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Issue no: 1134/172

• MARCH 19 - 21, 2019

• PUBLISHED TWICE WEEKLY

PRICE: GEL 2.50

In this week’s issue... Weekly Entrepreneurial News @entrepreneur.ge NEWS PAGE 2

The Truth behind the Names the Christchurch Killer Chose

FOCUS

ON GEORGIAN WINE IN JAPAN

The 'Georgia- Homeland of Wine' exhibition opened this weekend

BUSINESS PAGE 3

Real Estate Market Q4 2018: Market Highlights

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ISET PAGE 4

World Economic Forum Names Georgia’s PM as Young Global Leader BY THEA MORRISON

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eorgian Prime Minister Mamuka Bakhtadze has been named by the World Economic Forum as a Young Global Leader. “Mamuka Bakhtadze is Prime Minister of Georgia. Previously, he was the Minister of Finance and special representative of the New Silk Road. He started his career in the transport and energy sectors. He promises to usher in liberal reforms and European Union and NATO membership for this South Caucasus country,” the organization says. The Forum of Young Global Leaders, the World Economic Forum’s foundation for remarkable

leaders under 40, was founded to fuel new models of leadership. Every year, the organization seeks out change-makers with the grit, foresight and potential to improve the state of the world. For 2019, the World Economic Forum chose 127 young leaders from all over the world. “We look for individuals who reflect global diversity, innovate to promote public interest and value authentic exchanges towards public-private cooperation. Our team invites them to join a fiveyear program cultivating a generosity of spirit and the recognition that the world can only mirror our hopes if we work together,” the organization says. The World Economic Forum is the International Organization for Public-Private Cooperation. The Forum engages the foremost political, business and other leaders of society to shape global, regional and industry agendas.

Georgia, Tajikistan Sign Draft Agreement on International Road Transport

BUSINESS PAGE 5

Waste Management Project Launches to Reduce Green House Gases POLITICS PAGE 11 Prepared for Georgia Today Business by

Markets Asof15ͲMarͲ2019

Price

w/w

m/m

Price

w/w

m/m

BankofGeorgia(BGEOLN)

GBP17.11

+6,9%

+1,9%

GEOROG04/21

103.20(YTM5.12%)

+0,6%

+1,3%

GeorgiaCapital(CGEOLN)

STOCKS

GBP10.50

Ͳ5,4%

Ͳ7,1%

GEORG04/21

105.74(YTM3.95%)

+0,1%

Ͳ0,2%

GHG(GHGLN) TBCBankGroup(TBCGLN)

COMMODITIES CrudeOil,Brent(US$/bbl) GoldSpot(US$/OZ)

BONDS

GBP2.00

Ͳ2,9%

Ͳ13,8%

GRAIL07/22

107.14(YTM5.36%)

+0,2%

+1,0%

GBP16.42

+7,9%

+24,8%

GEBGG07/23

99.68(YTM6.08%)

+0,2%

+0,7%

CURRENCIES

Price

w/w

m/m

67,16

+2,2%

+1,4%

GEL/USD

2,6840

+0,0%

+1,8%

1302,40

+0,3%

Ͳ1,5%

GEL/EUR

3,0355

Price

+0,7%

w/w

+2,1%

m/m

GEL/GBP

3,5662

+2,1%

+4,9%

INDICES

Price

w/w

m/m

GEL/CHF

2,6697

+0,3%

+1,8%

FTSE100

7228,28

+1,7%

Ͳ0,1%

GEL/RUB

0,0414

+2,2%

FTSE250

19491,03

+2,3%

+2,7%

GEL/TRY

0,4915

Ͳ0,4%

Ͳ1,7%

DAX

11685,69

+2,0%

+3,4%

GEL/AZN

1,5797

Ͳ0,2%

+1,7%

DOWJONES

25848,87

+1,6%

Ͳ0,1%

GEL/AMD

0,0055

Ͳ

+1,9%

7688,53

+4,3%

+3,8%

+2,9%

GEL/UAH

0,0992

Ͳ2,6%

+2,6%

165,68

+2,3%

+1,9%

EUR/USD

0,8829

Ͳ0,8%

Ͳ0,3%

MSCIEM

1057,30

+2,6%

+2,6%

GBP/USD

0,7524

Ͳ2,1%

Ͳ3,0%

SP500

2822,48

+2,9%

+1,7%

CHF/USD

1,0021

Ͳ0,6%

MSCIFM

2707,14

+1,7%

+0,9%

RUB/USD

64,8011

Ͳ2,3%

Ͳ2,3%

GTIndex(GEL)

1582,68

Ͳ

Ͳ

TRY/USD

5,4466

+0,1%

+3,1%

GTIndex(USD)

1208,13

Ͳ

Ͳ

AZN/USD

1,6957

Ͳ

Ͳ0,5%

NASDAQ MSCIEMEE

Ͳ0,3%


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NEWS

@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: For those who like modest, cozy boutique hotels, Taste Tbilisi is must. It already boasts high rankings on booking.com even after just three months. Located on Agmashenebeli Avenue, Taste Tbilisi is located in a grand old building and offers 16 rooms. It was established by the founders of Synergy Capital and Barbarestan restaurant, whose aim is to create unforgettable memories for visitors and make each feel part of the Georgian culture. Exceptional care for each guest is considered the cornerstone of the success of Taste Tbilisi. Tapli Sachino, established in 2015 in the region of Vani, and today owning 53 hectares of raspberry and blackberry plantations, is starting construction of a modern berry greenhouse. The project is supported by USAID, and investment amounts to $75,000. Along with berries, the company is actively involved in honey production. The head of the cooperative states that the demand for berries is high, however, only local markets are supplied as yet. Future plans include production of 500 tons of berries annually and the delivery of products in various packaging. Negotiations are underway for export. A new destination for coffee lovers in Tbilisi! Irakli Rusisvhili launched COFFEECA, with a number of coffee varieties and special apple pie, after noting the lack of places offering high-quality coffee. The atmosphere is warm and friendly, premium-quality coffee – Italian, while the pie is pure home-baked goodness. Visitors can also taste traditional Georgian wine there. Based on its growing popularity, the founder is already looking to expand the chain and open COFFECA in other popular parts of Tbilisi. 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

GEORGIA TODAY

MARCH 19 - 21, 2019

Georgia’s Parliament Promotes Legislative Openness & Sustainable Development

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he principles and practices of Open Parliament and the Sustainable Development Goals (SDGs) were the focus of a three-day discussion on 14-16 March organized by Georgia’s Permanent Parliamentary Council on Open Governance and its Consultative Group with assistance from the European Union (EU), the United Nations Development Program (UNDP) and the Institute for Development of Freedom of Information (IDFI). Chairs of the parliamentary committees, representatives of civil society and international organizations reviewed the implementation of the 2018-2019 Open Parliament Action Plan and discussed the development of the Georgian Parliament’s Strategy on SDGs. “The Parliament of Georgia achieved significant progress in 2018, making its operation more open, transparent, inclusive and accountable,” said Irina Pruidze, Chairperson of the Permanent Parliamentary Council on Open Governance. “The third Open Parliament Action Plan, which covers 2018 and 2019, is the result of the wide public consultations and is shaping our further commitments to design the new tools for citizen engagement and increase Parliament’s role in achieving Georgia’s national Sustainable Development Goals.” The overview of the Parliament’s progress in implementing its Open Parliament Action Plan 2018-2019 was followed by a discussion on the Parliament’s SDG strategy and action plan developed with the support of the Government of Swe-

den and UNDP. The group discussions, facilitated by Rusudan Tushuri, SDG Consultant in the UN Resident Coordinator’s Office, focused on the key priorities and actions of the Parliament of Georgia aiming to foster the effective implementation of the 2030 Sustainable Development Agenda in the areas of law-making, oversight, budgetary processes and public outreach. Meri Makharashvili, Communications Manager at IDFI, presented the Communication Strategy & Action Plan of

the Parliamentary Council on Open Governance and the Social Media Communication Concept of the Parliament of Georgia, prepared with the support from the European Union and UNDP as part of the Open Parliament Action Plan. The three-day discussion concluded with a workshop for journalists which brought together representatives of 22 print, broadcasting and online media outlets from all over Georgia. The Council members informed the journalists about the country’s progress on the path to open governance and answered their questions about the achievements and remaining challenges.


BUSINESS

GEORGIA TODAY MARCH 19 - 21, 2019

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Georgian Gov't Initiates Creation of Mediation Institute BY THEA MORRISON

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he Government of Georgia has initiated the creation of an alternative agency of dispute settlement – the Mediation Institute. The draft law on Mediation was submitted to Parliament on March 18. The legislative amendments were prepared by the Ministry of Justice. The government explains the current judicial system has a major problem in terms of the large number of civil disputes in courts, which is why some cases are prolonged or delayed, and the fast and efficient administration of

justice hindered. The initiative claims that the creation of the Mediation Institute will remove a lot of cases from the court system and will accelerate hearings of prolonged disputes due to this problem. “A thoroughly prepared, impartial third party in the mediation process helps citizens and business representatives to resolve civil disputes without longterm and expensive judicial processes, in a mutually agreed manner,” the explanatory note of the draft law reads. It also explains that the aim developing mediation is to promote alternative means of dispute resolution, increase accessibility and effectiveness of justice, and maximally freeing the court from such disputes that have the prospect of

Image source: channelbiz.co.uk

being completed through a mutual agreement. “It should be underlined that the goal of the mediation is not the replacement of the traditional means of dispute settlement - court or arbitration,” the note reads. Georgia’s Justice Minister Thea Tsulukiani stated on March 12 that the gov-

ernment supports the reform project that her ministry has been working on for over a year and a half. “This reform is called ‘Georgia’s Draft Law on Mediation and Consecutive Changes’ and will help to save state funds, which can be used to enlarge the corps of judges and make the whole justice system better,” she stated.

The Minister also noted that there is a lack of qualified mediators in the country, adding the project will also solve that problem by training staff. The draft reads that the list of disputes subordinated to the Mediation Institute will be expanded and will cover not only business but bank, labor and loan disputes too.

The Truth behind the Names the Christchurch Killer Chose

Davit Aghmashenebeli. Source: icons.ge

BY VAZHA TAVBERIDZE & AMY JONES

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mages published by the Daily Mail newspaper on Friday revealed gun cartridges with Georgian inscriptions thought to have been used in the deadly terrorist attack on two mosques in Christchurch, New Zealand. Law enforcers seized weapons after the attack which had inscriptions in Georgian, Russian, English, and other languages. David Soslan, the name of Queen Tamar’s husband, and David Agmashenebeli, also known as David the Builder, were written on the cartridges. However, the Georgian Ambassador to Australia and New Zealand, Giorgi Dolidze, affirmed that there is no proof confirming the authenticity of the photos. The Georgian State Security Service is “cooperating with its partners in order to receive information regarding the detainees and the weapons seized,”

reported the security service. 49 people were killed and at least 20 were seriously injured when white supremacists opened fire on worshippers in a mosque. One of the attackers live-streamed the massacre online. Police detained four suspects, including one male with Australian citizenship and a woman. Yet, contrary to the information disseminated online, the names written on the gun cartridges of the Christchurch shooters were not the names of “people who had carried out mass murder attacks,” but historical figures who fought off Muslims in the Middle Ages (mostly Turks and later, the Ottomans). This varied assortment of names might give you the idea that the shooters had a keen interest in history, but they were by no means experts. There were two Georgian names amongst those on the cartridges, wellwritten, especially for someone unfamiliar with the script. We decided to give you some insight into the names the killer chose. David Agmashenebeli (დავით

and tactics. In 1685, he and his band fell into an uneven battle against the advancing Ottoman forces. Regarded as one of the most distinguished hajduks (bandit-cumfreedom fighter, Balkan history) of his time, he is praised in Serbian epic poetry. Stefan Lazar(evic) – Also known as Stefan the Tall, Prince of Serbia, 14-15th century A.C. One of the most prominent Serbian princes and well respected throughout Europe for his knightly and military exploits. He was a constant thorn in the side of the Ottomans and inflicted several heavy defeats upon them, then entered their service, then reneged on them and declared independence as a desMarko Miljanov. Source: albanianhistory.net pot. Stefan was a highranking member of the Order of Dragon, inside the Turkish cannons so that the of which Vlad Tepes (Dracula’s proto- damage on the walls of Vienna would be minimized.” It was his and the Polish type) was also purportedly a member. Serban Cantacuzeno – A prince of Wal- relief forces that eventually made Vienlachia (modern day Moldova) of Byzan- na’s survival feasible. For his contributine origin. Hero of the Siege of Vienna tions, he was pronounced "Defender (or (1683). He fought alongside Ottomans, Count) of the Holy Roman Empire” by while at the same time working as an the Emperor and promised the throne informant and saboteur for Catholic of Constantinople after the Turks were Europe. In one case, he sabotaged his driven out. Dmitry Senyavin – A famed Russian Turkish "allies" by warning the Austrians beforehand about the siege. “He also admiral who fought the Ottomans, but informed them about Ottoman plans, also the Venetians, British and forces of movements and tactics (in a hidden tun- Napoleon too. He fought against the nel beneath the city's walls), and finally Turks in the Battle of Navarino (1827) as ordered his men to put hay and straw the commander of the Baltic fleet alongside the English and French. Edward Codrington - A British admiral who took part in the Battle of Trafalgar and the Battle of Navarino. Marco Antonio Bragadin – A Venetian captain who was in charge of the heroic siege of Famagusta, modern day Cyprus (1570-1571), where the Venetian and Greek forces were besieged by Ottomans. After dragging the siege out, Bragadin and his forces negotiated surrender, the terms of which the Ottomans broke. Bragadin was brutally tortured and then executed. Ernst Rudiger Von Starhemberg – The Military Governor of Vienna from 1680, with fewer than 20,000 men to oppose about 120,000 besieging Ottomans. He lead the city's defense forces during the Battle of Vienna in 1683 against the Ottomans, and later became the Imperial Marshal during the Great Turkish War. Sebastiano Venier – Doge of Venice, 16th century. He was the commander of the Venetian contingent at the Battle of Lepanto (1571), in which the Christian League decisively defeated the Turks. Sir Edward Codrington. Source: wikimedia.org აღმაშენებელი) – the greatest king of Georgia, who reigned in the 11-12th century A.C. Famous for his campaign against the Turk Seljuks and particularly for the victory in the Didgori battle where he, with a miniscule force, overcame a far more numerous army of Turk Seljuks. The Battle of Didgori very often ranks in the internet worldwide polls as among the most improbable victories. David Agmashenebeli was canonized, yet is reknowned for his tolerance towards other faiths, particularly imams, and was said to be a great patron of minorities. A true expert of history would probably have known that. David Soslani (დავით სოსლანი) – Georgian military commander, 13th century A.C. Famous for being the husband of Queen Tamar and basically thrashing invading Turkic armies left, right and center. Just like the earlier David, Soslani often ends up in all kinds of historical internet polls as a dark horse, which might explain the shooter’s knowledge of him. Miloš Obilic – a semi-legendary Serbian knight in the service of Prince Lazar during the invasion of the Ottoman Empire. He assassinated Ottoman Sultan Murad I in the Battle of Kosovo (1389). In the 19th century, Miloš also came to be canonized as a saint in the Serbian Church. Marko Miljanov Popovic– A Montenegrin general of the late 19th century who waged guerilla warfare against the Ottomans. He was also an accomplished writer. Bajo Pivljanin – A Bosnian military commander, late 17th century. Pivljanin started off as a lowly brigand, then entered the service of the Venetians against the Turks and participated in numerous battles, gaining much fame as a master of strategy


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BUSINESS

Real Estate Market Q4 2018: Market Highlights

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n Q4 2018, Sale Price Index (SPI) for residential properties experienced an increase of 6.2% quarterly (QoQ) while Rent Price Index (RPI) decreased by -7.3% (QoQ). During this quarter, Average Sale Price (ASP) varied between 871 USD and 913 USD per m2 (monthly average), and Average Rent Price (ARP) was between 7.1 USD and 8.1 USD per m2 (monthly average). The quarterly averages are 887 USD for ASP and 7.5 USD for ARP. For Q4 2018, ASP increased (YoY) in all Tbilisi’s districts. The highest increase can be observed in Isani and Didube, 18.4% and 16.3%, respectively. ARP revealed various patterns for various districts. The highest drop was in Nadzaladevi, by -9.5% (YoY), while the highest jump was in Isani, by 9.6% (YoY). Due to the new law, which requires the pricing of real estate in GEL, prices in the local currency stabilized starting in Q3 2017, while the prices in USD became more volatile, reflecting exchange rate fluctuations. In Q4 2018, the most expensive and the cheapest districts of Tbilisi by ASP were: Mtatsminda (1096 USD) and Samgori (552 USD); and by ARP: Mtatsminda (8.72 USD) and Gldani (4.40 USD).

GEORGIA TODAY

MARCH 19 - 21, 2019

Graph #3. Quarterly Dynamic of Average Sale and Rent Prices for Commercial Property in GEL and USD

Graph #1. Quarterly Dynamic of Average Sale and Rent Prices for Residential Property in GEL and USD

COMMERCIAL PROPERTY PRICES After its upward trend during the last three consecutive quarters, SPI decreased by 12.9% (QoQ) in Q4 2018, dropped to 0.856 index points. RPI decreased as well, by 37.1% (QoQ), to 0.924 index points. Graph #2. Average Sale and Rent Prices by District in USD

During Q4 2018, ASP varied between 1032 and 1136 USD per m2, and ARP between 9.18 and 10.55 USD per m2. The ASP for commercial properties increased by 4.2 % (YoY), and reached 1076 USD per m2. While ARP increased as well by 4.0% (YoY) to 9.73 USD per m2.

BATUMI & KUTAISI RESIDENTIAL PROPERTY In Q4 2018, ASP for residential properties in Batumi increased by 11.6 % (YoY) and reached 842 USD per m2. While in Kutaisi ASP increased as well but only by 6.4% (YoY) and amounted to 399 USD per m2.


BUSINESS

GEORGIA TODAY MARCH 19 - 21, 2019

TBC Wins Best Bank in Georgia 2019 from Global Finance Magazine

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or the eighth consecutive year, TBC Bank has been awarded the Best Bank in Georgia 2019 by the prestigious Global Finance magazine, underlining its ongoing commitment to offering the very best banking services to its customers. In selecting the top banks for 2019, Global Finance considered a range of factors, including asset growth, profitability, geographic reach, strategic relationships, new business development and product innovation. “We are delighted to receive this award from Global Finance. This is an acknowledgement of our robust financial performance, outstanding progress in relation to our digitalization strategy and continuous enhancements to our customer service offering. We look forward to even stronger performance in the year ahead”, stated TBC Bank CEO Vakhtang Butskhrikidze. Commenting on the winners, Joseph D. Giarraputo, Publisher and Editorial Director of Global Finance said: “What it takes to rank among the world’s best banks is increasingly difficult to deliver. Customer expectations of financial services providers has never been higher - tailored products delivered in real time with complete security.” Global Finance, founded in 1987, has a circulation of 50,050 and readers in 188 countries. Its

circulation is audited by BPA. Global Finance’s audience includes chairmen, presidents, CEOs, CFOs, treasurers and other senior financial officers responsible for making investment and strategic decisions at multinational companies and financial institutions. Global Finance’s website — GFMag.com — offers analysis and articles that are the legacy of 32 years of experience in international financial markets, and provides a valuable source of data on 192 countries. Global Finance is headquartered in New York, with offices in London and Milan. TBC Bank has been recognized as the Best Bank in Georgia by Global Finance in the following years: 2004, 2006, 2007 and 2012-2019. About TBC Bank Group PLC (TBC PLC) TBC PLC is a public limited company registered in England and Wales that was incorporated in February 2016. TBC PLC became the parent company of JSC TBC Bank (TBC Bank) on 10 August 2016. TBC PLC is listed on the London Stock Exchange under the symbol TBCG. TBC Bank, together with its subsidiaries, is the leading universal banking group in Georgia, with a total market share of 38.8% of loans and 41.2% of nonbanking deposits as at 31 December 2018, according to data published by the National Bank of Georgia.

Georgia, Tajikistan Sign Draft Agreement on International Road Transport

Image source: Ministry of Economy of Georgia

BY THEA MORRISON

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eorgia and Tajikistan signed a draft agreement on International Road Transport which will facilitate the growth of the passenger and freight traffic flow between Georgia and the Republic of Tajikistan and strengthen mutually beneficial economic cooperation. Georgia’s Ministry of Economy reports that the draft agreement determines the bilateral, transit or via-third-party-countries transportation based on quota permits, the number of which is determined by the parties on the basis of the agreement and the exchange of permit forms. In addition, it regulates the legal issues related to road transportation between the parties, which will help Georgian and Tajiki carriers in their business activities. The Draft Agreement on International Road Traffic between the Government of the Republic of Tajikistan and Government of Georgia was prepared and signed in Tbilisi last week, during the visit of the representatives of the Ministry

of the Transport of Tajikistan to Tbilisi. At the meeting, the members of the Tajik and Georgian delegations agreed on the text of the Agreement and a relevant protocol was signed seeing the parties confirm mutual interest in promptly completing the necessary internal procedures to speed up signing of the Agreement. The guests met their Georgian colleagues, including the Deputy Minister of Economy and Sustainable Development of Georgia, Akaki Saghirashvili, and the representatives of the Transport and Logistics Development Policy Department and the LEPL Land Transport Agency. It was noted that the Tajiki side is interested in using Georgia’s transport capabilities, including Georgia’s harbors, more actively in future. “Tajikistan is interested in developing trade and economic relations with Georgia and the development of transport links in different directions are of outmost importance in this regard,” the representatives of the Tajik ministry said. Within the frames of the visit, the delegation also visited the Tbilisi Customs Clearance Zone and expressed its interest in sharing Georgia’s experience in the customs affairs.

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BUSINESS

GEORGIA TODAY

MARCH 19 - 21, 2019

Georgian, Japanese Ministers Discuss Economic Cooperation BY THEA MORRISON

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rade and economic relations between Georgia and Japan, with special emphasis on bilateral trade, were discussed in detail during the meeting of the Ministers of Economy of Georgia and Japan in Tokyo last week. Giorgi Kobulia and Hiroshige Seko discussed a wide range of bilateral economic and trade relations within the framework of Prime Minister Mamuka Bakhtadze’s official working visit to Japan. It was noted that in 2018 the export volume was increased by 55%, highlighting that the potential of further development in this direction is still vast. The sides also mentioned the export of Georgian wine to Japan, which increased by 28% last year. An agreement between Georgia and the Japanese Export and Investment Insurance Company (NEXI), signed on March 15, was also part of the conversation. It was noted that the Agreement will stimulate the growth of trade of Japanese and Georgian goods and services and encourage Japanese investment to enter Georgia. Kobulia drew attention to the launch of negotiations on a Georgian-Japan Free Trade Agreement and offered his Japa-

nese counterpart the chance to promptly start the preparation process. The benefits of the agreement on cooperation in the field of investment, which is almost complete, were also emphasized during the conversation. The ministers expressed readiness to complete the remaining formal procedures quickly. The Japanese Minister also highlighted the possibility of launching negotiations on a Free Trade Agreement between Georgia and Japan as a further step of cooperation. Kobulia introduced the energy sector reforms in Georgia and suggested Japanese companies participate in an audit of the major industrial energy enterprises in Georgia, provide consultations on technical support and share experience in elaborating the energy efficiency implementation plan. The Georgian side offered the Japanese the chance to participate in the implementation of two energy projects – construction of a 230-250 MW combined cycle thermal power plant and a 50 MW power plant. Other renewable energy sources such as wind, solar, geothermal and biomass energy were also named as fields for expanding cooperation between the two countries. The ministers also positively evaluated the Georgian wine exhibition which opened in Tokyo on March 15 and will last until May 7.

Image source: Ministry of Economics of Georgia

The exhibition is about Georgian viniculture and history and it, with its concept drawing on showcasing Georgia's millennia-old viniculture, brings together unique archeological artifacts and modern technologies. The Japanese partners' major contribution involves using the latest WarpSquare technology to bring to life Georgian

culture and winemaking history, enabling visitors to travel to the most ancient homeland of winemaking through virtual interaction. The Georgia-Homeland of Wine project, along with the exhibition, includes seminars on the origins and uniqueness of Georgian wine delivered by celebrated global experts, also winetasting sessions,

master classes on the Georgian supra – a festive table, and a cultural program. The implementation of the GeorgiaHomeland of Wine project started in 2017, at the Bordeaux Center for Wine and Civilizations, France, and involved a scientific study, based on which the scientific community recognized Georgia as the cradle of wine.

Georgia- Homeland of Wine Project Presented in Japan

BY KETEVAN KVARATSKHELIYA

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ine represents one of the paramount parts of the diverse and colorful culture of Georgia, and has strongly established itself locally, as well as in multiple countries of Europe. Georgia has even been recognized as the ‘cradle’ of wine. The taste of fine Georgian wine mesmerizes wine enthusiasts all over the world and even attracts dozens of travelers to Georgia who seek to discover the roots of Georgian viniculture and see the vineyards sprawled throughout the different regions of the country. Georgia is now presenting its wines to a wide audience in one of the most devel-

oped, dynamic and prospective countries, Japan, within the scope of the new project ‘Georgia – Homeland of Wine’. The given project is expected to blaze a path for Georgian wine through Asia and contribute to its promotion across the region. The exhibition was launched on March 10 at the huge exhibition center of Terrada Warehouse in Tokyo, Japan. However, the Grand Opening ceremony took place on March 15, seeing the government delegation of Georgia, multiple wine companies, representatives of the media sector and other involved parties participating in the celebration. The event will last until May 7. GT spoke exclusively to David Tkemaladze, the Deputy Chair of the National Wine Agency of Georgia. "The exhibition is just one part of the

project, within which we display unique vessels of the National Museum collection, representing the integration of wine in our life from the Neolithic era to modernity. "The project is ever-changing and we aim to present unique elements for each country. In Japan, it is eclectic and full of modern elements, especially so as it is held in a loft-style venue with novelties offered by our partner, Sony Communication Company.” ‘Georgia – Homeland of Wine’ does not only represent a chance for Georgian wine degustation as, through multiple activities including thematic film-shows, talks about Georgian history and cuisine, folklore performances, master-classes on a Georgian ‘Supra’ (feast), art and culture, seminars of global experts of wine and, of course, tastings of Georgian wine and

food, it offers visitors a unique opportunity to familiarize themselves with the 8,000-year history of Georgian viniculture and ancient methods of winemaking. “This exhibition presents the history and the culture of the world’s oldest Georgian wine, sometimes referred to as the 'Tears of Cleopatra',” reads the organizer’s preview. A special website georgia-homelandofwine.com has been launched especially for the event, which will serve as a guide for potential visitors of the exhibition and provide all useful information regarding Georgian winemaking history and the details of the event. The website is bilingual: Japanese and English. The financial and technical partner of the project, Sony Communications Company, launched the ‘WarpSquare’ initiative, which, with the utilization of ultramodern technologies and audiovisual capabilities, creates an authentic Georgian atmosphere in the venue and enables the attendees to travel to the homeland of winemaking through virtual interaction. Aside from obtaining prominence and

stimulating promotion of Georgian wine, the project is expected to have fruitful outcomes in the economic regard as it will allow Georgian wine enterprises to augment their sales locally, as well as abroad. The participants will have an opportunity to arrange meetings and negotiate future business with foreign companies. ‘GeorgiaHomeland of Wine’ may also help the development of tourism in Georgia by raising the interest of foreigners in Georgia,asmorethan150,000guestsareexpected to visit the exhibition. Prior to the start of the ‘Georgia – Homeland of Wine’ project, Georgian wine had already succeeded in another major Japanese exposition, ‘Foodex Japan 2019’, which was held on March 5-8 and saw the Vaziani Winery from Georgia win the Diamond Trophy. The project ‘Georgia – Homeland of Wine’ was first launched in 2017 at the Bordeaux Center for Wine and Civilizations in France, where Georgia held the status of Guest of Honor and which brought together multiple countries, expressing an interest in further collaboration with Georgia.


BUSINESS

GEORGIA TODAY MARCH 19 - 21, 2019

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Gebrüder Weiss Opens New Tbilisi Terminal the regional hub for multiple services for Armenia, Azerbaijan and other neighboring countries and so plays a vital link in the Gebrüder Weiss chain.” “We are celebrating the opening of the extension of the existing location seven years since its launch in March 2012. The main investments made in 2012 amounted to EUR 10 million and were followed by further growth annually. There were only four employees at our company at inception, but today we have 120 members of staff at Gebruder Weiss Georgia,” said Alexander Khalamov. “EUR 15.5 million has been invested since 2012, the latest figure being over EUR 2.5 million for the construction and expansion of the logistics terminal, which is equipped with high-quality and cutting-edge technology, making it possible to provide logistics solutions tailored specifically to the

BY KETEVAN KVARATSKHELIYA

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ebrüder Weiss, Europe’s leading transport and logistics company with more than 7,100 employees in 150 locations, 13 million shipments, 5 million parcels and a provisional annual turnover of 1.67 billion Euros (2018), launched a new logistics terminal in Tbilisi on March 15. GEORGIA TODAY attended the opening ceremony to discover the services offered by the Gebrüder Weiss company on site.

At the press conference held prior to the opening ceremony, Wolfram SengerWeiss, CEO of Gebrüder Weiss; Thomas Moser, Director and Regional Manager Black Sea/CIS; and Alexander Kharlamov, Country Manager Georgia, briefed media about the history of the company, the importance of ‘s involvement Georgia in the Gebrüder Weiss global chain and their upcoming plans. “Gebrüder Weiss is an Austria-based company with a strong focus on Central and South-Eastern Europe, with worldwide coverage and big business development in the USA and Canada. We are very strong in Asia, including China, Japan, Taiwan, Singapore, Vietnam and

Dubai. Our services include land transport, air and sea freight, and logistics, as well as logistics consultancy, which is incredibly important for our customers,” Senger-Weiss noted. “What makes us special is that we are the oldest transport and logistics company in the world, launched nearly 500 years ago in Austria,” he said, going on to emphasize the significance of human capital for the development of the company. “Our people have always been paramount for us. Our employees represent our biggest asset.” Thomas Moser stressed the strategic location of Georgia, naming it the ‘cornerstone’ of the Silk Road. “Georgia is

customer,” Khalamov explained. The representatives of the company also focused on the significance of Gebrüder Weiss in contributing to the economic development of Georgia and spoke about the support received from the local government and Georgia’s free trade environment, which helped Gebrüder Weiss establish itself on the local market. The new terminal comprises of an additional 2,300 square meters of handling, 7,800 square meters of paved open space and 300 square meters of office space. The entire location covers an area of 90,000 square meters. The construction works took six months to complete. The official opening ceremony of the modern logistics facility was attended by representatives of the government, diplomatic corps and business circles.


8

BUSINESS

GEORGIA TODAY

MARCH 19 - 21, 2019

Double Pay for Nothing? Thus, in practice, the certification process yielded a doubling of base pay with only a modest hurdle to be surmounted. Furthermore, the large salary increase was not conditional on teachers' subsequent effort or effectiveness, but instead depended only on a one-time determination that the teacher met some certification criteria. Hence, for all practical purposes, the reform resulted in an unconditional salary increase for incumbent teachers. Not the best way to stimulate improved performance.

BY ERIC LIVNY

T

he ruling Georgian Dream coalition’s recent plan to gradually ramp up education spending to as much as 6% of GDP by 2022, has come as a surprise to many. “Funding allocated to the education system will be increased annually and will reach its maximum by 2022, when we will hit the target of 6% of the Gross Domestic Product (GDP), i.e. one fourth of the State Budget. It will be ensured with a tailormade piece of legislation – the Education Equality Act – which will be binding for the current and future governments of Georgia in order to keep investments this high flowing into the education sector and steadily increasing it every single year. Moreover, such voluminous public investment in the education system will lead to respective private sector initiatives and the education system will thus become dominant in our economy, ultimately with a 10-11% share.” - Georgian Prime Minister Mamuka Bakhtadze.

A REFORM LONG OVERDUE Let us begin by stating the obvious: this proposal is long overdue. Georgia’s general education system, the public segment of it, is among the worst in the world, judging by the results of international math and science tests, such as PISA (Georgia ranked 60th in science, 62nd in reading and 57th in mathematics, out of 72 countries included in the PISA of 2015). As shown in Chart 1, the Georgian educators’ average wages (581.4 GEL) were lower than in any other sector of the economy in 2017. Think of it: Georgian teachers earn less than the country’s peasants and hunters-gatherers, and less than 60% of the national average (about 1,000 GEL). Not surprisingly, a very large share of Georgia’s teacher population lacks basic qualifications. And of those, many are past retirement age, but unwilling to retire despite low wages (since retirement benefits are even lower). In Georgia’s countryside, teacher jobs are an important source of cash, complementing in-kind income from subsistence agriculture. Teaching also comes with improved social status and side earnings from private tutoring. As shown in Chart 2, wages in the education sector did grow over time in nominal terms, albeit from an extremely low basis. Major adjustments occurred during the first part of Saakashvili’s rule: in 2002-2004 (growth of about 25% per annum), in 2006 (32%), 2007 (25%), and in 2008 (59%). An additional significant adjustment followed in 2013, the first year of the Georgian Dream coalition rule (19.1%). Still, wages in the sector failed to catch up with the rest of the economy, disincentivizing young people to enter the teaching profession. Georgia’s public expenditure on education stood at 3.78 and 3.83% of GDP in 2016 and 2017. This is significantly higher than in the country’s entire recent history, and is close to the 2016 average of Europe and Central Asia (excluding high income countries) of 3.95%. At the same time, it is well below the target of 6% set by the Georgian Dream leadership. If this target is achieved by 2022, Georgia will find itself in a respectable club consisting of Nordic countries such

GEORGIA’S EDUCATION POLITICS

as Iceland, Finland, Norway and Sweden, which all spend around 7-8% of GDP on education. But we should ask two critical questions regarding the proposed reform: • Firstly, how will the government finance the increase in education spending (as well as the planned increase in social pensions)? This question is of primary concern for Georgia’s macroeconomists and the International Monetary Fund. • Secondly, what will be the impact of nearly doubling education spending on the quality of schools and the learning outcomes of Georgian students (however measured)? Below, I will try to find an answer to this question.

THE ROAD TO HELL IS PAVED WITH GOOD INTENTIONS Money cannot buy love, but it can go a long way in improving education. For starters, money can buy infrastructure, which Georgian schools urgently need. But even more importantly, money can be used to increase (double and even triple) teacher wages. And this is exactly where it gets complicated. Few would argue with the idea that underpaid teachers are unlikely to be good teachers. Indeed, UNESCO's flagship Education for All Global Monitoring Report (2013/14) claims that "[l]ow salaries reduce teacher morale and effort" and "teachers often need to take on additional work – sometimes including private tuition – which can reduce their commitment to their regular teaching jobs and lead to absenteeism". But would higher pay necessarily increase teacher motivation and effort? A recent experimental study by the World Bank (Double for Nothing? Experimental Evidence on an Unconditional Teacher Salary Increase in Indonesia by Joppe de Ree et al, (2017)) suggests that this might not be the case, particularly when pay raises are 1) not conditional on going through a rigorous training program and passing an external examination, and 2) are difficult to reverse in case of substandard performance. The authors provide experimental evidence on the impact of a large unconditional salary increase (a permanent doubling of the base pay) on the effort and productivity of incumbent teachers.

DESCRIPTION OF THE EXPERIMENT Given the large fiscal burden of the policy, teacher access to the certification program was phased in over 10 years (from 2006 to 2015), with priority in the

queue being determined by seniority. Thus, many "eligible" teachers had to wait several years before being allowed to enter the certification process. Working closely with the Government of Indonesia, the authors implemented an experimental design that took advantage of this phase-in. It allowed all eligible teachers in 120 randomly selected public schools to access the certification process and the resulting doubling of pay immediately; in contrast, teachers in control schools experienced the "business as usual" access to the certification process through the gradual phase-in over time. The study was conducted over a three-year period, in a near-nationally representative sample of 360 schools drawn from 20 districts and all major regions of Indonesia. The experiment significantly improved measures of teacher welfare: teachers in treated schools had higher wages, were more likely to be satisfied with their income, and were less likely to report financial stress. They were also less likely to hold a second job, and worked fewer hours on second jobs. Yet, despite this improvement in incumbent teachers' pay, satisfaction, and time available to focus on their main job (due to a reduction in second jobs), the reform did not improve either their effort or student learning. Teachers in treated schools did not score better on tests of teacher subject knowledge, and the authors found no consistent pattern of impact on self-reported measures of teacher attendance. Most importantly, they found no difference in student test scores in language, mathematics, or sci-

ence across treatment and control schools. In other words, a reform that cost over 5% of Indonesia’s GDP was found to have absolutely no impact on the performance of incumbent teachers (the so-called intensive-margin effect).

GOOD INTENTIONS, BAD IMPLEMENTATION As suggested by the authors, Indonesia’s education reform failed for political reasons. “The certification process was initially meant to include a high-standards external assessment of teacher subject knowledge and pedagogical practice, with an extensive skill-upgrading component for teachers who did not meet these standards (featuring up to a year of additional training and tests). However, teachers' associations opposed the high-standards certification exams. Thus, by the time the final law and regulations were negotiated through the political and policymaking process, the quality-improvement stipulations had been highly diluted.” The last thing the Indonesian government wanted was to pick a fight with the country’s powerful teachers’ associations. As a result, instead of going through high-standards external assessments, teachers were allowed to simply submit a portfolio of their teaching materials and achievements. Not surprisingly, very few teachers entering the certification process failed it. And, even those who failed the first attempt were all certified after a two-week training program, which mainly focused on helping teachers prepare the portfolios that would need to be submitted for the certification process.

For Georgia to successfully combat poverty and regain its role as a cultural, scientific, and educational leader in the region (Bakhtadze’s goals), the country’s education reforms should not be sacrificed on the altar of political cost-benefit calculations. Alas, this is easier said than done. So far, successive Georgian governments have had very little appetite for fighting the 60,000-strong Educators and Scientists Free Trade Union of Georgia. As a result, this powerful lobby has been very effective in blocking reforms seeking to establish rigorous certification exams and retire old and unqualified teachers. With highly contested parliamentary elections looming on the horizon, there is every reason to suspect that politics might once again interfere with excellent intentions. Increased pay for new and qualified teachers should be a key component in any future education reform seeking to provide Georgia’s public schools with new blood and new ideas. However, a politically-motivated, unconditional increase in compensation, as may be lobbied by the Educators and Scientists Free Trade Union of Georgia, will achieve no impact while diminishing the fiscal space for other important programs (such as infrastructure investment). Such a populistic move will fail to produce an intensive-margin effect on incumbent teachers’ motivation and effort. If anything, it will strengthen their incentives to cling to their jobs, diminishing an extensive-margin effect associated with the potential arrival of new teachers.

ABOUT THE AUTHOR: Eric Livny is Founder and President at Tbilinomics Policy Advisors, and Chair of Economic Policy Committee at the International Chamber of Commerce (ICC Georgia).


BUSINESS

GEORGIA TODAY MARCH 19 - 21, 2019

“Internetization” Campaign Begins in Pshav-Khevsureti Mountains

Image source: Travelgraph.ge

BY SAMANTHA GUTHRIE

W

ith the support of the Ministry of Economy and Sustainable Development of Georgia, the project to bring Internet to the regions of Pshav-Khevsureti and Gudamakari has begun. Within the framework of the project, the Internet connectivity will finally reach the communities of Pshavi, Khevsureti, Arkhoti, Shatili, Ardoti, and the Gudamakari Gorge. The new network will cover 76 villages, 496 families, 1291 permanent residents, and four secondary schools. A static IP telephone network will also be arranged for 50 subscribers to improve connectivity for emergency situations. On March 15, an official state financing agreement on the Pshav-Khevsureti and Gudamakari Community Internet Project was signed by Avtandil Kasradze, Chairman of the LEPL "Innovations and Technologies Agency" under the Ministry of Economy and Sustainable Development and Executive Director of "Mountain Community Organization" Jemal Damatsalashvili. The signing ceremony, held at the Techno Park in Tbilisi, was attended by Deputy Minister of Economy and Sustainable Development Lasha Mikava and the Prime Minister's Advisor on Regional Issues, Sozar Subari. Mikava told media representatives that residents of the Pshav-Khevsureti and Gudamakari gorges will now be able to use modern information and communication technologies, as well as many electronic services offered by the public and private sectors. The new technology will have a positive impact on the social, cultural and economic development of Pshav-Khevsureti and Gudamakari, explained the Deputy Minister, especially regarding the potential for tourism. “This project is a successful example of cooperation between the state, the non-governmental sector, and donor organizations, towards the joint effort of achieving internet access to this very important area,” said Mikava. The Ministry of Economy and Sustainable Devel-

opment of Georgia worked with the Small and Medium Telecom Operators Association of Georgia (TOA), and the Internet Society – Georgia Chapter (ISOC), to develop the project, which received technical and financial assistance to the amount of $25,000. An additional 246,805 GEL ($92,091) was allocated from the High Mountain Settlement Development Fund. Other funds required for the construction of the network will be covered by various donors. The project involves 10 different parties, including the Czech Embassy in Georgia, Veoni Georgia (Beeline Georgia), Dusheti Municipality City Hall, Intellcom Group, LTD. “Digital Technology” (Cambium Networks Georgia), LTD. "SkyTele" And LTD. "Enbi Net.” Subari expressed pride in the project, saying that its implementation “once again emphasizes the special care taken of Georgia's mountain development, which has been a priority for the government in recent years. Pshav-Khevsureti and Gudamakari are the valleys that have great potential for tourism development.” He also noted the “historically significant functions” of many of the region’s villages that lie on the border with Russia. It is “very important,” said Sozari, to properly support the development of these villages to encourage the population, who have largely moved to more easily habitable lowlands or larger population centers, have a desire to return. A similar project was implemented in Tusheti in 2017 by the TOA, with the involvement of the Ministry of Economy and Sustainable Development and technical assistance from the ISOC. Today, internet is available in 25 villages and four gorges in Tusheti and the network is managed by the NNLE Tusheti Development Fund. As explained on the TOA website, the project was lifechanging for many local people, especially small business owners. “For many fulltime residents the internet is free, and costs are covered by Tusheti Development Fund,” says TOA, noting that project creates “hope that young people will have more reason to stay in the area. In essence, internet in Tusheti serves as an additional service for tourists a connection for locals to obtain information and to contact to their family members and friends, both near and far.”

Tolerance - The Common Value among Peoples OP-ED BY THE AMBASSADOR OF THE UNITED ARAB EMIRATES H.E. ESSA ALNOAIMI

T

he decision of the United Arab Emirates in proposing 2019 as the Year of Tolerance, announced by its President, His Highness Sheikh Khalifa bin Zayed Al Nahyan, is in line with two things: 1. Its foreign policy, which is based on firm rules for the promotion of peace among nations, in adherence to the Charter of the United Nations and international laws in order to establish relations with different countries and to stand with just causes and resolve disputes through dialogue and peaceful means. 2. Because tolerance is an effective instrument for Mankind and future generations to create new hopes and to enable sustainable human and economic development in an atmosphere of co-existence. The acceptance of others and their cultures, without distinction, has been based on the holy books and philosophical beliefs of peoples since the beginning of Mankind, despite having faced dissipation by wars and conflicts. The Year of Tolerance in the United Arab Emirates steadfastly aims to build tolerance with the common values of different peoples and nations of the world. It is no wonder that the UAE embraces more than 200 nationalities - more than the number of UN member states. In practical terms, there is a roadmap of legislative and other initiatives and activities in the United Arab Emirates in addition to comprehensive global efforts. The concept of tolerance among people is growing, and here, in Georgia, in this hospitable country, a visitor, through the social fabric of the Georgian people which live in peace, assurance and considerable vitality, feels happiness, joy and love for others. It is therefore unsurprising that the number of tourists coming to discover this friendly country is increasing and that, according to the official 2018 data, over 8 million tourists visited last year, while the UAE welcomed 19 million tourists in 2017.

9


10

BUSINESS

GEORGIA TODAY

MARCH 19 - 21, 2019

Black Sea Bulletin – Exchange Rates 2018

I

n this bulletin, we discuss exchange rate dynamics in the countries of the Black Sea region1 during the period of 2014-2018. In particular, the exchange rates of these countries’ currencies against the USD and EUR and the nominal exchange rates of the Georgian Lari against currencies of other countries on the Black Sea are reviewed. Moreover, the real effective exchange rates of the Georgian Lari against the currencies of Black Sea countries are calculated and the economic indicators, highly correlated with currency changes, like external trade and international traveler visits, are discussed.

during the period of 2015-2017, making Georgian goods and services relatively cheap for these countries, thereby increasing Georgia’s competitiveness. However, in 2018, compared to 2017, the Georgian Lari appreciated against the currencies of Black Sea countries by 1.6%. In 2018, compared to 2017, the real exchange rate of the Georgian Lari appreciated against the Turkish Lira (by 10%) and the Russian Ruble (by 3.2%). Meanwhile, it depreciated against the currencies of three Black Sea countries: the Ukrainian Hryvnia (by 8.8%); the Bulgarian Lev (by 7.9%); and the Romanian Leu (by 7.9%).

EXCHANGE RATES OF CURRENCIES OF BLACK SEA COUNTRIES AGAINST USD AND EUR In 2018, compared to 2014, among Black Sea countries, the Ukrainian Hryvnia was the currency which depreciated the most both against the USD and EUR, by 56% and 51% respectively, followed by the Turkish Lira which depreciated against the USD and EUR by 55% and 49.1% respectively. Among the currencies of Black Sea countries, the Bulgarian Lev depreciated the least against the USD (by 11%) and did not change against the EUR, as the Lev is pegged to this currency (EUR 1 = BGN 1.9558). Meanwhile, the Georgian Lari depreciated against the USD and EUR by 30% and 21.4% respectively. In 2018, compared to 2017, the currencies of all Black Sea countries, except the Bulgarian Lev depreciated against the EUR. The Turkish Lira depreciated the most (by 27.8%), while the Romanian Leu depreciated the least (by 1.8%). In 2018, compared to 2017, the currencies of four Black Sea countries (Turkey (by 55%), Russia (by 7%), Ukraine (by 2%), and Georgia (by 1%)) depreciated against the USD, while the Bulgarian Lev and Romanian Leu appreciated against the USD by 5% and 3% respectively.

NOMINAL EXCHANGE RATE OF THE GEORGIAN LARI AGAINST THE CURRENCIES OF BLACK SEA COUNTRIES In 2018, compared to 2014, the Georgian Lari depreciated against the Bulgarian Lev and the Romanian Leu by 21.6% and 17.8% respectively. Meanwhile, the Georgian Lari appreciated against the Ukrainian Hryvnia, Turkish Lira, and Russian Ruble, by 65.3%, 50.1%, and 15.7% respec-

EXTERNAL TRADE BETWEEN GEORGIA AND BLACK SEA COUNTRIES

tively. In 2018, compared to 2017, the Georgian Lari appreciated the most against the Turkish Lira (by 27.8%), while it depreciated the most against the Bulgarian Lev (by 5.3%). Moreover, in 2018, the Georgian Lari appreciated against the Russian Ruble (6.2%) and the Ukrainian Hryvnia (1.2%), while it depreciated against the Romanian Leu (by 3.6%).

REAL EFFECTIVE EXCHANGE RATE (REER) OF THE GEORGIAN LARI AGAINST THE CURRENCIES OF BLACK SEA COUNTRIES The real effective exchange rate (REER) of the Georgian Lari against the currencies of Black Sea countries depreciated

Georgia’s external trade is dependent on the countries of the Black Sea region. During the 2014-2018 period, the share of these countries in Georgia’s total external trade turnover averaged 36.5%. Among Black Sea countries, Turkey’s share in Georgia’s external trade turnover was the highest (2014-2018 average – 42.7%), followed by Russia (2014-2018 average - 25.9%) and Ukraine (2014-2018 average - 15.1%), while Romania and Bulgaria amounted to 6.7% and 9.5% respectively. In 2014, REER of the Georgian Lari against the currencies of Black Sea countries appreciated significantly (by 8.7%), this had negative effect on Georgia’s export volume in the following years, as during 2015-2016, export from Georgia to Black Sea countries decreased. Specifically, the decrease in exports was significant in 2015 (falling by 21.2%), mostly due to a decrease in exports from Georgia to Russia (by USD 111 mln). In 2015, the latter development could be partially explained by the real exchange rate appreciation of the Georgian Lari against the Russian Ruble during 2014-2015, respectively by 3.5% and 8.2%. During the 2015-2017 period, the REER of the Georgian Lari depreciated against the currencies of Black Sea countries and even though, in 2018, compared to 2017, the Georgian Lari appreciated against the currencies of Black Sea countries by 1.6%, exports from Georgia to Black Sea countries increased by 16.2%. This was mainly due to increases in exports from Georgia to Bulgaria (by USD 72 mln) and Ukraine (by USD 50

mln). It has to be noted that, in 2018, compared to 2017, the real exchange rate of the Georgian Lari against the Bulgarian Lev and the Ukrainian Hryvnia depreciated by 7.9% and 8.8% respectively. The dynamics of imports from Black Sea countries to Georgia was in line with currency changes during the 2015-2016 period (in 2015, imports from Black Sea countries to Georgia decreased by 15%; in 2016, they fell by 0.1%). However, in 2017, imports from Black Sea countries to Georgia increased by 8.8%, mostly due to an increase in imports from Russia (by USD 121 mln). In 2018, compared to 2017, imports from Black Sea countries to Georgia increased by 12%, mainly due to an increase of imports from Russia to Georgia (by USD 139 mln). In 2018, compared to 2017, the Georgian Lari appreciated against the Russian Ruble by 3.2%, making Russian products relatively cheap for Georgians.

INTERNATIONAL TRAVEL BETWEEN GEORGIA AND BLACK SEA COUNTRIES The number of international travelers visiting Georgia from Black Sea countries has been increasing since 2015. During the 2015-2018 period, the number of international travelers from Black Sea countries to Georgia increased the most

in 2017 (by 16.1%). In the same year, the number of international travelers visiting Georgia increased from all Black Sea countries, except Bulgaria. Of Black Sea countries, Russia was responsible for the biggest increase in international travelers visiting Georgia (by 33.7%) and the expenditure of international travelers from Russia increased by 43.2% (amounting to GEL 1.2 bln). The increase in visitors from Russia could be somewhat explained by exchange rate depreciation of the Georgian Lari against the Russian Ruble. In 2017, among currencies of the Black Sea countries, the Georgian Lari depreciated the most against the Russian Ruble (by 15.7%). In 2017, while the number of international travelers from Turkey and Ukraine increased, the expenditures of these countries to Georgia decreased by 5% and 0.4% respectively. During 2016-2018, the expenditures of international travelers visiting Georgia from Russia and Ukraine were increasing year-by-year, the highest increase was recorded in 2018 for Russia (71.3%, in total bln 1.9 GEL) and in 2015 for Ukraine (53.5%, in total bln 0.2 GEL). For turkey, the expenditures of international travelers visiting to Georgia during 2016-2017 decreased, while in 2018 this increased by 8.3% and amounted GEL 1.1 bln.

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POLITICS

GEORGIA TODAY MARCH 19 - 21, 2019

11

What to Do if You See Someone Smoking in Your Building BY MARIAM MERABISHVILI

T

obacco Control Law in Georgia was launched on May 1, 2018, under which smoking is prohibited in buildings, on public transport, in educational establishments, and in cafes and bars, aside from a number of exceptions. It became mandatory to clearly place visual and written signs noting the prohibition / restriction of smoking at all entrances and in other visible places on the territory of the property/transport. Although many people work to promote law enforcement, there are those who still violate the law and the rights of others in public gathering places. What should we do if we see a crime being committed on public property? If someone sitting near you is smoking, what can you do? First, ask the person to stop smoking, pointing to their action being a violation of the law. If the person refuses, contact the manager (or, if on public transport, the driver- who is expected to be responsible for the law being upheld on their mode of transport). If the manager (or driver) does nothing, then you should inform the law enforcement agencies who are responsible for the issue. “I call on everyone to use the 112 mobile app. Through this app, you can send information to 112 about a violation of law and where it happened. The information will be transferred to

patrol officers and the police will execute the law,” explains Lela Sturua, Head of the Department of Non-Contagious Disease Control.

Lawmakers and initiators of the law explain that if a person reporting a crime wants to remain anonymous, their anonymity will be protected.

If not, their name and surname will be announced. So, just how many people violate the smoking law these days? What are the statistics? What is the situation in the regions and what is the attitude of the population? "We continuously conduct monitoring throughout Georgia. Law enforcement is above 90%. We receive information through our hotline and 112, but many people still don’t know that 112 can protect their rights,” Sturua says. “I receive information about crimes on my mobile and ignore not one! We call the place where cigarettes are being smoked, for example, and talk to the manager. In addition, various non-governmental organizations send us information that helps us monitor the process of law enforcement. It is unfortunate that reports about violations in public institutions are still being received. And in some cases, employees feel reluctant to report violations committed by their superiors. They don’t know that their right to anonymity is protected, and we are working on disseminating this information.” “As for the attitude of the population towards the law, it is positive,” Sturua says. “Before the adoption and execution of this law, the public was made ready. Surveys also prove it. People are now enjoying smoke-free public places restaurants, cafes and so on. They can take children there, and their hair or clothes no longer have the smell of tobacco. Generally, the attitude towards having to smoke outside is positive, though as I mentioned, sadly, there are still a number of public servants who smoke in their offices."

Waste Management Project Launches to Reduce Green House Gases

Aghluja landfill near Rustavi. Source: EU Neighbours

BY AMY JONES

T

he Georgian government and the EU launched a pilot green waste separation, collection and recycling project in Marneuli in eastern Georgia on March 15. The launch event was attended by the Ambassador of the European Union to Georgia Carl Hartzell and the Deputy Minister of Environmental Protection and Agriculture Khati Tsilosani along with government representatives and the Major of Marneuli. The project aims to improve green waste collection in the region by assisting the Marneuli composting plant. 30 containers with a 1,100-liter capacity will be purchased and place in various areas in Marneuli. 120 bins with a 12-liter capacity will also be distributed among local residents for kitchen waste collection. The project’s goal is to utilize the green waste, that currently ends in landfills, as compost. As around 50% of landfill in Georgia is green waste, the project should cut greenhouse gas emissions significantly. The pilot initiative comes under the EU-funded

“Technical assistance for the improvement of waste management systems in Georgia,” a joint project of the EU, the Ministry of Environmental Protection and Agriculture, the Marneuli Composting Plant and local government. Speaking at the launch event, Carl Hartzell underlined the importance of waste management in Georgia: “The EU is a global leader in environmental and health issues. Waste management is a key part of this, and we are happy to share our experiences in Georgia,” he said. “Through this pilot action supported by the EU in Marneuli, we are showing that there are opportunities to better manage waste in Georgia and that green waste can be recycled to produce useful compost,” he continued. The EU chose to tackle green waste due to its high volume in landfill. This is especially problematic for the environment as organic waste generates methane as it decomposes which is a greenhouse gas 25 times more potent than carbon monoxide. In addition, green waste can easily be recycled to create biological fertilizer and soil conditioning products. A report by the EU in 2018 found that approximately 900,000 tons of waste are generated annually in Georgia, of which more than 75% goes into landfills. This figure is much higher compared to other European countries such as Germany, the Netherlands, Austria and elsewhere, where over 50% of waste is recycled. Landfill is the least desirable waste disposal method. In Georgia, only 5 of the 56 official landfills have environmental impact permits. Many landfills were established from the 1960s to 1980s when little regard was paid to the environment and few protective measures were put in place. Landfills therefore create an especially high amount of dangerous chemical substances and harmful pollution. Merneuli houses the only green waste recycling facility in Georgia. By supporting the project, the EU hopes that the village can “serve as a good example for replication in other municipalities and regions.” If the project is successful, similar recycling projects may be launched in Georgia to reduce landfill waste disposal and environmental damage.

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Profile for Georgia Today

Issue #1134 Business  

March 19 - 21, 2019

Issue #1134 Business  

March 19 - 21, 2019

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