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Issue no: 860/35
• JULY 12 - 14, 2016
• PUBLISHED TWICE WEEKLY
PRICE: GEL 2.50
In this week’s issue... Spanish ‘Relais of Termal Group’ to Invest in Medical Tourism in Georgia
PAGE 2
Overworked and Underpaid ISET PAGE 4
BGCC Opens Tbilisi Office, Looks Forward to Boosting Relations between GeorgiaBritain
FOCUS ON DEVELOPMENT
How Tbilisi Mall came back to good
PAGE 7
PAGE 9
Georgian Government Launches Cybersecurity Campaign BY EKA KARSAULIDZE
C
ybercrime causes USD 100 billion worth of damage to the world economy each year, with around 550 million people falling victim to it. “Cybercrime has no borders or ethnicity. Georgia is facing cybercrime challenges when choosing the way of technological upgrading, modernizing institutions and integration into the Euro-Atlantic space. Our citizens use Internet technology and electronic services daily and their safety is important to us,” said Giorgi Mgebrishvili, Minister of Internal Affairs.
To that end, the Ministry of Internal Affairs (MIA) of Georgia has initiated an information campaign ‘Protect your Electronic Space,’ the purpose of which is to prevent cybercrimes and to increase public awareness about safety in the global network. In the framework of the campaign Cybercrime
Prevention Week will be held, at which experts on cyber security will meet with the general public. In addition, MIA has launched a special informative section about cybercrime on its website. Those with concerns or queries are also welcome to call the MIA hotline, enabling citizens to contact a specialist if they think they have become victims of cybercrime. “Cybercriminals adapt on a daily basis,” Minister Mgebrishvili said. “We must be one step ahead. To prevent crimes, we need to have the right information and technological tools. Various structures will participate in the campaign, including those from the public and private sector. This action will allow us to work together to identify key priorities and decide how to better meet the challenges.”
Georgian Products Enter Arab Market PAGE 10
Cartu Fund Supports “King Erekle in the British Press" Project PAGE 12
PACE President Commends Georgia’s True European Aspirations POLITICS PAGE 13 Prepared for Georgia Today Business by
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BUSINESS
GEORGIA TODAY
JULY 12 - 14, 2016
Spanish ‘Relais of Termal Group’ to Invest in Medical Tourism in Georgia BY EKA KARSAULIDZE
R
The company expressed its interest in Tskhaltubo, Imereti region, a town famous for its radoncarbonate mineral springs
epresentatives of worldfamous spa and health centers Relais of Termal Group were in Georgia to explore the country’s perspectives in the creation of various balneology centers. Moreover, Spanish experts made specific investment offers for the Racha and Imereti regions. For this purpose, representatives of the company, headed by the Director General of Relais of Termal Group, Fernando Fraile Garcia, visited Utsera village – one of the oldest villages in Racha. There, Spanish experts plan to build a balneological-rehabilitation center. The com-
pany also expressed its interest in Tskhaltubo, Imereti region, a town famous for its radon-carbonate mineral springs. The Spanish delegation met with David Saganelidze, the Head of Georgia’s stateowned shareholding Partnership Fund. The parties discussed the current business environment, investment potential and cooperation perspectives. The Partnership Fund’s management informed the Spanish delegation on the mandate, priorities and strategy of the Partnership Fund. Relais of Termal Group were encouraged to visit Georgia after the Partnership Fund went on a business trip to Spain in April 2016. The parties agreed to consider medical tourism development perspectives and exchanged information in the medical tourism field.
BUSINESS
GEORGIA TODAY JULY 12 - 14, 2016
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Number of Flights Spike at Batumi Airport BY EKA KARSAULIDZE
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atumi International Airport, located on Georgia’s Black Sea coast, has seen the amount of traffic both in and out of the airport skyrocket 34.9 percent over the first five months of the year. 788 flights with 54,429 passengers
passed through the airport from JanuaryMay, a 32.9 percent year-on-year increase. The Government of Adjara Autonomous Republic said the airport would host seven new airlines including Scat Air, Skybus, El Al Israeli Airlines, Israir Airlines, Air Arabia, Bravo Airlines and Taban Air. Batumi plans to increase the number of passengers travelling from Turkey, the United Arab Emirates, Poland, Israel, Kazakhstan, Belarus, Ukraine, Iran and
the Russian Federation. “We had eleven target countries in which we conducted active PR and marketing campaigns. As a result, today we can see that already two Kazakh airlines carried out flights from six major cities. We also added two new flights from Israel and for the first time have a route from the United Arab Emirates,” said Mamuka Berdzenishvili, acting head of the Department of Tourism of Adjara.
Georgian Wine Festival Held in China, 4th Largest Georgian Wine Importer BY TAMAR SVANIDZE
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ine Georgian wine companies presented their products at Georgian Wine Festivals held in two cities of China, in Hong Kong and Shanghai, early July. Well-known Georgian companies, Bagrationi, Chateau Mukhrani, Dugladze Wines and Spirits, GWS, KTW, Kakhetian Wine Cellar, Winery Khareba, Mildiani and Usakhelauri Vineyeards promoted their wine to one of the biggest markets of Georgian wine consumers. Head of the National Wine Agency (NWA), Giorgi Samanishvili, who attended
the event, emphasized that since 2014 China is one of the fastest growing export markets for Georgian wine. “The whole wine industry is involved in Georgian wine promotion to the Chinese market, including the National Wine Agency and wine producing companies. The relationship with China on a governmental level is progressing, that has significant influence on wine sales,” Samanishvili said. The NWA released data showcasing that during January-June this year, 1.9 million bottles of wine were exported to China, which is 148 percent higher than last year. The NWA further states that China takes 4th place in the five top Georgian wine importers after Russia, Kazakhstan
and Ukraine. The event was organized by the NWA and international marketing company ‘Meiburg Wine Media.’ The Director, Debra Meiburg, emphasized that Georgian wine is diverse and offers a unique taste experience. “Georgia offers a broad variety of wines to try, for example new styles of wines, wines that are a little bit lower in alcohol and have that freshness of fruit; for collectors, Saperavi ages beautifully. In short, there are different styles for different types of consumers in China,” Meiburg said. Guests at the festival had the chance not only to sample Georgian wine but also to attend wine masterclasses lead by Debra Meiburg.
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BUSINESS
GEORGIA TODAY
JULY 12 - 14, 2016
THE ISET ECONOMIST A BLOG ABOUT ECONOMICS AND THE SOUTH CAUCAUS
www.iset-pi.ge/blog
The ISET Policy Institute (ISET-PI, www.iset-pi.ge) is an independent think-tank associated with the International School of Economics at TSU (ISET). Our blog carries economic analysis of current events and policies in Georgia and the South Caucasus region ranging from agriculture, to economic growth, energy, labor markets and the nexus of economics, culture and religion. Thought-provoking and fun to read, our blog posts are written by international faculty teaching at ISET and recent graduates representing the new generation of Georgian, Azerbaijani and Armenian economists.
Overworked and Underpaid BY MAKA CHITANAVA AND NINO DOGHONADZE
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ORKING OVERTIME…
In 2014, 22% of Georgia’s working adults reported having worked more than 40 hours per week, i.e. working overtime. This many not sound like a lot, but, as any average figure, it hides a great deal of geographic variation in the incidence of overtime work. Very few people work overtime in places where there are almost no jobs, such as Kakheti or Racha. Conversely, more than 50% work over 8 hours/day in the dynamically developing Tbilisi, and as many as 44% in the adjacent Kvemo Kartli. With so many people doing it, working overtime is becoming the norm, and considered mandatory in many occupations. For example, in quite a number of government agencies, meetings and consultations routinely start after normal office hours, and often run until after midnight. Symptomatically, when interviewing for jobs with these institutions, candidates are expected to demonstrate ‘flexibility’ when it comes to working overtime. Having earned themselves the reputation of a lazy nation, Georgians may deserve to be overworked.
One may even think that making Georgian alpha males work 12 or 15 hours a day may be a great way to teach them Protestant work ethics. Yet, while perhaps justified, this approach would only work to a point. Fairness considerations aside, overtime workers are not very productive workers. And due to unhealthy lifestyles and permanent work-related stress, their mental and physical health would quickly deteriorate, making them unfit for any job. So, why do we work overtime?
WORK ETHIC, MONEY OR FEAR OF UNEMPLOYMENT? It may well be the case that some of us are workaholics and enjoy every extra hour spent in the office or on the factory floor. However, it is hard to believe that 50% of Tbilisi residents derive pleasure from slaving themselves at work. Another possibility is that people want the extra money that comes with overtime work. This theory finds some support in the fact that, in 2014, overtime workers earned, on average, 246 GEL more than regular-hour full-time workers. Yet, a very different picture emerges if we consider regionally disaggregated data. Overtime workers may, indeed, earn more than the national average, but only because the vast majority of them live and work in Tbilisi and its vicinity, where wages (and the cost of living) are higher than elsewhere in the country. The dif-
Source: own calculations based on GeoStat Integrated Household Survey, 2014
ferences in the earnings of overtime and regularhour workers within the same region are negligible. When considering income from primary employment in Tbilisi, we find no statistically significant differences at all. The same is true for MtskhetaMtianeti. As for Kvemo Kartli, the extra earnings associated with overtime work amount to a meager 59 GEL per month. Thus, if anything, the bulk of overtime workers are overworked and underpaid! If most Georgians are not workaholic, and if overtime work is not adequately remunerated, the main explanation we are left with is that overtime work is simply a way for people to secure their jobs. Indeed, by working overtime, employees may be trying to impress their bosses with their diligence and devotion. “Look”, they signal, “no matter how much you try, you won’t find anybody better in the long line of job seekers outside the factory gate”. A quick look at the regional unemployment and overtime work statistics (see chart) lends strong support to this line of reasoning. The incidence of overtime work (measured as a share of total employment) is correlated with unemployment. In other words, the higher the rate of unemployment, the more people tend to work overtime. The only ‘outlier’ in this regard, Kvemo Kartli, exhibits the second highest incidence of overtime work (43%) despite being fairly low on unemployment. Yet, Kvemo Kartli’s exceptionalism only serves to prove the rule. Most of its overtime workers (e.g. those living in Rustavi) are, in fact, taking a daily commute to Tbilisi and are subject to the same psychological pressures as most other workers in the capital. The fact that involuntary unemployment can motivate workers to work harder is yesterday’s news in economics. For example, according to Carl Shapiro and Joe Stiglitz (Equilibrium Unemployment as a Worker Discipline Device), unemployment may be the result of uncoordinated decisions by firm managers to raise wages above what their workers would receive at competing firms. The idea is that higher wages make it costly for workers to shirk and thus risk the loss of their wellpaying jobs. Since all firms raise wages, and workers work harder (and longer hours), the new equilibrium will be characterized by a higher level of (involuntary) unemployment. And since all workers will be paid the same (higher) wage, unemployment will substitute for wages as a worker discipline device.
HOW MUCH SHOULD WE WORK? According to a recent ILO survey, the 40-hour workweek is the norm in 41% of countries. We –
and our bosses – are all used to 8-hour work days and 40-hour workweeks, and rarely question their rationale. Yet, what is so “magic” about these numbers? As a matter of fact, Sweden’s recent shift to a 6-hour working day challenges our current perceptions of what may be optimal from the point of view of workers’ motivation and productivity. It goes without saying that shorter work days would give people more time to invest in their families, enrich their personal and social lives, and thus contribute to a sense of good balance and happiness. But, as confirmed by the experience of Swedish employers who introduced shorter work days more than 10 years ago (without waiting for a government decree to), working less hours may also result in lower staff turnover, higher productivity and higher profits. The 40-hour workweek was certainly a great achievement of the 20th century. The first business to implement a 40-hour workweek was the Ford Motor Company. In 1914, Henry Ford stunned the world by not only cutting the standard workday to eight hours, but also doubling his workers’ pay. Surprisingly for many, this resulted in his company’s profits doubling within two years, encouraging other businesses (and countries) to follow suit. While perhaps suitable for the 20th century, it is not at all clear that 8-hour workdays are a good fit for the 21st century as more and more routine tasks are performed 24/7 by robots, fully automated production lines, and computers. It is not at all clear that 8-hour workdays are best at a time when information technologies and automation are rapidly transforming the working environment and human culture. * * * In his “Economic Possibilities for our Grandchildren”, John Maynard Keynes had famously predicted that in a world of material abundance, towards which we are inexorably advancing, humans will be preoccupied with the challenge of filling their life with meaning. Those people will be able to enjoy the world of abundance, he argued, “who can keep alive, and cultivate into a fuller perfection, the art of life itself and do not sell themselves for the means of life … Three-hour shifts or a fifteenhour week may put off the problem for a great while. For three hours a day is quite enough to satisfy the old Adam in most of us!” Keynes wrote in 1930. While hardly living in an age of material abundance, we, Georgians, should also keep in mind the question of purpose. Are we working to live or living for work?
BUSINESS
GEORGIA TODAY JULY 12 - 14, 2016
Georgia as World Champion! Transparency as a Mutually Beneficial Way to Boost CSO-Citizen Relationships BY THE PMC RESEARCH TEAM
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he annual Think Tank Transparency 2016 report was recently published by Transparify. Of great value, it is the first ever global rating detailing the levels of financial disclosure of 200 Think Tanks located in 47 countries worldwide. Put simply, it highlights just how financially transparent CSOs are. The good news from the 2016 publication is the emphasis on Georgian CSOs, which it claims are operating in a very transparent way. According to the report, “Georgia is now the world champion in policy research transparency.” Seven out of ten Georgian institutions- PMC Research, ISET Policy Institute, Jumpstart Georgia, the Economic Policy Research Center, Transparency International Georgia, Institute for the Development
of Freedom of Information, and the Caucasus Institute for Peace, Democracy and Development -were assessed as highly transparent. This means that, according to transparency level, Georgian CSOs stand together with European peers Transparency International EU (Belgium), the European Center for Development & Policy Management (Netherlands), the German Development Institute (Germany), the World Economic Forum (Switzerland), and others. So why it is important for us to be transparent? As Think Tanks, we play a vital role in the political and policy arenas. We provide public policy research, analysis and advice. We support governments to make informed choices about various issues, and more. We need to be as reliable and as trusted as possible and that would be impossible to achieve without accountability and transparency.
The general public, our partners and donors, have the right to have easy access to information about our origin of funding and the projects we work on. On the other hand, such openness is beneficial for us, too: we become more trustworthy, our work is more respected, and policy makers and citizens listen to us more attentively when we are open. Perhaps those who have yet to reach a certain level of transparency consider “being transparent” difficult and time consuming. However, as an organization with experience, we can definitely state that in the modern world it is easy to achieve- you need only to publish your source of funding, name of the project(s), amount of funding and project duration onto your webpage and ensure that the information can be easily accessed by visitors to your page. For more detailed instructions on how to “transparify” your business, go to: www. transparify.org
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www.eurobus.ge
First ‘Host in Georgia’ Hotel to Open in Bakuriani
BY EKA KARSAULIDZE
T
he Entrepreneurship Development Agency of Georgia announced the opening of the first hotel in the framework of the ‘Host in Georgia’ program. Local company Toka will open a new high-standard hotel in Bakuriani ski resort this December. As part of the new state program, the Entrepreneurship Development Agency will pay the interest of Toka’s loan for the first two years while the company itself will pay only the amount it borrowed to build the hotel in Bakuriani. With the help of the Agency, total investment for the project will be USD 270,000. Dozens of people will be involved in the construction of the project while 15
people will be employed in the new hotel when it opens. Toka is the first business of the Host in Georgia state program that the Government of Georgia launched last year. The program is a sub-component of ‘Produce in Georgia,’ which was established mid-2014 to revive the country’s production industry and improve Georgia’s economic future. Host in Georgia encourages regional entrepreneurs to build new hotels and develop the hospitality industry in Georgia’s diverse regions. Entrepreneurs will also be free to expand existing hotels or bring foreign brands into the Georgian market as a franchise. Within this sub-program, the State will co-finance the business projects of entrepreneurs who want to build a new hotel in any region of Georgia except the capital Tbilisi and Black Sea resort town Batumi.
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BUSINESS
GEORGIA TODAY
JULY 12 - 14, 2016
Research Shows High Satisfaction from those Visiting Adjara BY EKA KARSAULIDZE
A
s Batumi has become one of the most popular tourist destinations in Georgia, the local Tourism Department decided to run a number of studies to determine the perceived pros and cons of traveling in the Adjara region, as well as to find out what challenges tourists face during their trips. The results were mostly positive – more than 90 percent of tourists were satisfied while travelling within Batumi and other resorts of Adjara. The studies were conducted in two phases during August-December 2015 and included 1,000 respondents in each phase, with about 36 percent from Turkey, 16 percent from Armenia, 16 percent from Azerbaijan and 7 percent from Russia. The research indicated that the majority of respondents (58 percent) were visiting Adjara for the first time. 90 percent of the respondents said they would happily visit the region again and planned to recommend it to friends and relatives. Only 1.5 percent said they did not want to visit the region again. Most visitor-respondents said they were travelling through Adjara
together with their friends (37.4 percent) and with family (34.2 percent). Only 23.7 percent were alone on their visit to the region and 4.7 percent were with their work colleagues. 64.9 percent of the respondents had heard about Adjara from their friends and relatives, claiming that they found this the most reliable source of information about the Georgian region. The second most popular answer was that their own experience encouraged them to visit Adjara again – 25.4 percent. Media sources like TV, radio, print media and internet as sources for information about the region came in at 17.7 percent. The data surprisingly showed that only 26.80 percent of the respondents had booked accommodation in advance, with 73.20 percent having found a place to stay after arriving in Adjara. The majority of tourists were attracted by beach and entertainment – 44.1 percent, the nature and landscape – 37.3 percent, while 5.9 percent came to Adjara to visit their friends and relatives. On the negative side, 14.4 percent of respondents said they were dissatisfied with the service provided in the region. 11 percent complained about the high prices and 10 percent complained about road safety. That said, at the same time 84.4 percent of the respondents found it difficult to say what kind of services
they would like to receive during their next visit to the region. “The research was focused on 10 target countries, the main idea of which was to make it possible to see the needs of tourists, their satisfaction or dissatisfaction according to each country,” said Mamuka Berdzenishvili, the Head of the Department of Tourism of the Autonomous Republic of Adjara. He added that such research allows the Department of Tourism to work in the right direction and to launch appropriate campaigns for each country to make Adjara even more of a tourist pull.
BUSINESS
GEORGIA TODAY JULY 12 - 14, 2016
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BGCC Opens Tbilisi Office, Looks Forward to Boosting Relations between Georgia-Britain BY KATIE RUTH DAVIES
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n July 6, the BritishGeorgian Chamber of Commerce (BGCC), after nine years of existence, invited guests to celebrate the opening of its Tbilisi branch, having been based solely in London before now. Present were special guests from founding companies British Petroleum (BP) and TBC Bank; new partners PriceWaterhouseCoopers; the British Embassy Chargé d'Affaires, Tiffany Sadler; and various representatives from both the Georgian business sector and the British. Non-profit organization BGCC has a vested interest in encouraging bilateral relations between Britain and Georgia, including in investment, trade, and cultural awareness-raising between the two countries through conferences, trade missions and exhibitions. Its current focus is on food and wine and it is preparing in particular for the Global Wine Forum to be launched in Kakheti, Georgia, this autumn. The BGCC was founded in London by Lord Cromwell and Mako Abashidze in March 2007. The main aim of having a branch in Georgia, located in the Beziki Business
Chris Schleuter, BP Country Manager, Georgia; Tiffany Sadler, British Embassy Chargé d'Affaires, and Mako Abashidze, Founder of the British Georgian Chamber of Commerce at the opening celebration for the new BGCC Tbilisi office
Center alongside the UK Visa Application Center, is to facilitate Georgian businesses in being able to invest, trade
and relate to their British counterparts. “In our Tbilisi office we will provide services we don’t provide in London,”
Mako Abashidze told GEORGIA TODAY. “In London we are more focussed on corporate membership,
whereas here we decided to fill a niche to provide tangible, practical and affordable services related to Britain. Guaranteeing good quality and high standards, we will offer Georgian businesses- large and small- consultancy, lobbying, translation, notarisation and more. We are also partnering with a consultancy firm in London which allows us to help Georgian companies step-by-step in registering, bank accounts, virtual offices and anything else they need to make a success of their business endeavours in Britain.” BGCC also has a big focus on professional education, arranging internships and facilitating the attendance of Georgian businessmen on courses at such prestigious institutions as Plumpton Agricultural College, which has a focus on wine branding and marketing, particularly useful for today’s Georgia. We asked Ms Abashidze if the idea of Britain leaving the EU concerned her or affected the aims of the BGCC in any way. “Brexit is nothing to be scared of,” she said. “Times of change often bring more opportunities. I’m actually very optimistic.” The celebratory event was held at the Terrace Hotel & Restaurant, where guests were welcomed with a buffet, wine, and music provided by Georgian male choir, Urmuli.
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BUSINESS
GEORGIA TODAY
JULY 12 - 14, 2016
Black Sea Arena Ready to Host International Events BY EKA KARSAULIDZE
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he new concert hall ‘Black Sea Arena’ in Shekvetili, on eastern Georgia's Black Sea coast hasbeenofficiallyopenedand handed to the State by the Cartu Charity Foundation (Cartu Fund), established and financed by Georgia’s former Prime Minister, Bidzina Ivanishvili. The concert venue is expected to develop tourism in the region and will support economic development and investment opportunities. Over the summer months, the
Dimitry Kumsishvili, Minister of Economy, and Niko Chkhetiani, Chairman of Cartu Fund, at the hand-over ceremony. Photo: Makho Jighaurishvili / GT
Black Sea Arena will host the concerts of both local and international musicians. Designed by German architects Drei Architekten, the Black Sea Arena can accommodate around 10,000 spectators and has additional adapted places for people with disabilities, before now unprecedented in Georgia. The technical capabilities of the Arena match international standards, including a retractable ceiling cover that can open or close within several minutes. 168 rotating, translucent facade lamellas will protect guests from the sun, wind and rain, but once opened will allow a full view of the nearby landscape and tow-
Designed by German architects Drei Architekten, the Black Sea Arena can accommodate around 10,000 spectators and has additional adapted places for people with disabilities. Photo: Makho Jighaurishvili / GT
ering mountains of the Greater Caucasus. Moreover, the Black Sea Arena aims to benefit local residents. According to official information, more than 600 people were involved in its construction. On opening, 100 locals will be employed
at the venue and this number is to double during concerts and other events. Together with a 200 million GEL investment in the Arena, Cartu Fund is to financially support several concerts of world famous musicians in the next few months.
All finances received from ticket sales will go to the state budget. The organizers claim that the concert hall will be able to host concerts of all musical styles, as well as sporting events and other public occasions.
BUSINESS
GEORGIA TODAY JULY 12 - 14, 2016
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New Head of Tbilisi Mall: Professionals Can Find Comfortable Partnership with Us BY GEORGE GOGIA
O
ne of the leading shopping centers in Georgia, Tbilisi Mall, appointed a new management head exactly one year ago. Aleksei Meshcheriakov, who has 15 years working experience in the property management field and in managing a number of large shopping malls, met with GEORGIA TODAY to talk about the future plans and challenges facing Tbilisi Mall.
HOW HAVE YOU BEEN DEVELOPING TBILISI MALL SINCE YOUR ARRIVAL? To be honest, when I came here I needed to take some time to understand the full situation in Tbilisi Mall. It wasn’t in the best of shape, but after our arrival things began to turn around quite dramatically. We were able to establish and continue to build quality relationships with tenants. Tbilisi Mall is a platform comparable to a large cruise ship that can power across the ocean and never think of the shore- in Tbilisi Mall, you can spend all day there and not feel tired or want to leave. Our goal is to create a comfortable atmosphere for our consumers, so they feel exactly that reluctance to leave.
HOW DO YOU ESTIMATE THE GEORGIAN MARKET? WHAT CHALLENGES HAVE YOU FACED AND HOW HAVE YOU OVERCOME THEM? The Georgian market is now at the initial stage of development in terms of commercial real estate. Basically, it has only street retail, while Tbilisi Mall is a different format with an entertainment component. And it was a great challenge to open a shopping center when the market was not ready for such a format. We have all heard the story of how a small miscalculation in the Titanic led to great tragedy. We are changing the internal policies towards visitors and tenants. Again, our goal is to make them feel comfortable with us.
WHAT DIRECTIONS ARE YOU GOING TO DEVELOP? We’ll try to concentrate all the brands that currently exist in Georgia, and even those for which the Mall is the only place to present their products, under one roof. In Tbilisi Mall we always have good weather, enabling consumers not only to shop but to watch a movie, enjoythe children’s entertainment center and in future planning to open many restaurants. We also plan to expand the service for children, in particular, to open a children's development center.
DOES TBILISI MALL ALSO OFFER THE PRODUCTS OF GEORGIAN DESIGNERS? I would like to support Georgian designers more in Tbilisi Mall. As they are in demand, they should naturally be presented here. We’re open for cooperation and we’re ready to organize something for even small production. 40 percent of our customers are tourists, and when they come to Georgia, they’re looking for some Georgian character in everything – culture, architecture, and in clothing as well. For example, ZARA is available in every country, while Georgian designers are presented only here.
WHAT PLANS DOES TBILISI MALL HAVE FOR SUCCEEDING IN THE DIFFICULT ECONOMIC SITUATION AND IN AN INCREASINGLY COMPETITIVE MARKET? Competition is always the engine of the market. It can be both fair and unfair. We’re going to compete in good faith and we’re happy that the market is open for new malls, because it develops the trade network and increases the number of brands. For which you are already welcome in Tbilisi Mall. The situation in the market is complex. To spend money, people have to earn it. Opportunities to make money in Geor-
gia are not so great. Currently, we are actively working on the development of the island display concept, which we believe could develop very well in these conditions. We try to attract people to
the Mall to get acquainted with our assortment. Shopping can be both planned, aiming to buy products at reduced prices, something which is at a low right now, and also impulsive, which takes up at least half of those purchases that are done in store. We are working hard to increase the flow of people, thus helping our tenants.
WHAT IS YOUR VISION OR ADVICE FOR THE DEVELOPMENT OF THE GEORGIAN MARKET, AND TBILISI MALL IN PARTICULAR? Professionals on the market can find comfortable partnership with Tbilisi Mall because it is always a pleasure to work with other professionals. In addition, our Mall is not just a place for shopping, but also a great platform for events. We look forward to the support of the government and business structures. We also want to present all the regions of Georgia in our shopping center because each region has something to show and it is interesting for both tourists and local guests alike.
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BUSINESS
GEORGIA TODAY
JULY 12 - 14, 2016
Georgian Products Enter Arab Market
BY EKA KARSAULIDZE
G
eorgian company Sairme Mineral Waters announced its entrance to the 32 million-consumer Saudi Arabian market last week while Vanrik Agro Group, which exports Georgian blueberry, announced its intention to provide United Arab Emirates (UAE) with Georgian fruit. In the first month of export, Sairme Mineral Waters sent 240,000 bottles of its own branded mineral water to Saudi Arabia through partnership with local trading partner Amlak Trading Est. The Georgian company is now cooperating with the diplomatic corps and large local and foreign companies in Riyadh, capital of Saudi Arabia, to introduce people to the product. The Georgian Embassy to Saudi Arabia is one of the main supporters of popularization of the water. Founded by the state Partnership Fund, blueberry exporters Vanrik Agro Group is working with the support of the Entrepreneurship Development Agency of the Ministry of Economy and Sustain-
able Development of Georgia on its upcoming export project. In May the Entrepreneurship Development Agency hosted an Arab delegation and introduced various Georgian products. As part of the visit, the delegation members were invited to Georgian enterprises to see the working process. Representatives of the Dubai Chamber of Commerce and Industry, and the Baqer Mohebi Trade Network, met with representatives of 25 Georgian companies from various sectors to discuss possible future collaboration.
Georgian Market Prices Drop in June BY EKA KARSAULIDZE
T
he monthly inflation rate amounted to 0.9 percent in Georgia in June 2016. Year-on-year, the Consumer Price Index change (annual inflation rate) posted a 1.1 percent increase. Compared to the 2010 average, the Index had risen 15.5 percent, according to the National Statistics Office of Georgia (Geostat). Prices for food and non-alcoholic beverages decreased 2.6 percent and contributed 0.79 percentage points to the overall monthly inflation rate. This change was mainly attributable to price declines for the following subgroups: fruit and grapes (18.3 percent), vegetables (11.3 percent) and milk, cheese and eggs (2.8 percent). In addition, prices decreased on alcoholic beverages and tobacco – 0.3 percent, housing, water, electricity, gas and other fuels – 0.1 percent, furnishings, household equipment and maintenance – 1.7 percent, clothing and footwear – 0.6 percent, recreation and culture – 1.4 percent, education – 0.1 percent, health – 0.5 percent, and miscellaneous goods and services – 0.2 percent. Geostat reported that transport prices showed a 1.7 percent increase, contributing 0.19 percentage
points to the overall monthly inflation rate. Restaurant and hotel prices were also up by 0.6 percent this June. According to current forecasts, the annual rate of inflation will continue to decline and will temporarily be below the target level of the year (5 percent) in the next quarter. In the first half of 2017, inflation will reach the planned 4 percent.
BUSINESS
GEORGIA TODAY JULY 12 - 14, 2016
New Handmade Leather Shoes to Appear on Georgian Market BY KATIE RUTH DAVIES
A
new locally produced shoe brand, CROSTY, is set to appear on the Georgian market from autumn, the company announced. CROSTY, a Georgian brand run by brothers George and Shota Mikaia, offers handmade leather shoes. The brand was founded in 2015, but its founders took no action to promote the brand until now. “There was a need to satisfy those successful young people who are always looking for new adventures, aspiring to grow, and striving for
perfection,” the brothers claim. “As young brothers, we understood the essence of something minimalistic, with a premium quality embodied in clean design.” The brothers announced that customers will have the chance to purchase the locally made high standard shoes from September 2016 via their website http://crostyshoes.com.
11
First Georgian Media Forum PREPARED BY KATIE RUTH DAVIES
M
edia company Business Georgia and Bank of Georgia, the leading Georgian bank, are going to hold the first large-scale business forum “Media Industry 2016” in Tbilisi, Georgia. The forum on the Media Industry in Georgia represents a platform for Georgian and foreign media and business leaders, where the participants can discuss current media challenges in the country as well as new possibilities and mutual benefits between business and the media. The aim of the forum is to represent different viewpoints and highlight the importance of developing the media industry in Georgia. During the panel discussion participants will cover the possibilities of successful cooperation between business representatives and the media industry as well as challenges and future plans.
The Forum will be divided into two panels. Among the participants of the panel there will be media experts and business leaders, representatives of international organizations and the nongovernmental sector. The modern media industry of Georgia will be assessed in
the frames of the panel. Discussion related to common interests of the media and business will also take place. The Forum will be held in Courtyard Marriott on July 14th. To attend, register at: http:// businessgeorgia.ge/forum/register/
Social Enterprise Aims to Expand Number of Disabled Employees BY KATIE RUTH DAVIES
E
rtad, a social enterprise manufacturing Svanetian salt Zeskho, won a European Foundation project award enabling it to launch production in Mtskheta, a town near the capital city, Tbilisi. Ertad was established in 2013 by a local Civil Society Organization (CSO), the
Movement for Accessible Environment, with grant support and technical assistance from the Eurasia Partnership Foundation (EPF) Social Enterprise Development Program. The enterprise currently employs three people with disabilities and aims to expand this by an additional six, aided by the financial support of a Finnish non-governmental organization, said Giorgi Alavidze, Zeskho founder. “It is no easy task to employ those with disabilities, so we keep the production
10 Galaktion Street
technique simple,” Alavidze said, adding that the enterprise also plans to introduce a spicy sauce to its product line. Zeskho’s products can be found in four supermarkets. After introducing international HACCP standards, the company also hopes to export its products to Europe. “Once our production processes are aligned with European standards, we will export to Europe. We have to take certain steps in terms of food safety, the timing of which is related to financial resources,” Giorgi Alavidze said.
Tel: (995 32) 2 45 08 08 E-mail: info@peoplescafe.ge
12
BUSINESS
GEORGIA TODAY
JULY 12 - 14, 2016
Cartu Fund Supports “King Erekle in the British Press" Project
Ana Bakuridze, Katie Davies, Giorgi Kalandia, Mary Kharaishvili, and Irakli Zambakhidze- the Art Palace team working on translation of the valuable newspaper articles. Photo: Giorgi Pridonishvili / GT
BY KATIE RUTH DAVIES
C
artu Fund has pledged to give 20,000 GEL to the translating and printing of historical material that connects Georgian King Erekle II (1720-1798) to Europe through 500 plus newspaper articles dating from the mid-1700s. The newspaper articles were discovered by Art Palace Director, Giorgi Kalandia, in 2014 whilst looking through the British Library archives from the National Library of Ireland for references to Georgia. At a time when Ottoman and Persian forces were a great threat to both the European continent and to Christianity, the Christian prince of the eastern provinces held particular fascination for the British press. “We learn from Persia that Prince Heraclius, whose exploits have made so great a noise in the world, was drawing all his forces into the provinces bordering upon the Caspian Sea, in hopes, by the vicinity of Georgia and the assistance he may receive by sea from Russia, to preserve that part of Empire;
he proposes an equal toleration of all religions, professing himself a Christian of the Greek Communion.” Whitehall Evening Post or London Intelligencer (London), 2-5 November, 1754. Through a series of letters and reports received from Venice, Petersburg, and other cities between the Ottoman Empire and Britain, we discover the exploits of King Erekle (known as Prince Heraclius), often exaggerated, sometimes contradicted, but nearly all painting him as a heroic, strong figure defending Christianity from the ‘barbarian hordes.’ “This is a treasure for Georgian historians and society,” Giorgi Kalandia told GEORGIA TODAY. “The National Library of Ireland and British Library had such documents in their archives which are totally unknown to Georgian society. Our team at the Art Palace immediately realized the value and put together a project for a bilingual English-Georgian book. Cartu Fund kindly agreed to finance and support the project, which we hope to have completed by December this year.” The King Erekle project will perhaps be the first of a collection on Georgia in the Foreign Media, as other articles from the mid-1600s to the late 19th century have been identified in both Britain and Germany awaiting collection and translation. Copies of some of the King Erekle articles discovered in the National Library of Ireland archives
Contact: www.edelbrand.ge Phone: 599 461908
POLITICS
GEORGIA TODAY JULY 12 - 14, 2016
13
PACE President Commends Georgia’s True European Aspirations PREPARED BY VAZHA TAVBERIDZE
E
nding his official visit to Georgia, Pedro Agramunt, President of the Parliamentary Assembly of the Council of Europe (PACE), commended Georgia’s European aspirations and commitment to Council of Europe values. “During my official meetings with the Georgian authorities, I felt a genuine and heartfelt desire to further European integration and commit to the values of democracy, human rights and the rule of law,” President Agramunt said. “Georgia has been a member of our organization for 17 years; during this time it has made considerable progress in terms of democratic reforms and strengthening state institutions. I am sure that with the recently launched Action Plan 2016-2019, Georgia will continue on this positive path and reach its reform objectives”. In his discussions, President Agramunt focused in particular on the forthcoming parliamentary election. “With all my interlocutors I raised the recent reports of violent attacks against political activists. All acts of violence should be firmly condemned and fully investigated. All parties should refrain from provocative acts which could lead to further tension. I was reassured by the authorities that they would devote even greater energy to adopting and implementing measures aimed at preventing further violence in order to deliver to Georgian citizens the fair, democratic and peaceful environment they deserve,” he said. When discussing the forthcoming elec-
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tions, President Agramunt also raised the issue of electoral reform. While welcoming that some progress has been achieved with regard to redrawing election districts, the PACE President noted that the majority and the opposition had not been able to agree on a new electoral system in time for the October elections. “The new Parliament will have an important mission to find a common agreement on the new system before the 2020 elections,” he concluded. Trials against former officials, as well as the recent judgement of the European Court of Human Rights in the case of Merabishvili vs. Georgia were also discussed. “I made it clear to my interlocutors that there should be no impunity for corruption offences and human rights violations. However, investigations and trials should be conducted in a transparent, efficient and independent manner, from the outset to the completion. The recent judgement of the ECtHR highlighted some issues of concern and I encouraged the authorities to address them effectively and to carry out appropriate investigations”. Turning to the situation in Abkhazia, Georgia, and South Ossetia, Georgia, the PACE President reiterated that the Assembly fully supported Georgia’s sovereignty and territorial integrity. He praised the Georgian authorities' current policy, which was based on increasing confidence building measures and reducing political tensions. “Rebuilding trust between the sides is of utmost importance and I welcomed some positive steps taken, including opening the doors of educational institutions and medical centers to all. I am, nonetheless, con-
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Pedro Agramunt, President of the Parliamentary Assembly of the Council of Europe (PACE) and Prime Minister, Giorgi Kvirikashvili
cerned by some recent developments which do not help this process, notably the murder of a Georgian citizen on 19 May near the administrative boundary line in the village of Kurcha.” Finally, President Agramunt welcomed the commitment made by the Georgia Prime Minister to put in place the necessary conditions for the ratification of the Istanbul Convention in the near future.
Journalists: Tony Hanmer, Tamar Svanidze, 13/06/16 15:16 Beqa Zviad Adzinbaia, Kirtava, Meri Taliashvili, Eka Karsaulidze, Zaza Jgarkava, Maka Bibilashvili, Karen Tovmasyan, Dimitri Dolaberidze, Maka Lomadze, Tim Ogden, Ana Akhalaia, Robert Isaf, Joseph Larsen, Will Cathcart, Vazha Tavberidze, Nugzar B. Ruhadze
During his official visit, PACE President met with President Giorgi Margvelashvili; Prime Minister, Giorgi Kvirikashvili; Minister of Foreign Affairs, Mikheil Janelidze; Speaker of Parliament, David Usupashvili; as well as members of the delegation of Georgia to the PACE. In Tbilisi, President Agramunt also participated in the 25th Annual Session of the Parliamentary Assembly of the OSCE, during which he met with the
Photographer: Giorgi Pridonishvili Layout: Misha Mchedlishvili Webmaster: Sergey Gevenov Circulation Managers: David Kerdikashvili, David Djandjgava
OSCE PA President, Ilkka Kanerva, and addressed the Assembly at its opening plenary session. In his speech, the PACE President praised the excellent cooperation existing between the two assemblies and highlighted some topics on which this collaboration should be strengthened, including the fight against terrorism and the search for a common response to the migration and refugee crisis.
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