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Issue no: 1100/155

• NOVOMBER 13 - 15, 2018

• PUBLISHED TWICE WEEKLY

In this week’s issue...

FOCUS

ON ECONOMIC DEVELOPMENT Francois Painchaud, IMF Resident Representative, believes the Georgian economy is "developing quite well"

PRICE: GEL 2.50

Weekly Entrepreneurial News @entrepreneur.ge NEWS PAGE 2

PAGE 2

Winter is Coming! Business Confidence Index Q4 2018 ISET PAGE 4

Georgia: The World’s Co-Working Hub

BUSINESS PAGE 8

Accumulative Pension to Begin January 1, 2019 BY SAMANTHA GUTHRIE

F

rom January 1, several new laws will come into force in Georgia, including the first part of the law on accumulative pensions. The law was hotly debated for several months in 2017 and 2018, and finally adopted by Parliament on July 21, 2018. It has several phases – the first phase will enroll all people working in Georgia under the age of 40, apart from self-employed people, into the new pension scheme. Workers 40 years and older and self-employed people can choose to voluntarily participate. The new pension system is designed to give Georgians a retirement savings account that is more proportional to their earnings while they

Image source: GzaPress

were working by taking a percentage of their pre-tax salary. The pension fund will be invested

within Georgia. Employees contribute 2% of their pre-tax salary, the employer contributes an amount equal to 2% of the employee’s pre-tax salary, and the government contributes an amount equal to 2% of the employee’s pre-tax salary. One exception, however, is when an employee’s salary is greater than 24,000 Lari ($8,888) per year, in which case the government contributes only 1%, or when an employee’s salary is greater than 60,000 Lari ($22,222) per year, in which case the government does not contribute. Last week, Radio Free Europe/Radio Liberty published an interview with Levan Surguladze, director of Georgia’s national Pension Agency – a legal entity of public law with an Investment Board overseen by the National Bank of Georgia, and its own Supervisory Board. Continued on page 9

Artisterium’s Contemporary Artists Present their Artworks at Karvasla CULTURE PAGE 15

Georgian Weightlifter Breaks World Record

SPORTS PAGE 15 Prepared for Georgia Today Business by

Markets Asof09ͲNovͲ2018

Price

w/w

m/m

BONDS

BankofGeorgia(BGEOLN)

GBP16.76

+2,0%

Ͳ2,2%

GEOROG04/21

101.61(YTM6.03%)

Ͳ0,2%

Ͳ1,2%

GeorgiaCapital(CGEOLN)

STOCKS

GBP11.80

Ͳ2,3%

+2,6%

GEORG04/21

105.30(YTM4.53%)

+0,0%

+0,3%

GBP2.35

+2,2%

+9,8%

GRAIL07/22

106.16(YTM5.85%)

+0,0%

Ͳ0,0%

GBP16.46

Ͳ3,7%

Ͳ1,9%

GEBGG07/23

98.17(YTM6.46%)

Ͳ0,1%

+0,2%

GHG(GHGLN) TBCBankGroup(TBCGLN)

COMMODITIES

Price

w/w

m/m

CrudeOil,Brent(US$/bbl)

70,18

Ͳ3,6%

Ͳ17,4%

CURRENCIES GEL/USD

Price

w/w

m/m

Price

w/w

m/m

2,6996

Ͳ0,7%

+2,7%

1209,65

Ͳ1,9%

+1,7%

GEL/EUR GEL/GBP

3,5024

Ͳ0,7%

+1,4%

INDICES

Price

w/w

m/m

GEL/CHF

2,6852

Ͳ0,9%

+1,5%

FTSE100

7105,34

+0,2%

Ͳ1,8%

GEL/RUB

0,0397

Ͳ3,4%

Ͳ

GoldSpot(US$/OZ)

3,0604

Ͳ1,2%

+1,4%

FTSE250

19106,61

Ͳ1,1%

Ͳ2,3%

GEL/TRY

0,4943

Ͳ1,3%

+14,8%

DAX

11529,16

+0,1%

Ͳ3,7%

GEL/AZN

1,5916

Ͳ1,1%

+2,8%

DOWJONES

25989,30

NASDAQ MSCIEMEE

Ͳ1,8%

+1,9%

7406,90

+0,7%

Ͳ4,3%

GEL/UAH

0,0969

Ͳ

+3,4%

156,23

+0,3%

Ͳ1,7%

EUR/USD

0,8822

+0,5%

+1,4% +1,3%

+2,8%

Ͳ1,7%

GEL/AMD

0,0055

976,17

Ͳ2,1%

Ͳ1,8%

GBP/USD

0,7707

Ͳ0,1%

2781,01

+2,1%

Ͳ3,4%

CHF/USD

1,0056

+0,2%

MSCIFM

2504,98

Ͳ0,8%

Ͳ0,9%

RUB/USD

67,9565

+2,7%

+2,6%

GTIndex(GEL)

1582,68

Ͳ

Ͳ

TRY/USD

5,4561

+0,5%

Ͳ10,6%

GTIndex(USD)

1208,13

Ͳ

Ͳ

AZN/USD

1,6990

+0,2%

+0,2%

MSCIEM SP500

+1,4%


2

NEWS

GEORGIA TODAY

NOVEMBER 13 - 15, 2018

IMF Representative: Georgian Economy Developing Well @entrepreneur.ge Gamarjoba! I’m the Editor-in-Chief of the Georgian edition of Entrepreneur magazine and I’m here to share the top weekly Entrepreneurial news with you: Dachi Dzebisashvili and George Jincharadze wanted to grow plants easily at home in winter. As there was a lack of the right equipment on the local market, they decided to create a startup which would solve the problem. After hard work and overcoming various technical challenges, they had ‘Grow Box’. The startup has since appeared on the pages of Russian Inc. and nowadays, GrowGrow covers products like lamps, fertilizers, flowerpots, etc. Grow boxes and inventory are created based on individual orders. Oto Kavtaradze and Rezo Kakabadze (23) have three startups. Lookup.ge, established three years ago offers GPS monitoring systems. New products, Easy Trade and Gmoji, are ready to launch. Easy Trade is a mobile app and web platform that helps suppliers and clients stay in touch 24/7, send/receive orders or make contracts electronically. Gmoji is a mobile app that enables customers to send gifts represented by emojis. The recipients can collect their gifts from Gmoji partner stores. The costs of the product/ service are covered by the emoji sender, making it easier than ever to send a gift! Students of the Tbilisi Culinary Academy, Tamar Kiknadze, Tina Vashakidze and Ia Dzagania, came up with the idea to create pepper and onion confiture. Amochame uses local and accessible ingredients to create jams that balance tastes, meaning you can eat it with almost everything, both sweet and savory dishes. The product is available only at specific shops, but the start-uppers are planning to expand sales via large chain stores and later to send it for export too. Follow the Entrepreneur Georgia Instagram page to get the latest updates from Georgian Entrepreneurs. For doing business with Georgian Entrepreneurs, write us on business@entrepreneur.ge

BY THEA MORRISON

F

rancois Painchaud, IMF Resident Representative in Georgia, believes that the Georgian economy is developing "quite well," despite the recent developments in the country, such as the upcoming second round of the presidential elections and fluctuation of the national currency. “I would say the Georgian economy is developing quite well. Fundamental factors are in place, the increase is high, inflation is low and the macroeconomic policy is reasonable,” he told bm.ge. However, the IMF Resident Representative says the main challenge in Georgia is inclusion in the economy and the high rate of poverty. Painchaud explained that relative poverty has also increased, as shown by UNICEF’s latest study. “It means that the government should carry out planned reforms, improve the business environment, better connect with trade partners and strengthen trade relations,” he said. He went on to positively evaluate the government’s decision to increase the state pension from GEL 180 to GEL 200 from 2019 and to fivefold increase support for socially vulnerable children under the age of 16 from next year. He expressed hope that these activities will reduce poverty in the country. Painchaud says the recent fluctuations of the national currency GEL are caused by several main factors, including tax balance, external shocks, uncertainty, expectations and global strengthening of the dollar. “We think that the National Bank of Georgia should retain the floating rate. Georgia has experience of reducing the

Image source: BM

influence of shocks with a flexible exchange rate,” he noted. He also added that the National Bank is focused on price stability, adding it is close to its target. “In addition, the exchange rate is flexible and performs the absorption of shocks. The policy of the National Bank is aimed at accumulating reserves,” the IMF Resident Representative in Georgia noted. The International Monetary Fund stated that at least 18 years is the time the Central Asia and Caucasus countries will need to increase revenue per capita to what it is in European countries. The last overview of the countries of Central Asia and the Caucasus reads that economic growth forecasts for this region are “historically low”, and with this fac-

tor and demographic trend, it needs almost two decades for said countries to change their low-income status to the status of countries with the income of emerging markets. In late October, IMF Mission Head Mercedes Vera-Martin, told journalists that Georgia has good economic indicators in terms of growth in tourism, export and money transfers, noting that this year, a 5.5% economic growth is expected in Georgia. According to the IMF assessment, the sustained implementation of the authorities’ reform agenda will support higher and long-lasting growth and increase the resilience of the economy. Currently, 189 countries are members of the International Monetary Fund. Georgia joined the IMF on May 5, 1992.


NEWS

GEORGIA TODAY NOVEMBER 13 - 15, 2018

Georgia Nominates Candidate for FAO Director-General

O

n the initiative of Mamuka Bakhtadze, Prime Minister of Georgia, Dr. David Kirvalidze is to be nominated for the position of Director-General of the Food and Agriculture Organization of the United Nations (FAO) for the tenure of 20192023. Elections will be held at the 41st Session of the FAO Conference in Rome on 22-29 June 2019. Dr. Kirvalidze has 28 years of leadership experience in the agriculture and rural development sectors. He is currently an Adviser to the Prime Minister of Georgia and a Member of the Board of Directors of a US-based, international, non-profit organization 'Cultivating New Frontiers in Agriculture (CNFA).' He served two terms as a Minister of Agriculture, as well as a Chairman of the Agrarian

Issues Committee of the Parliament of Georgia. Dr. Kirvalidze’s academic background includes the positions of a visiting scholar at the University of Maryland and Professor at the Agricultural University of Georgia and Institute of Environment Protection, Ecology and Agribusiness. Dr. Kirvalidze has earned a global reputation as an eminent expert, providing technical and managerial support all over the world, working with various international organizations and directing programs in numerous countries. The Government of Georgia says it is convinced that the experience Dr. David Kirvalidze has will "contribute tremendously to the work of FAO, ensuring the most successful implementation of the mandate of the Organization."

Kutaisi Int’l Airport to Triple Its Capacity by the End of 2019

Image source: UNStudio

BY SAMANTHA GUTHRIE

T

he long awaited and much delayed project to expand the Kutaisi Davit Aghmashenebeli International Airport finally has a due date – December 2019. Over the weekend, Deputy Minister of Economy and Sustainable Development Akaki Saghirashvili visited the new terminal construction works in Kutaisi and checked its progress, accompanied by Ivane Lekishvili, Acting Director of the Georgian Airports Association. A new passenger terminal is being constructed for Kutaisi International Airport that will be 24,176 square meters – more than three times larger than the current terminal. Saghirashvili told reporters on site that passenger flow through the airport is increasing daily. “We have already served 512,000 passengers in the past 10 months. 52% of them are foreign citizens, traveling to our country for tourism purposes, and the economic effect for the country, which is evaluated using a special standard, has already crossed the 110 million [dollars] mark. That is why the expansion of this airport is planned, and why new flights will be added.” Saghirashvili recognized that as tourism grows, related infrastructure must develop in kind. He announced that all construction projects at the airport will be completed by the end of next year, including the internal transportation infrastructure. In its current state, Kutaisi International Airport can accommodate 300 passengers an hour. With the addition of the new terminal, the airport will have seven gates and will be able to accommodate 1,000 – 1,100 passengers an hour. The airport is expecting one million passengers in 2020.

Kutaisi hosts one of the three international airports in Georgia, the other two being in Tbilisi and Batumi. It was opened in 2010 and underwent its first major renovation in 2011-2012. The small airport currently offers passengers a Duty-Free store and two coffee shops. It is rarely used for layovers. Passengers transiting to other parts of Georgia must rely on a few bus companies that regularly service the airport, or flag down a passing minibus. A railway station is being built in front of the terminal, which will connect the airport with Tbilisi, Batumi, and other Georgian cities, as well as leading onwards to Armenia and Azerbaijan. Since 2012, the airport has made attracting lowcost airlines a priority, which has proven to be a winning strategy, at least in the short term. Wizz Air entered the market in 2012, and links Kutaisi with more than a dozen European destinations. The design team behind the extension, UN Studio, explains on their website that they “aimed to ensure a user-oriented experience where the health and comfort of every passenger is accommodated through architecture and spatial design.” The design of the original airport, completed in 2012 by UN Studio, was voted among the world’s 14 Most Beautiful Airports by online real estate network Curbed. Earlier this month, the Georgian Civil Aviation Agency reported that passenger traffic at all three of Georgia’s international airports was up 23% year-on-year in the period from January to October 2018. Serving 512,386 passengers, Kutaisi International Airport saw the biggest increase with 39%. More than 8 million tourists have visited Georgia so far this year, an increase of 27.9% from the same period of 2017. Georgia is currently the fourth fastest growing tourist destination in the world in terms of year-on-year percentage increase of visitors.

3


4

BUSINESS

GEORGIA TODAY

NOVEMBER 13 - 15, 2018

Winter is Coming! Business Confidence Index Q4 2018 Only 7% of firms expect to decrease prices, and 19% expect to increase prices in the future. A low level of consumption activities and lack of access to financing continue to be two of the most significant obstacles for businesses. From a total of 131 firms participating in the survey, 29% of large sized firms and 30% of SMEs noted that lack of access to finance was their main obstacle. Meanwhile, 6% of large firms and 32% of SMEs chose lack of demand as the main limiting factor for further business development.

O

verall, the BCI lost 5.5 points compared to Q3 2018. Expectations in the private sector in Georgia decreased by 14.1 percentage points and dropped to 50.1 index points (up from 64.2 points in Q3). Business performance over the past three months decreased, reaching nearly 28.0 points (decreasing from 38.2), indicating a downturn in production/turnover/ sales. The synergy of worsening performance in the past three months and lower expectations have led to a drop in the overall BCI. The BCI index worsened in manufacturing (-55.0), construction (-12.4), agriculture (-10.7) and other (-13.5) sectors. The retail trade, service and financial sectors improved by 5.8, 2.3 and 1.3 points, respectively. Business confidence in the fourth quarter of 2018 decreased for large firms (-8.1) and improved for SMEs (+8.0). Less

51% of the surveyed firms expected that the economic condition of their businesses would improve over the next three months, and 36% did not expect any changes in the future, while a lower share of businesses expect their business conditions to worsen.

optimism and weak performance of the large firms outweighed the improved

SALES PRICES EXPECTATIONS

performance of SMEs and resulted in a decrease of -5.5 in overall BCI.

PAST PERFORMANCE Businesses’ actual performance decreased by -10.2 compared to the second quarter of 2018. In the Q4 2018 reporting period, sales (production or turnover) of the 131 firms surveyed decreased from 38.2 (Q3 2018) to 28.0(Q4 2018). A significant decrease in performance was observed in the manufacturing (-79.9), construction (-59.1), agriculture (-48.7) and other (-43.9) sectors. A significant decrease means that in these sectors, the weighted balance between positive and negative responses decreased compared to the previous quarter. In the remaining two sectors, production/

turnover/sales for the past three months improved: retail trade (+13.4) and service (10.1) sectors.

The Sale Price Expectation Index increased from 10.3 points (Q3 2018) to 17.5 points (Q4 2018). The improvement in the Index is driven by an increase in the manufacturing, retail trade and agriculture sectors. The manufacturing, construction and other sector expects a noticeable decrease in prices over the next three months. The majority (75%) of all surveyed firms are not going to change the prices they charge over the next three months.

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

EXPECTATIONS The Expectations Index decreased by 14.1 index points in the fourth quarter of 2018. Expectations about the next three months improved for the retail trade (+23.4), construction (+5.4) and other (+52.0) sectors. The remaining sectors expect worsening the situation. The highest decrease was reported in the manufacturing and financial sectors The majority (59%) of surveyed businesses do not expect any changes in employment over the next three months. Furthermore, 31% of firms stated that they would employ more employees in the future.

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6

BUSINESS

GEORGIA TODAY

NOVEMBER 13 - 15, 2018

World's Largest Dredger 'Athena' Pumps 5 mln m3 of Sand at Anaklia BY ANA DUMBADZE

O

n November 7, the world’s largest dredger ship, Athena, completed its large-scale works at Anaklia Port. A record-breaking amount of sand was pumped from the seabed. At this stage, the marine works of Anaklia Port are almost finished. The total investment value of the first phase of the project is $600 million and it includes employing 1500 people in the construction works. The second stage of marine works will start in a few months and includes deepening the seabed to the planned operational depth. Within the framework of the first phase of the project, one of the world's largest dredging vessels ‘Athena’ pumped about 5 million m3 of sand at the Anaklia Deep Sea Port and moved it to dry land. This is already 100% of works planned for the first stage of construction. Construction during Phase I included: • Dredging of the port’s maritime area down to a depth of 16 meters; • Dredging millions of cubic meters of sand and reclaiming it onshore to surcharge the terminal area; • Construction of a 1.6 km breakwater which will be constructed using 1.3 million tons of rock and concrete armor units; • Construction of a 625 meter long quay wall with multifunctional capabilities, along with 110 hectares for paved container yard port operations, customs and other supportive buildings. The port infrastructure built during

Phase I will enable Georgia to dock 10,000 TEU Panamax and Post-Panamax vessels, which are unable to dock at other seaports in Georgia. At the time of its opening in 2021, Anaklia Deep Sea Port will be able to handle 1 million TEU containers and 1.5 million tons of dry bulk annually. Anaklia Deep Sea Port will be constructed in 9 Phases. The total investment value of the project is $2.5 billion. The most important works were com-

pleted just 1.5 months after starting the large-scale maritime works, with the local population working alongside specialists of the Dutch Van Oord company. The world’s leading contracting company, Van Oord specializes in dredging and land reclamation and has already implemented many important projects throughout the world, including land reclamation, dredging, and beach nourishment. Projects undertaken by the company include the construction of the

Palm Islands in Dubai and expansion of the Suez Canal. The company is significantly contributing to the construction works of Anaklia Port. Van Oord is the first constructor, contractor, and investor. 5 million m3 of sand is a record-breaking number. In using other methods, 450,000 trucks would have been necessary to bring the same amount of sand out of the sea. Alongside the dredging and reclamation works, the installation of modern,

latest technology drainage systems provided by Van Oord is also almost complete. 241,429 drainage units have been installed, with a system of a total length of 2.5 million meters. The above-mentioned system is used for filtering the huge amount of sand from the water automatically. The large-scale works at Anaklia Deep Sea Port were launched on 16 September. Anaklia Deep Sea Port will begin commercial operations in December 2020.


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BUSINESS

GEORGIA TODAY

NOVEMBER 13 - 15, 2018

Georgia: The World’s Co-Working Hub

Coworking in Tbilisi, Georgia

BY ERIC LIVNY, TBILINOMICS POLICY ADVISORS

W

hile Georgia’s current liberal immigration framework may require some fixing, it is important that the policy debate surrounding this issue is conducted in a coolheaded, professional manner. It would be a mistake to throw the baby, Georgia’s appeal as a destination of choice for thousands of developers , out with the dirty bath water. Especially so, if this baby is sacrificed on the altar of racist sentiments harbored by certain groups within Georgian society.

CHAPTER 1: LANDING IN PARADISE About two weeks ago, on October 24, I got a LinkedIn message from Bastian Lauer: I have read your article "Industrial Policy as a Driver of Homecoming". I moved to Tbilisi in August this year and want to build a developer team for my US startup in Georgia. I am originally from Germany. I would love to connect and see how we can help each other in the future.

Why Georgia from a personal point of view:  Georgia seems to be the cheapest and yet safest and most fun place to live. Egypt is cheaper, but not as safe.  Good for startup founders: • Can live and work here without limitations. No visa requirement; can stay 360 days with no work permit; very low residency permit requirements; low crime, safe/peaceful. • Most people speak English and some people even speak German Why Georgia from a business perspective:  Entry and work visa very easy to obtain (no work permit required) which means one can hire the best developers from e.g. Ukraine or Belarus  English and German speakers available for hire  20% flat income tax and no social benefits or other payroll taxes  Can directly employ people (no requirement to have a local partner)  No BPO industry, implying less competition in hiring the best talent and low salary level for college graduates  Co-working spaces and startup scene available  100% ownership and no restrictions on foreign businesses other than for agricultural land  Easy banking and company setup

According to his LinkedIn profile: Bastian started to develop software when he was 14 years old. At 17, Bastian began working for a Fortune 200 company and gained the corporate project experience and leadership skills to someday become a startup founder. Bastian received a Masters from the Copenhagen Business School, and is an avid learner. He has lived in seven different countries and attended four well-known universities studying international business and entrepreneurship. Having run businesses and IT projects in a startup environment, Bastian is used to executing on a shoestring budget. Intrigued, I agree to meet Bastian for dinner at Baan Thai. Bastian tells me about his upbringing in the modest environment of a small German town in the Upper Rhine; his relatively late fascination with computers; his progression through Germany’s dual education system and apprenticeship with F. Hoffmann-La Roche; the three years he studied and traveled the world as part of the highly competitive International Business and Globe Exchange Program offered by the Copenhagen Business School (CBS); and, of course, his startups. What brought you to Georgia? – I ask him. I do not expect a short answer, but what I get far exceeds my expectations. Bastian hands me a two-page, systematic comparison of Georgia and other inter-

national locations. According to Bastian’s analysis, Georgia is a freelancer and developer heaven, a premium location compared with most other options, such as the Philippines, where Bastian had spent the last two years, overseeing the offshoring of software development by his US startup. What I learn from Bastian is that Georgia and the Philippines are strikingly different in their treatment of foreign workers and entrepreneurs. The Philippines is very attractive for international startup companies because of its large, highly capable, relatively inexpensive and Englishliterate workforce. And, because it is so attractive, it can afford byzantine regulations that respond to populist demands for anti-immigration laws and serve the government’s development agenda. The Philippines’ laws and regulations are designed to squeeze those foreign companies that choose, despite all the bureaucratic hurdles, to set up shop in the country. They are meant to make sure that foreign companies do not displace local producers; hire local labor; invest as much as possible in priority sectors and regions of the Philippines economy; earn as much hard currency as possible; and pay as much as possible in local taxes and various fees to local service providers. Georgia does none of the above. While losing its own talent due to an unrelenting process of brain drain (to Russia, Europe and further west), Georgia welcomes foreigners, whoever they are, wherever they come from, and whatever they do. The unique practice of gifting small bottles of wine to every foreign visitor entering the country was discontinued in 2013 or 2014, but Georgia remains open and liberal. It exerts no effort to filter investors and entrepreneurs, to force (or nudge) them to work in particular “priority sectors”, to operate in particular geographic locations, and to employ or partner with locals. Georgia does not even bother with taxing foreigners. It is very easy for a freelancer to operate under the Georgian authorities’ radar if one’s clients are outside the country. Mirroring the boom in expat freelancers/developers settling in Tbilisi, the capital’s real estate sector is beginning to see a boom of coworking space establishments. Fabrika’s Impact Hub was probably one of the first in this line of business, but many others can be found nowadays on the Coworker.com website, such as Generator 9.8, Terminal, Vere Loft, and UG Startup Factory. Welcome to Tbilisi, the world’s coworking hub!

CHAPTER 2: EXPELLED FROM PARADISE?

About a week after our dinner, on November 6, I got another LinkedIn message from Bastian: ‘Hey Eric, do you know anything about these changes that are coming?’ Bastian referenced a publication on Agenda.ge titled “Parliamentary committee confirms changes for residency permits for foreigners”. According to this publication, Georgia may amend the Law of Georgia on the Legal Status of Aliens and Stateless Persons, introducing serious restrictions on foreigners willing to apply for investment or labor residency permits. Such restrictions may include minimum investment thresholds for individuals seeking temporary investment residency permits, and minimum turnover and minimum salary thresholds for businesses willing to employ foreign nationals. Furthermore, permanent residency permits will only be granted after five years. Tbilisi Mayor Kakha Kaladze justified the above measures by the need to protect Georgian interests. For example, he has criticized what he called an “immigration carousel”, in which migrants obtain residence permits by purchasing and then immediately reselling a piece of property to another migrant seeking a short-term residence permit. In line with Kaladze’s claim that migrants should be making an “adequate contribution” to the Georgian economy, Georgian parliamentarians propose that holders of short-term residence permits be automatically stripped of their permits if they sell their property. While the current liberal immigration framework may indeed require some fixing, it is important that the policy debate surrounding this issue is conducted in a coolheaded, professional manner. The government has every right to block the “migration carousel”. At the same time, it would be a mistake to throw the baby, Georgia’s appeal as a destination of choice for thousands of developers, such as Bastian Lauer, out with the bath water. Especially so, if this baby is sacrificed on the altar of racist sentiments harbored by certain groups within the Georgian society. * * * This week’s traditional Tbilinomics Tamada toast is to Georgia’s centuries-old tradition of tolerance and the somewhat less traditional virtue – patience.

ABOUT THE AUTHOR:

Eric Livny is Founder and President at Tbilinomics Policy Advisors. In 2007-2018, he served as President with the International School of Economics at Tbilisi State University (ISET).

Why (not) the Philippines?  Large ICT industry served by a large pool of well-educated, English-speaking labor  Foreign employees need work visas and work permits  Rising labor costs for skilled employees  Competition from other companies in the ICT/BPO industry  Large overheads (more than 50%) on payroll due to taxes, social security and expensive office space in designated industrial parks.  Visas for foreign entrepreneurs require a large upfront commitment ($75-120,000)  Setting up a company is hard, requires registered paid up capital, license, local partners (unless the company is 100% exporting or in specific industries, such as tourism) and help by lawyers and consultants. Companies with more than 40% foreign ownership face restrictions in access to land and tax incentive programs.  Special economic zones and business parks are convenient but very expensive. In any case, companies still have to comply with all types of tax and permit requirements.

The Mercer 2018 Cost of Living Index ranks Tbilisi, Georgia among the “bottom 10 cities” which are supposed to be “developing, unsafe, and war-torn”. In reality, Tbilisi is not war-torn or unsafe. Rather, it is an affordable heaven for freelancers and startup developers from all over the world


BUSINESS

GEORGIA TODAY NOVEMBER 13 - 15, 2018

9

National Bank Explains Why It Purchased $10 mln BY THEA MORRISON

O

n November 9, the National Bank of Georgia (NBG) announced they had purchased $1 million on the Foreign Exchange Auction, noting that the weighted average exchange rate was 2.7220 per dollar. This was the ninth foreign currency intervention in 2018. In total, the National Bank purchased $112.5 million in 2018 alone. The last purchase raised many questions in society and among economic experts as to why the NBG is buying dollars when there is a pre-election period in the country and the national currency GEL is continuing to devaluate against the US Dollar. NBG President Koba Gvenetadze explained that this step was necessary to fill the reserves of the bank. “We have done this many times in the past. I have already mentioned that the

NBG's currency reserves are not adequate, so when the market allows us, we will always buy foreign currencies to fill the international banking reserves of the National Bank,” Gvenetadze said, adding that such interventions will take place again in future. The President of the National Bank also commented on the fluctuation of the GEL in the recent period, adding that the exchange rate regime in Georgia is characterized by short-term fluctuations only. “What is happening in the medium and long term period is much more important for us. The economic growth in the country is good. As you know, predictions are quite promising and the inflation rate is low. This is a more important economic indicator than the exchange rate,” said Gvenetadze. Georgia’s Finance Minister Ivane Machavariani also says that the purchase of $10 million by the NBG is a step to replenish reserves. “The National Bank of Georgia behaves as is necessary in this case - it periodi-

NBG President, Koba Gvenetadze. Source: 1 TV

cally complements foreign currency reserves. Our currency reserves are far less than the level our economy requires,” he said. The Minister explained that the International Monetary Fund (IMF) also calls on the NBG to periodically fill its reserves. Machavariani says this intervention was not so important to significantly affect the national currency exchange rate. He believes that the GEL will start gaining value, as there are no fundamental problems in the Georgian economy. “The fundamental indicators of the economy are absolutely solid. Today, our economy is as sustainable against external shocks as it has ever been before... Consequently, the fluctuation that occurred in recent weeks was absolutely speculative. I cannot say what exactly the national currency rate will be, but I am sure that the GEL will continue to strengthen,” the Minister said. At present one US dollar costs GEL 2.7146, while €1 is 3.0800 GEL.

Accumulative Pension to Begin January 1, 2019 Continued from page 1 Surguladze explained that the program is mandatory for people under the age of 40, but the possibility to opt-out will be introduced in June 2019, which will return the pension contributions made on behalf of an employee to the respective parties. This ‘opt-out’ design is popular for pro-social policies in many countries, and sees a much higher rate of participation in programs than the standard opt-in design. For example, Spain operates an opt-out system for organ donation, whereby all citizens are automatically registered for organ donation unless they choose to state other-

wise – Spain is a world leader in organ donation. The field that spearheaded this design, behavioral economics, was recognized with a Nobel Prize awarded to Richard Thaler, often called the “father of behavioral economics,” in 2017. Georgians will have access to their pensions funds when they hit the official state retirement age – 60 for men and 55 for women. Self-employed people will have the choice to participate in the pension scheme, but at 4% personal contribution. Regardless of whether a person participates in the new pension scheme, every retired Georgian will continue to be eligible to receive the standard state pension, which is currently 180 Lari

($67) a month. Surguladze also explained how the pension funds are returned to retired workers. If a person was in the pension scheme for five years or less before retirement, they will be able to withdraw their full contribution upon reaching retirement age. Otherwise, an amount will be distributed each month, calculated based on the average life expectancy for Georgian men and women, as calculated by the National Statistics Office. He somewhat morbidly added that if a person “is unable to fully utilize the amount,” or, in essence, passes away before reaching the average life expectancy age, the remaining funds will go to the person’s heir. He did not elaborate

on how the pension disbursements are arranged for those who live longer than average. Surguladze assured readers that they cannot lose money by participating in the system. “Accumulated pensions are private property. The courts and banks have no access to the accounts. You cannot use this account to pay fines,” he said. Participants in the scheme will have three options – low risk, medium risk, and high risk – correlating to the level of risk, and subsequent potential reward, of the investments for which a participant’s contributions will be used. During the first five years, participants will only be able to select a low-risk portfolio.

Since Georgian independence in 1991, the country’s pension system has been reformed multiple times. A flat rate pension was instituted in 1995. In 2004, social programs, including the pension fund, began to be funded by general budget revenues rather than the State United Social Insurance Fund (SUSIF), which was based on social contributions from employers and employees, as the system had previously worked. From 2008 to 2012, pensions included a long-service bonus of 10 Lari a month for people who had worked for more than 25 years, but in August 2012, pensioners stopped receiving long-service bonuses and instead received the combined amount as a flat rate pension benefit.


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UK-Georgian Relationship Strengthened with Wardrop Strategic Dialogue BY AMY JONES

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ovember 8, Sir Alan Duncan MP, UK Minister of State for Europe and the Americas, visited Georgia as part of the UK-Georgian Wardrop Dialogue. He met with Prime Minister of Georgia, Mamuka Bakhtadze, to discuss the Strategic Dialogue of Wardrop. The 5th UK-Georgia Wardrop Dialogue is designed to strengthen the relations between the UK and Georgia, which are growing stronger every year. The Dialogues are named after Sir Oliver Wardrop who established UK-Georgian friendship almost 100 years ago. The talks focused on the strategic relations between the two countries, including the bilateral trade and economic ties, Georgia’s European and Euro-Atlantic integration, people-to-people relations, and ongoing reforms and challenges in the region. Cybersecurity and Georgian sovereignty were also top of the agenda. As Sir Alan Duncan pledged support of the British government. He affirmed, “We will do whatever we can to support the peaceful resolution of these conflicts,” praising

Georgia that as the country continues “to pursue peace” and “keep open the door to reconciliation.” The projects formed as a result of the Wardrop Dialogue’s work towards improving political, defense and security, tradeeconomic and foreign relations. Discussions also focused on the importance of the UK Good Governance Fund in strengthening state institutions and democratic development in Georgia. The Prime Minister thanked Sir Alan Duncan for the support for national security development. During his visit, he also met with leading Civil Society organizations in Tbilisi and laid a reef to commemorate WWI servicemen. A reception, attended by Sir Alan Duncan and the British Ambassador Justin Mckenzie-Smith was held at the British Embassy in the evening where plans were announced for a UK cultural season named New Horizons. Taking place from September to December 2019, events such as film screenings and workshops will showcase the very best of British culture, education, business, and sport. The 6th Wardrop Strategic Dialogue will take place in London. Sir Alan Duncan believes that the relationship between Georgia and the UK “is going to continue to grow guided indeed by this strategic dialogues.

Impact Hub Tbilisi Hosts International Summit of the Social Impact Award

Photo: Government of Georgia

Labor Inspection to Cover All Kinds of Work BY THEA MORRISON

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mpact Hub Tbilisi hosted the international summit of the program Social Impact Award. More than 150 young entrepreneurs from 25 countries arrived in Georgia within the framework of the summit. The event was attended by the Executive Director of Social Impact Award Jacob Detering, the Head of Schwab Foundation's Social Entrepreneurship Catherine Milligan, UNDP Georgia's Leader Luisa Vinton, President of European Fund Ketevan Vashakidze, representatives of the American, Austrian and Dutch Embassies, and invited guests. Partners of the event include Georgia’s Innovations and Technologies Agency, Bank of Georgia, American Embassy in Georgia, UNDP Georgia, Poti Terminal, Adjara Group. "Impact Hub Tbilisi has been implementing the international youth program Social Impact Award for two years. 25 countries are involved in this program, which is the largest-scale program in the direction of social entrepreneurship. More than 400 students from different regions of Georgia have been involved

in the program in two years. 13 Students started incubation with professional mentors and were able to create prototypes of their products. We have a very special year because, with the efforts of Impact Hub Tbilisi, Georgia has gained the license to host the final event of the program, the International Summit. We are proud to host so many interesting entrepreneurs from around the world," said Ketevan Ebanoidze, co-founder of Impact Hub Tbilisi. "Georgia’s Innovations and Technologies Agency is always ready to support initiatives and activities aimed at developing a startup ecosystem in our country. Social Impact Award’s International Summit, which is being held in Tbilisi with the support of GITA, will be attended by more than two hundred young people from around the world. This is an opportunity to discuss the new approaches to social entrepreneurship in our country, how innovative business can support the development of social entrepreneurship in Georgia and not only in Georgia,” noted Avtandil Kasradze, Acting Chairman of Georgia’s Innovations and Technologies Agency.

rom 1 September 2019, the Law of Georgia on Labor Safety will apply not only to the dangerous, heavy and hazardous labor fields but to all sectors of economic activity. Georgian Parliament adopted a law on Labor Safety with the third and final reading on March 7, 2018. According to the law, sanctions for the breach of safety norms were tightened, and fines were increased from 100 to 50,000 GEL. However, the requirements of the law only covered 11 areas of severe, harmful and dangerous work, a fact repeatedly criticized by the non-governmental sector. At present, the Parliament of Georgia is holding the first hearing of amendments to the Law of Georgia on Labor Safety, according to which the law is to apply to all sectors of economic activity, including the labor relations regulated by the Organic Law of Georgia Labor Code of Georgia and the Law of Georgia on Civil Service. The goal of the draft law is to define the main requirements of labor safety and general principles of preventive measures in the workplace. The legislative initiative envisages the creation and operation of a system of effective and working mechanisms of enforcement and inspection. The mandate of the labor inspectorate is extended and, according to the draft law, the supervisory body is authorized to check any workspace covered by the inspectorate mandate without prior warning and at

any time of day or night. Until now, according to the Law of Georgia on Control of Entrepreneurial Activities, a supervisory agency had been authorized to control business activities, including entering the enterprise, requesting documents, suspending the operation of the enterprise, sealing the property, examining the enterprise, checking the quality of the goods produced, only on the basis of an order issued by a judge. However, under the new amendments, the labor inspectorate does not require advance court permission and is authorized, without prior notice, to check any workspace subject to inspection, at any time of day or night, in order to ensure effective implementation and application of labor safety norms. Under the current law, an employee has the right to receive compensation for injuries received in the workplace in accordance with the procedures established by the law, but after the amendments are adopted, “an employee has the right to receive compensation for injuries received in the workplace, including injuries resulting from occupational illness.” The existing Labor Law reads that

Image source: bkp.prokuror.kz

obstructing the work of the supervisory body can result in a warning or a fine of up to GEL 200 in the event of a failure to fulfill an instruction contained in the warning. In the new addition, preventing the supervisory body from carrying out inspection will result in a fine of up to GEL 4,000 for an individual and up to GEL 14,000 for a person registered as a VAT taxpayer. The amount of the fine is linked to the income received during the previous calendar year and to the total amount of operations taxable under VAT. Moreover, where under the current version of the law, the obligation to appoint a labor safety specialist currently applies only to work involving increased levels of danger, heavy and hazardous labor in dangerous conditions, the amendments read that the obligation to appoint a labor safety specialist will apply to all spheres of work. The employer is obliged to appoint one or more employees to the position of labor safety specialist or create for this purpose a labor safety service which, in order to prevent violations of labor safety norms, will ensure the introduction and management of labor safety measures.


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Azerbaijan Boosts Its Image as a Tourism Destination BY DIMITRI DOLABERIDZE

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zerbaijan is a country where ancient temples stand side by side with buildings designed by the best modern architects. The image of the capital, Baku, is a bizarre and at the same time harmonious combination of antiquity and innovation. Azerbaijan today is known and recognized at the world level as a new attractive tourist destination on the Eurasian continent. Foreign guests state a high appreciation for the infrastructure, unique architecture, progress in all spheres, ancient history and the rich centuries-old culture, as well as the stability and security of a comfortable stay in Azerbaijan. Undoubtedly, success in the field of tourism development is inextricably linked with the name of President Ilham Aliyev, who is pursuing a far-sighted strategy for the comprehensive development of the country, with tourism development playing an important role and being an essential step for attracting additional investments in the country's economy. Azerbaijan took part in this year’s international tourism exhibition World Travel Market in the exhibition center ‘Excel London.’ Within the exhibition, the Azerbaijan Tourism Bureau held a presentation of the new tourism branding of the country – the Take Another Look marketing campaign. As reported by AZERTAG, the presentation, which was attended by representatives of various countries, experts from leading travel companies, as well as journalists, was met with particular interest. One of the main goals of participation in this prestigious exhibition is to submit as many tourist offers to international markets as possible, to become

Image source: azernews.az

a world-famous destination brand, and to introduce the unique material and spiritual heritage of the country to the global community. Azerbaijan is implementing a number of important measures to accelerate the development of tourism in the country, tourism being one of the main areas of the non-oil sector of the economy. Tourism is recognized as a sphere of economic activity that serves the interests of the citizens, also being a great source of income. The Azerbaijan tourism sector is becoming one of the main factors creating additional jobs, accelerating the development of road and hotel construction, stimulating the production of all types of vehicles, and contributing to the preservation of folk crafts and national culture. In short, it acts as a catalyst for socio-economic development. The recent construction of hotels and road-transport infrastructure meeting modern requirements, in various regions of the country, has increased interest in the regions of Azerbaijan among both foreign and local tourists. On the decision of President Ilham Aliyev on April 20, 2018, the State Agency for Tourism was established. Tourism in Azerbaijan has been identified as a priority direction for the development of the economy, announced as an “industry of national importance.” The ‘Strategic Roadmap for the Development of a Specialized Tourism Industry in the Republic of Azerbaijan,’ approved by the head of state at the end of 2016, outlines the goals and objectives for ensuring the effective operation of the Azerbaijani tourism industry, which should “contribute to the formation of state and population incomes.” Over the next 10 years, the industry is expected to make up to 10% of the country's gross domestic product. Tourism contributes to attracting foreign currency and various investment projects to the state: the economy is diversified, the income of the population grows and their wealth increases.


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New Iranian Sanctions & the South Caucasus BY EMIL AVDALIANI

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n November 5, The Trump administration re-imposed sanctions on Iran following Washington’s decision to withdraw from the Joint Comprehensive Plan of Action (JCPOA) signed in 2015. Following the decision on withdrawal, the Iranian Foreign Ministry spokesman Bahram Qasemi told state TV that his country had “the knowledge and the capability to manage the country's economic affairs.” The worst disagreements coming as a result of the US decision were seen between the European and Russian counterparts. Both were against the break-up and still remain strong believers in the JCPOA. In order to diminish the economic effect on Europe, a special clearing house was designed to allow European companies that trade with Iran to bypass the new US sanctions. It was reported that the clearing house will be established within several months either in France or Germany. The Europeans came up with the idea of the clearing house, also known as a “Special Purpose Vehicle” (SPV), to show Iran that Europe is still a strong supporter of the 2015 nuclear deal and that the SPV will even allow the European Union to expand business with Tehran. While analysts discuss how the new sanctions will impact Iran and the world oil prices, it is interesting how it will influence the South Caucasus. It is clear that the region is important for the US in exerting pressure on Iran. One of the major reasons the US National Security Adviser John Bolton recently visited the South Caucasus countries was to enhance Iran’s isolation. The US remembers well how Iranians acted previously, before the 2015 agreement, using Armenian and other regional banks to circumvent the sanctions. Even though

Emmanuel Macron, Angela Merkel, and Donald Trump. By John Macdougall/AFP/Getty Images

Washington exempted eight countries from new sanctions, none of them is from the South Caucasus. Since one of the major goals of new US sanctions is to reduce Iran's oil exports to zero, Georgia, Armenia and Azerbaijan will not be directly impacted. However, although none of the three states in fact uses or transports Iranian crude, all three sometimes use Iranian natural gas either for transit or commercial usage. For example, Armenia, where a major portion of gas is imported from Russia (via Georgia), also imported about 400 million cubic meters of gas

Baku-Tbilisi-Kars to Expand to Nakhchivan

azernews.az

BY DIMITRI DOLABERIDZE

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ork has begun on the construction of a railway line between the Turkish city of Kars and the Nakhchivan Autonomous Republic, within the framework of the Baku-Tbilisi-Kars (BTK) project. “We consider Kars a logistics center, the work on which construction is underway,” said the Turkish Ambassador to Azerbaijan, Erkan Ozoral. “It’s difficult to say at what stage the work is now, but most likely it will be completed in the next two years. Now we are working on the continuation of the BTK project.”

The Baku-Tbilisi-Kars railway, he noted, is a link between Turkey and Europe. “Presently, cargo transportation is carried out via BTK from Kazakhstan to the port of Mersin. Some cargo is shipped from Russia to Turkey and Europe. It is difficult to say how much cargo there will be in the future, but one thing I can say is that the full potential will be used.” The opening of the Baku-Tbilisi-Kars railway was held on October 30, 2017 at the Baku International Sea Trade Port. The BTK railway is built on the basis of an Azerbaijani-Georgian-Turkish interstate agreement. At the initial stage, the volume of freight will be at the level of 6.5 million tons, and up to one million passengers will be transported.

from Iran in 2017, in exchange for which it sends electricity to Iran. In late 2017, there was even an agreement through which Yerevan would increase gas imports from Iran by some 25%, again in exchange for electricity. Now with the new sanctions in force, those plans are likely to be shelved. Moreover, Armenia’s position will be further worsened since the US sanctions will also touch other parts of the Iranian economy. Yerevan will now have fewer chances to build new pipelines or railways from Iran to Georgia in order to be a transit point. Talks around the construction of a $3.7 billion railway are stalled as there are difficulties finding finances

for the project. Another reason is that neighboring Azerbaijan already has the necessary pipeline infrastructure and the Baku-Tbilisi-Kars (BTK) railway. Perhaps Azerbaijan is the country which might benefit most from the new US sanctions, as global oil prices are likely to rise. Since natural gas prices are mostly indexed to oil prices, Baku might see a sudden growth in revenues. Sanctions-stricken Iran’s influence will be curtailed in the South Caucasus region. The diminution of Iranian economic activities in the region will be followed by a decline in the country’s geopolitical force. In that regard, Russia is to reap the most fruit. Russia and Iran have long been geopolitical rivals. Russia, for instance, wants to obstruct any Iranian moves to establish Russian-influence-free pipelines or railways to Armenia and Georgia. Now it will be easier for Moscow to block any Iranian initiatives. Yet both countries will nevertheless work together to block Western-led infrastructure projects. Another common interest will be to avoid any foreign military presence in the region, particularly in Georgia. Iran already lags far behind its regional competitors in terms of economic and military influence in the region, and now the country is set lose more in the South Caucasus. Those geopolitical impetuses which existed before, primarily Europe’s willingness (however unsuccessful) to diversify its gas market from Russian gas, are now unlikely to bring results. The next several months will show how negative the new sanctions will be for the region. However, one argument is clear: Iran, which hoped, following the successful negotiations and the lifting of restrictions in 2015, to increase its involvement in the South Caucasus, is likely lose the momentum it enjoyed. The European and Russian decision to stay in JCPOA might help, but as many believe, the US withdrawal is crucial.


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Could the Church Become a Catalyst for Change? BY AMY JONES

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he Georgian Orthodox Church massively influences all areas of Georgian life, including politics. With such huge influence comes the opportunity to impact opinions and politics, as well as generate change. According to a survey by the International Republic Institute in 2017, 88% of Georgians held a favorable view of the church, making it the most trusted organization in the country. In 2012, the National Democratic Institute asked “how important is your religious belief in making daily decisions” to which 36% of Georgians responded “very important”, and 48% said “important”. The impact of the Church on politics and opinion is easily visible in Georgia. “The perceptions and convictions of highly respected religious leaders help shape the public opinion to a considerable degree,” stated H.E. David Bakradze, Ambassador of Georgia to the USA. Indeed, in 2013, gay rights activists holding an anti-homophobic rally were met by thousands of protestors, organized and led by the Georgian Orthodox Church. Ilia II of Georgia, the head of the Georgian Church had described homosexuality as an “anomaly and disease” two days earlier, calling for a ban of the rally. The event ended in a clash which resulted in the injuries of multiple people. Moreover, the recent parliamentary discussions surrounding the legalization of cannabis were halted following opposition from the Church. Father Andria Jamghaidze warned “next we will see similarly liberal approaches to cocaine and heroin.”

Realizing the huge impact of the Church on Georgian life and democracy, government bodies and NGOs are beginning to reach out to the Church. Supported by the UK Governance Fund, the Center for Development and Democracy (CDD) has been working together with the Orthodox Church and leaders of religious groups in Georgia since 2014. Their work has shown the potential of the Georgian Orthodox Church to make positive changes and hold dialogues. This is especially significant due to the perception that the Church is against discussions and is relatively closed. For example, they organized study visits for a group of religious leaders to Washington D.C., as well as European and Euro-Atlantic institutions. Such visits establish important dialogues which promote both tolerance and collaboration among

UK-Georgia: New Horizons Season Announced

BY KATIE RUTH DAVIES

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ir Alan Duncan, UK Minister of State for Europe and the Americas, announced plans for a UK Season in Georgia at the 5th Wardrop Strategic Dialogue. The season, titled New Horizons, will take place from September to December 2019 and will showcase the very best of British culture, education, business and sport. It will be a celebration of the rich relations between the UK and Georgia. The UK Season will include events, festivals, film screenings, workshops and master classes, as well as discussions and lectures on music, film and performing arts. Already confirmed is the first-ever exhibition in Georgia of a remarkable coin from the time of King David the Builder, which depicts the renowned Georgian King himself. The coin will be loaned by the British Museum and is the centerpiece of a special exhibition to be curated by British and Georgian curators at the National Museum of Georgia. The British Council will lead on the cultural strand of the UK Season in Georgia.

The UK Season is being designed with a particular focus on inspiring 18 to 35-year-olds and women in Georgia. “Young people will be at the heart of the Season,” said Zaza Purtseladze, Director, British Council South Caucasus and Georgia. “We will create a Youth Board to bring together young Georgians to help guide programming so that it responds to their needs and interests.” Opportunities will be created for some of Georgia’s talented disabled artists to showcase their work to new audiences and build cultural connections. This will support the mainstreaming of work by disabled artists and professionals, making access to the creative sector open to all, during the UK Season and beyond. Commenting on the announcement of the UKGeorgia: New Horizons Season, Justin McKenzie Smith, Her Majesty’s Ambassador to Georgia, said: “With this UK Season in Georgia, we want to build on our close, long-standing friendship to create new horizons for the future. I am very excited that we will introduce Georgian audiences to some of the best that the UK has to offer in culture, education, business and sport.”

religious groups in Georgia, whilst also educating the Church and changing misconceptions. Often associated with anti-western propaganda which claims the Church is pro-Russian, the Church made a big statement by pledging its support to the EU, following the abovementioned visits. The Patriarchate of Georgia made an official statement: “It turned out that both in NATO and the EU, they had the wrong perception about the Georgian Church, and we also had the wrong impression about their policy towards a number of issues. Concerning Georgia’s aspiration to Euro-Atlantic membership, this is the choice of the Georgian people and the Church respects this choice.” Part of the work of the CDD also includes conducting educational projects such as lectures,

workshops and intensive training sessions with representatives and affiliates of the Church as well as the general public and parishioners. Topics such as the Georgia-EU history of relations, international treaties on human rights, and relations of religious organizations and governments in the EU member states were taught by government officials and representatives of diplomatic missions. Learning about such topics is of incredible importance for the Church, especially due to their massive influence. 93% of the participants said that the information they received was greatly needed and that they would be willing to participate in future educational and awareness-raising activities. Speaking at the signing ceremony of the Grant Agreement of the project “Supporting Participatory and Inclusive Governance in Mountainous Guria and Adjara” at the British Embassy on November 7, Ketevan Chachava was very positive about the possibility of the Church to become a positive message carrier. Ideas can be better re-laid to the Georgian population through teaching priests about important laws and ideas such as tolerance, human rights, and anti-discrimination. She plans to continue to work closely with the Church and hold regular dialogues to promote this change. Although such considerable power in a non-elected body is alarming, the recent openness of the Church to embrace dialogues and training could show a shift in attitudes of a Church which has historically been mostly unreachable. The conservative grip of the Church on Georgian society is not likely to loosen in the near future, making continued work with it arguably the most important direction for civil society. The continuation of dialogues and projects supported by the international community shows that positive steps are being made.


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Experts Predict HUAWEI Will Occupy 1st Place, Replacing Samsung BY MARIAM DIASAMIDZE

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ccording to the leading analytical firms IDC, IHS Markit, and Counterpoint, HUAWEI still beats Apple by the amount of smartphones sold and has remained the world's second largest smartphone vendor for two consecutive quarters. It was unexpected for everyone when HUAWEI beat Apple's sales and took second place, but after the presentation of the new Mate20 series, experts predict Huawei will soon be in first place and replace Samsung. In September, the International Data Corporation (IDC) published data about the business achievements of the first half of 2018, according to which HUAWEI saw a significant growth of over 95 million in global sales. According to the data of IDC, HUAWEI beat Apple's sales and occupied second place in the second quarter of 2018. According to the data collected during the last three months, 54.2 million

HUAWEI smartphones were sold, making the market share of the company 15.8%. The amount of Apple smartphones sold in April-June was 41.3 million. According to the report, Samsung took first place with 71.5 million smartphones sold, which is a 20.9% share on the market. HUAWEI has kept second place for two consecutive quarters. Despite the fact that its share on the market decreased after the last quarter, HUAWEI's sales amounted to 52 million, making up 14.6% of the global market. In terms of product, its P and Mate series turned out to be as competitive as never before. Experts say that the success of HUAWEI was conditioned by its continuous efforts to research and develop: “research and development have become a formula of success for HUAWEI.” HUAWEI is the leading brand in the industry with its technological innovations. With its premium products, this giant smartphone manufacturer has won both the consumer and the market. “The only way to show the custom-

ers how much HUAWEI cares for them is improving products and services. Through these efforts, today HUAWEI is a brand that is loved by the whole world. More and more customers are starting to use HUAWEI’s smartphones,” said Richard Yu, the CEO of HUAWEI Consumer Business Group. The presentation of the HUAWEI Mate20 series and its unique opportunities has been spotlighted by international media. “The HUAWEI Mate20 Pro is a smartphone that will get Apple and Samsung worried. This is a smartphone with the world's best camera, powerful processor and a powerful battery. These are added to other unique features like the wireless charging and the fingerprint scanner placed in the display,” said the ambitious and not groundless statement published by Hi-tech.mail.ru. HUAWEI products and services are available in over 170 countries and are used by a third of the world's population. 16 research and development centers operate throughout the world, in the USA, Germany, Sweden, Russia, and India and China.

HUAWEI Consumer BG is one of Huawei’s three business units, and their main direction is the production of smartphones, personal computers, tablets, and cloud services. HUA-

WEI Global Network is based on 20 years’ experience in the telecommunication business and offers innovative technologies for consumers worldwide.

The HUAWEI Mate 20 Series Spotlighted by International Media. Here's What They Wrote BY MARIAM DIASAMIDZE

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t was unexpected for everyone when Huawei beat Apple's sales and occupied second place in the world, but after the presentation of the new Mate20 series, experts predict HUAWEI will make first place and replace Samsung. The presentation of the HUAWEI Mate20 series and its unique opportunities has been well-spotlighted by international media. “The HUAWEI Mate20 Pro is a smartphone that will get Apple and Samsung worried. This is a smartphone with the world's best camera, powerful processor and a powerful battery. These are added to other unique features like the wireless charging and the fingerprint scanner placed in the display,” read an ambitious and not groundless statement published by Hi-tech.mail.ru. In addition, according to the October data, the HUAWEI Mate20 series has received positive reviews and awards from the media. In a short period, up to 50 top reviews were received from global and regional media and it is expected that this data will only continue to grow. The fact is that HUAWEI strengthens competition because it finds ways to surprise, pamper and please its customers. The company focuses on daily functions such as durable and long-lasting battery and new color variations. Recombu reports: “The Mate20 Pro is the candidate for best smartphone of the year due to its smart technology and original features.” Tech Radar, it made quite a loud statement, saying: “That year when every new phone lays a margin above its predecessor, the HUAWEI Mate20 Pro turned out to have enough premium features to be distingushed from the rest. This is a powerful smartphone with three rare cameras, and it's a sample of distinguished style, but its handwriting is the new "trick" that won’t be found anywhere else until next year.” “The Mate20 Pro is a distinctive phone. The camera is important for many peo-

ple, but with the best screen, super fast, wireless charging, and the strongest battery, it's an extraordinary phone,” Tech Advisor said, highlighting the advantages of the HUAWEI Mate20 series. “The HUAWEI Mate20 Pro is a masterclass of how to bring technological development of a phone to the maximum level,” said Stuff Magazine. “The HUAWEI Mate20 can be seen as a triumph. It is the most impressive, perfect phone, including what has been created by HUAWEI to date.” T3 Magazine says of the model's uniqueness.

“With the combination of high quality designs, best cameras, extraordinary batteries and future-oriented functions, such as the fingerprint scanner on the screen, the Mate20 Pro occupies the position of the best smartphones of 2018,” says Pocket-lint. “It's something different, it's strong, it's fun and modern ... It’s a monster in a good sense!” read the emotional address from The Inquirer. “The HUAWEI Mate20 Pro is fast, with a beautiful design and screen. It has an especially durable battery, a super-fast

charging feature and one of the best cameras,” writes Phone Arena. “The Mate20 is a wonderfully designed phone, with an unusual camera, sensational battery and huge power,” says TechRadar. “If something is obvious as a result of discussing the HUAWEI Mate20 Pro, it should be its phenomenal camera,” is Bigtechquestion.com's position. And still, what are the reasons behind the unconditional leadership of the HUAWEI Mate20 series? • The most refined and attractive design, unique and innovative colors. • It is equipped with the most innovative and small 7-nanometer processor - Kirin 980, that uses a processor based on Cortex-A76 and Mali-G76 GPU. Through the perfect combination of Dual-NPU and Cat.21 modem, they work more efficiently and use less energy. • Through the new Kirin 980, it is already able to capture 46% improved graphic images. In addition, while playing games, AI can determine the workload and provide the resources for optimal image and quality. In comparison with the previous generation, the Kirin 980 provides the fastest loading of applications. • The old tradition is preserved in the new smartphone, and all three main cameras are created in collaboration with Leica, giving users an opportunity to capture objects at a minimum distance and focusing at even 2.5cm from the lens. Unlike the previous models, there is a more enhanced lens with a broader view (16 mm). • The HUAWEI Mate20 series is equipped with operative system EMUI 9.0 based on Android Pie, through which users can access all the working and entertainment functions of the smartphone with a simple touch to the screen. EMUI 9.0 is followed by the GPU Turbo 2.0 – with more support for game-lovers. • Yet another important function of the system is HiVision, which enables the camera to capture famous attractions or paintings and deliver users information about them.

• Enhanced battery: the working time of the battery is improved and enhanced in the new models of HUAWEI. Through the 4200 mp battery, it is now possible to charge the phone up to 70% in 30 minutes. • The HUAWEI Mate20 Pro is the first smartphone in the world to have support relevant to 4.5G LTE Cat. 21 standard, giving users a chance to benefit from a 1.4 GB/s download speed. It also has the fastest Wi-Fi connection, allowing for max. 10 seconds downloading. • The HUAWEI Mate20 Pro has the support of 3D Face Unlock. Through this feature, it is possible to identify a user in just six seconds. A camera with 3D in-depth sensor is installed on the front, which allows the device to see even the smallest details of the subjects with the highest precision. The fingerprint access is installed directly in the screen. • The HUAWEI Mate20 Series also features an AI Portrait Color video mode. Using AI, the HUAWEI Mate20 Series can isolate human subjects and desaturate the colors around them to dramatically highlight the person. AI Spotlight Reel identifies clips with a shared theme and auto-generates a montage made entirely of highlights. • In-screen Fingerprint, embodying exquisite design, the newest processor Kirin 980, 3X optical zoom, extraordinary capturing capabilities, next-generation intelligence, the fastest charging function and 4K support – the new HUAWEI Mate20 Series is the partner of choice for professionals pursuing quality of life. HUAWEI products and services are available in over 170 countries and are used by a third of the world's population. 16 research and development centers operate throughout the world, in the USA, Germany, Sweden, Russia, and India and China. HUAWEI Consumer BG is one of HUAWEI's three business units, and their main direction is the production of smartphones, personal computers, tablets, and cloud services. Huawei Global Network is based on 20 years’ experience in the telecommunication business and offers innovative technologies for consumers worldwide.


CULTURE

GEORGIA TODAY NOVEMBER 13 - 15, 2018

15

Artisterium’s Contemporary Artists Present their Artworks at Karvasla

BY ANA DUMBADZE

T

he Georgian National Museum Tbilisi History Museum is hosting Artisterium, Tbilisi's 11th International Contemporary Art Exhibition and Art Event. On November 9, the opening of the Artisterium 11/2018 was held at Tbilisi History Museum Karvasla. The opening ceremony was followed by foreign and local contemporary artists’ exhibitions. According to the curator of the Artisterium, Magda Guruli, ‘Artisterium As

It Is, 2018’ will be the last Artisterium exhibition as it is, now, as this year a decade-long cycle of contemporary art exhibitions will be completed. “From 2019, Artisterium will evolve into a new format. However, the connection with the Artisterium's traditional space, Tbilisi History Museum, will not end. Further details will be available next year,” Guruli said. “Since our first exhibition in November 2008, we have always held Georgia's tumultuous political, social and cultural changes at the forefront of our minds. We've tried to cast the momentum of Georgian history and artistic thought into the wider international context, and of course, visa versa.”

She went on to express hope that the event’s partners and sponsors, the Georgian Ministry of Education, Science, Culture and Sport, Tbilisi City Hall, British Council, Goethe Institute, French Institute, the Embassies of USA, Poland, Israel, Estonia, Holland, and other international and local organizations in Georgia, would remain with them on their continuing journey. “The goals we had in 2008 have been generously fulfilled and the formative atmosphere of Artisterium has claimed a place in the history of Georgian art,” Guruli noted. “Where the new road will lead us, we don't know. But that, of course, is down to the artistic process. And within it we shall remain devotedly hand in hand

with our audience. Alongside this, our accumulated organizational experience and management skills over 11 years will definitely aid the way forward. This year’s exhibition is on until November 19 at the Tbilisi History Museum. As Lika Mamatsashvili, Doctor of Arts, Curator, and Head of Permanent exhibitions noted, the Tbilisi History Museum has significantly contributed to the development of contemporary arts. “The international program Artisterium has existed for 11 years now. It was launched by two Georgian artists, Iliko Zautashvili and Magda Guruli. In the first year, the artists of five countries participated in Artisterium. Nowadays, no less than 15 countries take part in this exhibition and are delighted to be a part of it,” Mamatsashvili said. “Every year, Artisterium sends different messages to society. This year, the exhibition is titled ‘Artisterium As It Is,’ and it presents the artworks of contemporary Georgian and foreign artists. Georgian students also expressed their wish to participate in Artisterium this year, so the attendees of the exhibition can enjoy their artworks as well,” she said. This year, Artisterium is mostly dedicated to Czech artists and their artworks, with 12 Czech artists participating alongside other contemporary artists from different countries. Professors of Ostrava University recently came to Georgia to establish long-term partnerships with the Tbilisi Art Academy. According to Pavel Forman, an internationally acclaimed Czech artist and curator, collaboration between Georgian and Czech artists will be more active in the future. “This is my second time in Georgia. I took part in Artisterium 2016,” Forman said. “This year, I told Artisterium’s curator Magda Guruli I wanted to bring

here artists from Ostrava City, which is quite an interesting region boasting many exciting artists. We signed a Memorandum of Understanding between the Tbilisi Art Academy and the Ostrava Faculty of Fine Arts and have started collaboration and we are planning to implement a lot of interesting activities within the framework of this collaboration in the future,” he elaborated. Within the framework of Artisterium 11/2018, Tbilisi History Museum also hosted Artist Talks on November 10-11. ‘Artisterium As It Is’ has many more interesting art events to offer art lovers. The program of the festival includes:

TUESDAY NOVEMBER 13 3 – 7 PM: Meeting of VAADS (Visual Arts, Architecture and Design School) students with the participating artists. WHERE: Georgian National Museum, Tbilisi History Museum (Karvasla), 8 Sioni Str, Tbilisi.

FRIDAY NOVEMBER 16 7 PM: Dima Filatov (Ukraine), personal exhibition K ART ON Presentation of the Artisterium 11/2018 catalogue. WHERE: Dédicace Gallery, 27 Athoneli Str. at the Dry Bridge, Tbilisi.

SUNDAY NOVEMBER 18 5 – 7 PM: Presentation of the Artisterium 11/2018 catalogue. WHERE: Georgian National Museum, Tbilisi History Museum (Karvasla), 8 Sioni str, Tbilisi. The exhibition is supported by The Ministry of Education, Science, Culture and Sport of Georgia and the Municipal Department of Culture, Education, Sport and Youth Affairs.

SPORTS

Georgian Weightlifter Breaks World Record BY THEA MORRISON

F

amous Georgian weightlifter competing in the +105 kg category, Lasha Talakhadze, broke the world record at the World Weightlifting Championship held in Ashgabat, Turkmenistan. Talakhadze became the Number 1 in the world after he lifted 474 kg (a record 217 kg in a snatch and 257 kg in a push). Aside from breaking the world record, Talakhadze won three gold medals. On September 23, 2018, at the World Weightlifting Championships held in Tbilisi, Talakhadze broke two world

records by snatching a 264 kg lift and in the clean and jerk – a total of 478 kg. At the 2017 World Weightlifting Championships, Talakhadze broke his own snatch record with 220 kg, and he went on to set a new world record for the total with 477 kg, also breaking the all-time highest total of Leonid Taranenko from 1988. Last year, the Georgian National Olympic Committee awarded him the title of Georgia's Sportsperson of the Year. Georgian Prime Minister Mamuka Bakhtadze congratulated Talakhadze on his success, saying he is the pride of Georgia. “The strongest man in the world is Georgian!” the PM’s Facebook post reads.

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Profile for Georgia Today

Issue #1100 Business  

November 13 - 15, 2018

Issue #1100 Business  

November 13 - 15, 2018

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