Issue #1214 Business

Issue no: 1214/212

• DECEMBER 24 - 26, 2019

• PUBLISHED TWICE WEEKLY

In this week’s issue...

FOCUS

ON INVESTING Forbes names Batumi among the “Best European Cities to Invest in for 2020”

PRICE: GEL 2.50

Weekly Entrepreneurial News @entrepreneur.ge

PAGE 2

NEWS PAGE 2

Tourism Remittances, FDI & Capital Spending Up but Food Price Inflation Spoils the Festive Mood ISET PAGE 4

The Guardian: Georgian Harvesters Risking Lives to Supply EU with Xmas Trees BUSINESS PAGE 5

EMERALD PARK - An Outstanding Home in Vake BUSINESS PAGE 6

Georgian Municipalities Join National Efforts to Reduce Climate Threats

Image source: propertygeorgia.ge

EU4Energy: Georgia Adopts Key Laws The Int’l Chamber of to Harmonize the Energy Sector Commerce Holds Annual BUSINESS PAGE 8

BY NINI DAKHUNDARIDZE

General Assembly Meeting BUSINESS PAGE 11

E

U Neighbors East has highlighted Georgia’s accomplishment in the energy sector, reporting that “Georgia is making progress in reforming its energy sector in line with the EU Energy Law and the Energy Community Treaty, by substituting the existing energy market framework with the Third Energy Package.” This success was preconditioned, being a positive result of the adoption of the Law on Energy and Water Supply and the Law on Renewable Energy Sources by the Georgian parliament in the third reading.

Trump Signs Defense Budget for 2020 which Involves Georgia & Ukraine POLITICS PAGE 15 Prepared for Georgia Today Business by

Markets As of 20ͲDecͲ2019

STOCKS

However, the laws haven’t come into force just yet, as they are still awaiting the signature of the President of Georgia Salome Zurabishvili.

The Third Energy Package was initially adopted by the European Commission in 2009. It aims to improve the operation of the internal energy market and resolve certain structural problems, while at the same time accelerating investments in energy infrastructure to enhance cross-border trade and access to different sources of energy.

The EU expects that Law on Energy and Water Supply will enable Georgia to develop a more independent, competitive and liquid market via the unbundling and certification of transmission and distribution system operators.

Continued on page 12

Price

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Bank of Georgia (BGEO LN)

GBP 16.32

+3,8%

+13,3%

GEOROG 04/21

104.46 (YTM 3.31%)

+0,1%

+0,1%

Georgia Capital (CGEO LN)

GBP 9.61

+5,8%

+0,6%

GEORG 04/21

105.57 (YTM 2.49%)

+0,1%

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GBP 1.57

Ͳ6,6%

Ͳ12,1%

GRAIL 07/22

110.08 (YTM 3.57%)

+0,2%

+0,2%

GBP 13.02

Ͳ2,8%

+6,5%

GEBGG 07/23

105.66 (YTM 4.28%)

+0,1%

+0,5%

CURRENCIES

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

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

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66,14

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2,8580

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1 478,22

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3,1679

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3,7152

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FTSE 100

7 582,48

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0,4815

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DAX

13 318,90

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DOW JONES

28 455,09

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GEL / AMD

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FTSE 250

21 674,30

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0,1226

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190,34

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0,9027

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1 107,64

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SP 500

3 221,22

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0,9828

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MSCI FM

2 712,99

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1 582,68

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GT Index (USD)

1 208,13

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NASDAQ MSCI EM EE MSCI EM

8 924,96

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2

NEWS

GEORGIA TODAY

DECEMBER 24 - 26, 2019

Batumi Among ‘the Best European Cities to Invest in’ for 2020 @entrepreneur.ge Gamarjoba! I’m the Editor-in-Chief of the Georgian edition of Entrepreneur magazine and I’m here to share the top weekly Entrepreneurial news with you: RENTO is a new Georgian company specializing in combined tourism and transportation, founded

by Nikoloz Siradze and Erekle Mepisashvili, who met at the Caucasus University. Each driver of RENTO wears a uniform, follows the protocol of the company and ensures the customers are satisfied, safe and comfortable. Customers can choose a driver who speaks a particular language from the over 100 drivers who work in the company. RENTO has big plans to improve further following consumer needs and demands.

Lunchoba is a Georgian digital cafeteria which enables its international partner offices and companies in Georgia to offer their employees a corporate cafeteria without actual, material space. Founder Niko Rekhviashvili created the platform with the digital transformation agency Redberry Start-up Studio. Lanchoba is the first company in Georgia to aim to deliver a healthy lunch for office workers, with a 6 lunch-box menu uploaded to the app every two days.

Lanchoba will soon open a big centralized kitchen and a smaller one in the city. Lunchoba also plans to export regionally.

Female artist Mariam Tushishvili has been working with enamel at TM Enamel Art for 18 years, masterfully creating diverse delicate and technically polished artworks. Her signature style corresponds to the vineyard – the symbol of Georgian culture and identity.

She won the 2016 EthnoFest Grand Prix, and was named Artisan the same year. An artisan is a worker in a skilled trade, especially one that involves making things by hand, using a traditional method and creating an innovative final product. Find her works in Ornament Gallery, EthnoDesign, Market Store and online on Facebook and Instagram.

Follow the Entrepreneur Georgia Instagram page to get the latest updates from Georgian Entrepreneurs. For doing business with Georgian Entrepreneurs, write us on business@entrepreneur.ge

BY ELENE DZEBISASHVILI

F

orbes’ senior contributor Amy Dobson has named Georgia’s charming seaside town of Batumi among the “Best European Cities to Invest in for

2020”.

Dobson reached out to LeadingRE, a global consortium of 565 real estate brokerages across 70 countries, to see which cities were showing signs of real estate growth but hadn’t yet surpassed

the threshold for turning a profit.

“With plenty of land available in Batumi and little restriction on development, new projects are popping up in the city to cater for the uplift in demand,” Dobson cites Chris Dietz, Executive Vice President of Global Operations for LeadingRE. Dietz also notes that “investors, also from neighboring Turkey, are attracted to the 2,000-year history and culture as well as the favorable prices compared to other more well-known European coastal hubs”.

Earlier this year, Batumi was named

‘Europe’s Leading Emerging Tourism Destination’ at the World Awards ceremony. While Western guests arrive in increasing numbers to visit the country’s capital city, Tbilisi, the rest of the country awaits undiscovered.

But some have already stumbled onto the unique synthesis of the mountains and sea in Batumi, a lazy seaside town where the beaches are welcoming, the food and wine delectable, and the culture ancient and vibrant. It won’t be long before the Western world catches on to the quiet, luxurious escape of the Georgian coast.

4

BUSINESS

GEORGIA TODAY

DECEMBER 24 - 26, 2019

Tourism Remittances, FDI & Capital Spending Up but Food Price Inflation Spoils the Festive Mood

BY DAVIT KESHELAVA AND YASYA BABYCH

I

SET-PI has updated its forecast of Georgia’s real GDP growth rate for the fourth quarter of 2019 and the first quarter of 2020. The highlights of this month’s release are as follows:

HIGHLIGHTS • The real GDP growth rate reached 5.7% y/y in October 2019. As a result, estimated real GDP growth for the first ten months of 2019 was 5.1%.

• ISET-PI’s real GDP growth forecast for the fourth quarter of 2019 remains at 4.4%.

• Based on October’s data, we expect annual growth in 2019 to be 4.9%.

• ISET-PI’s forecast for Q1 2020 GDP growth is 4.2%.

Based on October’s data, the growth forecast for 2019-2020 remains largely stable. While changes in the current GDP forecast do not appear to be significant, a number of variables deserve our attention. In particular favorable economic conditions in the wider region, improved external statistics for Georgia, increased national and foreign currency deposits, and inflation rate above the targeted value all have influenced the GDP growth forecast.

EXTERNAL STATISTICS The first eight months of 2019 were characterized by improved economic conditions in Georgia’s neighboring countries.

The Armenian economy advanced on average by 6.4% y/y in the summer of 2019, while Russia’s real GDP grew by about 2.2% in the same period of 2019.

Furthermore, the annual real GDP growth in Azerbaijan and Belarus amounted to 2.4% and 1.1% respectively in the first eight months of 2019. These favorable economic developments in Georgia’s immediate neighborhood and the wider region further stimulated our economy through the trade, remittance, and tourism channels.

In October 2019, exports grew by 4.5% y/y and this growth was mainly driven by the following: significant increases in re-export of motor cars and trucks to Armenia; recovering exports of wine and mineral water to Russia; export/reexport of copper ores and concentrates to Belarus; growing re-export of motor cars to Ukraine. During the same period, imports decreased by 2.1% and as a result the trade balance (net-exports) improved by 5.7% y/y (trade deficit declined to 531 million USD).

Remittances and tourism, together with foreign direct investment (FDI), are among the main sources of foreign exchange flow into Georgia. In October, remittances increased by 11.5% relative to the same month of the previous year.

As in the previous month, the main contributors to this growth were Kazakhstan (remittances up by 127%, which amounted to a 1.3 percentage point contribution),

Italy (remittances up by 24.6%), Greece (up by 19.7%) and Poland (up by 32.4%).

Overall, however, remittances from the EU declined moderately by 0.9%. Regarding the number of visitors, Georgia experienced an 8.8% increase in yearly terms.

In October, inbound tourism recovered from the recent growth slowdown and showed a 7.8% growth y/y. The reported growth had a significant positive impact on projected real GDP, particularly due to the fact that remittances and income from tourism comprise an important part of households’ income in Georgia.

NATIONAL AND FOREIGN CURRENCY DEPOSITS The other set of variables that have had a significant positive effect on our forecast were national and foreign currency deposits in commercial banks. Almost all types of deposits increased significantly both in yearly and monthly terms.

In particular, the total volume of domestic currency deposits increased by 16.6% annually, while the total volume of foreign currency deposits went up by 18.0% compared to the same month of the previous year. Moreover, growth rates are still pronounced even after excluding the exchange rate effect. Deposit dollarization increased by 0.51 percentage points annually and 0.03 percentage points monthly. All deposit-related variables contributed positively to the growth forecast.

INFLATION In October, the annual inflation rate reached 6.9% , which is 3.9 percentage

points higher than the medium-term target of 3% set for 2019-2021 by NBG. The main contributors to annual price increases were increased excise tax on tobacco and higher food prices, which contributed to annual inflation by 0.8 and 3.8 percentage points respectively.

It is important to note that the excise tax hike can increase only the level of prices, not the inflation rate going forward (it is a one-time factor) and this effect is expected to be exhausted next year, while increased food prices, if sustained, can pose an inflation risk to the Georgian economy. Since food prices often fluctuate, it is important to also consider core inflation (inflation excluding the most volatile items, such as petroleum and food prices). Core inflation reached 3.4%, while annual inflation on imported goods reached 5.5% y/y.

Diving deeper into the reasons behind the rising price levels (excluding the already-mentioned excise on tobacco), we note the following: First, in June-August of 2019, the lari depreciated with respect to Georgia’s main partner countries, which fueled expectations of further depreciation (these processes tend to have a selffulfilling nature), and exacerbated the upward pressure on prices (since depreciation leads to an increase in imported product prices, which then raises the overall price level in the country). In October, the real effective exchange rate (REER) depreciated by 7.7% relative to the same month of the previous year, but appreciated by only 0.1% in monthly terms. Notably, the lari real exchange

rate depreciated with respect to the national currencies of major trading partners in yearly terms. The lari/lira and lari/ruble real exchange rates both depreciated compared to the same month of the previous year by 12.4% (remained unchanged in monthly terms) and 9.8% (depreciated by 0.3% monthly) respectively. In addition, the lari real exchange rate experienced a notable annual depreciation against the US dollar and the euro (falling on average by 5.8% and 1.2% respectively y/y). The depreciation of the REER typically means that Georgian exports are cheaper for foreigners to buy, while imports become more expensive. In the very short run, however, real depreciation of the domestic currency can even decrease the overall value of exports. Eventually, however, REER depreciation will lead to the increased competitiveness of Georgian goods on international markets.

Secondly, world prices for food and agricultural products recently increased quite substantially, putting additional pressure on domestic prices. For example, the FAO food price index went up by 2.9%, 5.9% and 9.5% y/y in September, October, and November of 2019, respectively. Hence, the National Bank of Georgia increased the Monetary Policy Rate (MPR) twice in September — each time by 0.5 percentage points, then in October and December by 1 and 0.5 percentage points respectively. These measures, aimed at stemming inflation, also restrict borrowing and are expected to have a negative impact on the future growth rate.

FOREIGN DIRECT INVESTMENT AND EXPANSIONARY FISCAL POLICY Foreign Direct Investment (FDI) recovered from a sharp decline in the second quarter of 2019. According to Geostat’s rapid estimate, FDI increased by 13.7% in annual terms in Q3 2019 and the main contributor to this high annual growth rate was reinvestment, which nearly doubled y/y.

Moreover, the government’s net cash outflow from investments in non-financial assets (i.e. the government’s capital expenditure) increased by 106.4% y/y in October alone, while the same figure for the last ten months of 2019 was 71.2%.

Recovered FDI and government capital spending variables are not yet reflected in the forecast, but they could potentially have a positive impact on real GDP growth going forward.

Our forecasting model is based on the Leading Economic Indicator (LEI) methodology developed by the New Economic School, Moscow, Russia. We constructed a dynamic model of the Georgian economy, which assumes that all economic variables, including GDP itself, are driven by a small number of factors that can be extracted from the data well before the GDP growth estimates are published. For each quarter, ISET-PI produces five consecutive monthly forecasts (or “vintages”), which increase in precision as time goes on. Our first forecast (the 1st vintage) is available about five months before the end of the quarter in question. The last forecast (the 5th vintage) is published in the first month of the next quarter.

BUSINESS

GEORGIA TODAY DECEMBER 24 - 26, 2019

5

The Guardian: Georgian Harvesters Risking Lives to Supply EU with Xmas Trees

BY BEKA ALEXISHVILI

I

n Georgia’s northern region of Racha, where the mountainous forests reach all the way up to the Caucasus peaks and the alpine zone, there is an abundance of pinecones which are harvested for their seeds, to be exported Europe-wide to produce Nordmann Fir trees for Christmas.

"But while foreign importers line their pockets, the climbers hazard all for a pittance," The Guardian's journalist Jenny Gustafsson claims in an article released Monday.

“I try to not think of anything up there, just focus. The problem is, if you lose concentration, then you might fall,” one of the local Georgian harvesters tells Gustafsson.

This gathering happens in Ambrolauri, seeing the forest filling with locals, fewer every year as the young move to find income in the cities, all in search of the same thing: pine cones or, more specifically, the seeds concealed inside.

These seeds, once transported and planted in European soil, will harvest Europe’s desired Christmas trees, the tall and gracious Nordmann Fir. “It is thick and green with a beautiful shape. And most importantly, it doesn’t drop its needles,” says Marianne Bols, a Danish tree grower.

She is among a number of importers who come to the forest every year to bring seeds back to Europe. The industry is immense: about 150 million Christmas trees are sold annually on the con-

tinent. It is exceptional that a third of them, perhaps more, originate from the Ambrolauri region.

The Guardian notes that the Georgian cone pickers, who come from small towns and villages near the forest and risk their lives gathering the cones, “see little of the final earnings.”

“I was practically born in the forest, and have been climbing since I was a kid,” says Lasha Sopromadze, from the village of Tlugi at the forest’s edge. Each season he earns between 1,000 and 2,000 GEL. The price per kilo varies from year to year, from one to two GEL, a small fraction of the price for a full-grown tree in Europe.

Gustafsson speaks to Lamara Katsitadze-Jikhvashvili, 77, who spent her youth climbing the firs for cones.

“Everyone would do it. The entire village went into the woods in autumn.

We would cook together in the evenings, and the food tasted like the sap on our fingers,” Katsitadze-Jikhvashvili tells The Guardian journalist. “Climbing is not difficult. We just grabbed the branches one by one. Once up, we would swing and jump from tree to tree.”

These days ropes and hard-hats are brought by the companies to protect the climbers in their service, though not all climbers wear them.

“It’s much faster to climb without- you can finish a tree in 20 minutes. Otherwise you need an hour,” Sopromadze tells Gustafsson.

Several people have died, most recently in 2001 and 2011. The 1990s brought two deaths: a 16-year-old boy and 26-yearold Gaga Namgaladze, whose brother later became the mayor of Ambrolauri,

The Guardian reports.

"Companies say that they enforce strong safety measures now," Gustafsson writes. "Bols’ company, Fair Trees, holds annual safety trainings with their climbers; Levinsen & Abies brought

new ropes and harnesses this year. Fair Trees also runs several social projects, including a free dental clinic and breast cancer check-ups. They pay their climbers significantly more than others, too: five lari per kilo of cones. But the indus-

try’s wealth has yet to transform into real improvement for people in Ambrolauri. The municipality taxes every kilo of cones at an equivalent of 15p. But no one controls how much is harvested."

6

BUSINESS

GEORGIA TODAY

DECEMBER 24 - 26, 2019

EMERALD PARK - An Outstanding Home in Vake E merald Park is an upscale boutique-project located in central Tbilisi within walking distance of Vake Park and Abashidze Street. The six-story home is presented in an ecofriendly and peaceful environment, essential to the well-being of every person. Now that air pollution is one of the gravest obstacles in Tbilisi, Emerald Park offers a whole new style of living, where the greenery and trees around your home will significantly alleviate the problem. GEORGIA TODAY spoke to representatives of Emerald Park to find out more.

COMPARED TO SIMILAR PROJECTS, WHAT SPECIAL CONVENIENCES DOES EMERALD PARK OFFER?

Our project is a boutique-residence comprising 30 apartments. The building is equipped with an outdoor swimming pool, a fully staffed gym, a children's playroom, a concierge, parking

and a storage room- everything a person needs for overall comfort and wellbeing.

It is an undeniably great luxury to revel in beautiful green spaces in Tbilisi, in an eco-friendly environment with a view of the picturesque city- all this Emerald Park offers unconditionally to those clients who trust its cause.

TELL US ABOUT THE QUALITY OF MATERIALS USED IN ITS CONSTRUCTION.

Every material used in construction has been carefully selected. These include aluminum windows, German lifts and a facade made of Austrian material Fundermax. In our opinion, this type of project is ideal for those who desire to live in the

city center while being close to nature.

HOW CAN A CUSTOMER INTERESTED IN YOUR PROJECT GET IN TOUCH?

They can send us a message on our Facebook page – Emerald Park, or contact us: 577112828, or visit us at our sales office: Niko Tskvedadze Turn. #4

WHAT URGED YOU TO START A CONSTRUCTION SITE IN VAKE? Four years ago, when we began searching for the perfect location for our project, a friend showed us a place just two streets up from Abashidze Avenue.

We fell in love with the location right away; finding ourselves in a healthy, eco-friendly environment, which is a great luxury in today's reality. We realized that this was the place we were looking for; ideal for achieving our goal that has, I believe, truly blossomed.

COULD YOU EXPLAIN WHAT YOUR SLOGAN “LUXURY IN EVERY DETAIL” MEANS? Our choice of slogan was not random, as we earnestly try to fill every detail with luxury.

From the start of the project to the end of it, we have fully controlled the processes to achieve the desired results.

As for the name, emerald signifies a green gem, and that is exactly how we see our project. In an altogether healthy, green environment, we have designed a splendid project for our future residents.

Tel: 577 11 28 28 F: Emerald Park Adress: NIKO TSKHVEDADZE STR. N4

BUSINESS

GEORGIA TODAY DECEMBER 24 - 26, 2019

7

Welcome to Ibis Tbilisi Stadium

A

ccor Group, a world leader in travel, modern lifestyle and digital technology, has opened ibis Tbilisi Stadium - the third hotel in the capital of Georgia. ibis Tbilisi Stadium is located in the heart of the cultural and business part of Tbilisi, on Agmashenebeli Avenue, on the left bank of the Kura River, near the famous stadium " Dynamo Arena."

The new economy-class hotel offers 150 modern and comfortable rooms decorated in the corporate style of the brand to accommodate guests. Each room features ultra-comfortable ibis Sweet Beds, as well as everything you need for work or leisure after a busy day in the city. The design of the hotel and public spaces was designed by the renowned Bureau of Sundukovy Sisters and meets all international environmental standards.

In the hotel lobby there is a bar and a relaxation area where guests can enjoy morning coffee or evening cocktails in a comfortable setting, as well as hold business meetings. All areas of the hotel are equipped with Wi-Fi. The new hotel concept creates a simple, but at the same

ibis, the democratic brand of the Accor hotel group, guarantees a modern approach, comfort and quality service at the best price.

In order to offer its guests a modern approach, comfort and affordability, the brand is constantly improving - the concept of innovative Sweet Bed TM beds by ibis, stylish lounge areas and modern ibis restaurant. The ibis network is known worldwide for its quality, reliability and environmental care. The ibis chain, established in 1974, is currently the European leader in budget hotels and the fourth largest chain in the world in its category among more than 1,209 hotels in 67 countries.

Accor is a world leader in hospitality, modern lifestyle and digital technology, offering a unique experience of accommodation in more than 4,900 hotels, resorts and residences, and 10,000 of the best private homes around the world.

time refined, home-like atmosphere, which was made possible thanks to modern and vivid visual solutions. Public spaces here are designed for acquaintances and useful communication and are open to both hotel guests and local residents.

The hotel is perfect for exploring the sports and theatrical life of the city. The State Theater of Music and Drama, and the Tbilisi State Theater of Cinema Acting named after Mikhail Tumanishvili are located nearby. In addition, only two minutes away is the Mushtaidi Park, as well as the Tbilisi-Passenger Railway Station.

“We are pleased to introduce our third hotel in the capital of Georgia. The new ibis perfectly complements the existing lifestyle portfolio and is suitable for both tourist trips and business travelers. The ultramodern design developed by the Sundukov Sisters and executed using traditional motifs, an excellent location in the city center and high standards of service guarantee guests the most pleasant way to discover the city, and the pricequality ratio will certainly become its competitive advantage,” ACCOR New East Europe CEO Alexis Delaroff says.

David Aghmashenebeli Avenue 178 0112 TBILISI — GEORGIA T: +995 (32) 222 10 35 EMAIL: HA1L2@ACCOR.COM ibis.com | accorhotels.com

FB Removes Georgian Web Content for ‘Coordinated Inauthentic Behavior'

BY ANA DUMBADZE

F

acebook has removed 39 accounts, 344 pages and 13 groups for “coordinated inauthentic behavior” in Georgia targeting domestic audi-

ences.

In a statement released on December 20, Nathaniel Gleicher, Head of Facebook’s Security Policy, explained that the people behind this activity used

fake accounts to increase engagement on their content and manage pages.

"These pages posed as news organizations and impersonated political parties, public figures, activist groups, and media entities”, Gleicher said.

"The page admins and account owners typically posted about domestic news and political issues such as elections, government policies, public officials, criticism of the opposition and local activist organizations”, he added.

Gleicher said that the Facebook team has identified these accounts through

their investigation into suspected coordinated inauthentic behavior in the region and their investigation benefited from public reporting.

"Although the people behind this activity attempted to conceal their identities and coordination, our investigation linked this activity to Panda, an advertising agency in Georgia, and the Georgian Dream-led government", he said.

He further noted that the Facebook team is “constantly working to detect and stop this type of activity” because

they don’t want their services to be used to manipulate people.

One of the ruling Georgian Dream party leaders, Mamuka Mdinaradze, wrote on Facebook in response that the ruling party has nothing to do with the group mentioned in the Facebook statement.

However, he said that the majority of the pages that have been removed seem to be either supporting the Georgian Dream or sharing negative information about the oppositional United National Movement (UNM) and its 'satellites'.

8

BUSINESS

GEORGIA TODAY

DECEMBER 24 - 26, 2019

Georgian Municipalities Join National Efforts to Reduce Climate Threats

R

epresentatives of 13 Georgian municipalities facing a high risk of flooding and other climate-driven disasters met in Kachreti on 19-20 December to discuss the threats they face and the potential solutions at a community forum organized by the United Nations Development Program (UNDP) in partnership with the Environmental Information & Education Center of Georgia’s Ministry of Environmental Protection and Agriculture (MEPA).

The community forum was the first of its kind under a new $74 million program implemented

by UNDP and MEPA with funding from the Green Climate Fund (GCF), the Government of Georgia and the Swiss and Swedish development agencies.

This seven-year program aims to reduce the risk of floods and other climate-driven disasters in all 11 of Georgia’s major river basins, provide direct protection to more than 1.7 million people and assist the country in building a climate-proof future.

“Engagement of local municipalities is the key to achieving success under this unprecedented national program,” said Deputy Minister of Environmental

Protection and Agriculture Solomon Pavliashvili.

“Countering our common challenge of climate change requires a combination of measures built around systemic policy approaches and active involvement of society.”

“People tend to assume that someone else far away in the capital is responsible for protecting them from natural disasters,” said UNDP Head Louisa Vinton. “The engagement of the responsible national authorities is crucial, but local communities also have a key role to play in prevention and response.”

Participants in the forum were briefed on program components, which include sophisticated satellite-based river basin mapping to identify the locations at highest risk of natural disasters; the modernization and re-equipping of the country’s hydrometeorological forecasting and observation system; the creation of a nationwide early warning system; community-level awareness-raising and education; and investments in protective infrastructure and other nature-based structural measures.

The 13 municipalities attending – Lagodekhi, Signagi, Akhmeta, Gori, Telavi, Abasha, Senaki, Sam-

tredia, Khobi, Kobuleti, Ozurgeti, Lanchkhuti and Chokhatauri – have already been identified as highrisk areas and will be among the first to receive direct support from the program in designing and constructing disaster-prevention infrastructure.

Ultimately, 100 municipalities will receive support.

The importance of communication, cooperation and coordination among the many different government agencies with responsibility for disasters was another focus of the discussions. Among the entities represented at the forum were the National Environmental Agency under MEPA; the National

Security Council; the Emergency Management Service under the Ministry of Internal Affairs; and the Roads Department of the Ministry for Regional Development and Infrastructure.

The municipalities were represented not only by local government officials but also activists from community and non-governmental organizations and university and other educational personnel.

The discussions showed that disaster risk is a topic of deep and immediate concern for local communities, and that the need to build climate resilience is recognized as an urgent priority for Georgia.

National Bank of Georgia Includes 25 Countries in High-risk Money Laundering List

BY TEA MARIAMIDZE

T

he National Bank of Georgia (NBG) has included 25 countries in its list of countries posing a high-risk of money laundering.

The Law on Preventing Money Laundering and Terrorism Financing went into force in Georgia on October 30, 2019. By law, the Financial Monitoring Service will oversee dubious invest-

ments in the country. Special supervisory activities will be carried out by the Accounting and Audit Supervision Service, the National Bank, Ministries of Justice and Finance, State Insurance Supervision Service and the Bar Association. The list of accountant sides includes financial institutions such as banks, microfinance organizations, leasing companies, brokerage companies, currency exchange companies, lottery organizers, notaries and others.

Some of Georgia's investor countries, including Panama, the Cayman Islands and the Seychelles, have been included in the list of money-laundering

Image source: Financer.com

countries. All three offshore zones play a big role in total FDI flows into the country. More specifically, in the third quarter of 2019, $15,678 million was invested in Georgia from Panama, $1,248 million from the Seychelles and $1,891 million from the Cayman Islands.

To note, in late November, a non-governmental organization Transparency International (TI) Georgia released a report which claimed that in 20102018, Foreign Direct Investments attracted by Georgia from those countries which have offshore territories amounted to $5 billion, which is 38% of the total FDI in Georgia in eight years.

“With $300 million, Panama tops the list of investors of those countries that are entirely offshore zones, followed by Malta with $239 million, the Virgin Islands with $6 million, Belize with $64 million and so on,” the NGO says.

The organization claims that there are about 3,000 companies registered in Georgia that are fully or partly owned by offshore companies.

The Georgian National Bank reports that Georgia is a responsible player in the international architecture of the fight against money laundering and terrorism financing.

Under the Association Agreement with the European Union, Georgia has undertaken an obligation to bring its laws closer to EU law, including the detection and prevention of money laundering and terrorism financing. Georgia also participates in the work of the Advisory Committee of Experts on Money Laundering against the Council of Europe (Moneyval). Moneyval checks countries' compliance with the Financial Action Task Force's (FATF) standards, one of the main requirements of which is to assess the risks of money laundering and terrorism financing.

In 2019, the Georgian Parliament adopted the Law on Facilitating the Suppression of Money Laundering and Terrorism Financing, and a year earlier, the National Bank of Georgia approved the "Regulation on Accompanying Transfer Information".

With these changes, the legal and institutional mechanisms for combating money laundering and terrorism financing in the country have been significantly improved and brought in line with FATF recommendations.

The list of high-risk money laundry countries made by the NBG is as follows: 1. Islamic Republic of Afghanistan; 2. Anguilla; 3. Antigua and Barbuda; 4. Bahamas community; 5. The Republic of Botswana; 6. The Republic of Ghana; 7. The Dominican Community; 8. Federal Democratic Republic of Ethiopia; 9. Turks and Caicos Islands; 10. Yemen; 11. Islamic Republic of Iran; 12. Cayman Islands; 13. The Kingdom of Cambodia; 14. The Republic of Colombia; 15. People's Democratic Republic of Korea; 16. Federal Republic of Nigeria; 17. Islamic Republic of Pakistan; 18. The Republic of Panama; 19. The Republic of Seychelles; 20. Saint Vincent and the Grenadines; 21. Syrian Arab Republic; 22. Republic of Tajikistan; 23. Trinidad and Tobago Republic; 24. The Republic of Tunisia; 25. Democratic Socialist Republic of Sri Lanka.

BUSINESS

GEORGIA TODAY DECEMBER 24 - 26, 2019

9

Georgia's Top 10 Products

by Export & Import

BY TEA MARIAMIDZE

G

eorgia’s National Statistics Office (Geostat) released a report, according to which, in January-November 2019, the external merchandise trade of Georgia amounted to $11 504.1 million, 1.4% higher year-onyear.

Imports stood at $8,122.6 million which is 2.3% lower compared to the data of the previous year.

The following products are represented by the highest share of total imports: 1. Petroleum and Petroleum Products - share in total imports: 8.4% 2. Cars: 7.1% 3. Copper ores and concentrates: 6.7% 4. Medicaments: 3.9% 5. Petroleum gases: 3.5% 6. Telephone sets, including phones intended for cellular networks or other wireless networks: 2.2% 7. Wheat and Meslin: 1.1% 8. Cigars and cigarettes from tobacco or its substitutes: 1.1% 9. New tires: 1.0% 10. Automatic data processing machines: 0.8% Exports equaled $3 381.4 million, which is 11.7% higher compared to the data of the previous year.

The following products are represented by the highest share of total exports:

1. Copper ores and concentrates - 17.8% of total exports 2. Cars: 17.6% 3. Ferroalloys: 7.7% 4. Natural grape wines: 6.0% 5. Medicaments: 4.7% 6. Mineral and Fresh water: 3.7% 7. Alcoholic beverages: 3.4% 8. Fertilizers, nitrogen: 2.5% 9. Gold: 2.0% 10. Hazelnut and other nuts: 1.7% In January-November 2019, Georgia imported products to 127 countries. The top ten trading partners by imports in the total imports of Georgia amounted to 65.8%. The top partners were: 1. Turkey 17.8% 2. Russia 10.7% 3. China 9.7% 4. Azerbaijan 6.0% 5. Germany 4.8% 6. Ukraine 4.5% 7. US 4.3% 8. Armenia 3.1% 9. Italy 2.5% 10. Romania 2.4% In January-November 2019, a total of 123 countries carried out export from Georgia. The share of the top ten trading partners by exports in the total exports of Georgia amounted to 72.9%. The countries with the largest share in export are the following: 1. Russia 22.2% 2. Azerbaijan 13.2% 3. Armenia 10.5% 4. Bulgaria 7.6%

Image source: gtreview.com

5. Ukraine 6,6% 6. China 5.8% 7. Turkey 5.5% 8. Romania 4.9% 9. The US 3.1% 10. Uzbekistan 2.4% The report also reads that in JanuaryNovember 2019 the exports from Georgia to the EU countries amounted to $752.3 million which is14.2% higher compared to January-November 2018, and it

constituted 22.2%of total exports, while the imports amounted to $2 087.6 million (7.4% lower) with 25.7%in total imports. The external trade turnover of Georgia with the EU countries amounted to $2 839.9 million, showing a 2.5% decrease compared to the corresponding indicator of the previous year. The EU countries accounted for 28.2% of the trade deficit.

In January-November 2019 the exports

to the CIS countries stood at $1 794.9 million (21.0% higher compared to January-November 2018) and reached 53.1%of total exports, while the imports equaled $2 173.3 million (11.3% lower) with 26.8% in total import. The trade turnover with the CIS countries totaled $3 968.2 million which is 0.9% increase. The CIS countries accounted for 8.0% of the overall trade deficit in the corresponding period.

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BUSINESS

GEORGIA TODAY

DECEMBER 24 - 26, 2019

Monthly Tourism Update November 2019

I

n 2018, there were 8.7 million international traveler trips made in Georgia. In the first 11 months of 2019, the number of international traveler trips exceeded that of the previous year by 48 thousand.

The number of foreign travelers in airports has been increasing rapidly: compared to 130 thousand foreign travelers using Georgian airports in 2005, the number has increased more than 13 times and reached 1.79 million in the last year.

There is a noticeable difference between the two main airports, in Kutaisi and Tbilisi. Tbilisi International Airport served more than 3.8 million total passengers last year. Throughout the same year, more than 1.4 million incoming international trips were made in the above-mentioned airport. Kutaisi International Airport served 617 thousand travelers last year, of which only 147 thousand were incoming international traveler trips.

However, airports accounted only for 24.8% of international traveler trips in

2018. Most of the travelers used land passes. Some of those passes, like Kazbegi, Sadakhlo, Tsiteli Khidi and Sarpi, are used for more than a million trips annually (each) by visitors entering the country. Kazbegi especially has experienced a remarkable growth, as in the last eight years, the number of international travelers using the pass to enter the country has increased more than 30 times. In total, land borders account for 73.8% of incoming international traveler trips.

The remaining 1.4% is divided between railways and ports. In 2018, more than 67 thousand incoming traveler trips were made via railways and this number has been increasing steadily. Meanwhile, sea transportation is two times less popular and is becoming less attractive to foreigner travelers by the year.

HOTEL PRICE INDEX In November 2019, in Georgia the hotel price index3 decreased by 6.4% compared to October 2019. The 3-star, 4-star and 5-star hotel price index decreased

by 6.0%, while for guesthouses, the price index decreased by 9.4%.

In November 2019, compared to November 2018, hotel prices in Georgia increased by 0.5%. The prices of 3*, 4*, 5* hotels increased by 2.0%, while the prices of guesthouses decreased by 5.7%.

AVERAGE HOTEL PRICES In Georgia, the average cost of a room1 in a 3-star hotel was 129 GEL per night

in November 2019. While the average cost of a room in a 4-star hotel in Georgia was 202 GEL per night and the average cost of a room in a guesthouse2 was 64 GEL per night.

The average cost of a room in a 5-star hotel in Georgia in November 2019 was 441 GEL per night. In Tbilisi, the average price was 516 GEL, followed by Adjara – 420 GEL, and Kakheti - 390 GEL and Samstkhe-Javakheti - 350 GEL.

1. The calculation of the hotel price index is based on the recommendations given by the International Monetary Fund (IMF). The elementary aggregate price index is calculated by Jevons index (Consumer Price Index Manual-Theory and Practice (2004), Practical Guide to Producing Consumer Price Indices (2009)).

2. The results are based on the surveying of standard double hotel room prices of 3, 4, 5-star hotels and guesthouses in 10 regions of Georgia. Hotels were chosen arbitrarily according to random sampling principle. The study contains 71% (312) of all 3, 4 and 5-star hotels and 25% (456 guesthouses) of all guesthouses registered on www. booking.com The 3, 4 and 5-star hotel price data was collected by contacting hotels individually, while the prices of guesthouses were taken from booking.com. The average prices are arithmetic mean of standard double hotel room prices.

3. Guesthouse: a type of accommodation that is characterized by having a small number of rooms and services are usually offered by the resident family.

4. * Preliminary results

BUSINESS

GEORGIA TODAY DECEMBER 24 - 26, 2019

11

UN Court: We Have Jurisdiction to Hear Ukraine’s Claims against Russia

M

G Law Office, through the contribution of partners Archil Giorgadze and Nicola Mariani, joined by senior associates Ana Kochiashvili and Tamar Jikia and associates Mariam Kalandadze and Vakhtang Giorgadze and paralegal Lasha Machavariani is partnering with GEORGIA TODAY on a regular section of the paper which will provide updated information regarding significant legal changes and developments in Georgia.

In particular, we will highlight significant issues which may impact businesses operating in Georgia. *** On 8 November 2019, the United Nation’s International Court of Justice (ICJ) ruled that it has jurisdiction to review Ukraine’s claims against the Russian Federation.

The ruling of the court relates to the claims of Ukraine submitted to the ICJ on 16 January 2017 in relation to the alleged violation of international law and specifically, the International Convention for the Suppression of the Financing of Terrorism (Convention on Terrorism) and the International Convention on the Elimination of All Forms of Racial Discrimination (Convention on Discrimination).

Ukraine alleges by its claim that the Russian Federation breached the Convention on Terrorism by supplying funds, weapons and training to illegal groups engaged in the terrorism activity. Additionally, Ukraine argues that the discrimination and mistreatment in Crimea violated the Convention on Discrimination. In its response, Russia raised objections regarding jurisdiction of ICJ and argued in favor of dismissal of the case from ICJ’s docket. The ICJ judges ruled against Russian position and admitted the claim of Ukraine.

This judgement is significant in terms

of Georgia v. Russian Federation dispute which was dismissed by ICJ on 1 April 2011 due to the lack of jurisdiction under the Convention on Discrimination.

FACTUAL BACKGROUND The claim of Ukraine concerns the continued actions of the Russian Federation from 2014 and consists of two principle episodes: (i) alleged support to terrorist groups in Eastern Ukraine constituting violation of the Convention on Terrorism; and (ii) racial discrimination in Crimea constituting the breach of the Convention on Discrimination. With respect to the Convention on Terrorism, Ukraine contends that the Russian Federation failed to prevent the financing of terrorism and committed acts of terrorism via its proxies. Ukraine’s assertions include well-known tragic accidents, such as the shoot-down of Malaysian Airlines Flight MH17 and bombing of civilians in Kharkov. In connection to the Convention on Discrimination, Ukraine refers to the ongoing oppres-

sion and mistreatment of Crimean Tatars and ethnic Ukrainians on the peninsula.

Ukraine filed its claim to the ICJ on 16 January 2017. Russia did not respond Ukraine’s claims and objected to ICJ’s jurisdiction to hear the case on 12 September 2018. These objections maintained that Ukraine’s claims were outside the scope of both conventions and alternatively, Ukraine failed to comply with the procedural preconditions. Specifically, Russia claimed that Ukraine failed to exhaust other potential remedies, such as negotiation or arbitration.

ICJ RULING ON JURISDICTION ICJ established that Ukraine’s claims fall under the scope of the conventions with respect to the events occurring in eastern Ukraine and Crimea since 2014. With respect to the Convention on Terrorism, ICJ ruled 13 to 3 against Russia and 15 to 1 with regard to the Convention on Discrimination.

ICJ reviewed Russia’s contention that the acts on which Ukraine basis its claims

do not fall under the Convention on Terrorist or the Convention on Genocide.

The judgment notes with respect to the Convention on Terrorism that it is not necessary for the actions of individuals to constitute the actions of state. The court explained that the Convention on Terrorism obliges states to take appropriate measures and co-operate in the prevention and suppression of terrorism financing committed by any person. In case of breach, the potential liability for breach of international obligation arises.

As regards the Convention on Discrimination, the court ruled that restrictions allegedly imposed by the Russian Federation on Crimean Tatars and ethnic Ukranians in Crimea, potentially violate the rules enshrined in the Convention on Genocide.

ICJ further reviewed whether Ukraine had exhausted the obligation to negotiate the dispute before resorting to other remedies. Ukraine argued that it has attempted to settle these disputes amicably, however in numerous instances Russia appeared to be either unresponsive or unwilling to negotiate. Despite the lack of success of the measures implemented by Ukraine, ICJ found that genuine attempt to negotiate the dispute is sufficient to deem the procedural preconditions met. ICJ explained that if negotiations reach a deadlock it is unreasonable to expect exploration of other means by the parties. Therefore, it was determined that ICJ could not upheld Russia’s objections.

IMPACT OF THE RULING ON GEORGIA The assessment made by ICJ with respect to the Genocide Convention may substantially influence the outcome of Georgia’s claims against Russia. On 12 August 2008 Georgia instituted proceedings before ICJ under the Convention on

Discrimination. Georgia contended that Russia was engaged in continued racial discrimination and sponsorship and support of such acts against ethnic Georgians in the period from 1990 to August 2008.

Russia objected to the jurisdiction of ICJ to rule on the matter as it deemed that Georgia failed to fulfil the requirement of negotiations. On 1 April 2011, ICJ upheld the objections of Russia, stating that parties failed to negotiate on the subject matter of the dispute, therefore established that it lacked jurisdiction to hear the case.

Eight years after the ruling of ICJ on Georgia v. Russian Federation, the ICJ ruled in favour of Ukraine. The latest judgement can be construed as providing more flexible and attainable standard and may serve as a precedent for Georgia in case it decides to pursue its claims against Russia. *** Note: this article does not constitute legal advice. You are responsible for consulting with your own professional legal advisors concerning specific circumstances for your business.

MG Law is the first full-service law firm in Georgia to be founded by international partners. The firm advises a diverse group of Georgian and foreign companies, financial institutions, investment funds, governments and public enterprises.

Among many other areas, the firm primarily focuses on the following sectors: Banking & Finance, Capital Markets, Arbitration & Litigation, Labor & Employment, Infrastructure and Project Finance, Energy Law, Real Estate, Tax and Customs, Investment Law, Corporate Law, and Cryptocurrency & Blockchain.

For more information, please visit www. mglaw.ge or contact Archil Giorgadze at archil.giorgadze@mglaw.ge and Nicola Mariani at Nicola.mariani@mglaw.ge

The Int’l Chamber of Commerce Holds Annual General Assembly Meeting

T

he International Chamber of Commerce (ICC Georgia) held the annual General Assembly Meeting on December 20, 2019.

During the General Assembly, members approved the annual budget of ICC Georgia of 2019 and the planned budget for 2020. They were also presented with the review of the work of the organization throughout the year.

The General Assembly also amended the requirements needed to be eligible as Vice Chairman/Treasurer of the Organization.

By the end of the General Assembly, members unanimously reconfirmed Mr. Fady Asly to remain Chairman of ICC Georgia until the next elections of the Executive Board of Directors, scheduled for June 2020.

ICC Georgia is the largest and most

vocal global Business Association in the country; it includes over 350 corporate and youth members and 28 business associations. The International Chamber of Commerce is the largest business organization in the world that includes over 6.5 million businesses and chambers of commerce.

ICC consults regularly at the global level with the G8, G20, the World Bank, WTO, WCO and the UN.

Austrian Embassy Invites Applications for Position of Executive Assistant to the Ambassador

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TASKS AND FUNCTIONS

classified and unclassified material in and out of the office, screen phone calls and visitors), determine priorities and provide timely and responsive administrative support.

• Manage documentation and inform the Ambassador of matters requiring attention. Research and prepare correspondence in German & English, speech notes, travel programs, quarterly and annual reports and diplomatic cables as required.

• Liaise on behalf of the Ambassador for contact/appointments. Liaise with staff of all agencies in the Embassy on behalf of the Ambassador. Manage Ambassador’s diary and program of appointments.

• Official event management; Assist with public diplomacy events; Manage Embassy protocol issues; Undertake research tasks and translation exercises

• Manage the Ambassador’s office (including coordinate and distribute all

SELECTION CRITERIA

he Austrian Embassy in Tbilisi invites applications for the position of Executive Assistant to the Ambassador.

The position requires a self-starter, able to work independently and with a high level of intuition, initiative, energy, judgement and discretion. The successful candidate must have strong organisational and communication skills, including the ability to liaise effectively with a wide range of people, and good writing and research skills.

Above all, the applicant must be able to work well under pressure as part of a small and dynamic team.

Fluency in German and English is essential. Fluency in Russian is desirable.

FOR THE POSITION • Masters Degree in Law, Economics, Finance or Business Administration (or other related fields); • Demonstrated experience as an Executive Assistant or similar experience in diplomatic or international environment (5+ years); • Proven ability to take initiative, work under pressure and prioritise workloads in order to meet tight deadlines. Demonstrated flexibility and ability to adapt to different work environments; • Strong verbal and written communication skills including ability to build productive working relationships; professional manner and ability to liaise effectively with senior members of the Diplomatic community, government officials and members of the civil society.

DESIRED PERSONAL QUALITIES AND SKILLS:

• ability to foster productive and supportive working relationships • ability to prioritise competing tasks and to meet deadlines • ability to work independently and to take initiative • ability to travel • enthusiasm, adaptability and ability to work in a small team • a high level of professionalism and an exemplary standard of personal conduct • excellent computer/IT (including Power point, Access and Excel) and writing skills

REMUNERATION & START DATE A salary and benefits package will be offered under contract in accordance with current staff conditions of service.

Austrian Federal Ministry of Europe, Integration and Foreign Affairs is equal opportunity employer. An initial appoint-

ment will be made on a fixed-term employment contract, after an initial probationary period.

Start date preferably: 1 February 2020

APPLICATIONS Applications should include a cover letter or succinct statement addressing the four selection criteria outlined above.

Please include your CV and the name and contact details of two referees and send your application to tiflis-ob@bmeia. gv.at no later than 31 December 2019.

Only short-listed candidates will be contacted and invited for a hearing / an interview.

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BUSINESS

GEORGIA TODAY

DECEMBER 24 - 26, 2019

Securing the Belt & Road Initiative: China’s Approach to Georgia OP-ED BY EMIL AVDALIANI

A

s China's huge Belt and Road Initiative (BRI) expands to cover more and more states across Eurasia, the urgent question as to how Chinese economic assets should be protected against external threat, be it terrorist or potential enemy state, has arisen among scholars of the Chinese economic initiative.

Surely,nodefiniteanswercanbeexpected.

Considering the size of China and the amount of finances she is pumping into a great number of states in often radically different geographic areas, the question of measures will quite naturally differ from country to country and region to region.

China has never been open to the outside world. The Silk Roads in ancient and medieval times served as the only land connection between China and the western Eurasia. However, even there, the Chinese rarely ventured beyond the Central Asian region. This means that the current Chinese activities beyond the state borders are unlikely to be part of a grandiose, already well established, strategy. On the contrary, the Chinese are now adapting to various challenges they face abroad and offering a different approach to each region.

For example, on its western border, where there are issues of long-standing Uighur resistance, the Chinese have opened at least two military outposts to secure the unstable Tajik border and the Wakhan Corridor which serves as the only geographic connection China has with Afghanistan.

On its eastern frontier, where China meets the US and its allies in the South China Sea, Beijing is gradually gaining advantages by increasing its patrolling activities and building outposts.

The third example is as straight as possible: construction of a full-scale military base at geographic choke-points where global economic activity is taking place,

Image source: ecfr.eu

such as Djibouti, at the Red Sea. As these examples show, we’re dealing with several very diverse approaches.

All of them depend on the geographic, military and economic situation in the particular region.

We should keep in mind these geopolitical settings when discussing China’s interests around the South Caucasus economic and transportation corridor.

Since 2013, when the BRI was announced by the Chinese president, both Georgian politicians and analysts have been quite enthusiastic about the prospects of the country's involvement in the project.

What was rarely if at all mentioned was the fact that the BRI did not actually include the South Caucasus route among its major six trade corridors. Indeed, the Russian, Central Asian and Iranian/ Pakistani routes are far more efficient (because of the lack of geographic barriers) and much larger in economic scope than that of the South Caucasus.

However, Chinese moves in Georgia over the past year or so could signal a shift in its approach to the South Caucasus corridor (which includes not only roads and railways, but also Georgia's Black Sea ports) and Georgia’s potential

inclusion in the BRI. The increasing attention which was paid to the Silk Road Forum and the visit of the Chinese Minister of Foreign Affairs (the first in more than 20 years), suggests at least interest in the Anaklia Port.

It should always be kept in mind that the BRI is an evolving project, constantly adapting to new challenges and seeking new opportunities. This approach is at the heart of Chinese foreign policy: there is no set of geopolitical moves Beijing will necessarily use. Like other rising powers in world history, China is adapting itself to the outside world, but will

also try to adjust the world order to its own needs. There are plenty of signs that the Chinese are meticulously working to expand the country’s influence without any rush moves. The rise of new world powers in history never took place overnight, but was rather a slow and at times daunting process.

Therefore, it is not entirely clear at present what kind of cooperation China would be choosing with the South Caucasus, and Georgia in particular. However, the pushback from the US will be defining and there will remain many obstacles to Beijing’s moves in the region.

Atoneli Presidential Palace Opens to Visitors

BY ANA DUMBADZE

T

he President's Atoneli residence is now open to visitors, Salome Zurabishvili, President of Georgia, announced at a conference of the Parliamentary Assembly of the Council of Europe last week.

“The Presidential Palace is opening from today. There should be a place for the Diaspora in the capital of Georgia where they can get useful information.

For this purpose, I am ready to give them an office in the President’s Palace. I suggest the Ministry of Foreign Affairs of

Georgia appoint a person for that reason," she said.

GEL 1,199.558 was spent on the purchase of antique furniture and interior accessories for the Administration of the President of Georgia, GEL 255,000 was spent on the restoration and GEL 720,225 was spent on the purchase of modern furniture, lighting and curtains, the Institute for Development of Freedom of Information (IDFI) stated.

The most expensive antique item purchased for the Atoneli residence is reported to have been a 19th-century chandelier made at the Russian Imperial Factory which cost $59,000,”, reads the IDFI statement on state resources spent on the President's residence.

EU4Energy: Georgia Adopts Key Laws to Harmonize the Energy Sector Continued from page 1 The EU4Energy is an EU program for Eastern Partnership countries. This includes Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine.

Through working with the International Energy Agency, Energy Community and Energy Charter Secretariat to implement the program, EU4Energy aims to improve the quality of energy

data and statistics, shape regional policy-making discussions, strengthen legislative and regulatory frameworks and improve access to information in the partner countries. It forms a key component of the EU4Energy Initiative.

Pushing forward regulatory changes, providing access to investment and strengthening monitoring and compliance – that is how the EU4Energy helps

the Eastern Partnership countries align their energy policies and markets more closely with the EU standards. While the EU reports that some countries are closer to achieving the goals than others (not really going into detail which countries are leading and which are falling behind), the organization believes that all six countries in the region stand to benefit from transitioning towards more sustainable energy

frameworks. The potential for improvement is evident, through the data suggests that, on average, economies in partner countries are three times more energy-intensive than in the EU Member States.

What’s more, the program, within a timeframe of four years between 2016 and 2020, and with a budget of EUR 21, contributes to sustainable economic development, creating jobs and invest-

ment; greater resilience in the face of climate change; and a reduced carbon footprint, by merely transforming the region’s approach to energy.

In Georgia’s case in particular, the Renewables Law sets the national target for renewable energy at 35% of total final consumption by 2030. The new legislation requires that support schemes are evaluated using competition and/or state aid regulatory norms.

BUSINESS

GEORGIA TODAY DECEMBER 24 - 26, 2019

‘Sharden Villa’ - Modern Boutique Hotel Welcoming Guests in the Historical Center of Tbilisi

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bilisi, Georgia’s charming capital, has always attracted foreign travelers due to its stunning views and variety of attractions that makes the city a unique combination of a modern and old.

The historic part of the city, Old Tbilisi, is especially interesting to tourists, since its architecture reflects the country’s rich history and cultural diversity.

Comfortable and convenient accommodation is essential for guests during their trip. For those who are looking to enjoy famous Georgian hospitality combined with a high-quality service to the fullest, Hotel Sharden Villa comes highly recommended, having been welcoming guests since 2012.

Hotel ‘Sharden Villa’ is an excellent model of a modern boutique hotel, located in the historical center of Tbilisi, at 42 K. Abkhazi (former Leselidze) Street.

The hotel is surrounded by the sights of Old Tbilisi, among them the Narikala Fortress, Metekhi Church, Sioni Temples, Bridge of Piece and Europe Square.

Sights such as Liberty Square and central Rustaveli Avenue is just a10-minute walk away. The Synagogue and the Armenian Church are within walking distance, just 50 meters from the hotel, the Mosque and the famous Sulfur baths are within walking distance in 5 minutes.

Guests will also find several restaurants and cafes within 100 meters. Around the hotel there are many places of recreation and entertainment, such as

Shangri La Casino, and its location is quite convenient for lovers of nightlife.

Tbilisi Central Station is just 2 km away. A shuttle service to / from Tbilisi International Airport (20 km) is available at an additional cost.

The Hotel boasts 22 cozy rooms, several of which have balconies. Guests at Sharden Villa Hotel can enjoy a highly rated continental breakfast during their stay.

The affordable Sharden Villa offers various categories rooms, including Suite, Twin, Double and Single. Rooms equipment include telephone, IP TV, safe, air conditioner, working table, table for ironing and iron if requested, central heating, carpet, individual bathroom, hairdryer, bide, mini bar.

From the windows of the rooms, one can enjoy the breathtaking views of the Old Tbilisi streets and Narikala fortress.

The Hotel has an open terrace on the 4th floor, where visitors have the unique chance to taste the most delicious breakfast and take maximum pleasure from the wonderful 360-degree views of Old Tbilisi.

Couples particularly like the location, as it allows them to spend their holidays in a relaxing and romantic environment. Check-in at the Hotel is from 14:00, and checkout is until 12:00.

The highly-trained and experienced team of ‘Sharden Villa’ always looks forward to warmly welcoming guests at the Hotel, so, if you have the opportunity to enjoy your stay there, don’t miss out.

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14

POLITICS

GEORGIA TODAY

DECEMBER 24 - 26, 2019

Georgian PM, Turkish FM Meet in Tbilisi to Discuss Strategic Projects

BY ANA DUMBADZE

W

e appreciate the special relationship with Turkey and welcome the deepening of the strategic partnership, - Georgian Prime Minister Giorgi Gakharia said during a meeting with Turkish Foreign Minister Mevlüt Çavusoglu.

During the meeting, the sides underscored the trilateral format between Georgia, Turkey and Azerbaijan and noted that the 8th meeting of the foreign ministers of the three countries in Tbilisi confirms the uniqueness of the format.

In addition, the sides focused on the next meeting of the two countries' highlevel strategic cooperation council, which will be held in Ankara early next year.

They also focused on joint projects in

the field of energy and transport, including the Southern Gas Corridor, part of which has just been inaugurated at the Trans-Anatolian Gas Pipeline (TANAP) in Turkey, and stressed the importance of the Baku-Tbilisi-Kars railway.

Cavusoglu expressed his support for Georgia’s sovereignty and territorial integrity, for which the head of the Georgian government thanked him.

The sides also underlined the importance of Georgia-Turkey cooperation in the field of culture and the dynamics of bilateral high-level visits, which ones again highlights the strategic partnership between the two countries.

Georgian FM David Zalkaliani, who also met with Cavusoglu face-to-face, raised the issue of the abduction of well-known Georgian doctor Vazha Gaprindashvili by Russian-controlled occupation forces and the current severe humanitarian situation in Georgia's two Russian occupied regions of Abkhazia and Tskhinvali.

The UAE’s Support at the celebration of completing 2019, the year of tolerance the Global Council for Tolerance and peace

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he members and partners of the Global Council for Tolerance and Peace (GCTP) received support from the UAE for their vision and mission, which are in line with the UAE policies at a celebration of completing 2019, the year of tolerance which was held on 16th and 17th of December 2019 in Abu Dhabi.

His Highness Sheikh Mohammed bin Zayed al Nahyan, Deputy Supreme Commander of the Armed Forces and Crown Prince of Abu Dhabi, expressed his happiness to receive the delegates at the celebration and 42 delegations of GCTP and one of its main bodies - the International Parliament for Tolerance of

Peace, had the pleasure to attend meetings which discussed the achievements and future initiatives for promotion of the values of tolerance and peace.

Furthermore, the celebration program included a visit to the Sheikh Zayed Grand Mosque and the Louvre Museum in Abu Dhabi as each of them is an extraordinary representation of the governmental, religious and cultural heritage of the United Arab Emirates and was a unique opportunity for the delegates to get acquainted with it in details. During the program of the visit, the delegation was accompanied by H.E. Ahmed bin Mohammed Al-Jarwan - President of the Global Council for Tolerance and Peace.

Georgian FM Zalkaliani Comments on the Davit Gareji Dispute

BY BEKA ALEXISHVILI

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e are working on a second official meeting. Of course, the dates will be agreed, and everything should be developed in the context of our strategic partnership, Georgian Foreign Minister David Zalkaliani told reporters while commenting on the issue of David Gareji.

According to the Foreign Minister, it is essential to start talks with Azerbaijan on returning to the status quo.

“The work of the commission has been restored. The first working meeting has been held, and experts also arrived when the measurement activities were carried

out. We are working on the second meeting. Of course, the dates are agreed upon, and everything has to be done in the context of our strategic partnership.

During the visit of the Georgian Prime Minister to Baku, the issue was discussed.

We think it is necessary to talk about the return of the status quo. We hope that our Azerbaijani partners will understand this. This issue must be resolved in the interests of our strategic partners and no one should be able to bring any kind of resistance to our bilateral relationship," FM Zalkaliani said.

The situation at the Georgia-Azerbaijan border has been tense over the last several months. On May 23, a local guide published photos in social media, saying that the Azerbaijan side was constructing a road to the Chichkhituri Church at the David Gareji Monastery Complex.

The Georgian-Azerbaijan commission working on border issues met in Baku in May. The Foreign Ministry explained that works were definitely being conducted on the territory of Azerbaijan.

In May, Georgian clerics and public groups held a peaceful rally at the Davit Gareji Monastery Complex. It came amid negotiations between Georgia and Azerbaijan on the border, which has not been agreed upon since the collapse of Soviet Union in 1991. The Georgian protestors claimed that the sixth-century Gareji monastery complex is the country’s cultural heritage and the border issue must be settled so that the whole complex can be located within Georgia.

In April, Azerbaijani borders guards closed the road and did not allow visitors and clerics into the Monastery.

However, the problem was quickly resolved after negotiations.

Davit Gareji is a rock-hewn Georgian Orthodox monastery complex located in the Kakheti region of Eastern Georgia, on the half-desert slopes of Mount Gareja, some 60–70 km southeast of Georgia's capital Tbilisi. The complex includes hundreds of cells, churches, chapels, refectories and living quarters hollowed out of the rock face.

Part of the complex is located in the Agstafa region of Azerbaijan and has become subject to a border dispute between Georgia and Azerbaijan.

Turkish President to Visit Georgia in 2020

BY ANA DUMBADZE

P

resident of Turkey Recep Tayyip Erdogan will likely visit Georgia in May, Giorgi Janjghava, Extraordinary and Plenipotentiary Ambassadors of Georgia to the Republic of Turkey, told reporters on Monday.

“Our Prime Minister Giorgi Gakharia paid a visit to Ankara a few weeks ago.

This visit was followed by an eco-com-

mission, which was held for the first time after 14 years. This visit was followed by his second visit to open the Turkish section of Tanap (the Trans-Anatolian Natural Gas Pipeline). We have talked with the Turkish side that a strategic commission meeting is likely to be held in Ankara in February, and then President Erdogan is expected to visit Georgia in May. Talks are underway. Turkey is not only our kind neighbor but also a strategic partner that recognizes Georgia's territorial integrity and supports Georgia's NATO membership," he said.

POLITICS

GEORGIA TODAY DECEMBER 24 - 26, 2019

15

Senate Approves Kelly Degnan as US Ambassador to Georgia

BY ANA DUMBADZE

T

he US Senate has approved Kelly Degnan as the new Ambassador of the US to Georgia, a diplomat who has 25 years of diplomatic experience and is a recipient of the Secretary of State’s Expeditionary Service Award.

Elizabeth Rudd has served as acting ambassador to Georgia since Ambassador Ian Kelly departed in March 2018.

The US President Donald Trump presented Degnan for the role in September 2019.

Degnan delivered a speech at the Foreign Relations Committee of the US Senate on October 29, saying that “We will strengthen support to Georgia in the direction of NATO and EU membership. We will work together to strengthen Georgia’s defense of its borders and the creation of a demo-

cratic community. I look forward to working with the Georgian government on these and other issues.”

Before the nomination to the post, Degnan served as the political advisor to the Commander of United States Naval Forces Europe – the United States Naval Forces Africa.

Previously, she was deputy chief of mission of the United States mission to Italy, deputy executive secretary of the Department of State, and Deputy Chief of Mission of the United States Embassy in Pristina, Kosovo.

During her 25-year career, she has served as political counselor at the United States mission to the North Atlantic Treaty Organization in Brussels, Belgium, senior civilian representative to Brigade Combat Team Salerno in Khost, Afghanistan, and deputy political counselor at the United States Embassy in Ankara, Turkey.

She speaks Italian, French, Turkish and Urdu.

Trump Signs Defense Budget for 2020 which Involves Georgia & Ukraine

BY BEKA ALEXISHVILI

T

he US President Donald Trump signed the 2020 National Defense Authorization Act which states that the defense budget for the year 2020 will be $38 billion.

The document mentions Georgia as being a "valuable friend to the US" which has shown its commitment to the improvement of US-Georgia rela-

tions especially with its participation in NATO-led peacekeeping missions.

“Russia's violations of the sovereignty and territorial integrity of Georgia and Ukraine and its ongoing destabilizing and aggressive behavior, have undermined peace, security and stability in Europe and beyond", states the Bill.

Similarly, the US Congress restates US support to Georgia’s sovereignty and territorial integrity within its internationally recognized borders.

The Bill also underlines that Georgia

and Ukraine are "allies and partners" of the US and NATO in Eastern Europe.

Creator of the bill Senator James Inhofe, who is also the Chairman of the Senate Armed Services Committee, released a statement saying the bill will "build a stronger, safer America and keep us ahead of our strategic competitors: China and Russia".

“President Trump has been a tireless champion of our Armed Forces, and I thank him for his leadership and for signing this important legislation quickly", he stated.

Local & Int’l Society Reacts to Vazha Gaprindashvili’s Sentence

BY NINI DAKHUNDARIDZE

G

eorgian society has had many troubles of late. One of the most concerning things has been the case of renowned Georgian doctor Vazha Gaprindashvili, who was abducted on November 9 and was sentenced to an illegal, two-month pretrial detention on November 15 in the Russianoccupied region of Tskhinvali. All Doctor Gaprindashvili did was visit a patient in the conflicted territory, and now he is sentenced to almost two years of imprisonment for ‘deliberately crossing the border,' a decision made by the court of the ‘Leningori Region’ on December 20.

International society has been actively involved in the campaign to free the Georgian doctor. His abduction was discussed at the Geneva Talks and NATO Summit 2019, and the New York Times wrote about him and the rally that was held to show support for him. The foreign embassies in Georgia have openly spoken of their disapproval of the occupational forces keeping the Georgian

doctor in custody for no apparent offence.

So when the so-called court sentenced Dr. Gaprindashvili to one year and nine months in jail on the evening of December 20, it was no surprise that international society, along with the local authorities, expressed their perturbation.

On Friday, the State Security Service confirmed the sentence of Dr. Gaprindashvili. Their statement made further promises to society that the agency would not give up on its efforts to free the illegally-detained and now imprisoned Georgian doctor.

“The State Security Service will continue its efforts to ensure the release of Vazha Gaprindashvili and to inform international organizations and partner countries of Georgia about this illegal decision," read the statement.

Minister of Foreign Affairs David Zalkaliani immediately corresponded to the Leningori court’s sentence, condemning it.

“The recent decision to send the doctor to prison for nearly two years once again confirms that the adduction was a deliberate provocation. I will communicate immediately with the co-chairs of the Geneva International Discussions to activate the action plan we had in such

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a case. What has happened is absolutely unacceptable and is a fundamental violation of international norms and regulations,” the Minister said.

International society was quick to respond, too. On December 20-21, the US and British embassies in Tbilisi expressed their disapproval and urged the occupational forces to release the Georgian doctor, showing their continued support of Georgia.

“The Government of the United States does not recognize as legitimate the de facto authorities in the occupied region

Journalists: Tony Hanmer, Zaza Jgarkava, Maka Bibilashvili, Vazha Tavberidze, Nugzar B. Ruhadze, Beka Alexishvili, Tea Mariamidze, Ana Dumbadze, Nini Dakhundaridze Elene Dzebizashvili Photographer: Irakli Dolidze

of South Ossetia, nor does it recognize as legitimate today’s sentencing of Dr. Vazha Gaprindashivili,” read the statement of the US Embassy to Georgia, published on Friday evening.

“We again call on the de facto authorities, and those in the Russian Federation who have influence on them, to allow for the immediate release of Dr. Gaprindashvili. The United States sees this unfortunate case as a symptom of the much bigger problem of occupation and aggression. We note that this case has developed in the context of other deten-

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

tions, of a worsening humanitarian situation that endangers lives when people cannot receive appropriate medical care, and of a worsening situation along the administrative boundary line (ABL) which unnecessarily affects the lives and livelihoods of people on both sides of the ABL. We are using all the tools available to us, including the Geneva International Discussions, where we raise this case and these broader issues with all relevant parties,” the US Embassy said.

Justin McKenzie Smith, the British Ambassador to Georgia, commented on the Dr. Gaprindashvili sentence via his official Twitter page on December 21.

“My thoughts are with Dr #Gaprindashvili & his family at this painful time.

Locking up doctors when patients need them is beyond comprehension. He should be released immediately by those in control in Tskhinvali and their Russian backers,” read the tweet.

Georgian society is now awaiting bigger steps from local authorities and the international community to help in the case of Vazha Gaprindashvili – a man only guilty of doing his job, having courage over prudence, and choosing empathy over his own safety.

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