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facebook.com/ georgiatoday

Issue no: 1016/113

• JANUARY 23 - 25, 2018

• PUBLISHED TWICE WEEKLY

PRICE: GEL 2.50

In this week’s issue... Georgia Paticipates in Fitur 2018 Tourism Trade Fair NEWS PAGE 2

Minister Kumsishvili Meets Zurab Pololikashvili, UNWTO Secretary General NEWS PAGE 3

Tbilisi’s Super Vet: Pioneering Animal Care in Georgia

FOCUS ON BEEF

ISET looks at the changing trends of beef import and consumption in Georgia

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Prime Minister of Georgia to Attend World Economic Forum in Davos BY NINO GUGUNISHVILI

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rime Minister of Georgia, Giorgi Kvirikashvili, will be attending the World Economic Forum in Davos, Switzerland, on January 22 - 24. As Georgian media sources report, the PM will meet with political leaders and representatives of various international companies also attending the 48th World Economic Forum to be held

BUSINESS PAGE 5

Tourism Market Watch GALT & TAGGART PAGE 6

MagtiCom Delays Planned Rise in Mobile Data Cost BUSINESS PAGE 7 Photo: World Economic Forum, Davos. Photo source: GPB

from January 23 to January 26, this year. Kvirikashvili is to participate in the Strategic Outlook –Eurasia discussion to be held on January 23. Alongside the Prime Minister of Georgia, Minister of Foreign Affairs of Georgia Mikheil Janelidze, Minister of Finance Mamuka Bakhtadze, and Giorgi Bachiashvili, Chief Executive Director of the Georgian Co-Investment Fund, are to be members of the Georgian delegation heading to Davos. The annual meeting of the World Economic Forum 2018 is expected to gather over 2,500

leaders from governments, businesses, international organizations, civil society, academic circles and arts. The forum, with the theme: “Creating a Shared Future in a Fractured World,” offers over 400 sessions within its program, covering global, geopolitical, economic, regional, industry and business and ‘the future’. Issues to be discussed range from improving global governance mechanisms, advancing major multilateral processes, sustainable and inclusive economic development, to the fast changing geopolitical landscape, and innovations, ideas and discoveries of the future.

Laura Thornton on the Latest NDI Poll Results

POLITICS PAGE 10 Prepared for Georgia Today Business by

Markets Asof19ͲJanͲ2018

STOCKS BGEOGroup(BGEOLN) GHG(GHGLN) TBCBankGroup(TBCGLN)

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

INDICES

Price

w/w

m/m

Price

w/w

m/m

GBP37.80

+0,2%

+7,8%

GEOROG04/21

107.67(YTM4.20%)

Ͳ0,1%

Ͳ0,1%

GBP3.48

+0,7%

Ͳ0,7%

GEORG04/21

BONDS

110.94(YTM3.27%)

Ͳ0,7%

Ͳ1,2%

GBP17.24

+0,6%

+4,8%

GRAIL07/22

112.73(YTM4.57%)

Ͳ0,1%

+0,3%

BGEOLN07/23

105.14(YTM4.92%)

Ͳ0,2%

+0,5%

Price

w/w

m/m

68,61

Ͳ1,8%

+7,5%

CURRENCIES

Price

w/w

m/m

1331,84

Ͳ0,4%

+5,6%

GEL/USD

2,5405

Ͳ0,4%

+0,6%

GEL/EUR

3,0892

Ͳ0,7%

+3,2%

Price

w/w

m/m

GEL/GBP

3,5137

+0,3%

FTSE100

7730,79

Ͳ0,6%

+2,5%

GEL/CHF

2,6312

+0,2%

+2,2%

FTSE250

20653,32

Ͳ1,0%

+1,5%

GEL/RUB

0,0448

Ͳ0,4%

+4,2%

DAX

13434,45

+1,4%

+1,7%

GEL/TRY

0,6671

Ͳ2,0%

+1,3%

DOWJONES

26071,72

+1,0%

+5,3%

GEL/AZN

1,5032

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+1,2%

7336,38

+1,0%

+5,3%

GEL/AMD

0,0053

Ͳ

+1,9%

NASDAQ

+3,9%

180,91

+1,5%

+11,4%

GEL/UAH

0,0880

Ͳ1,5%

Ͳ2,8%

MSCIEM

1232,60

+2,0%

+8,9%

EUR/USD

0,8184

Ͳ0,1%

Ͳ3,1%

SP500

2810,30

+0,9%

+4,8%

GBP/USD

0,7219

Ͳ0,9%

Ͳ3,4%

MSCIEMEE

2286,33

+1,1%

+7,9%

CHF/USD

0,9628

Ͳ0,5%

Ͳ2,2%

MSCIFM

3154,02

+1,2%

+7,8%

RUB/USD

56,7175

+0,2%

Ͳ3,5%

GTIndex(GEL)

1582,68

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TRY/USD

3,8065

+1,5%

Ͳ0,7%

GTIndex(USD)

1208,13

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AZN/USD

1,6996

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Ͳ0,0%

MICEX


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NEWS

GEORGIA TODAY

JANUARY 23 - 25, 2018

Georgia Paticipates in Fitur 2018 Tourism Trade Fair BY NINO GUGUNISHVILI

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eorgia participated in international tourism trade fair Fitur 2018, held January 17 to January 21 in Madrid, Spain. The Fitur tourism and trade fair is recognized as one of the largest international fairs for tourism professionals, gathering 9,500 companies from more than 160 countries, with over 13,500 visitors attending. “Tourism, for Georgia, is one of the major sectors of the economy,” said Dimitry Kumsishvili, First Vice Premier and Minister of Economy and Sustainable Development of Georgia, who attended Fitur 2018 while on an official visit to Spain. In 2017 alone, according to Kumsishvili, tourism generated over $2 billion

for Georgia's economy. He highlighted that the goal of the economy, the goal of the country is to maximally support the development of the tourism sector. Georgia’s pavillion at Fitur 2018 introduced all the major tourism products from Georgia, giving visitors the chance to “travel” around different parts of the country through a 3D virtual tour, to taste Georgian wine, and to find out about the tourism opportunities the country has to offer. “Fitur 2018 is one of the most important international tourism trade fairs in Europe,” said George Chogovadze, Head of National Tourism Administration of Georgia. “We’re represented here together with numerous Georgian tourist companies. Considering the record breaking number of visitors coming to Georgia, we will be focusing on and accenting ever more on the international direction.”

Giorgi Kvirikashvili Rules Out Possibility of Running for President in Next Election

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ccording to the Press Office of the Georgian Government Administration, Giorgi Kvirikashvili has ruled out the possibility of running for president in the next election. When asked whether the ruling team is already discussing its future presidential candidate, and whether or not his candidacy is being considered, the Prime Minister replied that the team has yet

to make a decision, that preliminary talks are being held regarding the issue and that he absolutely rules out the possibility of running for president in the upcoming election. “As for my candidacy, a topic periodically surfacing in the media, I can assure you that my candidacy will not be nominated for the next presidential election. Given my current position, I, together with the government team, am imple-

menting the platform defining important positive dynamics in the country. The successful implementation of this platform requires full consolidation and achievement of significant results in ongoing activities. Under the circumstances, nominating me as a presidential candidate seems uncalled for and uninteresting to me. I believe that over-exaggerating this issue is even detrimental to our team,” Kvirikashvili said.

New Menu at Kindergartens Raises Parent Criticism BY THEA MORRISON

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Photo: Kumishvili and Chogovadze at the Fitur Tourism Fair

eorgian parents have slammed the new menu introduced in state kindergartens, claiming that portion sizes have been “significantly reduced.” Parents took to social networks to protest the new menu, which, according to the Ministry of Health, is in compliance with international health standards. One mother, Dodo Julukhadze, wrote on Facebook that the Tbilisi Kindergarten Agency had told her there would be only cereals and no bread served during the breakfast for children, noting that her child does not eat cereals, which means she will stay hungry until lunch. Another parent says she has to give her child food to take to kindergarten, because the new menu is not diverse and offers only limited food options. Journalist Archil Gamzardia, wrote on Facebook that the Tbilisi Mayor’s Office is “starving children.”

“Parents, the same is happening now as it did in the 90s: City Hall is keeping our children hungry,” his post reads. The new standard of nutrition in kindergartens entered into force on January 1. According to the standard, the amount of bread, cookies, and confectionery products that contain more than 15% fat was reduced to a minimum. The standard also prohibits regular consumption of products which contain a high level of sugar, salt or fat. Moreover, the new menu includes more meat, dairy products and fruit. Despite parents’ criticism, UNICEF approved the introduction of the new nutrition standard in the preschool educational institutions of Georgia. UNICEF Head of Education Programs Maia Kuparadze says the organization was actively involved in the elaboration process of the new menu. Kuparadze added that a group of specialists was set up in the Ministry of Health, staffed with food specialists and doctors, who decided that the old standard had to be replaced with one that better met the needs of children and guarantees they receive the neces-

sary calories, proteins and vitamins during the day. “The current menu is filled with significant proteins and natural carbohydrates as per international obligations. These standards are regulated by the European Union as well as the World Health Organization,” Kuparadze said. Tbilisi Mayor’s Office also commented on the issue, saying the new menu was introduced for children’s well-being and vitality. Deputy Tbilisi Mayor Irakli Bendeliani stated at a special press-conference that City Hall has increased monitoring of state kindergartens in order to ensure protection of hygiene and high nutrition standards. Bendeliani said the changes in the menu are a result of new regulations introduced by the Ministry of Health and are based on expert assessment. “I would like to underline that neither the amount of food nor quality have been reduced. The change in the menu stems from the new Ministry of Health regulations and was elaborated by experts, not City Hall employees,” he added.


NEWS

GEORGIA TODAY JANUARY 23 - 25, 2018

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Minister Kumsishvili Meets Electronic Medical Prescriptions Zurab Pololikashvili, UNWTO Secretary General Become Mandatory in Tbilisi BY NINO GUGUNISHVILI

BY THEA MORRISON

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eorgia’s First Vice Premier and Minister of Economy and Sustainable Development, Dimitry Kumishvili, met with UNWTO Secretary General Zurab Pololikashvili, on January 20, within the framework of the Minister’s official visit to Spain. Topics related to future cooperation between the UNWTO and Georgia were discussed at the meeting held at the UNWTO office, the Ministry of Economy and Sustainable Development of Georgia reports. George Chogovadze, Head of the Georgian National Tourism Administration, also attended the meeting. Kumsishvili congratulated Pololikashvili with his appointment to the post of UNWTO Secretary General, and went

Pololikashvili's success is extremely important for our country

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rom January 1, 2018, electronic prescriptions became mandatory in Tbilisi clinics and hospitals. This means that any medical institutions that violate the new rule will be fined, and the Ministry of Health will no longer cooperate with them. More than 1,000 doctors have already been trained in the new method in Tbilisi. Electronic and video instructions for the use of e-recipes were also created. The Health Ministry says the training Photo: Minister Kumsishvili meets Zurab Pololikashvili, UNWTO Secretary General

on to underline the importance of Georgia’s cooperation with the organization. He also expressed hope that this will deepen in the future. “We had a very important meeting with Mr. Pololikashvili, the UNWTO Secretary General. His success is extremely important for our country,” Kumsishvili stated after the meeting. “Georgia is very active in international relations, and with the UNWTO. With them, we have organized a wine tourism conference and mountain resorts tourism conference in recent years in Georgia. The fact that Mr. Pololikashvili is the UNWTO Secretary General is

now new stimulus for developing more projects and relations with the UNWTO,” Chogovadze said. Zurab Pololikashvili was appointed to the post of UNWTO Secretary General in September 2017, for the years 20182021. He was selected by the UNWTO General Assembly, according to the recommendation of the 105th UNWTO Executive Council. Previously, Pololikashvili served as Ambassador of Georgia to Spain, Morocco, Algeria and Andorra, Minister of Economic Development of Georgia in 2009-2010, and Deputy Minister of Foreign Affairs of Georgia 2005-2006.

will be held in other regions as well, where the mandatory e-prescriptions will be introduced gradually. Under the new system, pharmacies are also obliged to use electronic prescriptions. Patients will now only need an ID card when visiting a clinic or pharmacy. Doctors will be able to directly send their patients’ prescription details to pharmacy computers, with the goal of cutting down the number of clerical mistakes for patients, and saving time. The changes are approved of by both patients and medical representatives. They say the new system is the most efficient way of prescribing medicines.


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BUSINESS

GEORGIA TODAY

JANUARY 23 - 25, 2018

THE ISET ECONOMIST A BLOG ABOUT ECONOMICS AND THE SOUTH CAUCAUS

www.iset-pi.ge/blog

The ISET Policy Institute (ISET-PI, www.iset-pi.ge) is an independent think-tank associated with the International School of Economics at TSU (ISET). Our blog carries economic analysis of current events and policies in Georgia and the South Caucasus region ranging from agriculture, to economic growth, energy, labor markets and the nexus of economics, culture and religion. Thought-provoking and fun to read, our blog posts are written by international faculty teaching at ISET and recent graduates representing the new generation of Georgian, Azerbaijani and Armenian economists.

Is the Georgian Beef Market Becoming More Western? BY GERMAIN MILET AND IRAKLI KOCHLAMAZASHVILI

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hen visiting Georgia, the son of a French farmer may feel like cows are invading the countryside, absolutely everywhere, roaming in herds- the cows, heifers and calves all together- aiming to chomp up every blade of grass under the watchful gaze of their herdsman. From this point of view and many others, including amazing landscapes, Saperavi wine, khinkhali and mtsvadi, the Georgian countryside is most surprising and interesting! As is the beef market and the ongoing evolution inside it. With animals of an average carcass weight of around 150 kg, to be eaten less than four days after slaughtering, the organization of the Georgian meat market cannot be compared with French standards. In France, animals weigh an average 350 kg per carcass, and no meat is eaten before a week of maturation. Most of the meat in Georgia is sold fresh at open bazaars and butchers: 65% of consumers use these as their first provider of meat, whereas in France, more than 60% of the meat is distributed through supermarkets. Why is meat maturation regarded as so important in France? For tenderness! Maturation helps meat to soften, and also brings out the taste. Tender-

ness is so important in France because the French favor the meat from adult cows over any other, and most will be grilled or oven-roasted. Accordingly, tenderness is the first quality mark for French consumers. Most butchers in France will leave the meat to mature for a few days… or much more, as in some high standard outlets like the Blauenstein Company, which has a farm in Racha, and sells its products in its Tbilisi shop.

exporter of live cattle, with 50,000 to 100,000 cattle heads per year exported, and even more live sheep and sheep meat, Georgia is still importing more than 20% of its beef in the form of lowcost meat (frozen boneless meat) from Ukraine, European countries and from even further afield – Brazil and Australia. But why? This was one of the main questions asked by our team, and there are three levels of answers. First, fattening ani-

Source: Blauenstein Georgia

But we weren’t brought to Georgia by the French Ministry of Finance to compare its meat market with the French situation; we came here to understand the Georgian meat market, and make predictions about its future development. Despite being an important

Source: AGRIndex based on data provided by the Ministry of Agriculture of Georgia

mals requires a lot of fodder, a rather rare commodity in a country with such a large number of cows and sheep. Second, exporters are ready to pay a much higher price for live animals than the price achieved in the local market. This encourages farmers to export their young bulls, and pushes up the beef price on the local market. A high price for local beef on the Georgian market renders international low-cost meat very price-competitive on the market. The third factor that is fueling the demand for international meat in Georgia is the evolution of demand. Our team, with the help of the ISET Policy Institute, conducted a survey on the meat consumption habits of more than 700 consumers residing in Tbilisi in September 2017. This survey shows some ongoing changes in what people expect from the beef they purchase. These changes are occurring in the younger generation, whose expectations toward beef are clearly different from

10 Galaktion Street

those of older people. When asked what they think should be the price for 1kg of beef, 45% of people under 40 years old responded 10 GEL or more; whole only 21% of respondents over 40 years of age agreed. The most recent price for 1 kg of boneless beef was, on average, 13 GEL/kg, according to the AGRIndex . This indicates that young Georgians are ready to pay more for beef than the older generation. The type of meat researched is another changing point; our survey shows that the younger the consumer is, the more he will favor boneless meat over bonein meat. 46% of people under 40 buy boneless meat more often than bone-in. This goes down to 26% in the 41-60 year-old age group, and 13% for the over-60 group. Another example of change occurring is the place where meat is bought. Under 40s are deserting bazaars for supermarkets and butchers; 24% of people under 40 usually buy meat in supermarkets, against 8% for those over 60. How do these changes promote meat import? These result shows that young people are tending to move to a more “western way” of consuming meat, focusing on pieces that are more expensive but also quicker to prepare. This is confirmed by their growing appetite for chicken, the simplest and quickest meat to prepare. To meet this sort of meat demand, the Georgian supply chain

will need to adapt its marketing methods. At the moment, most meat is brought to the consumer as a whole carcass, and the differentiation between the cuts is low. Foreign meat producers are able to bring to Georgia all specific cuts in vacuum packs that could, in the near future, satisfy the demands of younger consumers. This movement is not bad news for the local supply chain, as a higher degree of differentiation between cuts means a higher added value for suppliers. The evolution of Georgian demand for meat is bringing opportunities for the meat sector, especially when meat prices demonstrate an upward trend. Georgia has a clear lack of quality signs in its meat sector, and promoting the quality of local produce is crucial to satisfy the new generation. Private companies and the public sector should follow the examples below, from the official quality signs available in the EU.

Written subsequent to the study, “Meet the Meat Demand,” a partnership between the French Ministry of finance and the Georgian Ministry of Agriculture, organized by France Génétique Elevage and the International Technical Cooperation Bureau (ITCB).

Tel: (995 32) 2 45 08 08 E-mail: info@peoplescafe.ge


BUSINESS

GEORGIA TODAY JANUARY 23 - 25, 2018

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Tbilisi’s Super Vet: Pioneering Animal Care in Georgia INTERVIEW BY TAMZIN WHITEWOOD

animals. I studied at Tbilisi State University and took every opportunity I could to work closely with other vets and trained professionals.

T

WHAT MADE YOU WANT TO STUDY VETERINARY MEDICINE?

here are many noticeable things upon arrival in Georgia as a foreigner. Whilst the majority are positive aspects that form a part of Georgia’s unique culture; there are, however, also some negatives. The street animal situation in Tbilisi, whilst improving, can still be rather shocking if you come from western Europe or North America. There are cats and dogs on the streets in abundance, which can be a difficult thing to see. In recent years, there have been numerous attempts to improve this. The Mayhew, a Britishbased charity organization, carries out annual vet-training in Georgia, with numerous animal shelters around Tbilisi taking part in an immunization program to ensure disease is not spread. They also spade as many dogs and cats as they can to prevent mass-breeding. The latest animal-aid in Tbilisi is much improved vet training. Arthur Lagovski runs his Veterinary Clinic just next to Dry Bridge, and has been given the new nickname of ‘Tbilisi’s Super Vet’. GEORGIA TODAY went to meet Arthur to find out what makes his services different from the many other vets across the city.

TELL US ABOUT YOUR TRAINING AS A VET I graduated in 2012, and worked in my mother’s veterinary practice, I always had a passion for

Since I can remember, I always loved animals; not just a specific animal, such as dogs, as a lot of Georgians do, but all of them. I also had a great interest in medicine, in particular, surgery, so I decided to combine both my passions.

WHY DID YOU BEOME A VET IN TBILISI, CONSIDERING THAT THE OVERALL IMPRESSION OF ANIMALS, ESPECIALLY AT THAT TIME, WAS NOT GREAT? I always wanted to change the image of animals in my country, to try and change the mentality of the people. My thought process was always that animals are living and breathing creatures, just like us, with the same organs, so surely, they deserve a chance to be cared for too? You can’t just throw a pill at a situation and expect it to get better: they need proper care, analyses, treatment.

WHEN YOU WERE STUDYING, I’M SURE YOU UNDERSTOOD THAT THE IMAGE OF ANIMALS IN GEORGIA WAS NOT AS POSITIVE AS THAT IN WESTERN COUNTRIES, DID THAT NOT MAKE YOU FEEL WORRIED ABOUT SPECIALIZING IN THIS FIELD? Sure, it was a worry. Yet, my ideology was never to make money: this was

of no interest to me. My passion, my goal, was to change the mentality of the people and improve the situation. I was determined to teach people to love animals, and to take care of them more.

WHY DO YOU THINK THE SITUATION WITH ANIMALS IN GEORGIA OVER THE YEARS HAS NOT BEEN PARTICULARLY POSITIVE? Whenever I ask myself this question, I always look back to the situation in the 90s. Frankly, it is incomparable to now. So, however bad the treatment of animals may have been back then, it’s easy to see the vast improvement today. There are also a lot more veterinarians nowadays, all of whom help to increase knowledge of animal care. The new generation is more responsive to the care that animals need and deserve. When I started out, I was determined to make a difference, be it even in a small way, and this is what gave me the incentive to pursue my career.

WHAT WOULD YOU SAY ABOUT THE TRAINING SITUATION FOR VETS IN GEORGIA? At the time of my training, the only study materials for vets was in the Russian language; there was a severe lack of material in Georgian. I am a Russian speaker, so for me it didn’t prove to be too much of a problem, but for others, this is not only far from ideal, it also raises serious

questions of ethics. How can students learn how to care for animals properly, to gain the knowledge they need, if the study isn’t in their mother tongue? The situation is slowly changing, yet I myself made sure I took every opportunity to attend any training available abroad. I learnt a lot during my visits to Lithuania, Germany, Ukraine and Estonia.

YOU HAVE YOUR OWN VETERINARY PRACTICE IN TBILISI, TELL US WHAT MAKES YOUR CLINIC DIFFERENT FROM OTHER SUCH SERVICES IN TBILISI My fellow doctors and I concentrate on particularly difficult surgeries. For example, complex bone fractures and breaks, neurological surgery. I also recently started offering laparoscopic surgery for animals; it works very well and reduces the risk of infection and is the safest method of surgery on animals. We use laparoscopies for diagnostics, hysterectomies, trachioscopies, bronchoscopies – to name just a few.

IS IT TRUE YOU ARE THE ONLY VET IN GOERGIA TO OFFER LAPAROSCOPIC SURGERY? At the moment, yes, this is true.

THIS MUST MAKE YOU VERY POPULAR WITH PET OWNERS? Yes and no. Many people don’t quite understand the difference between normal surgery and laparoscopies. Once again, it comes down to a lack of knowl-

edge in this field. At my clinic, we try to teach and inform people about the new methods of surgery available. It’s a slow process but we’re starting to see positive results.

CAN YOU GIVE ME SOME OTHER EXAMPLES OF THE WORK YOU CARRY OUT, THAT PERHAPS OTHER VETS IN GEORGIA DO NOT? Many clinics are starting now to cooperate with my practice, so if they have a particularly difficult situation, they can ask for help, advice, or even for help with complex surgeries, such as ophthalmic conditions or complex breaks.

I MYSELF AM FAMILIAR WITH YOUR WORK AS MY CAT BROKE TWO BONES IN HER LEG. I WAS IMPRESSED WITH THE APPARATUS YOU USED TO FIX THE PROBLEM, TELL US MORE ABOUT THIS METHOD There are some vets that would deem such cases to be too complicated, yet I see this as a challenge. Surgically, in such situations, I would try to set the bones back in place by using a metal frame which would then be set with clay at either end. This ensures the broken bones, once set back into place, do not move for the remainder of the animal’s recovery.

THIS IS QUITE INNOVATIVE IN GEORGIA. I THINK IT WOULD BE FAIR TO SAY THAT SOME VETS HERE MAY FIND THIS QUITE HARD TO DO, SO THE FACT THAT YOU CAN PERFORM SUCH SURGERY IS QUITE PIONEERING WORK, NO? Yes. Previously, nobody performed such surgery as it really is rather complicated. You need a lot of patience and mental strength to see such operations through! This is what spurs me on, what makes me want to initiate new surgery methods here.

WHAT WOULD YOU SAY TO FOREIGNERS, TOURISTS, EVEN GEORGIANS, WHO MAY BE READING THIS, ABOUT THE ANIMAL SITUATION IN GEORGIA NOW The situation is still not great. We don’t even have a law that works to protect animals. Whilst overall opinion is rising, and animals are being treated better by the public, we need laws to be put into place to further protect the well-being of animals, such as in Western Europe or the US. Yet, this is why I chose such a profession, it’s what I have a passion for and I don’t regret it for a minute. Thanks, Arthur! We wish you every success in the future.


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BUSINESS

GEORGIA TODAY

JANUARY 23 - 25, 2018

The Galt & Taggart Research team comprises Georgian and Azerbaijani finance and economic experts who have broad experience of covering the macro and corporate sectors of the two countries. Our current product offering includes Georgian and Azerbaijan macroeconomic research, Georgian sector research, and fixed income corporate research. For free access to Galt & Taggart Research, please visit gtresearch.ge or contact us at gt@gt.ge.

Tourism Market Watch FOR GEORGIA TODAY BY KAKHABER SAMKURASHVILI

S

ector research is one of the key directions of Galt & Taggart Research. We currently provide coverage of Energy, Healthcare, Tourism, Agriculture, Wine, and Real Estate sectors in Georgia. As part of our tourism sector coverage, we produce a monthly Tourism Market Watch, adapted here for Georgia Today’s readers. Previous reports on the sector can be found on Galt & Taggart’s website - gtresearch.ge.

INTERNATIONAL BRANDED HOTEL PROJECTS IN GEORGIA BEHIND SCHEDULE Of the 27 international branded hotels in our 2016-2018 pipeline (see our June 2016 tourism report, Shifting into High Gear), only four have been completed, while three projects have been cancelled. Of the remaining 20 projects, only four are expected to be finished on time. Delays are geographically distributed as follows – 10 of 13 hotels in Tbilisi, three of four in Batumi, and all three in other

regions. The delays can be largely attributed to regional turbulence, coupled with currency fluctuation, in recent years. Nonetheless, international branded hotel stock is expected to increase by 1,371 rooms (+79.7%) in Tbilisi, 440 rooms (+44.9%) in Batumi, and 706 rooms (+142.3%) in other regions by end-2018. The updated 2018-2020 pipeline now includes 19 projects in Tbilisi, seven in Batumi, and 10 in other regions.

5 INTERNATIONAL MIDSCALE BRANDED HOTELS ADDED TO GEORGIAN MARKET IN 2017 Last year saw five new branded hotels added to the Georgian market. Notably, only one of them, the 3-star Ibis Styles, was opened in Tbilisi. The 5-star Wyndham Hotel and 4-star Best Western Plus opened in Batumi, while the 4-star Golden Tulip was added to the international hotel stock in Borjomi. The first international branded hotels were opened in Kutaisi and Bakuriani in 2017 – the 3-star Best Western in Kutaisi, with 45 rooms, and the 4-star Best Western Plus in Bakuriani, with 70 rooms. These six hotels added 447 rooms to Georgia’s international branded hotel stock, bringing the total to 25 properties with 3,346 rooms.

INTERNATIONAL TRAVEL INFLOWS TO GEORGIA INCREASE 27.0% Y/Y TO US$ 2.75BN IN 2017, ACCORDING TO NBG’S PRELIMINARY ESTIMATES Foreign card operations in Georgia were up 30.3% y/y to GEL 1.9bn in the first 11 months of 2017. Tourism value added was up 11.5% y/y to GEL 1.5bn in the first nine months and accounted for 7.0% of GDP. Accommodation units subsector was the main driver, with 32.6% y/y growth. Travel companies, which account for 31.9% of tourism value added, posted modest 1.1% y/y growth.

NUMBER OF INT’L ARRIVALS UP 23.3% Y/Y TO 0.6MN IN DECEMBER 2017 Of the top four source markets, Russia was the top performer (+45.4% y/y), while Armenia (+13.7% y/y) and Azerbaijan (+15.7% y/y) also posted double-digit growth rates. The number of visitors from Turkey has been on the rise for six consecutive months, with growth in December coming in at 33.4% y/y. Arrivals from the EU were up 9.6% y/y to nearly 15,000 visitors.

to the overall growth of 18.8% y/y. The number of Israeli visitors increased 35.9% y/y to over 125,000 visitors, while the number of visitors from Saudi Arabia was up 164.6% y/y to over 56,000. Arrivals from the EU were up 21.9% y/y to over 322,000 visitors in 2017, with Germany, Poland, and UK accounting for a third of the growth.

TOURIST CATEGORY CONTINUES

TO DRIVE ARRIVAL GROWTH IN DECEMBER 2017 The number of overnight visitors (‘tourist’ category) was up 31.7% y/y and accounted for 39.2% of international arrivals. The transit category was also a major contributor (+54.9% y/y), while the number of same-day arrivals was up 6.7% y/y. The number of tourist arrivals in 2017 is up 27.9% y/y to 3.5mn, surpassing the annual figure for 2016 by 0.8mn tourists.

NUMBER OF INT’L ARRIVALS UP 18.8% Y/Y TO 7.6MN VISITORS IN 2017 The number of visitors increased from all major source countries, except Turkey (-0.8% y/y). The largest individual contributor to overall growth was Russia (+34.1% y/y), while Armenia and Azerbaijan also posted double-digit increases. The number of Iranian visitors was up 2.2x to nearly 323,000 visitors and surpassed the number of Ukrainian visitors (193,002) in 2017.

SECONDARY SOURCE MARKETS POSTED ROBUST PERFORMANCES IN 2017 Arrival growth from secondary (nonEU) source markets contributed 3.5ppts

Georgian Trade Union: 41 Dead, 63 Injured in Workplaces in 2017 BY THEA MORRISON

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he Georgian Trade Union has spoken out about the “alarming” statistics of accidents that occurred in workplaces last year, claiming 41 people died and 63 people received serious injuries due to the absence of proper safety norms. The information was released by the Head of the Labor Technical Inspection of Trade Union, Nika Kakashvili, who said the majority of accidents happened at construction sites because the companies are not observing safety norms. Kakashvili is calling on the government to regulate the field and to ensure safe working conditions at construction sites and other workplaces. “The statistics provided by us are not full and we call on the Interior Ministry to release the full statistics, as the real picture is very alarming,” he said, add-

Photo source: Netgazeti

ing that after the construction sector, the majority of incidents occurred in the mining field, followed by electricity and other sectors. “The most incidents happen in Tbilisi as there are so many ongoing construc-

tions there; however, the reason is not the quantity of constructions but the non-observance of safety norms,” he said. Kakashvili did note that there are highstandard construction companies who

do ensure the safety of their workers, “but the majority of companies operating in Georgia opt to save money by avoiding the safety norms.” The absence of safety norms in Georgian workplaces was also mentioned among the key findings of 2017 in the recent report of Human Rights Watch (HRW), an American-founded international NGO that conducts research and advocacy on human rights. The HRW stressed that every year in Georgia dozens of workers die and hundreds suffer injuries as a result of occupational accidents, adding that the country is failing to introduce effective health and safety measures in the workplace. “According to the Ombudsman, 270 people died in the past five years due to unsafe working conditions, 18 of them in the first half of 2017. The Ombudsman and NGOs criticized the Labor Inspection Department under the Ministry of Labor, Health, and Social Affairs, for having no executive authority to enforce standards, thus failing to introduce effec-

tive health and safety measures in the workplace. Investigations into workplace incidents rarely lead to accountability,” - the report reads. The most recent incident happened on January 18 this year when a worker fell off a construction site in Temka, GldaniNadzaladevi district, and died in a hospital soon after. The worker, 27, was working in a high spot without a helmet or harness. As reported by media, the site also lacked a safety net around the building. The Ministry of Internal Affairs subsequently launched an investigation into the case under Article 240 which envisages a breach of safety norms. Akaki Zoidze, Chair of Parliament’s Healthcare Committee, believes Georgia should share the European experience regarding labor rights in order to avoid frequent incidents in the workplace. “We should adopt the highest standards of labor rights…But it should be done gradually and in parallel with proper supervision,” Zoidze added.


BUSINESS

GEORGIA TODAY JANUARY 23 - 25, 2018

MagtiCom Delays Planned Rise in Mobile Data Costs BY TOM DAY

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agtiCom, the leading mobile operator in Georgia, has delayed a planned rise in the cost of mobile data following protests by the Georgian National Communications Commission (GNCC), the state telecommunications regulator. It was announced earlier this month that the company would be increasing their prices for mobile data tariffs by 2-5 GEL ($0.8-2). Prices for fixed amounts of data on MagtiCom range from 3 GEL ($1.2) for 500 MB to 30 GEL ($12) for 15 GB. After the price rise, these packages would cost 5 GEL and 35 GEL ($14) respectively. MagtiCom explained their decision by saying, “there are very low tariffs for mobile services in the country today,” and consequently, the company’s mobile internet delivery costs and revenue from services “do not balance each other.” Other reasons were given for the move, such as funds being needed for laying new cable lines this year; volatility in exchange rates; inflation; a rise in electricity prices; and the cost of leasing stateowned land being higher that the actual market price.

The rise cannot be justified; the initiative goes beyond the regularity of the market - GNCC

The GNCC made a statement on January 5, saying that such a rise cannot be justified, and the initiative “goes beyond the regularity of the market.” The GNCC said that Caucasus Online, a MagtiCom-owned company who provide them with internet services, cut the price at which they sell internet by half. It was also pointed out that taxes for mobile telecommunications service providers had been “significantly reduced,” and on January 1 this year, were completely abolished. The GNCC accused MagtiCom of attempting to export subsidies from the government, and said, “while increasing tariffs on the abovementioned services, MagtiCom may be planning to finance (or maybe is already financing) various services which they are offering to consumers at a lower price than its cost.” As soon as suspicions were aroused by the GNCC, they said that they would investigate the case further. On January 17, Kakha Bekauri, head of the commission, requested MagtiCom postpone the price hike until “the topic of subsidizing” had been studied. The same day, MagtiCom said they “had taken into account” this request, and “temporarily suspended tariff charges” until March 1 this year. In 2017, MagtiCom raised tariffs on all their TV packages by 2 GEL. They justified this by saying they were “forced” to after six Georgian TV channels decided to charge service providers for showing their TV programs. Rustavi 2, their two subchannels Marao and Comedy Channel, Imedi, Maestro, and GDS made the decision in 2017. In 2017, MagtiCom had 2 million mobile internet customers, according to the GNCC website. Geocell came in second with around 1.8 million. MagtiCom is a Limited Liability Company and is owned by US-based companies, International Telcell Cellular LLC (51%) and Telcell Wireless LLC (49%). It gained its status as the largest internet service provider after buying the operating assets of Caucasus Online and Delta.com – two of the biggest service providers in the country.

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BUSINESS

GEORGIA TODAY

JANUARY 23 - 25, 2018

Iran Aims to Attract Europe, Asia to Build Oman Gas Pipeline

BY DIMITRI DOLABERIDZE

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ran plans to attract European and Asian oil and gas companies, for example Total, Royal Dutch Shell, Uniper, E.ON, Kogas, Mitsui & Co. and others, to the construction of a gas pipeline to Oman, reports the Iranian edition of the Financial Tribune, referring to sources in the National Iranian Oil Company (NIOC). At the end of last year, NIOC Executive Director Ali Cardord said that the Islamic Republic is interested in the participation of Russian companies, in particular Gazprom, in the construction of the Iran-Oman gas pipeline. According to Cardord, the Iranian authorities are ready to begin construction of the ground section of the pipeline, through which the “blue fuel” will be transported from Iran to Oman. “The results of the talks between Tehran and Muscat say that Iran will build the ground part of the pipeline, and we are ready to start work,” said Hamid Reza Araki, managing director of the Iranian National Gas Company (NIGC). About a year ago, Iran and Oman signed a preliminary agreement on the project. Its cost, by some estimates, is about $1.2 billion. In 2013, Iran and

Oman agreed that the Iranian gas supplies to Oman would be 28 million cubic meters of gas per day for 15 years. Prior to that, it was reported that the supply of "blue fuel" through the new gas pipeline could begin as early as 2020. Russian Gazprom earlier also reported that it was studying the possibility of participating in the Iran LNG project. This project is now in the spotlight of the Islamic Republic which, despite its own efforts to implement the project from Iran, was unable to do so due to a lack of foreign investment. Meanwhile, Tehran does not rule out increasing its LNG export. A gas pipeline to Oman is needed by Tehran also because it is supposed that the liquefaction of Iranian "blue fuel" will take place at the Qalhat factory in Oman. In addition, the Iranians are negotiating with Norwegian companies on the construction of a floating LNG plant. Meanwhile, the Russian side is exploring possibilities for implementing projects in Iran for the extraction, transportation and processing of hydrocarbon raw materials. In November 2017, Gazprom and the Iranian NIOC signed a memorandum of understanding. While this is a non-binding document, it nevertheless, allows companies to begin preparing a feasibility study for a gas pipeline project from Iran to India through Pakistan.

EBRD Delays Decision over Georgia’s Nenskra HPP Loan, Again

BY THEA MORRISON

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he European Bank for Reconstruction and Development (EBRD) has, for the fourth time, delayed discussions over financing Georgia’s largest Hydro Power Plant (HPP), Nenskra, in Svaneti. The EBRD was to discuss the Nenskra HPP issue in April, then in September, and after delays on January 17, 2018, as the EBRD official website reads, the bank will now discuss the issue on January 31. The exact reason why EBRD is delaying discussions over Nenskra HPP financing is not known, but as Georgian media reports, this might be related to the continued protests of Svaneti residents, who are against the construction, claiming that if the HPP is built, it will result in the cutting of hundreds of hectares of forest in Svaneti, and will change the

natural landscape of the western Georgian region, which is one of the most attractive tourist sites in Georgia. The implementation agreement package of Nenskra HPP was signed in early September 2015 by Georgia’s Partnership Fund, the Georgian government, Korean company K-Water, Commercial Operator of Electro-Energetic Systems, and JSC Georgia Electric System. The HPP is expected to annually produce 1.2 billion kilowatts of electricity per hour. The Nenskra HPP construction will be based on a Build-Operate-Transfer (BOT) structure, according to which the investor is obliged to build the HPP, operate for 35 years, then transfer ownership of the HPP to the State. The total cost of the Nenskra HPP project is over $1 billion, which is expected to play a crucial role in Georgia’s energy stability. Georgia is waiting for 70% of financing from the banks, including $214 million from EBRD.

‘Elit Electronics’ Success of 2017 & Plans for the Forthcoming Year ADVERTORIAL

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lit Electronics saw a successful year in 2017, both in terms of sales and profitability, with 18% growth in retail sales over 2016. Sales growth was seen in numerous areas: 30% increase in sales of mobile phones and 20% in small household appliances. Also, in terms of the profitability of the company, last year saw the highest rate recorded. Elit Electronics opened two new stores in Akhaltsikhe and Ozurgeti in 2017, and opened a brand-new concept store ‘Elit Home’ where, for the first time in Georgia, customers can buy small household appliances. Highly qualified sales-personnel can assist customers with any queries they may have, and will provide technical and functional details of the product. Elit Home’s first store opened in the Black Sea Mall in Batumi. Elit Electronics offers customers unique concept shops that enable you to choose and buy products to create an ideal home or workplace. The company is the first multipurpose hardware store network in Georgia, which showcases the world's leading brands. Another important event for Elit Electronics was the signing of a Memorandum of Cooperation in 2017 with the leading German brand Nobilia, which sells kitchen furniture. As a result of this MoC, the Nobilia brand will be exclusively sold in the Elit

Electronics stores. These products will be unique, and customized to individual customer requirements. Elit Electronics has been the leader on the Georgian market for many years, and controls nearly half the market with retail sales. The company commenced large-scale advertising campaigns during the course of 2017. As for 2018, Elit Electonics has interesting and ambitious plans for retail sales growth and company development. The company plans to kick start new, innovative projects that will run through the end of the year, and plans to open two new stores in Khashuri and Gori. The aim of the company is to promote the development of new technologies in the country, provide energy efficient and ecologically clean technics to the Georgian market, and most importantly, to make this technology available to every citizen. The Elit Electronics’ team is focused on permanent development, which is reflected in the company's annual growth. "Our goal is to make it possible for our customers to use the equipment we sell, and at the same time, offer the most comfortable environment and favorable conditions for them," the company said. Elit Electronics has operated in Georgia's retail market for 21 years, and is the largest trading network of technical products.


BUSINESS

GEORGIA TODAY JANUARY 23 - 25, 2018

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Russia: Georgia’s Largest China Increases Source of Remittances Supply of Goods to Europe via Azerbaijan, ReshtAstara Moves Forward

BY Mà TÉ FÖLDI

BY DIMITRI DOLABERIDZE

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he urban district of ĂœrĂźmqi in the Xinjiang-Uygur Autonomous Region of China, has begun deliveries of cargo through the territory of Azerbaijan to Europe. The first freight train, carrying engineering equipment and other goods, has left Urumqi and is to come to Europe via the East-West transport corridor and will stop at the port of Kazakhstan, after which the cargo will be delivered to Baku, and then to Europe by sea. The total length of the route will be 4,186 kilometers. The cargo will be delivered from China to Europe in eight days. The media reported that in 2018, 1,400 trains with cargo will be sent from Urumqi to Europe. According to the China Railway Corporation,

last year more than 3,000 carrying various cargo were delivered from China to Europe, and this year their number is planned to increase to 4,000. Meanwhile, Azerbaijan and Iran are to jointly finance the railway of Resht-Astara in northern Iran on a parity basis, reports Iranian Deputy Minister of Roads, Asgar Kashan. “Each of the two countries will provide 50% of the necessary investment for the construction of the railway. Azerbaijan will contribute $500 million to the project,� he said. The Deputy Minister also informed that the next section of the Rasht-Qazvin railway can be opened within the next three months. The sites of Resht-Astara and Resht-Qazvin are important parts of the international transport corridor “North-South,� designed to connect Northern Europe with India and South-East Asia through the territories of Russia, Azerbaijan and Iran.

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ussia is the largest source of remittances for Georgia, ahead of Italy and Greece. The three countries are home to the largest Georgian diasporas, who send money home to their families in Georgia on a monthly basis. $45m (USD), or 32.5% of total remittances, was transferred to Georgia from Russia in December

2017. In comparison, the combined amount of transfers received from Italy and Greece was just over $30m, with an Italian contribution of $15.4 million and a Greek of $15.1m. Next on the list are the United States ($13.1), Israel ($12.4m), and Turkey ($10m). In December, the total amount of remittances received by Georgia amounted to $138.4m, a 16.3% increase compared to December 2016, according to the National Bank of Georgia. Similarly, in the same period, money transfers abroad totaled $19.8m, a $1.6m increase from the previous year.

BGCC Signs Exclusive Agreement with London School of Business & Finances

BY NINO GUGUNISHVILI

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he British Georgian Chamber of Commerce (BGCC) have finalized and signed an exclusive agreement with one of the leading professional educational colleges – London School of Business and Finance (LSBF). The LSBF is one of the few private higher educations in UK having received the Queen’s Award for Enterprise, an award that recognises organizations with outstanding performance in international trade, innovation and sustainable development. From January 2018, any eligible candidate can take an Advanced Certificate Online Program offered by the LSBF: short (up to four month) courses with executive education online programs designed for those who already have prior knowledge in their respective field of study either from

prior formal education or through experience. The Advanced Certificate Online Programs offered by LSBF are said to be ideal for those individuals seeking a career change, looking for a new role or those wishing to improve their current performance. The courses are designed according to employers’ recommendations for the skills they are specifically looking for when aiming to fill vacancies in their respective fields. Programs offered include certificates in Contemporary Issues in Oil, Gas and Energy, Certificate in Global Business Management, Diploma in Business Management, Policy Issues in the Global Economy Course, and mini MBAs. The length of courses varies from four to nine months, and the tuition fees in this agreement are said to have been designed exlusively for the British Georgian Chamber of Commerce. So, if you are interested in and willing to take any of the above mentioned courses, contact: contact@bgcc.org.uk for further information.

FIRST BRAND HOTEL IN KUTAISI UNDER BEST WESTERN INTERNATIONAL Within the framework of the Georgian Hotels’ Regional Network Development Project “12 hotels in 12 regionsâ€? by GHYHORSPHQWFRPSDQ\Âł6LPHWULD´WKHÂżUVWEUDQGKRWHOKDV been opened in Kutaisi under the Best Western International brand. The hotel accommodates 45 guest rooms, including 40 standard rooms and 5 suites. The hotel was designed taking into consideration special conditions and safety for guests with disabilities.

Address: 11 Grishashvili Str., 4600, Kutaisi, Georgia TEL 219 71 00 info@bwkutaisi.com

Three mobile conference halls are available with a total capacity of about 100 persons. (XURSHDQFXLVLQHFDQEHHQMR\HGLQWKHJURXQGĂ€RRUFDIp and a grill-bar menu in the roof top restaurant with panoramic views over the city. The International Hotels Management Company “T3 Hospitality Management,â€? providing the hotel management, has 20 years’ experience in hotel management in different countries globally.


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POLITICS

GEORGIA TODAY

JANUARY 23 - 25, 2018

Laura Thornton on the Latest NDI Poll Results INTERVIEW BY VAZHA TAVBERIDZE

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he latest NDI survey is out, and full of surprises. 41% of those polled, think that Russia is stronger militarily than the US. An even higher number has no clue who their majoritarian representative in Parliament is. An alarmingly high 29% wants to join the non-existent Eurasian Union, and, among all cities in Georgia, Kutaisi wants the country to join NATO the most. The ruling party customarily dismissed the findings, saying they have their own internal polls to rely on (oh, but for one glance at those!). GEORGIA TODAY and Panorama Talk Show sat down with Laura Thornton, resident director of the NDI in Georgia, to find out more.

WHAT DO YOU THINK THE REASON IS BEHIND THE GOV’T’S DISTRUST OF THE NDI? I think that skepticism about NDI’s polls has been around for a long time. It stems mostly from misunderstanding. Polling is a social science. You have a lot of absurd comments like “I was not interviewed by the NDI” and “who exactly did they interview?” People don’t realize that you do not need that many people to get a random sample. Or they don’t understand terms like ‘margin of error.’ So, some of it is just misunderstanding and lack of familiarity. And, of course, there is the ‘killing the messenger’ aspect: they just don’t want to hear it and they don’t like results. Rather than addressing the problem it’s easier [for them] to just discredit the poll. That hurts them in the long run, though. In the US, you advise the party or candidate to look at the lowest poll number and to work with that. Hope for the best, assume the worst. Whereas here, a negative poll number is seen as embar-

A negative poll number is seen as embarrassment [but] it’s important to stand up and criticize the processes

rassment or humiliation. It’s important to stand up and criticize the process.

EVERY POLL FORCES US TO DRAW CONCLUSIONS. KEEPING THAT IN MIND, WHAT IS THE CONCLUSION FROM THE QUESTION AS TO WHETHER PEOPLE KNOW WHO HAS MORE MILITARY MIGHT BETWEEN THE US AND RUSSIA? I actually really like this question. We try to ask a lot of questions about foreign policy and we to ask a lot of proxy questions. Basically, this was a proxy question to figure out where people stand on Russia and the USA. My assumption is that this is less about size and military strength and more about relevance to Georgia. Georgians know what a Russian tank looks like but not an American one as it’s not relevant [to them]. The US could have the strongest military in the world, but you wouldn’t care unless it affected you in 2008: Russia’s military is more of a threat [to Georgians]. So, I think the military question is an interpretation of that threat. I also think propaganda plays a role. It’s interesting that ethnic minority settlements are more likely to think Russia is stronger as they are more likely to listen to the Russian news channels. We see the older generation also believing that Russia is stronger, originating from their own history.

THERE WAS ALSO A BIT ABOUT

PEOPLE NOT KNOWING WHO THEIR REPRESENTATIVES ARE IN THE PARLIAMENT ARE AND SOME GENERAL DISTRUST TOWARDS THE POLITICAL PARTIES. CAN WE ASSUME THAT PEOPLE ARE FED UP WITH THE EXISTING PARTIES? People not knowing who their representative is isn’t unique to Georgia. I would say the majority of Americans would not be able to name their congressperson. I do not necessarily think it’s a bad finding. It does speak a little of a gap in communication and I do think it’s a motivating factor for a new force and maybe for existing parties to do more outreach.

29% OF PEOPLE QUESTIONED WANTED TO ENTER THE EURASIAN UNION, WHICH DOESN’T EVEN EXIST AND IS STILL AT THE STAGE OF CUSTOMS UNION. WHY THE RISE? We’ve asked that question for many years, and when we ask it separately, there is a 50% overlap between the people who’d like to join Eurasian Union and between people who’d like to join the EU; a group of citizens who says – yeah, I want to be member of the EU, EAU. When we’ve done focus groups, there is zero understanding what it is. As you said, it’s a meaningless union and has only to do with economic possibilities. I always joked

we could even make up a union like the “China-Georgia Economic Partnership Union: Would you like to join?” [laughs] Putting in a binary question is really a measure for “do you want to be economically closer to Russia or economically closer to the West?” It’s more about economics and less about politics. Trading, citrus farming, grapes from Kakheti: a person just wants to sell their own products. That said, our focus groups have also always shown a cultural element of distrust towards Europe, whether it’s on values related to family, perceived ideas about the LGBT community, or the Church.

AND FINALLY, THE ENVIRONMENTAL BIT. WE UNDERSTAND YOU ARE VERY PASSIONATE ABOUT THIS ISSUE. THE POLL SHOWS THAT IT HAS BECOME THE NUMBER ONE CONCERN. WHAT’S YOUR PERSONAL TAKE ON THE CHALLENGES TODAY? I was extremely encouraged that citizens are aware of the environmental issues. Often, you hear the criticism that this is a minor issue, or it appears that only Tbilisi NGOs and foreign organizations care. Now we see that the average Georgians across the country also care about this issue. It is in the mindset and hopefully will bring support for changes to the environmental policy, pushing policymakers to act. I’m not an environmental expert, but we’ve seen plenty of studies coming

Now we see that the average Georgians across the country care about the environmental issue out that talk about the worsening air conditions in Tbilisi, Kutaisi, Batumi. It concerns me. The fact we just got rid of the Ministry of Environment and put it under Agriculture, is all well and good if we don’t lose resources and policies geared towards the environment in the process. It has to be prioritized, and having public demand for it might help to push the government in the right direction to really address these concerns and not to hide them behind other issues. We have families, children, here, and the cost in the long run of health problems and other concerns will rise as a result of not addressing environmental issues. It is dangerous and we need to take it seriously.


POLITICS

GEORGIA TODAY JANUARY 23 - 25, 2018

11

Nothing Wrong with Georgia’s Russian Policy OP-ED BY EMIL AVDALIANI

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ooking at Russia-Georgia relations over the past 25 years, we usually tend to overemphasize mistakes made by various Georgian governments, or solely stress how geopolitically active Moscow has been in the South Caucasus. However, if we look closer at the dynamics of the bilateral relations, one might find a strong consistency on a par with Georgian leaders. From Zviad Gamsakhurdia, first President of Georgia, to the current PM, Georgia’s foreign policy was pro-Western. Indeed, Gamsakhurdia and later on Mikheil Saakashvili were at times radically anti-Russian, while current leaders are modest; but this does not change the overall picture of Georgia being persistently pro-western. Surely, one of the options could have been to give up on its EU/NATO membership stance and embrace a pro-Russian position under Russian guarantees that Abkhazia and South Ossetia (Samachablo) would rejoin Tbilisi. But in geopolitics, this thinking does always work, as Georgia’s geographic position allows Tbilisi be more active as a regional transit

hub, and not be oriented towards one country (hypothetically Russia). However, this also does not preclude Georgia and Russia from talking to each other and fostering economic relations. The non-existence of diplomatic relations as well as deep troubles around Abkhazia and South Ossetia would, in the grand scheme of things, not stop Tbilisi from creating closer economic contacts with Russian businesses. It is a fact that Russia is Georgia’s neighbor, and it would be impossible not to talk to Moscow on a permanent basis. To that end, the current Georgian leadership is doing so rather cleverly. Indeed, Russia is still economically vital for Georgia. Consider the following statistics: Russia is the largest source of remittances for Georgia. $45m (USD), or 32.5% of total remittances, was transferred to Georgia from Russia in December of last year. Moreover, trade routes (with Tbilisi control) through Abkhazia and South Ossetia are currently in-progress. At the same time, we should also be aware of what the geopolitical imperatives which drive Russia’s foreign policy in the South Caucasus are. We deal here not necessarily with the anti-Georgian government of Vladimir Putin, but rather a well-thought out strategy on the Russian part as to how to effectively project its military power into the region, by

limiting the barrier capacity of the Caucasus Mountains. This would also mean that in the event of a regime change in Moscow, it is very unlikely that there would be a change in Russian foreign policy towards the South Caucasus. It is in Russia’s vital interests to keep Georgia at least unstable. On the opposite side, the loss of Georgia to the West would mean a rapid decrease of Russian power, with much wider ramifications for the entire former Soviet space. “Russia-free” Georgia is a nightmare for Moscow, as the Kremlin would then be less able to pressure Azerbaijan on export routes. Moreover, the Caspian energy corridor would again see its relevance and Central Asian gas could reach Europe. Overall, it could be argued that Georgia is pursuing a clever strategy of positioning itself not as an anti-Russian state, but at the same time also not

abandoning its pro-western course. The ideal scenario for Tbilisi would be when all the neighboring countries have a stake in the security of Georgia. In addition, large players, such as China with its Belt and Road Initiative, the EU, the US and others would also be involved in the economics of the country. This might create a certain balance in the region. On a local basis, though, to be competitive in the issue of the reclaiming of Abkhazia and South Ossetia, Tbilisi should lay out a clear strategy for the country’s internal development: strong economy and education. Whatever geopolitical scenarios are played out in the future, one would still have to persuade many in the breakaway territories to embrace Tbilisi. And to do this, beyond the fortunate exterior situation in the region, the situation needs to be appealing.

James Blunt Concert to Include Performances with Georgian Rock Bands

BY TAMZIN WHITEWOOD

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eorgian rock groups, Young Georgian Lolitaz and Loudspeakers, are to collaborate with James Blunt at his concert in May. The famous British popstar James Blunt will visit Georgia during his world tour. The festival will be held on May 26, on Georgian Independence Day, at the Mikheil Meskhi Stadium. The singer and composer will perform songs from his latest album "Afterlove". The event is organized by New International Promotion Company Black Pearl Live. Tickets can be purchased online from January 31 for the concert – with the first 30 ticket holders to be included in a special prize draw to meet the singer on the day. The organizers promise you an unforgettable show on May 26. Fans will have the opportunity to listen to

their favorite hits, including his last single, ‘Love Me Better’. "We are honored that the concert also makes Georgian Independence Day”, says Kine de Beer. The company has ambitious goals for the Georgian market. Black Pearl Live plans to turn Georgia into a host country of real cultural significance. "Yet, everything depends on how things will develop, how we will work today to achieve success in the future. We have the opportunity to arrange worldclass events, and research has shown that Georgia offers a real unique opportunity, with the country showing great potential, "said Kine de Beer. The Parlotones - a Rock Band from Johannesburg (South Africa), will also perform at the festival, with their songs relating to both love and life. Also performing at the event will be rock groups Young Georgian Lolitaz and Loudspeakers. Young Georgian Lolitaz are the first all-male band from Georgia, who participated in Eurovision 2016. The Loudspeakers are a famous Georgian rock band that has gained tremendous popularity at the Tbilisi Altervision Music Festival.

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Issue #1016 Business  

January 23 - 25, 2018

Issue #1016 Business  

January 23 - 25, 2018

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