BUSINESS
AUGUST 21 - 27
11
er ence Confer erence Geor gia Ste pping F orw ar d Digital Conf Georgia Stepping Forw orwar ard hed in Geor gia Launched Georgia Launc in the Wor ld of Business orld By Eka Karsaulidze
Georgia has rightly proved itself ready to host another successful investment forum with September 18th 2015 already marked on the calendars of many international investors. On that day Cushman & Wakefield | Veritas Brown, together with the Georgian National Investment Agency and the government of Autonomous Republic of Adjara, are planning to organize the “Investment Forum, Batumi 2015” at the Hilton Hotel Batumi in the Black Sea Region. The aim of this forum is to provide an intensive dialogue between international investors and Georgian counterparts, with the view of efficient future cooperation. Local and foreign investors, regional and central government representatives, and business organizations will come together to discuss various topics, including investment projects, proposals, investment climate characteristics and expansion of the commercial real estate and hotel development sector, something that has proved to be in demand for many years in Georgia. “In recent years, Batumi has become not only a major tourism center of the Black Sea region, but it’s also the most attractive investment destination. This has resulted in a growing interest towards the whole Adjara region from both foreign and local investors. The forum will provide potential investors with an opportunity to get familiarized with Georgia’s attractive investment environment, as the foreign direct investment (FDI) inflow is the main priority for both central and regional governments. The aim of the forum is to inform interested groups about the investment potential of the Adjara region, its leading economic sectors, and ongoing projects,” said David Baladze the Minister of Finance and Economy of the Autonomous Republic of Adjara. A similar forum was organized in London in May 2015 by Cushman & Wakefield | Veritas Brown, together with the Georgian National Investment
Agency, and the event has definitely showed reported success. Georgia demonstrated itself to be an opportunistic market for investment and gained further international recognition as a competitive country to invest in. “On behalf of Cushman & Wakefield | Veritas Brown, we fully support the initiatives to bring additional investments to Georgia and look forward to a successful business forum on September 18th,” said Steve Brown, Managing Partner at Cushman & Wakefield | Veritas Brown. “Meanwhile, attracting foreign direct investment (FDI) is one of the main priorities for Georgia. Thus, a flexible investment environment, tax and legislative benefits, simplified company registration procedures, liberalized manufacturing regulations and a positive approach to foreign investors is a big step forward for attracting FDI to Georgia,” Brown continued. It is obvious that this specific and other similar investment forums, will lead to Georgia’s further economic success, and undoubtedly this shall assist global investors to enter the Georgian market, increasing demand for various real estate properties, form new enterprises and hospitality related áervices, and also the implementation of large-scale infrastructure projects; this shall lead Georgia towards progressive development and vast economic success. “Georgia has a fair, transparent and
secure investment environment, a vast untapped potential in different sectors of the economy, excellent geographic location and free trade agreements with strategically important countries,” said Giorgi Pertaia, Director of the Georgian National Investment Agency. “But, still to this day, one of the main challenges for Georgia is awareness at international levels. This is why largescale business events inside and outside the country are very important for attracting more companies to Georgia. With the help of the Batumi 2015 investment forum we aim to focus attention on the advantages and business opportunities in our country,” Pertaia said. According to Pertaia, the Forum will bring together up to 250 business decision makers and investors from the region. “They will have direct access to the representatives of government, consulting companies and organizations providing access to finance and we are sure that this will be a productive platform for engaging investors from the wider region into some large and medium-sized commercial projects in Georgia,” Pertaia added. One thing is clear: Georgia has demonstrated repeated readiness to serve as a positive investment environment. Therefore, September 18th 2015 is a significant date in the Georgian investment climate, so Ready, Steady, Go Georgia!
Tak es Mor e than 5 F acts to Explain R ussia’ s Economic Dec line akes More Facts Russia’ ussia’s Decline The Times Magazine released an analysis explaining the 5 main reasons of Russia’s economic decline based on some high-caliber research by leading experts and organizations such as International Monetary Fund or Pew Research Center. “For the first time since 2009 - low point of the global economic slowdown - Russia is in recession” - cites the publicationadding its economy will contract 3 percent this year, though Moscow’s $360 billion in cash reserves will cushion the immediate blow.” It summarizes that although Russia’s Vladimir Putin’s continuedattempt to assert Russian power on the international stage, it has become clear that he is now ruling a “submerging market.” Among the other hard problems, lack of diversification, high dependence on its oil resources and no incentive to change are some very aspects, which can simply underline Russia’s fragility in this technology-based world of 21st century. “For years, the Kremlin has supported and protected large state-owned companies at the expense of small and medium-sized enterprises (SMEs). But those smaller firms are the foundation of any strong and well-diversified economy. SMEs spur innovation and respond effectively to changing times, technologies, and consumer tastes. In the EU, SMEs contribute an average of 40 percent to their respective countries’ GDP; in Russia, SMEs contribute just 15 percent. Those are daunting figures for anyone looking to start a business in Russia” – the Times emphasizes.
With the subtitle of “at the Mercy of Oil Markets”, the analysis reviews Russia’s dependence on oil prices citing the price of oil has now fallen below $45 a barrel - welcome to the new normal. “OPEC continues to pump oil at historic rates as it tries to price out competitors, and Iran expects to bring over a million new barrels a day to world markets after the lifting of international sanctions. These are deeply troubling developments for Moscow, which relies on oil and gas sales for nearly 50 percent of its government revenues”. According to the article, Moscow’s growing so reliant on energy sales leads it to the condition whenfor each dollar the price of oil drops, Russia loses about $2 billion in potential sales.“For Russia to balance its budget, oil will need to surge back to $100 a barrel.” Considering Russia’s over-reliance on crude oil (up 40 percent of Russia’s state budget) - the country is left vulnerable to the current international sanctions. “Given the age of many existing fields, Russia will increasingly depend on cutting-edge technology from Western firms to pump oil from difficult-to-reach shale
and deep-water reserves.”It seems that Russia’s endeavors to turn for help to Chinadoes not lead the country to alter the western market because of China’s lack ofthe technology Russia needs to draw those resources from the ground. According to the IMF the sanctions could eventually cost Russia 9 percent of its GDP. At the same time, Russia, which vitally needs rapid technological and economic growth to endure those western sanctions and be a competitive force in the world markets, it has rather opted for something radically different. Moreover, as the Time assumesRussians aren’t nearly as productive as for each hour worked, the average Russian worker contributes $25.90 to Russia’s GDP, while the average for U.S. is $67.40. There are other deadly elements, such as endemic corruption, massive brain drain from the country, lack of freedom and no potential to change – all of these makeone hard to predict the Russia’s positive development in the near future.“It’s no surprise then that well-educated Russians are leaving their country in droves. Between 2012 and 2013, more than 300,000 people left Russia in search of greener economic pastures, and experts believe that number has only risen since Moscow’s annexation of Crimea last year”. The article ends with the assumption that “Putin knows what his people want to hear however,It’s just not clear if he knows how to fix his flailing economy.” In summation, there might be five facts but more to explain Russia’s economic decline.
Tbilisi hosted the first international digital conference Future Georgia on August 15-16 during which twenty speakers from Georgia and neighboring countries shared their experiences and achievements, talked about business development and the necessity ofnew technologies to bring products to a new level. The Future Georgia Conference became an excellent platform to exchange knowledge and create new projects, according to the Conference organizers. “Recently in Georgia a large number of creative agencies were opened, startups launched, and people started to develop these areas. That is why it is important to hold such conferences with the participation of foreign experts,”said Gigi Janelidze,
acquire new skills and gain knowledge. The audience actively communicated with the speakers. Opportunity to talk face-to-face with an interesting speaker was another advantage of Future Georgia. “Beside inspiration and practical information from most of the Future Georgia’s speakers, it was very important, personally, for me to get some insights from Alpha Bank’s Research and Development Chief Dmitry Andronov during the break,” said Shalva Bukia, Co-founder of In2circle Incorporated and audience member at the Conference. Andrey Manirko, one of the Co-organizers of Future Georgia, noted that besides many positive feedbacks, there were questions why so many Russians took part in the Conference. “Both Georgia
Future Georgia Conference 2015 (from the Conference facebook page).
Co-organizer of Future Georgia. Digital media, branding, PR, marketing and IT were the main topics at the Future Georgia Conference. Specialists from Russia and Ukraine shared their experience and knowledge about digital communication strategy, trends in media, virality, startup strategy and more. Ilya Krasilschik, publisher in Meduza Project, described how to create quality and leading media from zero in a short time, as well as how to build new kinds of relationships with partners and advertisers. “Website banners are not relevant any more. Today we need to find new ways to advertise. For example, Meduza, together with partners, creates games. Recently, together with Airbnb, we offered our readers the chance to play a game and correlate an apartment and the city,” said Krasilschik. Speakers were not limited in time, on average they had about 20 minutes – enough time to discuss the most important things. Nevertheless, there were exceptions, like Andrey Buzina, Founder of Smetana Viral Marketing Agency whose speech about the effectiveness of viral videos lasted more than an hour. “I had no idea that the viral video can be so effective, interesting and not as irritating as ordinary advertising is. It was so exciting that I did not even notice how time passed,” said Yana Israelyan, Freelance journalist and audience-member at the Future Georgia Conference. Future Georgia provided not just lecture sessions, but also roundtables with the participation of representatives of Meduza Project, Coub, Look At Media and Yandex. Participants talked about how to create and promote startups,
and Russia have emerging markets. Not so long ago, the Russian market was at the same stage of development as Georgia is now, but the country was able to develop and achieve high results, especially in terms of media and startups. That’s why we thought that the Russian example could be interesting and relative to Georgia,” explaqined Manirko. Georgian speakers also played a huge role in Future Georgia Conference. Their participation gave to the audience the chance to compare, catch the differences and find out local success stories. Among Georgian speakers were Levan Lepsveridze and Giorgi Avaliani from Leavingstone Advertising Agency, who recently gained a Bronze Lion in PR at the Cannes Lions International Festival of Creativity, and Sopio Elizbarashvili from Myvideo.ge, leading video platform in Georgia, who each told how they had achieved their goals and are going to enter new markets. Aside from the abundance of marketing and new technologies topics, FutureGeorgia also highlighted topics like contemporary art. TommyPetrov, CoFounder of DaDa Agency, reported that modern art, theatre, cinema and advertising exist thanks to the era of Dadaism. “The distinctive feature of Dadaism was context changing- when you take something well known and add something new, like Marcel Duchamp did when he painted a mustache on Mona Lisa,”said Petrov. Indeed, it seems that the main idea of Future Georgia Conference is all about Dadaism – you just need to take foreign expert knowledge and add something of your own and fit it to the Georgian context.
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