Issue #948 Business

facebook.com/ georgiatoday

Issue no: 948/79

• MAY 23 - 25, 2017

• PUBLISHED TWICE WEEKLY

FOCUS

ON THE INTERNATIONAL BUSINESS FORUM Two days, six top speakers. Find out more inside.

PAGE 8

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In this week’s issue...

Radio NRJ Celebrates Georgian Launch at Tbilisi Event Hall NEWS PAGE 2

Free or Fearful? The Fear of Floating in the South Caucasus ISET PAGE 4

PM Kvirikashvili Attends World Economic Forum

BY THEA MORRISON

G

eorgia and Jordan signed a mutual agreement on deepening cooperation in tourism within the frames of the World Economic Forum (WEF) on the Middle East and North Africa 2017 held in Jordan last weekend.

Georgian Prime Minister, Giorgi Kvirikashvili, and his Jordanian counterpart, Hani Mulki, also attended the signing ceremony.

The Prime Ministers held a face-to-face meeting and also expressed interest in boosting cooperation other fields, including in economic relations.

Continued on page 2

Legendary Band Aerosmith Wows 10,000 Strong Crowd at Black Sea Arena PAGE 9

Georgian Foreign Minister Meets HighRank Officials in Cyprus POLITICS PAGE 10

Agriculture Minister: The State Cannot Help Farmer Victims of Weather Disaster SOCIETY PAGE 11 Prepared for Georgia Today Business by

Markets As of 19ͲMayͲ2017

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NEWS

GEORGIA TODAY

MAY 23 - 25, 2017

PM Kvirikashvili Attends World Economic Forum Continued from page 1 Kvirikashvili also met Jordan's Crown Prince, Al Hussein bin Abdullah II to discuss issues of mutual cooperation.

Both expressed hope that the decision of the Georgian government to abolish visas for Jordanian citizens would further deepen ties between the two countries.

Developments in the Middle East and their influence on global security were also discussed by the officials, and the fact that the two states actively contribute to global security in the fight against terrorism was noted.

The Georgian Prime Minister attended the opening ceremony of the WEF, the key speakers of which included Crown Prince Al Hussein bin Abdullah II, King Philip IV of Spain, and WEF Founder Professor Klaus Schwab.

The speakers emphasized regional economic cooperation, the development of modern technology and the importance of engaging young people and tapping into new opportunities.

Together with the Georgian PM, the Forum's opening ceremony was attended by the State Minister on European and Euro-Atlantic Integration, Victor Dolidze; First Deputy Foreign Minister, Davit Zalkaliani; Deputy Minister of Economy and Sustainable Development, Genadi Arveladze; and the Prime Minister's Foreign Advisor, Tedo Japaridze.

The World Economic Forum, committed to improving the state of the world, is led by 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.

This year the forum was held at the Dead Sea, Jordan, on 19-21 May and gathered over 1,200 government, business and civil society leaders from more than 50 countries.

The Georgian delegation also met with Norwegian Foreign Minister Borge Brende within the frames of the Forum whereby Georgia’s progress on its path towards European and Euro-Atlantic integration and the reforms implemented in Georgia were key issues.

Kvirikashvili personally met King Philip IV of Spain, and WEF Founder Professor, Klaus Schwab.

On Sunday, the Georgian PM met with the current High Representative of the European Union for Foreign Affairs and Security Policy and Vice-President of the European Commission, Frederica Mogherini.

Reforms implemented by the Georgian government, the upcoming Eastern Partnership Summit and Georgia’s EuroAtlantic aspirations were the topics of the meeting. The sides also discussed the current situation in Georgia’s occupied regions of Abkhazia and South Ossetia.

Kvirikashvili noted that Georgia continues effective implementation of the Association Agreement and the Association Agenda 2017-2020 while the PM’s Press Office reports that Mogherini confirmed the European Union’s unwavering support for Georgia's territorial integrity and sovereignty and noted that the EU is committed to the non-recognition policy of the occupied territories.

Radio NRJ Celebrates Georgian Launch at Tbilisi Event Hall

BY NINO GUGUNISHVILI

R

adio NRJ, a hugely popular European Radio Broadcaster, held an official reception and mega celebration at the Tbilisi Event Hall on May 18 to officially celebrate the brand’s recent launch onto the Georgian market.

The most popular radio station in France, with 14 million listeners daily, it is also broadcast in Germany, Austria, Switzerland, Finland, Norway, Sweden, Russia, Bulgaria, Lebanon, Morocco, Egypt, and now features in Georgia on 104.7FM. Radio NRJ’s audience segment is typically aged 20 to 40, and it is regarded as a leader in ratings, offering its listeners all the latest musical hits.

The French version of Untouchable, a new music clip by Bera Ivanishvili made at Radio NRJ’s French studio, was presented during the reception at Tbilisi Event Hall. After congratulating the audience on Radio NRJ’s arrival in Georgia, Bera awarded a lucky winner a trip to the Cannes NRJ Music Awards, to be organized by Atlas Global.

Guests then had a chance to listen to the acoustic version of Ed Sheeran’s popular hit Shape of You, broadcast from Radio NRJ’s Berlin studio.

“Radio NRJ entering Georgia means that Europe is now one step closer to

Bera Ivanishvili and George Sharashidze, founder of NRJ Georgia

Georgia and Georgia one step closer to Europe,” George Sharashidze, Founder of NRJ Georgia, told the packed hall.

“The strength of the Radio NRJ brand will positively change the situation on the Georgian market- not only as a successful radio station, but also as a massive project which will support the development of the radio business and showbusiness in Georgia, overall,” Sharashidze said, going on to thank co-organizers Georgian Post and its General Director, Levan Chikvaidze, who came up with the initiative to send a symbolic congratulatory gift of Georgian wine to all of the offices of Radio NRJ abroad.

“Georgian Post fully supports the arrival of the European radio station and brand in Georgia and is ready to ensure that

Radio NRJ Georgia will communicate with their European colleagues through a fast and high quality service from Georgian Post,” Chikvaidze said. “European brands appearing on the Georgian market, considering the country is on the road to Euro integration, is very important and I’m delighted that such a popular European radio broadcaster as Radio NRJ is now in Georgia with its multi-million audience in 14 countries around the world. Georgian Post congratulates Radio NRJ Georgia on its official launch and wishes it to become as popular as it is in Europe”.

Radio NRJ Georgia’s Tbilisi office is located at 2, Dolidze Street in the Radio Café, in which the radio station studio and café share one space.

4

BUSINESS

GEORGIA TODAY

MAY 23 - 25, 2017

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.

Free or Fearful? The Fear of Floating in the South Caucasus

BY DAVIT KESHELAVA & YAROSLAVA BABYCH

regimes for an emerging market economy, we would probably make a good case for having a flexible exchange rate.

I

WHY IS A FLEXIBLE EXCHANGE RATE GOOD FOR THE ECONOMY?

n economics there is a long-standing debate on whether emerging markets should adopt a fixed exchange rate currency regime or leave their exchange rates up to markets to decide. Intuitively, exchange rate is just another price, similar to the price on a sack of potatoes, a liter of milk or a kilogram of honey.

Except that exchange rate is the price of 1 unit of foreign currency (say, 1 US dollar) in terms of our domestic currency. Textbook economics would tell us that price flexibility is essential for markets to function well, to quickly clear up any shortages or surpluses that may arise on the markets. So, if it is bad for the government to regulate prices on potatoes, milk or honey, is it a good idea to regulate the exchange rate?

Indeed, for many years researchers keep asking this question and providing sophisticated and detailed answers. If we follow famous exchange rate models describing the most optimal currency

In a small open country, subject to frequent and large external shocks, the exchange rate plays a role of shock absorber and smooths the effect of negative disturbance on the country’s economy.

For example, a negative output shock will most likely cause domestic currency to depreciate against the foreign currency. This depreciation can be a blessing in disguise for domestic exporters, who will become more competitive on the foreign markets, and so on…

Furthermore, unlike fixed exchange rates, a freefloating regime guarantees an independent domestic monetary policy. Economists call this phenomenon “impossible trinity” - a concept which states that it is impossible to have a fixed exchange rate, free capital movement and an independent monetary policy at the same time. Therefore, facing increasingly integrated capital markets, policy-

makers are forced to make a choice between free monetary policy and exchange rate stability.

To understand the idea behind “impossible trinity,” imagine a hypothetical country that fixes the exchange rate against the US dollar and allows free movement Source: International Financial Statistics of the International Monetary Fund of capital. Let’s say that in order to reduce inflation, the central bank of this “fear of floating” index, we discover that the country decides to contract the money supply by exchange rate is the least volatile variable in a increasing domestic interest rate, while the inter- majority of cases, while policy rates have the highest rate set by US Federal Reserve remains the est volatility, especially for the Georgian economy. same. The increased interest rate differential will make the domestic currency of the country more WHY DO COUNTRIES FEAR FLOATING? attractive for foreign currency investors, who are There is broad literature that tries to identify what constantly looking for higher returns. Thus, the is behind the decision to intervene and smooth demand for local currency will increase and the exchange rate fluctuations. First, as Belhocine et exchange rate will be pushed to appreciate. Ulti- al. (2016) claims, the degree of exchange rate mately the peg with the US dollar will break. volatility is closely related to a country’s experiIn addition, a flexible exchange rate regime does ence of high inflation or hyperinflation during not require the country’s central bank to accumu- transition – the higher the peak inflation in the late large amounts of foreign exchange reserves early 1990s, the more likely a country was to mainto defend the currency peg against a potential tain a fixed exchange rate or to allow de facto speculative attack. Furthermore, to have a hard floating. All three countries in the South Caucasus peg or any type of fixed exchange rate, countries region experienced hyperinflation in the early need sufficient foreign currency inflows over time, transition years. while for many underdeveloped small open econSecond, according to Castro (2004), when the omies this is still a problematic issue. country’s central bank cares a lot about inflation In summary, there is overwhelming evidence and exchange rates are very likely to quickly affect that maintaining a stable and predictable exchange prices (the pass-through effect from exchange rate is very costly. rates to prices is strong), then it is logical for the central bank to try and smooth currency fluctuaTHE FEAR OF FLOATING PHENOMENON tions.

The pass-through effect is especially strong for While an increasing number of emerging countries are officially classified as free-floaters, a net importer countries such as Georgia and Armecloser look at the empirical evidence reveals that nia. In Georgia’s case, 1% change in the nominal it is common for these countries to have very tight exchange rate causes approximately 0.42 percentmonetary policies and frequent interventions in age point change in the long-run price level and the currency market aimed at preventing sharp the pass-through time is 4-5 months (Tamar Mdivnishvili, 2014). The main idea behind the passdepreciation of the domestic currency.

Calvo and Reinhart (2000) first described this through consideration is that large exchange rate phenomenon and dubbed it “fear of floating”. The volatility leads to higher price volatility which fear manifests itself through mild exchange rate reduces the credibility of policymakers commitfluctuations, but also high interest rate and reserve ted to inflation targeting.

Third, most transition countries are charactervolatilities in emerging market countries. According to the authors, as many as 76.4% of the emerg- ized by high asset and liability dollarization. For ing economies classified as free-floaters are affected. instance, in Georgia, the Loan Dollarization Ratio Calvo and Reinhart (2000) constructed the exceeds 60% for recent several years (65.4% in Calvo-Reinhart Fear of Floating Index (C-R Index) 2016), while the Deposit Dollarization Ratio is that puts exchange rate volatility in relation to even higher in the last two years (71.4% in 2016). the variability of the policy instruments (nominal If domestic residents borrow in foreign currency, interest rate and official reserves). A low value while their income is denominated in domestic index would indicate a country with a high “fear currency (this phenomenon is called currency of floating”. Despite the fact that the C-R Index mismatch), a depreciation of national currency is very far from being a perfect indicator of the makes it harder for borrowers to get their loans “fear of floating,” it still provides some informa- back (now borrowers have to spend a larger share tion about the attitude of a central bank toward of their income to repay their loans) which leads to a contraction of aggregate demand and output. the volatility of the exchange rate.

When we apply the Calvo and Reinhart (2000) This phenomenon is widely recognized as a conmethod and compute the C-R index for Georgia, tractionary depreciation.

Finally, it is a well-known fact that most develArmenia and Azerbaijan we can see some interoping countries are unable to borrow in their esting patterns.

We discover that the C-R index was close to zero national currency. Economists even have a special for all these countries even at the time of the name for this phenomenon – “original sin”. In this devaluation wave during the latest regional crisis. scenario, devaluation of the domestic currency It is not surprising that Azerbaijan has the low- significantly increases the debt burden for these est index values in the two corresponding periods countries and further stimulates policymakers to in 2008-2010 and 2011-2013. Before the end of 2015, keep the exchange rate as stable as possible.

In summary, although the central banks of emergthe country was operating with a fixed exchange rate that theoretically guarantees a C-R index very ing small open economies realize the benefits of a free-floating exchange rate regime, there are close to zero.

However, even after moving to a floating exchange several things that prevent them: Past experiences rate regime in 2015, Azerbaijan’s “fear of floating” of high inflation, a pass-through effect from index was not much different from that of Arme- exchange rates to prices, contractionary depreciation (high currency mismatch) and the “originia and Georgia.

It is also notable that during the recent regional nal sin” problems do not let them overcome a crisis, Georgia was the least “fearful” country, let- strong fear of floating, and the countries continue ting its currency float more than its neighbors did. to bear the high costs of smoothing exchange rate If we separately observe the components of the fluctuations.

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Fitness Center

Event Hall

Swimming Pool

Green Area

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For the safety of residents, the whole territory of Tbilisi Gardens is fenced and controlled by security staff.

A 25-meter and children’s pool are located within a total area of 1100 m2, where you can relax and enjoy a healthy lifestyle the whole year through.

A 375m2 fully equipped gym with experienced trainers is available 24/7.

Italian designers have been working to create the green area of Tbilisi Gardens. The location of the building in the garden is idyllic, while the selected trees guarantee the quietness and green environment.

An event hall and magnificent terrace is the right place for louder events and meetings.

A colorful space and caring teachers will always be there for the smallest residents of Tbilisi Gardens.

6

BUSINESS

GEORGIA TODAY

MAY 23 - 25, 2017

Easier Access to the German Labor Market for Georgian Professionals & Skilled Workers

E

mployland develops innovative intermediary platform With its internet platform www.employland.de, available in German and English, Hamburg start-up Employland is offering a new way to find work in Germany.

For the first time, recruitment and legal services are being offered from a single source as a way of streamlining the labor integration process: Employland helps job-seekers with residence and work permits as well as recognition of their qualifications.

“With Employland, we have created a platform that paves the way for qualified workers with or without a university degree to find work in Germany’s very receptive labor market,” says HansChristian Bartholatus, founder and managing director of the new online portal.

“The country is already experiencing a shortage of skilled personnel, a trend set to gain even more momentum in the near future. Until now, the administrative burden created by German laws on entry and residence has proven a major obstacle both for companies in Germany as well as specialists from around the world. This is precisely where our Ready to Work service comes into play: Our qualified lawyers support the whole process up to the point of commencing employment in Germany.”

employees; candidates with a good command of German have the best chances of being headhunted. All profile data is stored on servers in Germany.

The service is free to use for qualified workers. Once an employment contract is concluded and the employee begins work, Employland will receive a commission from the employer. As a rule, the employer also covers the costs of the residence permit and, where applicable, recognition of the employee’s qualifications.

HIGH-CALIBER FOUNDERS AND MANAGEMENT TEAM The Employland team has proven expertise in building digital platforms, having developed mobile.de – one of the leading automobile markets on the internet and sold to the US corporation eBay in 2004.

The international team has extensive knowledge of labor market-related immigration from non-EU countries and the specifics of migration legislation.

In order to protect its strong economy, Germany needs well-qualified workers from around the globe. Based on demographic developments, the IAB estimates that Germany needs to achieve a net migration of 400,000 people per year in order to maintain a steady potential labor force in the long-term. As part of a large-scale Qualified Professionals

Initiative, the German government has been welcoming qualified immigrants since 2012. The legal and regulatory framework behind the campaign has seen significant improvements in recent years. All that was missing was a platform where all the steps to securing employment in Germany were supported in one place, and this has now been cre-

ated with Employland.

FREE TO USE FOR PROFESSIONALS AND SKILLED WORKERS Job-seekers create a detailed online profile on the website and use it to introduce themselves to employers in Germany.

Employers then search the platform for

EMPLOYLAND BLOG “In our blog, we show why it pays to live and work in Germany and invite readers to get involved in discussions,” says Bartholatus. At blog.employland.de, jobseekers will also find experience reports, legal requirements and tips for getting settled in Germany.

BUSINESS

GEORGIA TODAY MAY 23 - 25, 2017

7

Georgia on the Road to Standardization

BY NINO GUGUNISHVILI

T

he National Agency of Standards and Metrology of the Ministry of Economy and Sustainable Development of Georgia organized a seminar covering Georgia - EU Cooperation and the role of Standardization, held in Courtyard Marriott Tbilisi and focusing on discussing the reforms Georgia is implementing towards aligning itself with the best existing EU practices.

The representatives of the Management Center (CCMC) of the CEN-CENELEC (European Committee for Standardization - CEN and European Committee for Electrical Standardization - CENELEC), Deputy Minister of Economy and Sustainable Development, Genadi Arveladze; General Director of Standards and Metrology Agency of Georgia, David Tkhemaladze; Ivane Didberidze from ISO Consulting Georgia, Georgian expert, trainer, and auditor on Quality and Food Safety Management Systems at Lloyd's Register Quality Assurance; Peter Lakatos, PHD and Key Expert in Technical Standardization in Georgia; and various other local and international organization and business representatives united to

discuss Georgia’s progress towards European standardization.

Deputy Minister Arveladze talked about the support Georgia receives from the EU regarding infrastructure quality and institutional development, “The Standards and Metrology Agency of Georgia serves to implement European standards in the country, in order for local production to bring high quality products to the international market,” he said.

With commonly applied standards, European Standardization organizations, along with national bodies and international organizations, are addressing the safety and protection of customers in Georgia. Standards facilitate cross-border trade and encourage technological advances, environmental protection and help enterprises to develop.

“The potential for standardization is almost inexhaustible,” Arveladze said.

“Standardization facilitates business processes and will allow Georgian exporters to introduce their production to the EU market and enjoy the preferences granted under the Free Trade Agreement between Georgia and EU,” he added.

“Since the signing of the DCFTA between Georgia and EU, Georgian goods and services have the incredible opportunity to enter the EU market by meeting the specific requirements for Quality

and Safety- by using internationally recognized ISO & EN standards,” said Didberidze. “We work in this direction to support local business to meet those

requirements. The other slice of the pie is the value of brand names and trademarks and how far standardization contributes to this. Supposing that standardized products are accepted by the customers, especially if they conform to international standards, such products can add to the value of a brand name, even if it appears hard to manifest this in every instance… by receiving an international ISO 9001, ISO 22000 or other Management System certificate, the company crosses some barriers to trade in the EU. At the same time, it gives more credibility to the companies from the point of view of customers".

Peter Lakatos, Key Expert working on Technical Standardization in Georgia, training technical offices, and having extensive knowledge and experience in the field, explains why standardization is so important: “For European standards, safety is very important. The problem for Georgia is how to activate and involve experts from different national committees to work together on the issues of standardization.

Althought the personnel in agencies are very skilled and qualified, Georgian experts should be working more with the national committees. The role of our project was to train staff to be able to work with intenational and EU organizations, though working on the national level is equally important. Safety, for example, should not only be a matter of economic interest, but has to be a social fact,” he stated, adding that having regular inspections and market surveillance are much needed in Georgia.

The role of technical standardization is to manage the technical environment.

“Georgia has a huge advantage compared to other post-soviet countries, but in order to attract foreign capital to your country, the products entering the EU and international markets should have the highest standards. When you put a product on the market it should be safe and the customer should need it. Technical standardization can be applied everywhere, be it the energy sector, metallurgy or transport- and also in social responsibility,” Lakatos concluded.

8

BUSINESS

GEORGIA TODAY

MAY 23 - 25, 2017

Georgia's Strategy on Sustainable Urban Transport: National Discussion Kicks Off

T

he legal and institutional framework and financial resources needed to promote sustainable urban transport in Georgia were the focus of a workshop on May 19.

The event brought together representatives of the Georgian government, civil society, and 10 municipalities across Georgia – Tbilisi, Batumi, Kutaisi, Rustavi, Gori, Mtskheta, Telavi, Poti, Akhaltsikhe and Zugdidi.

The workshop kicked off a series of national discussions that will continue through August and will lead Georgia to developing its first national strategy and policy framework of sustainable urban transport.

The initiative is supported by the United Nations Development Program (UNDP) and Global Environment Facility (GEF), in close partnership with the Ministry of Environment and Natural Resources Protection of Georgia. “The national discussions will help shape the vision of the sustainable urban transport strategy, develop clear guidelines for municipalities, and identify institutional and financial mechanisms for coordinating sus-

tainable urban transport at the national, regional and local levels,� said Nino Antadze, Environment and Energy Team Leader at UNDP in Georgia.

Experts from the Georgian non-governmental organization “Partnership for Road Safety� and the Dutch non-government organization MOVE Mobility presented an overview of urban transport in Georgia and informed attendees about best practices utilized in Europe.

The work continued in thematic working groups during which participants discussed the priorities of the sustainable urban transport strategy, required legislation and financial mechanisms.

IBF: Making the Right Decision

BY OTAR KIRIA

T Source: tfgm.com

he behavior of an individual in the process of decision-making is not always logical. While ultimately decisions taken by a person affect their personal life directly and are less connected with people surrounding them, the future of other people greatly depends on the decisions made by a leader or an executive.

The leader chooses the direction not only for himself, but for the whole organization. Taking responsibility for crucial decisions is a rather heavy burden for managers and this clearly manifests itself at the higher levels of management; especially with regards the issues of the human resources and strategic marketing. Thus, the fundamental basis is common: a leader should only make very wellthought out and grounded decisions.

Making a decision means choosing, and actions taken beforehand are mostly developed after choosing the main direction. As such, it becomes apparent that the process of decision-making is far from simple.

Scientists offer different options that help optimize the process of decision-making and get the best results. Jeff Boss outlines the 9 characteristics of a good decision: 1. Good decisions positively impact others.

2. Good decisions are replicable.

3. Good decisions foster opportunity.

4. Good decisions include others.

5. Good decisions are executable.

6. Good decisions are systematic.

7. Good decisions are accountable.

8. Good decisions are pragmatic.

9. Good decisions involve self-awareness.

The process becomes incredibly complicated if we look at these characteristics radically and think “did he really test it according to all nine?� And this question becomes utopian if we discuss those cases when decisions have to be made in seconds.

However, specialists from HBR suggest that if good decision-making is not a rarity, the real leader will surely be able to make the right one in seconds, rather than in days or months. Meaning if one has thoroughly studied all characteristics of a good decision fundamentally (relevant high quality education) and if they have taken such steps earlier (professional experience) – they are bound to make the right decision.

Pierluigi Collina - The most famous football referee in the world, FIFA's "Best Referee of the Year" six consecutive times and the “world’s best referee� according to David Beckham, has made “decisions in seconds� thousands of times throughout his

career. He continues doing the same, though no longer in football- this time in education.

Collina is a personal couch and motivational speaker who came to the International Business Forum in Batumi this week to share his experience with the audience and show them the art of good decision-making through a master-class.

A total of 800 professionals attended the forum providing an added benefit in terms of networking on an international level. Other prominent speakers of the forum were: Kevin Gaskell - the art of creativity in digital chaos Sean Fitzpatrick - winning matters John King - tribal leadership Dananjaya Hettiarachchi - communicate, connect, sell The former CEO of Porsche and Lamborghini, Kevin Gaskell, compared the process of decisionmaking to that of preparing for the Olympic Games: “The athletes’ amazing achievements can be more than just inspirational to you and the way you run your business. You have more in common with these top class sports people than you think.�

Gaskell’s conceptual model suggests that in sports as well as in business, the quality and result of good decision-making is based on three factors: a) Building trust b) Effective and intensive communication with the team, and c) Magic of shared achievement.

Kevin Gaskell also conducted a master-class during the IBF Batumi in Hotel Euphoria.

People’s decisions are often influenced by a range of psychological factors, like social customs, experience and personal values among many. Thus, people who are supposed to make big decisions in the highest-ranking institutions are chosen only after careful consideration of their phenotypic and genotypic characteristics.

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 GHYHORSPHQW FRPSDQ\ Âł6LPHWULD´ WKH ÂżUVW EUDQG KRWHO KDV 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.

(XURSHDQ FXLVLQH FDQ EH HQMR\HG LQ WKH JURXQG ÀRRU FDIp and a grill-bar menu in the roof top restaurant with panoramic views over the city.

The International Hotels Management Company “T3 Hospitality Management,� providing the hotel management, has 20 years’ experience in hotel management in different countries globally.

www.ibf.ge

BUSINESS

GEORGIA TODAY MAY 23 - 25, 2017

Source: 24flix.com

Legendary Band Aerosmith Wows 10,000 Strong Crowd at Black Sea Arena

BY NINO GUGUNISHVILI

A

erosmith - the legendary American Rock Band performed to great acclaim at Batumi's Black Sea Arena on May 20, as part of the band’s last ever European tour ‘Aero-Vederci Baby’.

Ani Kavlelishvili, Director of the Black Sea Arena, says it was extremely important for Georgia to be among the countries where the legendary musicians would perform, as it was announced to be the band's last ever tour. "The concert at the Black Sea Arena, Shekvetili, was the second within Aerosmith’s tour program, and saw the legendary band performing to over 10,000 people,” Kavlelishvili told GEORGIA TODAY.

“The location was stunning, the infrastructure and organization fantastic and the band- spectacular! Steven Tyler was as energetic on stage as ever!” one audience member told us.

The event was held within the Check in Georgia project, which aims at increasing tourism flow to the country and assisting local business development in all Georgia's regions.

The concert sold out in 3 hours, with fans from Armenia, Ukraine, Turkey, Russia and Azerbaijan amongst the thousands that bought tickets, which, as Kavlelishvili told us, shows a promising start for the summer season ahead, with numerous other Georgian projects and international performers at the Black Sea Arena planned for the summer, making it even more attractive for tourists to spend time by the Black Sea coast.

IMF: Russia's Economic Recovery from the Crisis

BY DIMITRI DOLABERIDZE

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his year, Russia's economy will come out of a two-year crisis thanks to the measures taken by the authorities and will move to growth, experts of the International Monetary Fund (IMF) say. At the same time, they believe that growth might "reduce to approximately 1.5 percent."

The reason for this inactive growth of the economy is in the structural limitations of the Russian economy, the IMF believes. For example, in demographic and technological fields.

Experts of the international organization believe that Russia needs to use the current favorable situation that has developed in the oil market and

also move in four directions: adopt a budget rule that will mitigate the impact of fluctuations in oil prices; achieve the inflation target at four percent; reform the financial sector; and not focus on the raw materials industries.

Retail FPI | Cabbage In The Spotlight

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etail food prices increased by 3.4% on an annual basis (that is, compared to May 2016), but decreased by 1.2% on a monthly basis (that is, compared to April 2017). The biggest price increase was for cabbage, potatoes and peaches (76.5%, 30.2%, and 17.5%, respectively). The price of cucumbers, eggplants and greens became significantly lower, and decreased by 60.0%, 25.8% and 15.4% respectively.

Source: Geostat and Trade Map Note: Quantity of imports is not available for 2017

A CLOSER LOOK AT CABBAGE PRICES Cabbage is among the products that exhibited the largest increase in prices in May compared to the same month of the previous year. The price of cabbage now is around 1 GEL, whereas last year it was 0.47 GEL on average in the same time period.

Thus, cabbage prices in the major supermarkets of Tbilisi have more than doubled y/y.

According to the trade statistics, both the import value and quantity of cabbage follow the same trends and are quite volatile. Given that in 2017, the value of cabbage imports for January-April is already higher than for the whole year of 2016, the increase in cabbage prices is quite surprising.

In the first quarter of 2017, import value amounted to $462,000, which is a bit higher than $404,000 for 2016, and the year has just begun. It is true that most imports occur during the first half of the year, and are almost zero in summer; they usually start to increase by the end of the year. This means that imports for 2017 most likely will be much higher than in 2016, which should contribute to a decrease in prices, unless domestic production is extremely low.

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POLITICS

GEORGIA TODAY

MAY 23 - 25, 2017

The Syrian Safe Zone: The De-Escalation Process Georgian Foreign Minister Meets High-Rank Officials in Cyprus

BY THEA MORRISON

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eorgian Foreign Minister Mikheil Janelidze held several meetings with highrank officials within the frames of the 127th Session of the Council of Europe (CoE) Committee of Ministers, Held in Nicosia, Cyprus on May 18-19.

Janelidze met the CoE Secretary General Thorbjorn Jagland and thanked him for his consolidated reports on Conflict in Georgia that give information on the human rights situation in the Russian occupied regions of Georgia – Abkhazia and Tskhinvali (South Ossetia).

The officials also spoke about the progress Georgia has made through its reforms aimed at democratic consolidation.

Georgia’s impressive reforms and EuroAtlantic aspirations were the main topics of the meeting held between the Georgian Foreign Minister and his Latvian counterpart, Edgars Rinkevics.

Augusto Santos Silva, the Minister of Foreign Affairs of Portugal and Janelidze underlined the friendly relationship between the two states that marks 25th anniversary of diplomatic ties.

The Portuguese Foreign Minister expressed satisfaction over the growing interest towards the Portuguese language and culture in Georgia and thanked the Georgian side for successful cooperation in the field of culture and intercultural relations.

The officials also discussed prospects of cooperation in various fields, with Silva reaffirming Portugal's unwavering support for Georgia's sovereignty and territorial integrity.

Mikheil Janelidze also met his Cyprian counterpart, Ioannis Kasoulides.

ThetwoMinistershighlightedthefriendly relations that have become particularly dynamic in the recent period and reaffirmed their readiness to promote bilateral political, economic and sectoral co-operation and people-to-people contacts.

The sides spoke about the importance of the 25th anniversary of the establishment of diplomatic relations between the two countries and large-scale cultural activities that will be conducted on the occasion of this date, under the aegis of the Georgian Embassy to Cyprus.

Special attention was paid to the great

10 Galaktion Street

potential of trade-economic relations.

The sides welcomed the operation of direct flights between the two countries that have increased tourist flows to both countries and has also contribute to the development of co-operation in tourism.

The sides paid special attention to high-level co-operation in the areas of culture and tourism. The Georgian delegation expressed its satisfaction at the effective implementation of a number of successful and unprecedented projects with the Cyprian Department of Antiquities. One such project resulted in the discovery of a Georgian temple on the territory of Cyprus.

Preparation for the Eastern Partnership Summit, scheduled to be held in Brussels on 24 November, was mentioned and the parties exchanged views over Georgia’s expectations with respect to this Summit. The Ministers expressed the hope that the Summit will be oriented towards the future and will set forth plans and initiatives for further integration with the EU. Within the framework of the CoE ministerial, the Georgian Foreign Minister presented the instruments of ratification of the Istanbul Convention to the Deputy Secretary General of the Council of Europe, Gabriella Battaini-Dragoni.

Georgia acceded to the Istanbul Convention on Preventing and Combating Violence against Women and Domestic Violence, in 2014. The Istanbul Convention ratification package was adopted by the Parliament of Georgia this month with amendments made to the laws of Georgia, as well as to the Criminal Code of Georgia, in order to bring Georgian legislation into compliance with Convention standards.

Prior to holding the official meetings, the Georgian delegation led by Janelidze participated in the CoE Ministerial session at which the Georgian FM reaffirmed Georgia’s commitment to the CoE’s main principles. “Ensuring the democratic development of Georgia is one of the government’s key priorities,” he said, going on to highlight the Russia-Georgia conflict, as well as the difficult security, humanitarian and human rights situation in Georgia’s occupied territories.

The Foreign Ministers of the Council of Europe Member States reconfirmed their support for Georgia’s sovereignty and territorial integrity within its internationally-recognized borders.

Children walk near a parked ambulance in al-Rai town, northern Aleppo province, Syria December 27, 2016. (Reuters)

BY ABDULMELIK ALKAN

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here are many stakeholders in this dire situation who want to ratify a possible working solution for the “Syrian Crisis”. However, efforts to form said solution are not based on altruistic reasons, from each actor’s desire to see substantial peace in Syria, and much of the “Syria Talks” resemble little more than a game between state actors, each of whom has their own discerning interests and sought-after benefits regarding Syria: the goal of the game being for the actors on one team to outmaneuver the actors on the other.

The Syrian Peace Talks in Astana (SPTA) are one of those “cul-de-sacs” offering little to obstruct the escalation and lacking the substantive agreement of previous unsuccessful rounds of talks.

However, four-fifths of the May proposal

by Russia in the third round that took place in Astana, Kazakhstan, may constitute “hope” or a possible outcome to end the six-year conflict that turned the country to rubble and cost more than 400,000 lives. The SPTA was held under the auspices of the United Nations, and observed by the United States.

Three countries- Russia, Turkey, and Iran -who endorsed the negotiations, said yes to outlining the “safe zones”.

There are still facts on the ground that suggest the implementation and enforcement of the agreement demands time,

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resources and good faith from the participating actors, yet the agreement came into effect following the guarantors’ signing on Saturday. The countries maintaining the four zones will convene to form a commission at the end of May to work on the plan.

The Safe Zone Agreement is basically planned to mitigate the violence and cease the war between rebels, supported

by Turkey and the government of Bashar al- Assad, backed by Russia and Iran.

The four zones will be implemented in four Syrian provinces: ZONE 1- Idlib province: Combining northeastern areas of Latakia province, western areas of Aleppo province and northern areas of Hama province in which one million civilians live. Al-Qaeda and its factions are dominant in this region.

ZONE 2- The Rastan and Tailbash: An enclave located in northeast Homs province which has 180,000 civilians. Al-Qaeda and its allies operate in this region.

ZONE 3- Estern Ghouta: Located in the northern Damascus countryside, it has 690,000 civilians. Jaish Al-Islam controls the region, one of the rebel factions that participated in the SPTA. ZONE 4- Deraa and Quneitra: Provinces that have a border with Jordan, controlled by rebels and having a civilian population of around 800,000.

Safe Zone, by definition, means a “nonconflict” zone where civilians are protected and kept safe from any group fighting in Syria. It is a law of war assuring that civilians are protected. Zones

will be open to humanitarian access and public services, and infrastructure will be provided in areas where there has been a lack of electricity and water since the war broke out. The refugees will also be able to return to their homes if the safe zone is implemented.

The No-Fly Zone means no warplanes from Bashar Al Assad’s forces will be able to fly over the safe zones. Russian aircraft can fly over them, but cannot carry out air raids. A coalition led by the USA and guarantor countries will be able to attack ISIL strongholds and other Al-Qaeda affiliated group outside those four zones. When the demarcation of the Safe Zones is complete, the three countries’ military personnel will be deployed to the checkpoints and Safe Zones to begin the securing and deescalation process.

Talks are ongoing at the United Nations in Geneva. Russia has scheduled another talk in Kazakhstan in late July to outline the plan. The United States is concerned over the Iranian involvement in the peace process, claiming that Iran has not brought any positive efforts to solving the Syrian conflict. Members of the Syrian Opposition have also walked out of the talks, rejecting Iran’s role in the SPTA. With these developments over talks that may shape the future of Syria, it is undeniably clear that Syrian people are in need of stability and peace in their war-torn country. The SPTA might bring optimism to the people now, and it falls on the international community to shoulder this possibility.

SOCIETY

GEORGIA TODAY MAY 23 - 25, 2017

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Source: blog.rivetto.it

Agriculture Minister: The State Cannot Help Farmer Victims of Weather Disaster

BY THEA MORRISON

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eorgia’s Minister of Agriculture, Levan Davitashvili, says that the recent unstable weather which has seen heavy rain and hailstorms battering several regions of the country, has resulted in a massive loss that the State will not be able to compensate affected farmers for.

“The loss amounts to millions of Lari and the budget cannot afford to compensate the damage suffered by the farmers,” the minister said.

During the last several days, rain and hail has affected nearly all regions of Georgia.

The loss Imereti region experienced

as a result of this natural disaster exceeds GEL 600,000.

Imereti Vice-Governor, Soso Khakhaleishvili, says that the heavy rainfall caused serious problems throughout the region. “We will provide assistance to all in need,” he stated.

Heavy rain made the River Rioni in Tskaltubo Municipality, western Georgia, burst its banks. Eight houses and nearby vegetable gardens were flooded and infrastructure was damaged.

The regional administration of Imereti region reports they are working in emergency mode to deal with the issue.

It was also necessary to evacuate 13 people from a landslide zone in Borjomi on Sunday and strong wind uprooted hundred-year old trees in nearby Bakuriani.

Heavy rain also hit the Kvemo Kartli

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region. Tetritskaro Municipality was the most affected, with rain and hail damaging roads, vegetable gardens and orchards.

In the wine-making Kakheti region, hail totally destroyed vineyards in several areas, leaving farmers without a harvest.

The Governor of Lagodekhi claims that the anti-hail system was used and reduced the loss, though the damage is still widespread.

The Gori Municipality, Shida Kartli region, witnessed a hailstorm lasting around 20 minutes, which damaged vegetable gardens and orchards in Jariasheni and Variani villages.

The Georgian weather forecast center reports that unstable weather and rain will continue throughout the country until May 25.

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