalet style prevails: A self-initiated renovation of a residential and stable building from the 1950s in Ushguli

10

SOCIETY

GEORGIA TODAY

SEPTEMBER 11 - 17, 2020

Urek’d Again BLOG BY TONY HANMER

I

t was long-term friends of ours who recommended us their favorite place to stay on the Black Sea coast of Georgia, and we followed their suggestion with no qualms, meeting them there. All I’ll say at this point is that it’s near Ureki, with fir forest to camp in less than 100m from the water itself, hardly another soul in sight overnight and not that many beach enthusiasts during the day either. (If I told you more, I’d be tempted to silence you somehow to keep the secret!) Ureki itself can be quite noisy during the long tourist season, even now with almost all of its international clientele unable to come. The night clubs or restaurants offer live or recorded music at volumes not exactly conducive to a quiet family stay. But from where we were, this faded and echoingly distorted itself to less than a dull roar, more a dull white noise of sorts.

There were hardly any mosquitoes at all, shade from the trees, ample fallen wood and cones to start a fire with, a near-constant breeze the origin of which swung around from the sea in front to the forest behind and which helped to keep things cool. We agreed that it was a bit of paradise, and persuaded the friends to stay twice as long as the couple of days with us that they had available, changing their schedule to make this work.

Swims three times a day: early morning, late morning and early evening.

Followed by watching the sunset on the sea’s horizon. Schools of fish darting about in the early hours, as well as occasional dolphins and seagulls harassing them. Small white herons too, fishing at the water’s edge.

Ureki’s beach is sand of a dark gray color, and the entrance to the water is very shallow, both things in its great

favor. Further south, the shore is mostly rounded rocks of various sizes, with an angle into the water which sees you neck deep within meters as opposed to Ureki’s seeming knee-deep-for-100m approach. But Ureki’s water is also seldom as clear as elsewhere, a minor point against it. It can also be deceptively inviting, occasionally offering most unwelcome riptides to pull you out to sea if you’re not careful. So each location has its pluses and minuses, but in general this campsite was really ideal for us.

We had packed a small gas bottle to cook on, a folding plastic table for up to six, folding chairs, and the tent from

my recent Big Svaneti Circle walk. This is only just big enough for two sleepers, so my wife and I kept our luggage in the much more ample space of the 4x4.

We could put everything but the tent back in the car to drive, and come back with nothing disturbed. The odd restaurant meal, fish-buying excursion or other trip took us away for a short while, but we returned magnetized to this wonderful refuge.

A young man on a jet-ski, the water version of a snowmobile, was persuaded to stop and give my wife, behind him, then me solo, a spin at 20 GEL for 5 minutes, which we felt was good money for the speedy thrill. She ended up

rethinking the boat-towed parachute ride, though, seeing another enthusiast failing his first attempt to get skyward and crash into nearby people in the water. He managed flawlessly the second try, but she’d seen enough. I too declined, not having anything like the waterproof helmet-mounted GoPro still and video camera he took up, and feeling that the experience should only be done with such filming possibilities available.

It was to this same place that we returned for our last night, after our friends had left us and we had tried a few other locations to the south. They all had other positive qualities but the

original spot beat them, and it is there that we shall return next time for a cheap, wonderful break from the mountains which lack only this, some seashore, and anyway, it is reachable in three hours for us from home.

Tony Hanmer has lived in Georgia since 1999, in Svaneti since 2007, and been a weekly writer and photographer for GT since early 2011. He runs the “Svaneti Renaissance” Facebook group, now with nearly 2000 members, at www.facebook. com/groups/SvanetiRenaissance/ He and his wife also run their own guest house in Etseri: www.facebook.com/hanmer.house.svaneti

CULTURE

Announcement | Eclectik Music Festival

E

clectik Music Festival is a completely new and, most importantly, exciting space that is eager to celebrate art.

The festival lives up to its name, each time offering audiences unique and eclectic events.

Eclectik is a space that strives to promote and support arts that are out of the ordinary, while serving as an advocate for artists of all genres. This time, Eclectik will again be filled with astonishing

music-making and camaraderie, friendships formed and fostered, artistic discoveries and challenges. You will find new faces next to musicians and craftsmen we all know and love, all of whom have the opportunity to present their authorial works to attending guests.

On September 11, from 16:00, take a walk near Lisi, where you can enjoy an exhibition of handicrafts, get your face/ body painted, and throw yourself into the Festival of Colors. (Please be sure to

bring a light-colored T-shirt).

From 21:00, the alternative band ‘Asea Sool’ will hit the stage with its crazy music, followed by the kings of Georgian rap, Zaza Nozadze (Sfx), and the longmissed Kabu. After midnight, Eclectik’s stage will witness immensely talented newcomer DJs, Hesque and A70.

Tickets can be purchased both online and on the spot. https://tkt.ge/Event/237414/eclectik-nightvol-2

CULTURE

GEORGIA TODAY SEPTEMBER 11 - 17, 2020

11

Artistic Couples: Irma Kusiani also become an artist without a proper education, of course, but that is mostly luck.

HAVE YOU HAD TO OVERCOME ANY CHALLENGES IN YOUR PURSUIT OF ART? Everything starts as fun and games, then as you study more, you realize that it is not that easy. You need to work really hard: every day, I either paint or think about what I should paint. It’s not as easy to be a professional painter as it might seem on the outside.

COULD YOU TELL US THE ADVANTAGES AND DISADVANTAGES OF LIVING WITH A FELLOW ARTIST?

I don’t remember exactly when I started painting, I just know that for as long as I remember, I remember painting. When I was a kid, I would paint rather than have any other kind of fun.

when he started these brush strokes on an empty canvas, while I carefully watched as something blank slowly turned into something beautiful. If someone looked in the room at the very moment, they would see my astonished face! This was the moment my dream turned into thought. I was a fifth grader then. If before this moment all my paintings brought me a childish joy, after this painter visited our school, I grew critical of everything I painted – I didn’t like my pieces anymore. I decided I had to study and for this I had to paint more and more. So I soon started going to painting lessons in what was then the ViceRegent Palace.

My favorite painters are Gustav Klimt and Lawrence Alma-Tadema. Their impact can still be seen on my works.

I would literally give up one year of my life just to be able to talk to Klimt for a few hours. From a young age, his paintings bewitched me and made me fall in love with his golden sheets. I also love the pre-Raphaelites.

WHO HAD THE BIGGEST IMPACT ON YOUR WORK EARLY ON IN YOUR CAREER? CAN YOU NAME YOUR FAVORITE ARTISTS?

HOW IMPORTANT DO YOU DEEM PROFESSIONAL EDUCATION IN SHAPING AN ARTIST?

I remember once in school, a painter came in and painted my classmate. I remember my reaction quite clearly

I believe that professional education is still important. It doesn’t disrupt anything and it can help a lot. You can

BY NINI DAKHUNDARIDZE

W

ithin the scope of GEORGIA TODAY’s collaboration with BI Auction, we are offering to our readers exclusive interviews from Georgian artistic couples. Last week, we presented to you Merab Gagiladze, and this week you will read about his spouse, painter Irma Kusiani, who in conversation with us goes into detail about the advatages and disadvatages of living with a fellow artist, her many inspirations, and more.

WHO FIRST INTRODUCED YOU TO ART? HOW AND WHEN DID YOU START PAINTING?

My spouse and I are both painters: we have been painting side by side for almost 30 years now. There are some disadvatages, like secretly stealing each other’s brushes and paints, arguing over what music to put on when we’re working, sometimes wishing you were alone when you are painting but you are not... But there are advantages, too, like giving each other advice, making decisions together on professional issues, about exhibitions, useful and sometimes useless arguments.

WHAT WOULD YOU SAY ABOUT THE CONTEMPORARY GEORGIAN ART SCENE? Where would I put Georgian art on the world map? I would assess it the same way I would assess Georgian wine, music, dance, singing, and sports.

WHAT IS YOUR BIGGEST INSPIRATION TODAY? I think one can find inspiration in anything: it could be a cloud in the sky, or a leaf on the tree. If you watch closely enough, you will find that everything has its own character: an animal, a person, a star, grass, a tree, even a traffic light. They are all inspiring.

WHAT DO YOU WANT TO TELL PEOPLE THROUGH YOUR ART? Simply, the feeling I felt when creating that canvas; something I saw that made me paint it.

THE MODERN ART SCENE IS EVER-CHANGING. WHAT IS THE FUTURE OF PAINTING IN THIS REALITY? I don’t think art has either a past or a future: it is only a challenge of its times.

Art is the only thing that stays wonderful, no matter what. Everything without it seems like nonsense to me. I can’t imagine a person without art.

develop their own style. In short, first heart and then mind.

WHAT DO YOU THINK ART AUCTIONS IN GENERAL, AND BI AUCTION IN PARTICULAR, PLAY IN PROMOTING ART? I think different art auctions are one way to professionally connect a painter and collector. Unfortunately, we have not really been spoiled with many auctions in Georgia. The BI Auction is the first professional one, for which I am thankful and I wish them success!

WHAT ARE YOUR FUTURE PLANS? Coronavirus has turned everything upside down. I now see everything and everyone in mystique. So I don’t really have plans right now, for the near future. But in general, I plan many exhibitions.

WHAT DO YOU THINK ART’S MAIN MISSION IS?

WHAT WOULD YOUR ADVICE BE FOR ARTISTS JUST STARTING UP?

I think art is more of an illusion: it is there to interpret everything. I believe that art’s mission is to humanize people, make them more kind and sometimes angrier about things. Its mission is to bring emotions to the surface. I couldn’t live without it!

I would advise them to not go mellow on themselves and to work really hard.

It’s hard-work and determination that makes a person who she wants to be.

They should paint everywhere, all the time; even make copies of different great artists: appreciate classic art and then

About BI Auction ‘for ART’: BI Auction is the first Art Auction Company of Georgia, established in 2016. The company’s aim is to promote Georgian art and artists and enlarge the market. In four years, BI Auction ‘for ART’ has organized eight auctions and presented more than 450 paintings from 125 Georgian painters. In every auction, the collection is selected from among a thousand paintings from the well-known legendary artists of Georgia and also from promising young artists.

For more information, please contact biauction1@gmail.com

SPORTS

Telegraph: Georgian Rugby Team to be Added to Six Nations, Face England

BY ANA DUMBADZE

G

eorgia are to replace Japan in the Eight Nations tournament this autumn and will face England for the first time outside of a World Cup, having been drawn in the same pool along with Ireland and Wales in the new tournament, the Telegraph reports in the article by Gavin Mairs, Chief Rugby Union Correspondent.

"It is understood that official confir-

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George Sharashidze COMMERCIAL DEPARTMENT

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GEORGIA TODAY

The Georgian Rugby Union has not yet made an official announcement about the tournament. The Prime Minister of Georgia, Giorgi Gakharia, announced about the Georgian-British talks regarding the Eight Nations Tournament during a meeting with rugby players on September 7.

The parties discussed Georgia’s historical chance to participate in the ‘autumn cup of rugby.'

"The government makes every effort for Georgia to participate in the Eight Nations," the Prime Minister emphasized.

mation of Georgia’s inclusion is expected within the next couple of weeks and they are to face England at Twickenham on Nov 14. It will only be the third time the two sides have met, having previously faced each other at the 2003 and 2011 World Cups England will then entertain Ireland at Twickenham on Nov 21 before playing their final pool game, against Wales on Nov 28," reads the article.

The other pool will see Scotland, France, Italy and Fiji face each other, with the winners of each pool meeting in a final at Twickenham on Dec 5.

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