Issue #1126 Business

Issue no: 1126/168

• FEBRUARY 19 - 21, 2019

• PUBLISHED TWICE WEEKLY

FOCUS

ON CEMENT

LafargeHolcim reinforces its position on the Georgian market

PAGE 3

PRICE: GEL 2.50

In this week’s issue...

Weekly Entrepreneurial News @entrepreneur.ge NEWS PAGE 2

Persistent Pessimism!

Business Confidence Index Q1 2019 ISET PAGE 4

West Georgia Regional Business Forum Held in Kutaisi

The Munich Security Conference 2019 - Is NATO under Threat?

BY AMY JONES

T

he underlying theme of this year’s Munich Security Conference over the weekend was the fragmentation of the world order. As US President Donald Trump directs the US’ withdrawal from multilateralism, some fear that bodies such as NATO could become a thing of the past.

The Munich Security Conference first took place at the height of the Cold War in 1963.

Bringing together German leaders with NATO allies such as the US, it was designed to unite

Image source: Munich Security Conference

Western policy and strengthen mutual defense.

However, American foreign policy has dramatically shifted under President Trump as he withdraws the US from multilateral agreements and treaties, thus ending years of carefully constructed diplomacy with a late-night tweet. Trump has critized NATO, believing it imposes unfair financial burdens on the US. His words have been matched by action.

His decision to abandon the Iran nuclear deal, as well as pulling back from conflicts abroad, have left European allies questioning who will step in to replace America’s influence.

Shifting American policies and multilateralism have become very apparent at the conference in Munich.

Continued on page 2

BUSINESS PAGE 6

The Economist Tells Europe to Pay Attention to Georgia's New Port Potential BUSINESS PAGE 7

Bakhtadze Promises New & Renovated Schools SOCIETY PAGE 14

"Crusade Knights in Khevsureti" Grabs Tourist Attention Again CULTURE PAGE 15 Prepared for Georgia Today Business by

Markets As of 15ͲFebͲ2019

Price

w/w

Bank of Georgia (BGEO LN)

GBP 16.79

+5,9%

+7,5%

Georgia Capital (CGEO LN)

STOCKS

GBP 11.30

+1,5%

+11,0%

GBP 2.32

Ͳ1,3%

+16,3%

GBP 13.16

Ͳ6,5%

Ͳ9,5%

CURRENCIES

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

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

m/m

Price

w/w

GEOROG 04/21

101.90 (YTM 5.81%)

+0,2%

+1,2%

GEORG 04/21

BONDS

106.00 (YTM 3.93%)

Ͳ0,1%

+0,6%

GRAIL 07/22

106.06 (YTM 5.75%)

+0,5%

+2,2%

GEBGG 07/23

98.95 (YTM 6.27%)

+0,0%

+1,5%

Price

m/m

Price

w/w

m/m

w/w

m/m

66,25

+6,7%

+9,3%

GEL / USD

2,6362

Ͳ0,3%

Ͳ1,1%

1 322,49

+0,6%

+2,6%

GEL / EUR

2,9726

Ͳ0,7%

Ͳ2,3%

GEL / GBP

3,3999

Ͳ0,6%

Ͳ0,7%

INDICES

Price

w/w

m/m

GEL / CHF

2,6220

Ͳ0,6%

Ͳ2,5%

FTSE 100

7 236,68

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+5,0%

GEL / RUB

0,0397

Ͳ1,7%

Ͳ

FTSE 250

18 987,23

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+3,0%

GEL / TRY

0,4999

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+2,2%

DAX

11 299,80

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+3,7%

GEL / AZN

1,5532

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DOW JONES

25 883,25

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Ͳ

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7 472,41

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+6,4%

GEL / UAH

0,0967

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+1,7%

162,52

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+1,3%

EUR / USD

0,8854

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+1,0%

NASDAQ MSCI EM EE

0,0054

1 030,64

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0,7758

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SP 500

2 775,60

+2,5%

+6,3%

CHF / USD

1,0052

+0,5%

+1,8%

MSCI FM

2 683,23

Ͳ0,1%

+2,5%

RUB / USD

66,3270

+1,4%

Ͳ1,1%

GT Index (GEL)

1 582,68

Ͳ

Ͳ

TRY / USD

5,2838

+0,7%

Ͳ3,0%

GT Index (USD)

1 208,13

Ͳ

Ͳ

AZN / USD

1,7046

+0,3%

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MSCI EM

+2,5%

GBP / USD

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NEWS

GEORGIA TODAY

FEBRUARY 19 - 21, 2019

Georgian Prime Minister at Munich Security Conference

BY LISA MAIER

@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: We’ve got some interesting news for cheese lovers from a grandfather and grandson who are offering cheese tours in Georgia. Giorgi Ghaghashvili saw how much his foreign guests enjoyed cheese tasting and invested 90,000 GEL in the construction of the infrastructure to make something of it.

Along with tasting, guests can learn the history of cheese and participate in making some. Visitors from Israel, the USA, Canada and post-Soviet countries are among the most frequent guests. Ghaghashvili’s products have already been exported to the USA and they have an eye on Europe, too.

Adjara Group is doing wonders for Georgian tourism yet again! This time, they are adopting the ‘farm-to-table’ concept and have plans to launch it in a large Kakheti hotel set for completion next year. The concept allows guests to work as ‘farmers’, harvesting the products and then cooking them. The company has so far planted an almond garden on location.

Georgia offers a lot when it comes to taste and color in wine, and already many countries appreciate Georgian wine’s specific characteristics. Students Giorgi Machavariani and Saba Sakhvadze, one day unable to find a bottle-opener, decided to create a more practical packaging for wine and developed the canned “Mivino”. With the help of foreign partners, they produce high-quality cans which help keep the taste characteristics longer, making Mivino ideal for any simple occasion.

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

T

he Prime Minister Mamuka Bakhatze attended the 55th Munich Security Conference to strengthening bilateral partnerships with several countries. The Munich Security Conference is an annual gathering of officials of the international security community. The main target is to sustain a continuous, curated and informal dialogue within the international community.

During his attendance, the Georgian Prime Minister held several meetings with high-ranking officials of the US, UK and Belgium. Discussed topics were how to continue in strategic partnerships,

further cooperation plans and the general progress of bilateral ties.

In meetings with officials of the UK and Belgium, the positive dynamics of trade and economic relations between Georgia and the two countries were emphasized and an further intensification of trade ties focused on.

Another topic discussed was the regional conflicts in Georgia and their peaceful resolution. Deputy Prime Minister and Minister of Foreign Affairs and European Affairs of Belgium, Didier Reynders, and Mamuka Bakhtadze set priorities to create international mechanisms of security in the occupied regions. The format of the Geneva International Discussions was asked to be continued and even strengthened. FM Reynders reaffirmed that Belgium supports Georgia´s territo-

rial integrity and sovereignty within its internationally recognized borders.

Besides these highly offical meetings, the Georgian Prime Minister spoke about Georgia's expectations towards a possible NATO membership by holding a speech at a round table devoted to alliance enlargement prospects hosted by the Munich Security Conference. He pointed out that NATO membership remains the top priority of Georgia's foreign policy.

"A further NATO enlargement is the best option for increased security and peace in Europe and Georgia is ready to continue its efforts and provide a very solid basis for this," he said, going on to express hope that with allies, partners and friends, Georgia will find ways to overcome the challenges and advance on its way to NATO membership.

The Munich Security Conference 2019 - Is NATO under Threat?

Continued from page 1 On Friday, NATO Secretary-General Jens Stoltenberg consistently answered different variations of the same question: Does Trump really still believe in NATO? “Every time I speak to President Trump, he tells me that he likes NATO,” he responded to one reporter. “And not only that he likes NATO, but that he’s 100%in favor of it”.

Nonetheless, other politicians are not convinced by Trump’s commitment to NATO and world order as we know it today. “The liberal world order appears to be falling apart,” wrote Wolfgang Ischinger, Chairman of the Munich Security Conference, in his introductory note.

“We are experiencing an epochal shift: an era is ending, and the rough outlines of a new political age are only beginning to emerge”.

German Chancellor Angela Markel also spoke about multilateralism in her impassioned speech on Saturday. “Who can pick up the pieces of the world’s puzzle?”

She questioned. “Only all of us together.”

Similarly, the director of China’s Foreign Affairs Commission, Yang Jiechi

explained the key part of his speech in English: “History tells us that we can only realize our people’s dreams for a better life by upholding multilateralism and enhancing global cooperation”.

Lindsy Graham, Republican member of the US Senate Committee for Foreign Relations, defended Trump’s attack on multilateralism and the idea of “America First”. “The President can be a handful,” he said, “but so can all of you.” Graham insisted that Trump really wants “burdensharing” among US allies.

Other attendees at the Munich conference continue to insist that there is still a strong alliance of “Western” countries who defend liberal values. Former state premier of Lower Saxony and now chairman of the European Parliament’s foreign affairs committee, David McAllister, underlined that common interests guided by values distinguish allies from autocratically governed states: “What unifies us is the commitment to democracy, the rule of law, free election, religious tolerance, equal rights for women and men.”

Moreover, he believes that Trump’s US is actually more committed to world order than it may seem. Indeed, over 50

members of the the US Congress attended the Munich Security Conference, suggesting that they are committed to NATO. “American politics consists not only of this president,” he told German news outlet Deutsche Welle.

A key topic of this year’s conference was the security threat posed by Russia, their illegal activity, and disregard of international borders and sovereignty.

NATO and its allies must step up and unite to ensure that democratic values are withheld. With the situation in Abkhazia and South Ossetia, this is especially important in Georgia, as well as the rest of the world.

Many countries demonstrated a strong alliance to NATO during the conference.

Indeed, Gavin Williamson, the UK’s Secretary of State for Defense, said in his speech that “for the sake of our values, allies and friends, we will continue to lead in NATO… And let us not forget that the reason wethat will invest in our defense is to deliver a more peaceful, a more prosperous, and a more just world.” Whether Trump’s actions will speak louder than his words and how this will continue to effect the world, remains to be seen.

BUSINESS

GEORGIA TODAY FEBRUARY 19 - 21, 2019

3

Cement Giant LafargeHolcim Reinforces Its Position on the Georgian Market

BY MARIAM MERABISHVILI

D

uring the 6000-year history of the existence of civilization, construction and architecture have always been distinguished.

The scale and quality of the construction, along with the political and economic development of the country, largely came down to the correctly chosen construction material.

Construction is now happening faster than ever before. Every year, more and higher skyscrapers are built, and longer bridges and tunnels are constructed.

One thing unites the numerous different structures,no matter their design, size or purpose: cement, which is a necessary component for all construction: from a residential building to a huge dam And choosing the right cement

is therefore a necessary precondition.

At the end of 2017, the ‘Georgian Cement Company’ (GCC) appeared in the Georgian cement industry, representing the French giant Lafarge in Georgia. The company combines the direction of cement and concrete production. In 2015, Lafarge and the second-largest Swiss company in this sector, Holcim, merged, resulting in the establishment of mega company LafargeHolcim. Some statistical data will help readers to better understand the scale of the company.

LafargeHolcim owns over 2500 factories in 90 countries worldwide, employs over 115,000 people and produces 387 million tons of cement and concrete annually. Its annual turnover exceeds $26 billion and market capitalization of $28.5 billion.

After the successful start of Lafarge / GCC in Georgia, within two years, the company had occupied second place with throughput and sales on the cement

market, largely due to the high quality and stable service of the products they implemented.

According to Merab Chikhradze, one of the founders of the company, sales, which amounted to 209,000 tons in 2018, have not yet hit the peak of their goal.

Accordingly, existing volumes will be expanded further in the current year.

“We are steadfastly pursuing our development plan, which we successfully carry out with our partners, and in the near future, we will reinforce our position on the Georgian cement market,” Chikhradze says.

The company has already acquired consumer trust in the Georgian market, proven by the number of completed

and ongoing projects: Panorama Tbilisi, shopping center ‘City Mall’ on Kavtaradze Street, the 54-floor Alliance Group skyscraper in Batumi (on the first 12th floor of which hotel MARRIOT will be opened), M2 on Chavchavadze, Twin Tower, a 45-floor pair of skyscrapers with more than 7000 apartments, Lisi Green District, the Hotel Hilton Project in Tbilisi, Macro Construction district in Dighomi, Poti-Senaki central highway bridges, Anaklia Port, the Batumi bypass road, roads to Kutaisi, the Mestia-Ushguli road in Svaneti…and this is an incomplete list of projects that are implemented by Lafarge / GCC cement and concrete.

While the number of foreign tourists in the country increases by a two-digit percentage annually; while more than one hundred bridges and tunnel constructions are envisaged, from the Red Bridge to Sarpi, as well as the NorthSouth Highway in spatial arrangement; while there are several large water reservoir HPPs in the design phase; and while the demand for new flats is growing naturally with the growth of the economy, the need for a Europeanstandard cement and concrete manufacturing company is evident. Lafarge / GCC is a company that will make a great contribution to the country's economy and take care of its ecological environment.

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BUSINESS

GEORGIA TODAY

FEBRUARY 19 - 21, 2019

Persistent Pessimism!

Business Confidence Index Q1 2019

O

verall, the BCI lost 7.4 points compared to Q4 2018. Expectations in the private sector in Georgia decreased by 13.8 percentage points, dropping to 36.3 index points (from 50.1 points in Q4). Business performance over the past three months decreased, reaching nearly 24.4 points (down from 28.0), indicating a downturn in production/turnover/sales. The combination 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 the construction (-0.1), retail trade (-11.5), service (-24.0) and agriculture (-5.4) sectors. The manufacturing and financial sectors improved by 38.6 and 26.1 points respectively. Business confidence in the first quarter of 2019 decreased for both large firms (-9.0) and for SMEs (-0.4).

Past performance. Businesses’ actual performance decreased by -3.6 compared to Q4 of 2018. In the Q1 2019 reporting period, sales (production or turnover) of the 160 firms surveyed decreased from 28.0 (Q4 2018) to 24.4 (Q1 2019).

A significant decrease in performance was observed in the service (-17.8), retail trade (-14.9), agriculture (-13.3) and construction (-4.0) 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: manufacturing (+43.3) and financial (+34.4) sectors.

EXPECTATIONS. The Expectations Index decreased by 13.8 index points in Q1 2019. Expectations about the next three months improved only for the financial (+47.8) and construction (+25.4) sectors. The remaining sectors expect a worsening of the situation. The greatest decreases were reported in the agriculture and retail trade sectors.

The majority (58%) of surveyed businesses do not expect any changes in employment over the next three months.

Furthermore, 29% of firms stated that they would employ more employees in the future.

49% of the surveyed firms expected

that the economic condition of their businesses would improve over the next three months, and 38% did not expect any changes in the future, while a lower share of businesses expect their business conditions to worsen.

SALES PRICE EXPECTATIONS. The Sales Price Expectations Index decreased from 17.5 points (Q4 2018) to 12.8 points (Q1 2019). The reduction in the index is mostly driven by a decrease in the retail trade and service sectors.

The manufacturing, construction, and agriculture sectors expect a noticeable increase in prices over the next three months.

The majority (71%) of all surveyed firms are not going to change the prices they charge over the next three months.

Only 7% of firms expect to decrease prices, and 22% expect to increase prices

in the future.

The low level of consumption activities and lack of access to financing continue to be two of the most significant obstacles for businesses. 27.3% of largesized firms and 46.4% of SMEs noted that lack of demand was their main obstacle. Meanwhile, 18.2% of large firms and 39.3% of SMEs chose access to finance

as the main limiting factor for further business development.

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, to some extent, more likely to have a negative outlook.

BUSINESS

GEORGIA TODAY FEBRUARY 19 - 21, 2019

President of Ladurée on the New Tbilisi Opening & the Best Parisian Macarons

EXCLUSIVE INTERVIEW BY KETEVAN KVARATSKHELIYA

O

ne of the most luxurious and historical French bakeries, Ladurée, entered the Georgian market and welcomed its first guests in February 2019 at 21a Abashidze Street in Tbi-

lisi.

The history of Ladurée began in 1862, when Louis Ernest Ladurée from southwest France opened a bakery in Paris at 16 Rue Royale. Today, it is famous for its incredible assortment of pastries and delicious macarons.

The brand is present in the largest cities around the globe, including London, Milan and Tokyo.

The Ladurée team aims to recreate the Parisian air in every branch of the bakery wherever it is in the world. And now, Georgian customers are also being given an opportunity to taste a selection of unique seasonal classic flavors of macarons and other sweets, and to spend a pleasant time in an authentic, super fascinating French atmosphere.

David Holder, the President of Ladurée, traveled to Georgia to check on the Tbilisi branch of the famous brand. GEORGIA TODAY grabbed the chance to meet him for an interview.

WHY DID YOU DECIDE TO LAUNCH LADURÉE ON THE GEORGIAN MARKET? It was important for us to find the right people to launch Ladurée in Georgia. I had a chance to meet Anton, who is now my Georgian brother. It’s all about that. You find the right people that understand the culture of Ladurée, love Ladurée, understand French and who want to take this culture to his/her country. Anton wanted to have Ladurée in his country and we accepted his initiative because we understood what he was doing, and we were confident in him. Ladurée is like my baby, I really do care and I need to feel the authentic atmosphere of Ladurée, whether it is in Georgia or any other country. I need to make sure that all the branches of Ladurée are the same worldwide, creating a Parisian air and giving customers freedom to imagine. It is important that the ambassador of the brand understands our requirements in detail, including the décor, products and type of service. Anton did it. This is the way I started the adventure here.

DO YOU PLAN TO OFFER THE FULL ASSORTMENT OF YOUR WONDERFUL MACARONS TO THE GEORGIAN CUSTOMERS? You can feel like you are in Paris here: every flavor is presented at Ladurée Tbilisi.

GEORGIA IS CERTAINLY ECLECTIC IN TERMS OF CUISINE. ARE YOU GOING TO PRESENT ONLY CLASSIC MACARONS TO GEORGIAN CLIENTELE, OR DO YOU HAVE ANY PLANS REGARDING LAUNCHING A BRAND NEW, SPECIAL FLAVOR FOR THEM? Well, this is an area we have been working on. What I want is for customers to get the best of Ladurée, including macarons, as well as other products, even including the club sandwich. If we think there is something that has to be more adapted to the country in terms of aromas or tastes, I am very openminded and sure that some shifts can take place.

It is even interesting to work with local partners and chefs to see what could be done, maybe to launch a partnership with someone who is wellknown as a blogger or as a local chef and make a twist with Ladurée. This is something we did in Japan and some countries of the Middle East. With such an approach, you can discover the local culture through the Ladurée taste.

ARE YOU GOING TO SHARE YOUR MACARON RECIPES WITH GEORGIAN CHEFS? I am a very secret man, so I cannot share my recipes with anyone. We bake all the pastry locally, but the macarons are made only in one place in the world and then exported to all the countries.

YOU HAVE ALREADY SAID THAT LADURÉE IS YOUR ‘BABY’. PLEASE EXPAND MORE ON THE IMPORTANCE OF THE COMPANY FOR YOU. When I started working at Ladurée and took the business on from the Ladurée family, there was only one shop. When I say it is my baby, I mean am very attached to my brand: everything that happens at Ladurée comes from my soul. I say this is the best pastry in Paris and the high quality is of paramount importance for me. Ladurée was the first tea house to create a macaron. Therefore, we are very proud of having the ‘DNA of Excellence’.

I love Ladurée, and every new country is a new challenge.

DO YOU HAVE ANY SPECIFIC EXPECTATIONS FROM THE GEORGIAN CLIENTELE? Well, I have to first discover them. Of course, I do expect them to enjoy and take pleasure in Ladurée products and from the time they spend here. We come here and do our best to please. I hope people will love it.

HOW DID YOU START A BUSINESS WITH ONE SHOP AND MAKE IT GLOBAL WHILE MAINTAINING YOUR TOP POSITION DESPITE THE COMPETITION? I achieved success thanks to my dream team. I love travelling and could not just stay in Paris. And when you have a dream to become globally recognized and you want to expand your business, you certainly need to have a strong and devoted team, a team that shares your dreams. The only way to maintain the leading position is to create a team like an army.

IN AN INTERVIEW, YOU MENTIONED THAT LADURÉE HAS INFLUENCED FASHION AND THAT WHILE FILMING ‘MARIE ANTOINETTE’, SOFIA COPPOLA COLLABORATED WITH LADURÉE. COULD YOU TELL US MORE ABOUT THAT? It was a nice experience. It is the beauty of life that sometimes it presents you wonderful opportunities. Sofia Coppola came to Ladurée and said she was preparing to make the film ‘Marie Antoinette’, which would be very French and she, as an American, needed the help of the French people.

She also said she loved Ladurée, with its history, all the colors and flavors. And she asked us to become her partner. Sofia said: “I do not have enough legitimacy to make a film about Marie Antoinette. So, be my partner”. There is an inspiration from Ladurée throughout the entire film.

All the sweets and pastry presented in the film were created at Ladurée. That was very important, because those people who now watch the film think of our brand.

WHAT ARE YOUR FUTURE PLANS? I aspire to expand our company and make it even more popular around the globe. I also want to launch Ladurée on the markets of more Asian countries. In Paris, we see that there are a lot of customers from Asia who love sweets and especially macarons. However, we explore the markets and the requirements of the clientele in depth before presenting our brand. Of course, I wish to be very successful in the USA and Asia. In fact, every new country is an adventure and there truly are no limits.

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BUSINESS

GEORGIA TODAY

FEBRUARY 19 - 21, 2019

West Georgia Regional Business Forum Held in Kutaisi

BY SAMANTHA GUTHRIE

C

entralization is an ongoing challenge to Georgia’s economic growth and prosperity, and a variety of initiatives aimed at decentralizing the country’s economic, political, and social activity have been proposed and implemented. The West Georgia Regional Business Forum is one such initiative.

Minister of Economy and Sustainable Development of Georgia, George Kobulia, opened the forum’s inaugural year on Friday, February 15. The forum was hosted by the Georgian Chamber of Commerce and Industry (GCCI) at its regional office in Kutaisi – an office which also houses the local DCFTA (Deep and Comprehensive Free Trade Agreement between Georgia and the European Union) information center.

Representatives from more than 200 small and medium-sized enterprises (SMEs) operating in western Georgia attended the forum. Also in attendance were the Head of the Cooperation Section of the EU Delegation to Georgia, Vincent Rey, Deputy Minister of Economy and Sustainable Development, Genadi Arveladze, Project Manager Knut Berger, and the President of the

Image source: Ministry of Economy and Sustainable Development

GCCI, Nino Chikovani.

The forum gave attendees the opportunity to speak with Kobulia about challenges and specific issues affecting entrepreneurs in western Georgia. There were presentations and discussions on the implementation of the DCFTA and the challenges implementors face, and programs that support SMEs to adapt to and benefit from the DCFTA. Chikovani welcomed the audience, saying, “We are delighted to host you in

this renovated premises. It is our desire to see this office become a place where entrepreneurs from western Georgia meet. Thanks to the support and efforts of our international partners, all means are in place for the SMEs to receive most needed consultation services, attend trainings and be provided with a space for business meetings. These renovated premises will play a great role in terms of providing a venue for raising awareness in the regions about the government

services and the services provided in the area of on-the-job training.” The office’s recent renovation was funded by the EU and German governments.

In his speech, Kobulia discussed ongoing economic reforms and initiatives, Georgia’s DCFTA progress, and prospects for small and medium-sized business development. He also explained the details of state programs aimed at export promotion, including Produce in Georgia, credit-guarantee mechanisms

and vocational training, emphasizing vocational institutions in Georgia’s regions.

“One of the major obstacles to economic development in our country is the lack of a qualified workforce. This does not apply to higher education – we’re talking about the development of vocational careers. We should assist people willing to work in finding suitable jobs by giving them the opportunity to get a technical and professional education,” Kobulia explained.

He also described a new governmentled job retraining program that will soon come into force in the regions, “including the Imereti Region, and I encourage everyone to share information about this program as much as possible. We want to attract people, give them professional education and help them find a proper job. In order to achieve one of the most important goals of creating new jobs, we need to have qualified workers and the government undertakes the responsibility of generating these qualifications in our country” said Kobulia.

The forum was jointly funded by the EU and the German International Cooperation Society (GIZ) project “Small and Medium Entrepreneurship Development and the DCFTA in Georgia” and the Munich and Upper Bavaria Chamber of Commerce and Industry Academy (IHK).

NGOs Question TBC Bank Investigation

BY THEA MORRISON

A

number of Georgian nongovernmental organizations (NGOs) have released a statement which reads that the investigation of one of the transactions carried out by the largest bank in the country, TBC, 10 years ago, raises some questions.

“The investigation launched by the Prosecutor’s Office against Mamuka Khazaradze and Badri Japaridze, the founders of TBC Bank, on a case of alleged money laundering and other crimes said to have been committed 10 years ago, and the disinformation campaign allegedly orchestrated by ruling party-backed social network pages, creates the logical assumption that the investigation could be biased,” the NGOs say.

The organizations added that concerns increased after the National Bank of Georgia (NBG) insisted the shareholders of TBC Bank dismiss Chairperson Mamuka Khazaradze and Deputy Chair-

After [the NBG move], TBC Bank’s stocks dropped by 6.6%

person Badri Japaridze from the TBC Supervisory Board.

“This request is strange when the abovementioned investigation is still ongoing and the founders of TBC Bank have not been proven guilty. After publication of the mentioned letter of the National Bank of Georgia, the prices of TBC Bank’s stocks, which are listed on the London Stock Exchange, dropped by 6.6%,” the statement reads.

The third sector alleges that the abovementioned processes may be motivated by business or political interests.

“In both cases, the main concern is over the building of Anaklia Deep Sea Port by TBC Holding. This project has both economic and political value for Georgia. This is the largest and most important project that is being developed by this business group,” they added.

The NGOs expressed hope that the investigation will not hamper the work of TBC Bank or the Anaklia Development Consortium.

“Moreover, the orchestrated attacks by the government and their affiliate disinformation social network pages should be immediately stopped in order to avoid damaging state interests, hampering the development of the port of high economic and political importance and the work of one of the leading Georgian banks. So many unanswered questions cast doubt on the impartiality of justice in Georgia,” the non-governmental sector wrote.

They also added that Mamuka Khazaradze linked the ongoing investigation against him to the issue of Anaklia Port.

On 14 February, he wrote the following in a Facebook post: “Another issue that raises questions is that such a hasty

Image source: bfm.ge

decision and ongoing disinformation campaign against us are being made during a period when we are very close to the successful implementation of Anaklia Port – a very important project for our country,” he wrote.

Georgian Prime Minister Mamuka Bakhtadze noted that the National Bank had made a decision as a regulator and if anyone has a complaint about the issue, they should provide arguments.

“TBC Bank is a strong, systemic bank and one of the leading financial institutions not only for the financial sector but for our national economy in general.

Therefore, I would like to once again call on everyone to stop political speculation. This has nothing to do with politics,” the PM said.

Georgia’s Minister of Economy and Sustainable Development, Giorgi Kobulia, says the recent issue about TBC Bank represents a “great legal component,” adding the case is currently a priority for law enforcement bodies.

Moreover, TBC Bank’s Press Office told media that TBC Bank has filed a lawsuit against the NBG for suspending the rights of its founders.

"TBC Bank disagrees with the National Bank's position that the Bank violated

the law regulating the conflict of interests in 2007-2008,” the statement reads.

Several days ago, the NBG explained the reasons for suspending the authority of Khazaradze and Japaridze. The statement reads that that after examining transactions conducted by TBC Bank 2007-2008, it was revealed that the company founders violated the requirements of the legislation regulating conflict of interests.

The National Bank emphasizes that the supervisory decision and measures of the NBG are not directed against TBC Bank and this “will further improve the quality of the bank's corporate management, which ensures further development of TBC Bank and will make it more attractive for investors.”

On January 9, the Prosecutor’s Office of Georgia (POG) launched the investigation into an operation carried out

by TBC Bank in 2008. The POG claims that in April-May 2008, companies Samgori M and Samgori Trade took loans to the amount of $17 million from TBC Bank. On the same day, a loan was issued to individuals Badri Japaridze and Mamuka Khazaradze. The agency claims that none of the companies paid back the loans and later they [compa-

This has nothing to do with politics" - PM Bakhtadze nies] were replaced by an offshore company but the loan was not paid back to the bank.

TBC rejects the accusations and pledges to defend the legal right of the bank and its shareholders in local and international institutions.

"The allegations that have been voiced against TBC are serious. It is necessary to clear them, and we cannot claim this is political process. I do not have the impression that this particular case is pressure on business, because here there are quite serious allegations that have factual evidence behind them. Therefore, in this matter, the competent authorities should clarify everything,” the Minister said.

BUSINESS

GEORGIA TODAY FEBRUARY 19 - 21, 2019

7

The Economist Tells Europe to Pay Attention to Georgia's New Port Potential

I

n an article published last week and titled 'Shrinking the Black Sea', The Economist online says "A new mega-port may force western Europeans to think differently about Georgia".

"Black sand has been dredged from the seabed to create an eight-meter high, 80-hectare plateau to drain water from the boggy ground into 2,500km of pipes" - The Economist reports. "These are the first steps in the construction of a new deep-water container port. To stand here and look in different directions is to grasp its significance. North along the coast: Abkhazia, a Russian-backed breakaway state, then Russia, then battlescarred Ukraine. Straight ahead: the Black Sea and, over the horizon, the EU." "Georgia is blessed and cursed by its geography," Georgian President Salome Zurabishvili is reported as saying. "Blessed because the country is a lush intersection on the silk roads between Europe and Asia. Cursed because it is hemmed in by mighty empires with a penchant for invading: Persians, Turks and Arabs from the south, Mongols and Russians from the north. Moscow ruled Georgia for most of the 19th and 20th centuries, and invaded briefly in 2008". It still has control over Abkhazia and South Ossetia, another breakaway, The Economist notes, and last year warned of a “terrible conflict” should Georgia try to join NATO.

Georgians, however, want to join not just NATO but the EU too. “We consider ourselves European, perhaps even more so than the Europeans,” the President jokes.

The Economist explains that the first phase of construction at Anaklia Port is set for completion in 2021 and consists of “two container berths and one for bulk goods like fertiliser, plus EU-funded road and rail links”.

“Financed by a consortium of Georgian, European and American investors, as well as the Chinese-backed Asian Infrastructure Investment Bank, it will have an annual capacity of 1mln TEU, about twice that of all of Georgia’s existing ports combined (one TEU is equivalent to one regular container),” The Economist article notes, highlighting the longterm plan to expand that to 5m TEU within four decades, making Anaklia the largest port on the Black Sea. “Currently, goods are loaded onto small vessels and taken to Istanbul, where they are transferred to larger ships from other Black Sea ports for the onward journey through the Mediterranean. Anaklia will enable such vessels to sail directly from Georgia, drastically increasing trade on the route,” the article reads, noting that the investors claim Anaklia Port will “make the country more relevant to the West, increase interaction across the sea and raise the diplomatic costs of future

Russian interventions”.

“Running a project of such ambition in a volatile region has not been simple,” The Economist states. “Construction at Anaklia was meant to begin in 2016, but wobbles over financing and a change of government slowed things down. Russian journalists have suggested that the port might be a covert NATO naval base.

And now TBC Bank, a big backer, is under investigation over allegations of

money laundering (TBC denies these).

Consortium insiders hint at sabotage attempts but point out that it has now raised the $600m needed for construction and that work is underway”.

“The legacy of the Soviet Union is gradually leaving the region, along with the influence of Russia,” The Economist writes, quoting Thomas de Waal of Carnegie Europe. This means, The Economist claims, that “Europeans might have

to get used to the idea that the country is not merely part of Russia’s neighborhood. Blessed and cursed by its geography Georgia may be. But it does not have to be a prisoner of it.”

For the full article, go here: https://www. economist.com/europe/2019/02/16/ shrinking-the-black-sea?fbclid=IwAR012fuAT roJ5U2rliVQSmdBE2bQrfsPx4Sva6TEqhyCeuvPLiSPIdApoKY

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BUSINESS

GEORGIA TODAY

FEBRUARY 19 - 21, 2019

A Portrait of a Tushetian Farmer as an Entrepreneur

BY ERIC LIVNY AND RATI KOCHLAMAZASHVILI

W

e met Gogi Elanidze when interviewing farmers in Rati’s village, Kvemo Alvani.

Located in Akhmeta municipality, Kvemo Alvani and its twin, Zemo Alvani, are not your usual Kakhetian villages. The two serve as the winter base for the people of Tusheti, an isolated valley separated from Kakheti by the 3000m high Abano mountain pass.

Gogi Elanidze was born into an aboveaverage Tushi family. His father, Daniel Elanidze, resigned from his job as director of the Telavi Cheese Factory in 1988 in order to establish, together with his sons, one of Georgia’s first commercial farms (these were early Perestroika days, and the family farm had to be disguised as a ‘cooperative’). This was a risky and difficult endeavor, but with Soviet rubles in plentiful supply, and consumer goods sold exclusively under the counter, the family’s pig farm turned into a lucrative business, allowing them to quickly complete all major construction works and acquire farm land and machinery from the local sovkhoz.

Everything was fine until it wasn't.

Daniel Elanidze died, heartbroken, in 1994. Only 59 at his death, Daniel could not see his business fall prey to extortion by greedy mafia gangs in the chaos and lawlessness of Georgia’s early years as an independent state.

During the next 12 years, in a desperate effort to fend for his family, Gogi tried out every possible occupation, moving from job to job and from country to country, in the best of Tushi shepherd traditions.

In 1994-5, Gogi drove a bus on the Geor-

Getting settled. Kvemo Alvani’s rectangular shape and straight parallel streets betray a fairly recent, Soviet origin. Indeed, until well into the 20th century, the Tushi community’s center of life remained high up in the mountains. The lands granted to them by Kakhetian kings in the Alazani Valley have traditionally been used by the Tushi shepherds to park their sheep during the cold winter months, but the first permanent buildings appeared here only in 1920s. Kvemo and Zemo Alvani settlements acquired their central status as late as in 1950s, after the Tushi people had been forcefully resettled from their ancestral villages by the Soviet planners.

Traditions die hard but may take a peculiar twist. Unlike their laid back Kakhetian neighbors, the Tushi people are always on the move: to the next pasture, and to the next objective in life. Having settled in the lowlands and no longer able to wander after their herds, the Tushi came to appreciate the value of education as a means of moving up in the social landscape.

As they joke about themselves, a Tushi is either a shepherd or an academician.

gia-Turkey line, but, having had his passengers robbed by the Mkhedrioni thugs, decided to get a much safer tax inspector job in Akhmeta (working for the state is not my thing, he knows to say today). He continued his Odyssey growing watermelons and tomatoes in south Russia, and then sailing a fishing vessel in Poti.

In 2005, Gogi finally hit a jackpot, landing a risky but well-paid job as a truck driver carrying supplies for the American military in Iraq. In one year, he managed to put aside more than 10,000 USD – paid directly into his bank account in Telavi – enough to invest in a small factory producing plastic doors and windows.

Gogi’s ability to win municipal contracts for the refurbishment of local schools and public buildings in Kakheti gave him a stable source of income for the next seven years. It also provided him with the financial slack to start thinking about going back to his agricultural roots and what was left of his father’s farm.

The first thing he tried, in 2009, was beekeeping. Honey was good business, but, perhaps more importantly for Gogi’s Tushi soul, it gave him the opportunity to go back to Mother Nature, and the traditional way of shepherding life. Just as his ancestors had migrated with their sheep between Tusheti, Shiraki and Alvani, Gogi would load his beehives (about 120 at peak) on a truck and take them on a two-month tour of Kakheti: from the acacia groves of Lagodekhi in

early April, to the lush wildflower meadows of Shiraki and the linden forests around Kvareli in late May (needless to say, Gogi’s honey is really worth trying).

Two years later, in 2011, Gogi ventured into horticulture, planting 600 persimmon trees next to his father’s farm. With a drip irrigation system added in 2015, he expects his persimmon harvest to reach 18-20 tons in just a couple of years, once trees grow to full size. This would make for a full truckload, he explains, making it easy to sell to Ukrainian buyers whose trucks circle Kakheti around harvest time, loaded with packaging materials, pallets and all.

OK GOOGLE, HOW DO I START A GOAT MILK FARM? In 2013, as his plastic windows business started winding down, Gogi hit upon a new idea: a goat milk farm. He’d read about the health benefits of organic goat milk. He’d heard of French goat cheeses. He was familiar with the myth that goats would eat almost anything from apples to bark to unsold Xmas trees and brooms. But how on Earth does one get started? Since goats and goat milk were anything but common in Alvani’s sheep breeding community, there was little chance of getting expert advice or learning from the experience of others.

Luckily, Gogi had a computer connected to the World Wide Web, and so he was able to teach himself. When we met one Saturday morning on his father’s

farm, Gogi was using the drawings he’d found online to refit the old pig house to accommodate the goats he’d just bought on the local market. By then he knew that local goats are a lowly bunch, producing about 0.5-1 liter of milk per day as compared to 4-6 liters by the elite Swiss breeds. The simplest solution was to import male goats from Switzerland in order to improve the local breed, a process that would take 3-5 years.

Yet, transporting a small number of Swiss goats turned out to be a financial impossibility. After an extensive search, Gogi found another goat milk enthusiast in Natakhtari with whom he could join forces to save on delivery costs. A deal was struck, and in May 2015, five Saanen billy goats proudly stepped on the red carpet rolled out for them in Kvemo Alvani.

A year later, 29 of Gogi’s nanny goats (the best he could find) gave birth to 39 kids. While the little snow-white babies are strikingly similar to their aristocratic fathers, Gogi knew it would take a couple of additional generations and at least three more years for his goats to get to the original Swiss level of productivity.

Since Xmas trees and brooms are not an ideal long-term source of animal feed, Gogi invested another $8,700 in a China-made hydroponic feed production plant. Incidentally, he was hoping to have at least a part of his investment financed by the Georgian government’s “Invest in Georgia” program, for which

he applied, but could not afford to wait for months for the review process to be completed. His goats had to be fed.

As Gogi explains, hydroponics is an excellent solution for Georgian smallholders who are short on pasture land.

His plant consists of five compartments, equal to the number of days it takes for barley seeds to grow to optimal size in a nutrient mineral solution. Each day, Gogi plants one compartment with about 30-40kg of barley. Five days later he is able to harvest up to 150kg of 100% organic green fodder, which is more than sufficient for his current needs.

Gogi’s pace is truly breathtaking. A partnership is already in the making between him and other goat farmers (yes, Gogi is no longer alone!) on joint cheese production, goat-meat farming and genetic improvement of their herds.

Finally, he is in talks with Jean Jacques, a mythological Frenchman who settled in the nearby Argokhi village, on the possibility of learning French cheese recipes and marketing cheese, wine and other delicacies through Jean Jacques’ Tbilisi shop and expat networks.

Very importantly for Gogi, his entrepreneurial successes may be reason enough for his son Levan (25), a civil engineer by education, to join the family business and continue in his father’s footsteps. His daughter, Salome, has just graduated from the Tbilisi Arts Academy. A talented artist, Salome is not very likely to go into farming. Well, nobody is perfect.

BUSINESS

GEORGIA TODAY FEBRUARY 19 - 21, 2019

9

Introduction of Qualified Electronic Signature & Qualified Trust Service Providers in Georgia

F

rom 1 January 2019, companies and organizations that are engaged in business deals with administrative bodies of Georgia are obliged to conduct affairs via electronic documents signed by qualified electronic signature or qualified electronic stamp through electronic means of communication. As of now, this rule applies to public procurements.

In general, the qualified electronic signature has the following advantages: (i) an ability to uniquely identify and link its signatory to the electronic signature; (ii) allows the signatory to have sole control of the keys used to create the electronic signature; (iii) identifies if the data has been tampered with after its accompanying message has been signed; and (iv) invalidates the signature if signed data has been altered in any manner.

The aim of establishment and development of qualified electronic signature and stamp is to ensure high standard of document protection. In particular, based on the amendments made to the laws of Georgia, qualified electronic signatures and stamps increase the degree of trust and protection of the respective documents. Moreover, the users will be able to save time and distance and execute or sign any document and agreement from any location.

Development of the electronic signature significantly reduces the use of paper and increases protection. One of the advantages of the electronic document is the fact that it is impossible to forge such a document and they are protected

Image source: covermagazine.co.uk

from any kind of manipulation.

By using electronic documents, users as well as governmental entities are able to reduce the administrative costs.

Another impact of electronic documents is increased environmental protection.

PROCEDURE In order to create an electronic stamp, structural units of LEPL Public Service Development Agency (“SDA”) and Public Service Halls issue specially designated cards.

As regards to activating a qualified electronic signature, such signing method can only be used by citizens holding ID cards of Georgia (including Georgian residence card). The qualified electronic

signature requires a citizen to have the PIN code of the ID card. This PIN code can be obtained in Public Service Halls or structural units of the SDA. When a citizen of another state holding Georgian residence card got their card more than 2.5 years ago, they will need to renew that residence card to get a PIN. By establishing the electronic signature system in Georgia, the country will most likely improve its position in world rankings of electronic governance (e.g. in the survey of electronic governance of 2016, Georgia ranked 61 out of 193 countries).

Moreover, this will bring more recognition to Georgia as having technologyfriendly services. It is likely that the latter will attract more investments in Georgia, a guarantee for the stimulation

of the economic development of the country.

QUALIFIED TRUST SERVICE PROVIDERS Qualified trust service providers are persons and/or entities that provide and preserve digital software to create and validate electronic signatures and to authenticate their signatories. The qualified trust service providers have the responsibility to assure the integrity of electronic identification for signatories and services through a strong mechanism for the authentication of electronic signatures. In many countries, the qualified trust service providers are private commercial entities who sell the relevant software to the companies wishing to

operate their business via qualified electronic signatures and stamps.

Before 1 July 2018, SDA was the sole body entitled to serve as a qualified trust service provider in Georgia, carrying out such services via www.sda.gov.ge, which entitles the users to exchange electronic documents online. Therefore, authority to provide qualified trust services was vested in the government authorities of Georgia. However, as of 1 July 2018, pursuant to the Law of Georgia on Electronic Documents and Electronic Trust Services, a physical or legal person that wishes to become a provider of qualified trust service must undergo an authorization process at LEPL Data Exchange Agency of Ministry of Justice of Georgia. Such person/company must meet the technical standards in order to become a trust service provider. Such requirements, along with technical and technological specifications, encompass strong financial standing and obtainment of civil liabilities insurance to the amount of at least GEL 500,000. Authorization of qualified trust service providers is issued for two years.

MG Law Office, through the contribution of partners Archil Giorgadze and Nicola Mariani, joined by senior associates Irakli Sokolovski, Ana Kochiashvili, Tamar Jikia and associates Ana Chikovani, Elene Samadbegishvili, and Mariam Kalandadze is partnering with Georgia Today on a regular section of the paper which will provide updated information regarding significant legal changes and developments in Georgia. In particular, we highlight significant issues which may impact businesses operating in Georgia.

The Importance of the Anaklia Deep Sea Port to Georgia’s Future OP-ED BY EMIL AVDALIANI

I

n the previous issues of GEORGIA TODAY, I argued that the expansion of Georgia' Black Sea ports is of crucial importance for the whole region. It also marks an interesting development where Georgia, for the first time in many centuries, has a real opportunity to transform at least into a regional hub.

Never before has Georgia's geopolitical position been so attractive for large businesses, transcontinental trade, and more. Though it is fashionable to say that the country always was a part of the famous "Silk Road" stretching from China to various parts of the Middle East and Europe, Georgia rarely featured there in antiquity or medieval periods. If the country did, it was only for shorter period of times.

Furthermore, in the last two centuries, the Russians essentially blocked all international routes they deemed harmful to their own interests. Georgia was thus always subject to whims of its larger neighbors.

This is not to deny that the Georgian monarchy in the Medieval period or various Georgian principalities after the dissolution of the country in 1490 did not participate in regional trade. They did. Just that level of this involvement was not great enough.

Even under the Russians, when in the 1870s Baku was being transformed into a regional hub through development of the oil field, the Georgian territory was transformed into a transit land with Batumi serving as an export/import port.

Still, however, all of this was very much subject to the Russian interests and could easily be changed, to Georgia's detriment.

Thus, it could be argued that for the first time in several centuries, Georgia’s current geopolitical circumstances and those of global powers such as China, US and the EU converge on the significance of the Georgian Black Sea ports as a transit post for Chinese goods to Europe and vice versa.

True, there is plenty of work to be done in and around Anaklia to cement this nascent transit advantage of Georgia on the global map. But success has already been achieved and the Georgian govern-

Image source: emerging-europe.com

ments will always be interested in further development of Anaklia, Poti and Batumi.

This interest comes out of Georgia's current geopolitical circumstances where Russian pressure from the north propels Tbilisi to seek ways to counter-balance

Moscow. In that sense, the success of the Anaklia-Poti-Batumi line is directly linked to how strongly Georgia's position would be defended internationally.

We, Georgians, have been fighting for independence and its preservation for

decades, but a real possibility to be important enough for the outer world to defend us lies in our ability to be a hub for transcontinental trade which has been developing across the Eurasian continent for the last decade. China’s Belt and Road Initiative, European Union’s enlargement around the Black Sea – these create favorable conditions for Tbilisi.

Thus, the interest Europeans, Americans and the Chinese have shown so far through investments in Georgia's Black Sea shore is indeed very promising. It is this foreign financial involvement that could actually transform Georgia's international position, where every neighbor (including the Russians) will have to preserve peace for international trade routes to operate smoothly.

Seen from this regional and international context, Anaklia will continue to be a focus of this and next Georgian governments. There are simply too many foreign actors involved, making it extremely difficult to undermine the project. Nowadays, development of Georgia's Black Sea ports equals the enhancement of the country's international position.

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BUSINESS

GEORGIA TODAY

FEBRUARY 19 - 21, 2019

What is the Secret behind the Durability of the HUAWEI Mate20 Battery?

C

ompared to other brands, HUAWEI smartphones’ superiority is proven through its high-quality products, modern design and the ideal combination of technical data and affordability. HUAWEI creates smartphones tailored to customers, taking into consideration their requirements, lifestyles and interests.

The company has offered a lot of innovations in recent years, including one of the most important – energy efficiency in smartphones. HUAWEI’s main secret lies in its battery durability. The principle is the same: it is created so that it can withstand time and frequency of consumption.

With the fast pace of life today, people need smartphones constantly, for sending messages, emails, checking social media, watching and downloading vid-

recognition for improving photo and video capture. Expert Reviews is an authoritative, technological edition that allows customers to choose the best product at the time of purchase. Expert Reviews attracts seven million unique visitors each month.

T3 awarded HUAWEI with an Innovative Award for creating the Kirin 980.

"As a result of technological development, we have adopted faster phones with enhanced batteries and improved user experience. T3 introduces the latest tools and technological innovations, reviews and characteristics of smartphones, laptops audio, gaming, fitness and etc to the customers” - the edition reports. T3 attracts seven million unique visitors each month.

eos, playing games, and more. Consumers want to know they will not need to recharge their smartphone several times a day and won’t have to wait long to get back to what they were doing. The HUAWEI Mate20 series is designed exactly for people with such an active lifestyle.

IMPROVED PERFORMANCE QUALITY, SPEED AND ENERGY EFFICIENCY The world's most powerful nano-processor, the Kirin 980, has a capacity that exceeds its predecessor by 70%. Compared to the 10nm processor, the 7 nm processor brings 20% more efficiency and consumes 40% less energy. The Kirin 980 is the first processor into which a Cortex-A76-based CPU is embedded, which is 75% stronger and 58% more efficient than the previous generation.

Considering that mobile games are

becoming ever more sophisticated, HUAWEI has also integrated a Mali-G76 GPU in the Kirin 980.

In a word, the Kirin 980 is the first chipset that combines the CortexA76-based CPU, Mali-G76 GPU and Dual NPU, which helps HUAWEI Mate20 series smartphones in quick and rectified operations with a more durable battery. The Cortex-A76-based CPU has improved the performance quality and speed by 57% and energy efficiency by 58% compared to its predecessor, the Kirin 970. According to HUAWEI laboratory research, the Mali-G76 GPU is 178% more efficient compared to the Kirin 970.

KIRIN 980'S POSSIBILITIES ARE RECOGNIZED AS BEST BY INTERNATIONAL MEDIA PUBLICATIONS 2018 was especially successful for HUAWEI as it was distinguished for its innovative equipment, as well as a number of awards. The company participated in innovative technology exhibitions where multiple companies in the field of tele-

communications were presented with their own products. International media publications recognized HUAWEI products as the best. In total, HUAWEI earned 13 awards, seven of them received by the Kirin 980 chipset for high level function and energy efficiency.

Android Authority awarded the Kirin 980 with best rank IFA 2018. The new chipset was praised for its impressive performance and energy efficiency.

Android Authority is a global edition dedicated to the world's most popular operating systems. It has over 50 million readers a month.

Digital Trends awarded the Kirin 980 the "Editor's Choice" and granted the best dignity- IFA 2018. "The Kirin 980 is significantly improved after the impressive Kirin 970 and is fast enough to slow down time," the edition reports. Digital Trends is an important source of technology innovation and product reviews and has over 25 million readers per month.

Expert Reviews also emphasized the Kirin 980’s unique features and awarded it the best of IFA 2018 for being the world's first 7 nm chip to have gained

THE POSSIBILITIES OF A VIBRANT BATTERY The HUAWEI Mate20 has 4000mAh and HUAWEI Mate20 Pro a 4200mAh battery. These massive batteries are almost impossible to kill during the day, even with frequent use. Smartphones should be able to follow the fast pace of their users. The HUAWEI Mate20 series smartphones are designed to satisfy any customer requirements. Their secret is right there in that fact.

HUAWEI products and services are available in more than 170 countries and are used by a third of the world's population. There are 16 research and development centers operating worldwide in the USA, Germany, Sweden, Russia, India and China. HUAWEI Consumer BG is one of HUAWEI's three business units, mainly focusing on Smartphones, personal computers, tablets and cloud services. HUAWEI Global Network is based on 20 years’ experience in the telecommunications business and serves to provide innovative technologies to customers around the world.

Tobacco Control Law Is “Going Well” in Georgia

BY MARIAM MERABISHVILI

T

en months have passed since the law on tobacco control came into force in Georgia. From September 1, 2018, a new regulation for tobacco control was put into operation.

And, according to lawmakers, things are going well and society has been ready

to meet the changes.

The implementation of the law was preceded by large-scale surveys. 89% of society wanted to launch the Tobacco Control Law. Prior to enacting the law, Vera da Costa e Silva, the Head of Secretariat of the Framework Convention on Tobacco Control, visited Georgia on February 28, 2018 to support the ongoing processes. With the government, She discussed the status of fulfillment of obligations under the Tobacco Control

Framework Convention.

“Before the entry into force of the regulations, we made preparations,” said Akaki Zoidze Chairman of the Healthcare and Social Issues Committee. “The recommendations of the ‘Assessment Mission of Enforcement needs of the Tobacco Control Framework Convention’ and ‘Study of Public attitudes towards a Tobacco Free Environment’ were particularly important”.

The main recommendations included:

increased taxes on tobacco, which has been in force with success since 2013, when the price of filter cigarettes increased by 180% and of cigarettes without filters by 300%; 100% ban on tobacco smoking in all sealed places; ban of tobacco advertising, promotion and sponsorship; introduction of licenses; and development of optimal mechanisms of enforcement.

In the study of public attitudes towards an environment free of tobacco smoke, economic calculations were made based on data of international and national surveys. It was found that direct healthcare, as well as indirect fluctuations (premature deaths, costs related to smoking at work), amounted to 824.9 million GEL, which is 2.43% of the country's annual GDP. With execution of the above law, in 15 years the country will have prevented 53,100 deaths in Georgia and reduced the total economic costs associated with tobacco by 3.6 billion GEL. “From May 1, a new law on tobacco control was launched, according to which Georgia became the leading country in the region. The deaths caused by tobacco are 22% in Georgia and 10% worldwide.

This is an alarming indicator. We must protect our citizens from tobacco smoke, especially children. It is empirically established that the enactment of such a law evidently reduces the harmful effects of tobacco. Studies show that the majority of citizens and businesses understood the law enforcement and were ready for it”, says Amiran Gamkrelidze, Head of the National Center for Disease Control and Public Health.

Following the enactment of the law, there have been several checks on the implementation of the Law on Tobacco

Control made at public and medical institutions. A group of legislative representatives visited several facilities without prior notice. The monitors checked the enclosed space, checked whether no smoking signs were displayed and talked to the personnel. They questioned security guards about how the enforcement of the law was going and where the smoking places were. In most of the inspected areas, violations were not observed; the signs of prohibition were not only in the building and yard but also displayed on the bins.

Law enforcement and informationrecommendation visits to various public institutions are important for legislators and monitoring is carried out throughout the country, in all cities and regions of Georgia.

"We parliamentarians are ready to become monitors and without prior notice, in the form of enforcement of the Tobacco Control Law, to monitor closed premises and public buildings for no smoking signs and any evidence that smoking has taken place”, Zoidze said.

On May 17, 2017, the Parliament of Georgia confirmed the amendments to the Law on Tobacco Control and on July 26 last year, adopted the new edition of the Law. The implementation of the law is progressing gradually.

Tobacco Control Law in Georgia was launched on May 1, 2018, under which smoking is prohibited in buildings, public transport, educational establishments, cafes and bars aside from some exceptions. It became mandatory to place the rules connected to prohibition / restriction of smoking tobacco at all entrances and other visible places of a building’s territory, the relevant inscription and the sign on the ban on tobacco smoking.

BUSINESS

GEORGIA TODAY FEBRUARY 19 - 21, 2019

Real Estate Exhibition-Sales Area Expo 2019 to Be Held in Sheraton Grand Tbilisi Metekhi Palace

BY MARIAM MERABISHVILI

F

or the second time, the real estate exhibition-sales of Area Expo will be held, this year at the Sheraton Grand Tbilisi Metekhi Palace on May 4-5. The Georgian developers participating in the event will offer special prices and terms to those interested in purchasing particular residential, office or commercial spaces.

Area Expo represents an annual exhibition-sale where the developers and financial institutions presented on the Georgian market gather in one space to provide access to diverse products and financial resources for people interested in acquiring real estate. The exhibition is also interesting for those who want to find information about the real estate market and study it. According to the organizer, Area Group, the Area Expo is a platform that creates a new standard of service delivery on the real estate market, because it gathers multiple complete, current or future projects by Georgian

developers, offers diversity of choice to customers and at the same time provides access to financial resources on the spot through banking sector representation.

Area Expo was first held at Expo Georgia last year, where up to 30 participating companies presented projects mainly in Tbilisi. Participant developers say that the exhibition provided them the opportunity to attract potential new customers, selling on the spot and collecting important information on consumer behavior.

Over 2000 visitors visited last year's exhibition.

This year, based on the existing experience, Area Group is expecting a significant increase in the number of participants and a large inflow of visitors.

Area Expo 2019 is officially supported by the Ministry of Economy and Sustainable Development which, through the National Agency of Property of Georgia provides on the spot investment opportunities within state ownership and Construction Company Arconi. Media support for the event is being provided by Radio Commersant, Georgia Today and Marketer.ge.

More on that Mandatory Vehicle Insurance

Image source: Economic Times

BY THEA MORRISON

I

nsurance for vehicles registered in Georgia will soon become mandatory, with the respective package of amendments being discussed by the Georgian parliament.

“The compulsory insurance of vehicles is among the leading obligatory insurance in international practice. Due to negligence, inattention, inadequate knowledge and improper maintenance of the means of transport by its drivers, the increase in road accidents leads to unforeseen consequences,” the explanatory note to the bill reads.

It also says that mandatory insurance creates material guarantees, on the one hand for the driver and on the other for the victim when an accident occurs.

The draft law determines the minimum and maximum amount of annual insurance according to the category of vehicle.

The cost of insurance per annum for different types of transport is to be as follows: • Motorcycle with an engine capacity over 50 cubic centimeters: GEL 75.00 to GEL110.00 • Cars with maximum permissible weight of 3,500

kg, and no more than eight seats (not including driver's seat): GEL 100.00 to GEL 150.00; • Buses with more than eight seats (not including driver's seat): GEL 210.00 to GEL 310.00 • Car trailers: GEL 50.00 to GEL 75.00 • Agricultural vehicles, self-propelled cars: GEL60.00 to 90.00 GEL. From 1 March, all vehicles which are registered abroad and enter Georgia for at least 15 days require a motor vehicle insurance policy.

A policy can be obtained at the border checkpoint.

The fee depends on the type of vehicle and duration needed. The document may be issued for 15, 30, 90 or 365 days.

The insurance covers both physical and material injuries inflicted to a victim of a road accident.

Heavy bodily injuries will be 100% covered, while less serious injuries will be covered either at a rate of 30% or 60%.

The insurance will not cover damages or injuries that result from non-standard conditions such as damage that results from the transportation of hazardous substances, damage caused by terrorist attacks, military operations and military maneuvers, as well as that inflicted during competitions, practicing or tests.

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BUSINESS

GEORGIA TODAY

FEBRUARY 19 - 21, 2019

Construction Company Spectrum – Quality & Innovation in One Space

BY ANA DUMBADZE

T

hese days, there are few construction companies that care for the ecology, maintaining the conditions offered by nature, and also offer international experience such as Spectrum does.

Founded in 2014, Spectrum creates architectural quality based on innovation and experience and offers full project and construction services– everything in one space, something that in itself significantly helps in saving time, energy and resources.

There are a lot of construction companies operating on the Georgian market, and Spectrum’s strategy in these highly competitive conditions is to maintain high quality and safety in its services and products. Further, the Company never implements a project if it isn’t related to innovation and energy efficiency.

The company’s rare “one-stop shop” service is also especially attractive for customers, giving customers the chance and comfort to get all the products and services they need in one space from the trustworthy and experienced specialists of the Spectrum team. When the full responsibility is taken by just one company, it is easier for the customer to control all the processes related to the construction.

A unique design approach is another of the distinctive characteristics of the Company.

Its design solutions are methodically and holistically created following a rigorous analysis of the local context. The employees of Spectrum strive to set new global standards by fostering a design approach which uniquely integrates urban planning, landscape, architecture and the design of specific building components.

Spectrum represents a fully integrated design-build organization what consoli-

dates world-class capabilities for a onestop shop that will able to deliver the highest quality projects. Spectrum’s offer is comfortable for customers who can benefit from a full range of products and services, from project management to implementation, reparation, design, construction process, interior and exterior details, and more. The international expertise contained within the Spectrum team is able to take a project from inception to turnkey completion.

The Company’s services include a systematic approach, operation methodology, project analytical management, and a unique design skillset- even down to

picking out the furniture and colors for your dream house.

The highly qualified Spectrum team is made up of local and foreign employees performing corporate and individual orders, including the construction of restaurants, hotels and apartments.

Additionally, Spectrum provides a oneyear guarantee, which means that if you find any defects related to the project, the Company is responsible to correct and improve them.

Safety is yet another main priority of the Spectrum team. The Company provides high quality, durable building materials, such as wood, concrete, etc., both

local and foreign, depending on the project’s needs.

Most importantly, Spectrum architects always try to maintain the existing environment to the maximum level and keep the pleasant natural conditions offered by a location.

Among the important projects recently implemented by the Company, the construction of the restaurant Qalaqi is most noteworthy due to its unique design and distinctive style. The beautiful, sophisticated interior was inspired by 19th-century Tbilisi architecture. The various dining areas- the yard, apartment, terrace, library, lounge, and bronze hall – all together cre-

ate an ideal space and each detail of its concept was created by Spectrum architects.

The entire concept of the façade of restaurant Qalaqi is connected to a 100-yearold pine tree growing in front of it, and to giving it a second life. While constructing the restaurant, the architects of Spectrum were well-aware of the need to protect trees in the city and so chose to incorporate it into the façade design of the restaurant. This move got positive feedback from grateful members of the Georgian public, as care for the ecology is crucial for the urban environment.

Today, that pine adds a green glow to the façade of restaurant Qalaqi and makes it even more beautiful. The above-mentioned project is considered one of the most popular and successful works done

by Spectrum.

Most houses built by Spectrum, such as cozy wooden cottages out of the city, are so integrated into nature that they seem like part of the environment.

Among Spectrum’s projects, the beautiful greenery of the facade of the famous Radisson Blu Iveria Hotel is noteworthy, as such an innovative and eco-friendly system is unique, and has no analog in the Georgian market.

Using innovative and modern products, such as artificial sky used as a roof for buildings, the ceilings decorated with wooden details, etc., is yet another distinctive characteristic of the Company.

At this stage, the Company has many ongoing projects, the successful implementation of which occupies first place among its future plans. Spectrum is oriented on constructing energy-efficient buildings that are designed to provide a significant reduction of the energy need for heating and cooling.

Expansion of the company and creating more workplaces is also planned for the near future, as in parallel with having more and more orders, adding to the team naturally also becomes also necessary.

14

SOCIETY

GEORGIA TODAY

FEBRUARY 19 - 21, 2019

Bakhtadze Promises New & Renovated Schools

BY SAMANTHA GUTHRIE

G

eorgian Prime Minister Mamuka Bakhtadze briefed his government on Wednesday, February 13. Among other topics, he announced a new project to build 28 new schools and renovate 83 existing schools across Georgia.

The 50 million GEL ($18.98 mln) project will be headed by the Municipal Development Fund, supported in part by a grant from the Eastern Europe Energy Efficiency and Environment Partnership (E5P) and in part by a loan from the Nordic Environment Finance Corporation (NEFCO) About the project, Bakhtadze said, “Education is my government’s key priority, which is why we have launched a substantial educational reform, with infrastructure as one of its important components. Unfortunately, we inherited a very difficult legacy in this regard.

Infrastructural problems in schools have been studied thoroughly, and priorities have been defined accordingly. We are working with donor organizations and friend-countries to attract more resources to deal with these problems.”

Public schools in Georgia’s regions,

Image source: Giorgi Cheishvili, Liberali

especially in small villages, are often small, cold, and damp. Many villages in Georgia are not connected to the national gas infrastructure, and using woodburning stoves in classrooms poses a safety hazard. Many students avoid going to school in the coldest months, and even then must wear their coats inside – unless their seat is right next to the stove, in which case they are unbearably warm.

The infrastructure of many school buildings is in dire need of repair or replace-

ments. There is little to no maintenance done on most rural schools, which are missing plaster and paint, have holes in the ceiling and floor from water damage or rot, and see kids careening up and down staircases with shaky, broken metal railings. The government under Bakhtadze and his Education Minister Mikheil Batiashvili has recognized these problems and moved to address them, although the scope of the challenges is overwhelming considering the government’s limited

resources. International donor and lending organizations have stepped in to assist with the education reform plans.

Another major government initiative is the decentralization of power and decision-making, supported by doubling the sum of financial transfers to municipal governments, earmarked specifically for renovating and rehabilitating rural schools. “40 million GEL [$15.18 mln] worth of rehabilitation works have been carried out in stages on 57 municipal schools,” explained Bakhtadze. “Importantly, local self-governments were authorized to plan and implement these works, which reaffirms our policy in this direction. We believe that local authorities are best aware of the needs of schools on the ground, and therefore problems will be solved more efficiently. It is also symbolic that this year marks the 100th anniversary of the first local self-government elections in Georgia. We have taken numerous steps to empower local self-government, and delegating authority in this manner is a positive step which will continue in the future”.

E5P, NEFCO, and Denmark are together co-financing a project on energy efficiency in Georgia that began in the spring of 2018. NEFCO is providing a total of EUR 2.83 million in loan financing for the project, while E5P is adding EUR 1.87 million in grant funding and

the Ministry of Foreign Affairs of Denmark is offering EUR 440,000 worth of in-kind project consultancy support.

The project, of which the new school building initiative is part, is focused on building and renovating public buildings such as schools, kindergartens, and municipality administration offices to meet European energy efficiency standards. Energy-efficiency measures include improvements to roofs, walls and pipes, installing new ventilation systems, boilers, heat pipes, thermostatic valves and other automated control systems, LED lights and solar powered energy systems. NEFCO predicts that “The planned energy efficiency measures will generate annual cost-savings of approximately EUR 200,000 for the Government of Georgia. The expected annual CO2 reductions are approx. 1,300 tons. Furthermore, up to 10,000 people, mainly children, teachers and public employees will benefit from the upgraded buildings and better conditions.” NEFCO provides what is calls “results-based green financing” to countries in Eastern and Central Europe and signed the current framework agreement with Georgia in 2014.

Check out Friday’s issue of GT for more on the educational reforms and the national Civics Education Program.

Georgia to Tighten Sanctions for Mistreatment of Animals GEL 100 to 500 GEL. In addition, the Code of Administrative Offenses will include the law of parental responsibility which means that acts of mistreatment committed by juveniles will result in a fine for the parents from GEL 100 to 300 GEL. Moreover, the amendments planned to the Criminal Code read that animal mortality will not be considered as an administrative offence but a criminal one.

More specifically, the torture and cruel treatment of an animal which results in death or mutilation will be followed by imprisonment from 120 to 240 hours or home arrest from 6 months to 1 year, as well as a fine or imprisonment for up to 1 year.

If the same act is committed by a group and/or in the presence of minors, it will result in a penalty of 200 to 400 hours pre-trial detention or home arrest from

BY THEA MORRISON

G

eorgian parliament is discussing a draft law which tightens sanctions for the mistreatment of animals.

Amendments will be made to the Code of Administrative Offenses and Criminal Law which envisages increasing legal responsibility for animal abuse.

The legislative package was initiated

by MPs Kakha Kuchava, Zaza Khutsishvili, Sulkhan Makhatadze, Nino Tsilosani and Gela Samkharauli.

The amendments planned to the Code of Administrative Offenses read that inadequate treatment of animals and birds, which cause their suffering, pain, physical injuries or physical disturbance, one time or repeatedly, will be fined from

Image source: gspsa.org

1 year to 2 years, a fine, or by imprisonment for up to three years.

The current legislation reads that at present the fine for the ill-treatment of animals and birds is a minimum of 40 GEL. According to the statistical data of the information-analytical department of the Ministry of Internal Affairs, the number of offenses revealed for violation of Article 104 of the Code of Administrative Offenses, which envisages mistreatment of animals, is as follows: 2015 - 2 cases; 2016 - 0; 2017 – 0 and 2018 - 3 cases.

The number of crimes committed for breach of Article 259 of the Criminal Code which means killing or mutilation of animals, is as follows: 2015 - 19 cases; 2016 - 15 cases; 2017 - 23 cases and 2018 - 58 cases.

It is believed that the proposed changes will reduce cases of ill-treatment and mortality of animals in the country.

President Zurabishvili Meets Georgian Diaspora & Students in Paris

BY THEA MORRISON

W

ithin the framework of an official visit to France, the President of Georgia, Salome Zurabishvili, met with the Georgian diaspora in Paris.

Zurabishvili made some important initiatives during the meeting, stating that due to the large number of citizens living abroad, Georgian diaspora should have a representative in the Parliament of Georgia.

"With the competent authorities, we will start working on a draft legislative amendment that enables the Georgian citizens residing abroad to be elected to Parliament," she said, noting a similar practice in European countries.

The President underlined that the State

and the President are obliged to pay particular attention to the diaspora, which means proper activation of dual citizenship.

During the meeting, the President also touched upon the issue of maintaining the native language. With the collaboration of the Ministry of Education, a plan will be implemented which will enable members of the Georgian diaspora to distance-study the Georgian language.

She added that Georgia has no future if society is not united around important issues.

At the meeting with students, Zurabishvili was interested in the challenges the Georgian students face when studying and living abroad, their expectations, and plans after returning to Georgia.

She asked the students where they see themselves working, in public or private sectors, upon their return to their homeland, and their views on collaboration

with the government.

"We live in the 21st century, in which a place of residence is not as important as a connection and ways to strengthen this connection to be fruitful for both parties,” she said.

The President also visited LeuvilleSur-Orge where she was hosted by Mayor Eric Braive.

She laid a wreath at the memorial of prominent Georgian political emigrants at the Leuville cemetery and honored

the memory of Noe Zhordania, Chairman of the Government of the First Democratic Republic of Georgia and her parents.

President Zurabishvili also visited the Georgian Estate in Leuville.

CULTURE

GEORGIA TODAY FEBRUARY 19 - 21, 2019

15

"Crusade Knights in Khevsureti" Grabs Tourist Attention Again

Artist: Gigo Gabashvili, Drawing, “Warrior Khevsurs”

BY RYAN MICHAEL SHERMAN

G

Artist: Gigo Gabashvili, Painting, “Warrior Khevsur”

PUBLISHER & GM

George Sharashidze COMMERCIAL DEPARTMENT

Commercial Director: Iva Merabishvili Marketing Manager: Anuka Poladishvili

GEORGIA TODAY

EDITORIAL DEPARTMENT:

Editor-In-Chief: Katie Ruth Davies

eorgia’s tourism industry has helped awaken a largely forgotten story about Khevsureti that would have the Khevsurs be the descendants of a band of lost Crusaders.

This story has been dismissed as absurd by all serious scholars, but the growing popularity of the region has seen this unfortunate meme become a popular interest point for tourism guides and articles. Blogposts and message boards also discuss the “Lost Crusader” origin story as a hypothesis and theory, referencing “the experts and evidence” of ethnographic and historical sources.

Khevsur-related articles across the many language platforms of Wikipedia also treat the story as a credible theory.

A 2014 article by Washington Post correspondent Bill Donahue states as fact that in Khevsureti one finds “natureworshiping Christians descended from the last crusaders of Europe.”

Few online resources exist to counter these internet misrepresentations. Most notable are the efforts of Caucasus expert Alexander Bainbridge, whose website batsav.com offers a large amount of detailed and well-researched information about the peoples of the Caucasus, including personal communications with scholars and his own translations into English of much material.

In its most common version, the story describes of a band of knights who became detached from their Crusade and eventually found themselves in the Caucasus, where they settled and became the forefathers of the Khevsurs. This secret history was forgotten for nearly a millennium, so the story goes, until sharp-eyed Western travelers saw remnants of the Crusader heritage in their habits and dress.

Journalists: Tony Hanmer, Zaza Jgarkava, Maka Bibilashvili, Dimitri Dolaberidze, Vazha Tavberidze, Nugzar B. Ruhadze, Samantha Guthrie, Amy Jones, Thea Morrison, Ana Dumbadze, Ketevan Kvaratskheliya Photographer: Irakli Dolidze

The Russian serviceman Arnold Zisserman is most often quoted as the originator of the story and as an authoritative ethnographic source. Zisserman spent years with the Khevsurs and his accounts include much detail about the Khevsur manners of dress, personal conduct, details of swordplay, religious practices, and day-today activities. His articles about Khevsureti first appear in the Tbilisi Russian language newspaper Kavkaz in 1951.

In English, the most popular version of the story came from the celebrity adventurer Richard Halliburton, who published his account in a 1935 book called Seven League Boots in a chapter entitled “The Last of the Crusaders.”

Told in highly-stylized rhetoric, Halliburton suggests the knights originally came from German-French region of Lorraine and cites for support the Khevsurs’ French-style armor and that their “otherwise incomprehensible speech still contains six or eight good German words.”

Although Zisserman claimed to have discovered this supposed connection, an older version appears in an account by a Frenchman named Edouard Taitbout. Taibout says in his book Voyages en Circassie en 1818 that a “fairly common opinion” holds that escaped Crusaders had preached Christianity to the mountain people of the Caucasus, and explains that these signs appear in a

Maltese cross worn by Khevsurs on their clothes and shields, and in the French names they still bear such as “Devilete, Guillot, etc.”

In a footnote, Taitbout cites reports this information was relayed to him by a personal acquaintance, a Monsieur Hauy: “Je dois ces renseignements à M. Hauy, major du Génie, qui est peut-être l'unique Européen qui a pénétré chez les Khévsours, où le hasard l'a conduit et où son titre de Français l'a fait admettre. [I owe this information to M. Hauy major du Génie, who may be the only European to have penetrated Khevsur society, where chance has led him, and where he was admitted on account of his being French.]”

The above examples represent only only a few of the references to a KhevsurCrusader connection by visitors to Georgia before the formation Soviet Union.

The widespread fascination with this meme by outsiders and its recent revival present an interesting case of how foreigners perceive and romanticize Georgia to the present day.

Ryan Michael Sherman of Cornell University will discuss the history and scholarly treatment of the Crusader connection and its influence on February 20th at the Spring 2019 Workin-Progress series at the CRRC office at 1 Ramaz Chkhikvadze Street, near Tbilisi State University. For more information visit the Worksin-Progress Facebook page.

Artist: Theodor Horschelt, Drawing, “Armed Khevsur”

Website Manager/Editor: Katie Ruth Davies Layout: Misha Mchedlishvili Webmaster: Sergey Gevenov Circulation Managers: David Kerdikashvili, David Djandjgava

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