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Issue no: 1136/173

• MARCH 26 - 28, 2019



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

SOCAR Gas Stations Redecorate for Euro 2020 BUSINESS PAGE 3


ON THE NATO VISIT Check out a summary of the Sec Gen's visit


“IT Flu” in the Armenian Labor Market ISET PAGE 4

AqTushetii: Fighting Rural-Urban Migration BUSINESS PAGE 5

General Assembly From Presidency to Entrepreneurship AEPJ about Jewish Heritage to Be Held in Tbilisi



t is always interesting to find out what spheres the ex-leaders of countries move into after their service to the government. Giorgi Margvelashvili, the former President of Georgia, who held the status of fourth President of the country between November 2013 and December 2018, is a person worth paying attention to even after he completed his service as an official. From presidency, Margvalshvili has moved to entrepreneurship and today, he offering a cottage, built with his own hands, to local tourists, as well as travelers from around the globe. The ex-President constructed the cottage two years ago in the garden of his country house, which he bought for just $2,500 in 2004, in the region of Dusheti. Continued on page 4


Ambassador of the UAE on Relations, Development & Progress Image source: cbw.ge

BUSINESS PAGE 12 Prepared for Georgia Today Business by

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@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: The startup Elven Technologies has taken a problem and set to solving it by perfecting the uniforms of life’s superheroes. The idea of producing cool, comfortable clothing, brought together Vamekh Kherkheulidze, Giorgi Gabrashvili and Lado Tsibakhashvili, doctor, engineer and finance manager. With a GITA grant, the designers started working on integrating an innovative cooling system into uniforms, first with those worn by firefighters: the Elven Fire Heavy outer layer protects against fire, steam and heat while the inside layers keep the wearer cool. The team has plans to do the same for uniforms worn by the B2C segment. A new CE, European-standard aesthetic medical products factory is to be opened in the Orkhevi region in 2020. Aptos threads were created by Georgia’s Marlen Sulamanidze 23 years ago and are very popular in many countries today. They have so far been produced in Germany, but from next year will be sold with the ‘Made in Georgia’ label. The project is managed by the sons of Sulamanidze, Konstantine and Giorgi. Along with their own investments, the authors' plans are supported by Enterprise Georgia. After designing for the world’s most prominent brands, Georgia’s Zviad Tsikolia is working on the creation of the first Georgian airplane. The idea was born 12 years ago and after overcoming technical and financial obstacles, Tsikolia recently presented the azure blue airplane ‘Lizi’. This is a personal, single-seat airplane made using composite materials and equipped with modern technologies. Tsikolia is now looking for finances and says that after completion, it will be sold on the American, European and Brazilian markets. 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


MARCH 26 - 28, 2019

The NATO Sec Gen’s Tbilisi Visit



ithin the framework of an official visit to Georgia, NATO Secretary General Jens Stoltenberg and Georgia’s Prime Minister Mamuka Bakhtadze held a joint press conference. During the conference, Stoltenberg expressed hope that Georgia will soon become a member of the Alliance. “Georgia and NATO will jointly decide when Georgia should become a member, and no other party has the right to interfere,” he stated, calling on Russia to revoke its recognition of breakaway Abkhazia and South Ossetia as independent states and withdraw its troops from the regions. He reiterated that NATO recognizes

Georgia's sovereignty and territorial integrity within its internationally recognized borders. “We welcome the increased role of Black Sea security. That is why we are strengthening relations between Georgia and NATO and this cooperation will strengthen in every direction,” Stoltenberg added. “Georgia is the largest contributor to our initiatives, and I hope to welcome it to NATO soon," he emphasized. Bakhtadze thanked him for supporting Georgia and underlined that relations between Georgia and NATO have never been at such a high level. “NATO membership is the most important priority for Georgia's foreign and security policy, and the majority of Georgian society supports the country’s efforts to become a full member of NATO. This is further proof that our choice is not

only a political one, but one based on values,” he stated. Georgia’s Foreign Minister Davit Zalkaliani earlier stated that Stoltenberg’s visit to Tbilisi indicates that Georgia is a priority for NATO and noted that it took place ahead of the NATO anniversary ministerial. “The whole week is extremely intense in the context of relations with NATO. The Secretary General’s visit also coincides with the NATO exercise. This week we also have a meeting of the NATO Military Committee,” he said. “And I have a separate meeting in Brussels, within the framework of the NATOGeorgia Council, which will be devoted to Black Sea security issues. Having such a loaded role on the NATO agenda throughout the week shows that Georgia has a high priority on the NATO political agenda,” he concluded.




Tallinn Hosts Niko Pirosmani Exhibition BY THEA MORRISON


stonia’s capital Tallinn is hosting the exhibition of Georgia’s world famous artist, Niko Pirosmani (1862–1918), named ‘The World of a Lonely

Genius.’ The exhibition was opened in Mikkeli Museum on 23 March and will last until August 11. The event has been organized on the initiative and with the support of the Embassy of Georgia to the Republic of Estonia and arranged by the Art Museum of Estonia, the National Agency for the Cultural Heritage Preservation of Georgia and the Georgian National Museum. The exhibition covers all of the essential topics of Pirosmani’s works: city life

and ceremonial festivities, epic country life, still lifes, soulful figures of animals, portraits of his contemporaries and historical figures. “Pirosmani’s paintings stand out for their style and painting technique, and are fascinating due to their sincerity, their profundity and the meaningfulness hidden behind their seeming simplicity, which on the one hand made his works easily accessible to his clients from the ranks of common people, but on the other hand felt like a revelation in the innovative art of the beginning of the 20th century,” the Mikkeli Museum website reads. The museum also says Pirosmani was an artist “whose life has become a legend and who is highly regarded as an important influencer of 20th century avantgarde art, a representative of naive art, a founder of Georgian art and a symbol

Image source: Mikkeli Museum Facebook

of the Georgian national identity.” The exhibition is being held as part of the 100th anniversary of the Art Museum

of Estonia. Most of the works of Pirosmani belong to the permanent collection of the Mirzaani Museum in Georgia

and have not been displayed outside the museum before. The exhibition opened with a focus on the graphic portrait of Pirosmani created by Pablo Picasso in Paris in 1972. The opening ceremony of the exhibition was attended by the officials from Estonia, Parliament and government institutions, diplomatic corps accredited in Estonia, cultural and business circles, NGOs and media. The representatives of the Georgian diaspora in Estonia also attended the event. In addition, on March 23 and 24, exhibition-educational lessons for children and adults took place in the museum building, dedicated to Niko Pirosmani's works. The lessons were given in English (with Estonian translation) and Russian by specially invited teachers from Georgia’s National Agency for Cultural Heritage Preservation of Georgia.

Kenyan Teacher Crowned Global Teacher 2019 from candidates from 127 candidates. The Georgian Minister of Education, Science, Culture and Sport Mikheil Batiashvili attended the award ceremony along with his deputy. “Our country has Lado Apkhazava and I have a feeling of great pride for him, as I’m sure every Georgian does,” said Batiashvili following the results. “Thank you very much from the whole of Georgia, I congratulate you once again for this big achievement and look forward to your future success.” Following the event, Apkhazava congratulated Tabichi on Facebook: 'He is



he winner of Global Teacher 2019 was revealed at a ceremony in Dubai on Sunday. Kenyan teacher Peter Tabichi was crowned the winner, beating Georgian finalist Lado Apkhazava. Lado Apkhazava was among 10 finalists for the competition, which seeks to recognize the world’s best teachers. He was selected from over 5,000 applications

Photo source: Global Teacher Prize

SOCAR Gas Stations Redecorate for Euro 2020

EU Project to Support Transparency of Enterprises TRANSLATED BY KETEVAN KVARATSKHELIYA


Image source: SOCAR



he qualifying tournament for the 2020 UEFA European Football Championship, or UEFA Euro 2020, began on March 21. The tournament will run until March of next year, determining the teams that will play in the 16th quadrennial international men’s football championship for Europe in the summer of 2020. UEFA Euro 2020 will mark the first time that the games in the tournament will be spread across 12 different cities in 12 different countries on the continent. The host cities will be: London, Munich, Rome, Baku, Saint Petersburg, Bilbao, Bucharest, Dublin, Amsterdam, Budapest, Glasgow, and Copenhagen. A UEFA (Union of European Football Associations) tournament game has never before been held in the Caucasus. Former UEFA President Michel Platini explained that the 12 cities idea is a “romantic,” one-time structure, meant to celebrate 60 years since the tournament’s inception. To celebrate Baku’s role as a host city, SOCAR, the State Oil Company of the Azerbaijan Republic, is redecorating 11 of its gas service stations in Georgia to

be themed as the host cities. The redecorated stations will be maintained until the end of this year. The only city not represented will be Saint Petersburg – in recognition of Russia’s occupation of Georgian territory in Abkhazia and the Tskhinvali Region, according to Caucasus Business Week. Well-known local designers developed the concepts for the decoration of the service stations. Versions of workers’ uniforms will have also been designed to match the stations’ themes, and some stations include related souvenir shops. UEFA Euro 2020 will feature the top 24 European men’s football teams. The currently ongoing qualifying rounds include the national teams of both Azerbaijan and Georgia. On Saturday, Georgia lost to Switzerland 2-0 in their first game of the group stage. On Thursday, Croatia beat Azerbaijan 2-1. 55 national teams are playing in the qualifying tournament. Georgia’s next match will be Tuesday against Ireland. Azerbaijan plays Hungary on June 8. The Rome-themed SOCAR station was officially opened on March 21, mirroring the opening of the qualifying tournament. Rome will host the opening match of the 2020 competition. The Romethemed station is located in Tbilisi’s Ortachala neighborhood, near SOCAR’s head office in Georgia. The opening ceremony was attended by Italian embassy

officials, representatives from football governing bodies, and high-level management from SOCAR. SOCAR explained its decision to decorate the stations in Georgia as part of its corporate social responsibility (CSR) program. The SOCAR website explains that the company sees CSR as part of the role of a modern company following international standards. There are five directions in the company’s permanent CSR strategy: environmental protection, youth support, safety, empowering women, and enforcing the rights of people with disabilities (PWD). Under the umbrella of “youth support,” SOCAR contributes to the development of youth sports in Georgia, primarily soccer and rugby. The service station decoration initiative follows that vein of their activities. In 2013, SOCAR became an official sponsor of UEFA national team competitions. In addition to supporting youth sports, their website explains, SOCAR has built a number of parks in Georgia, conducts waste recycling, carefully controls fuel quality for minimal environmental impact, equips most of its highway service stations with free electric vehicle charging ports, is plans to plant 6,200 trees throughout Georgia in Tbilisi and on the land damaged by the Borjomi-Kharagauli National Park wildfire in 2017.

truly a distinguished teacher and personality,' he wrote. He also thanked his supporters and team for the support he has received. 'I feel like a winner...I was able to name my country before the world.' he said. 'From now on, my life will change to some extent and I will do everything to popularize the teaching profession globally.' Tabichi is the first African to win the award. He wins $1 million which he will put towards future teaching projects. Movie star Hugh Jackman announced the results.

he European Union has launched a new project of brotherhood ‘Enhancing Accounting and Audit Quality in Georgia’, seeing Greece as the major partner. The project was launched at the Courtyard Marriott Hotel, where Nikolz Gagua, Deputy Minister of Finance of Georgia delivered a speech noting that the brotherhood project of the EU will strongly contribute to elevating the quality of financial accounting and auditing in Georgia. “The reform helps establish an improved corporate management system, and augmentation of transparency in the business sector and its development," Gagua stated. "It is of crucial importance for the long-term economic progress of the country and mitigation of economic risks. The results of this reform will be reflected in the growth of access to finances and diminution of the income tax. The EU's active support is needed to strengthen the reform and development of the country’s economy in this direction.” “Bringing Georgian legislation to EU standards and practices and reinforcement of the service capabilities will help the country to increase transparency and consolidate stability,” said Vincent Rey, Head of Cooperation at the EU Delegation to Georgia. “This is an extremely important project for Georgia. It is vital to have transparent and trustworthy financial accounting and auditing services throughout the country," noted Dimitros Karabalis, the Ambassador of Greece to Georgia. "Georgia lacks experience in this regard; however, it is necessary for the country to honestly fulfill its obligations towards the European Union. We are experienced in this case, as Greece has trodden the path to the EU. We have also faced a number of challenges that [Georgia] has

to overcome now. That is why it is easier for us to assist in the implementation of this reform.” The leaders of the project, Yuri Dolidze, Head of the Service for Accounting, Reporting and Auditing Supervision, and Panaiotis Yiannopulous from the Supervisory Board of Financial Accounting and Auditing Standards of Greece (HAASOB), presented the aims of the project and noted that they plan to have long-term close cooperation in order to achieve mutual goals. The official launch of the project was attended by the representatives of business associations, governmental establishments, academic circles, professional organizations and diplomatic corps. The brotherhood project aims to improve the quality of financial accounting, reporting and auditing in Georgia, which is set to be achieved through collaboration between the Service for Accounting, Reporting and Auditing Supervision of Georgia (SARAS) and the corresponding EU legislation. The project will also help Georgia to fulfill the country’s obligations regarding the Association Agreement. Improvement of the quality of financial accounting and auditing of the enterprises is crucial for the establishment of a more transparent and stable business environ in the country which will contribute to the efficient decision-making in this field. Through the brotherhood projects, the EU supports the enhancement of institutional partnership between member countries and the public establishments of Georgia. Such cooperation is based on the sharing of practice and professional knowledge through numerous activities, including seminars, trainings, and educational visits.




MARCH 26 - 28, 2019



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.

“IT Flu” in the Armenian Labor Market BY LAURA MANUKYAN


his article is based on field research and interviews with IT experts. We are living in an era of advanced technology, and with such rapid development the changing landscape of the online world has dramatically changed our daily lives. There is no doubt that over the years technology has created amazingly useful resources, which has placed all the information we could need at our fingertips. Software is devouring the world, and you can imagine that this is great news for IT professionals. It’s not just Facebook and Google that need IT professionals. Almost every single industry is becoming dependent on those who know how to write code. The data backs this up, according to the U.S. Bureau of Labor Statistics, careers in software development are expected to have grown 17% from 2014 till 2024. They categorize this growth as “much faster” than the average rate among other professions. Because technology is only going to change more and more over the following ten years, there has never been a better time to be a developer. *** A few months ago, I came across at an article listing Yerevan, together with New York, San Francisco, Singapore, etc., among the best cities for tech career opportunities. Crucially, it identified that “Research shows that by 2025, the need for programmers in Armenia will have tripled to 30.000”. The World Bank also highlights the issue, “Due to growing number of IT companies in Armenia, demand in IT specialists will continue to increase” (IT Skills assessment in Armenia, World Bank, 2014). Not long after, my younger brother (a fourth-year student at Yerevan State University, studying Actuarial and Financial Mathematics) and I had a conversation about his future education and career development possibilities. I shared this information, and I told him that IT specialists are now in greater demand than any other specialists, and have been for at least the last 5-7 years. Moreover, many people are retraining as IT specialists. Consequently, I suggested he should also think about applying his skills in the IT industry. He could readily start learning programming languages, either by himself or by taking a short (6 month) programming course. We left the conversation there, though a little while later I started wondering whether I had given him good advice!

WHY ARE SO MANY PEOPLE ATTRACTED TO THE IT SECTOR? While working in an Armenian commercial bank (it was a few years ago), I got to know a young finance fella, Vahag, who at the time was leading the “Operations in Securities Market” department. A little later, I found that Vahag’s career goal was to become an IT specialist. “Imagine, without applying any physical strength, I can write a code, and the next second I can see a running dude in my screen, isn’t it fantastic”, Vahag once told me. He also added that it is a world of endless creativity. A year later, he quit his job and started pursuing his dream career. Today, guess what, Vahag, in his early thirties, is a senior IT specialist, and his desire has been achieved! A few days ago, chatting with Vahag, I brought up my recent queries, “Why are so many people changing their occupation and switching to IT professions? Are they unsuccessful in their current jobs or has the IT sector become so attractive in Armenia that people do not mind starting from the very bottom?” Also, of equal importance, “Is the profession feasible for anyone? Can just anyone become an IT specialist?”

ARE THERE ANY CHALLENGES IN THE PROCESS OF RETRAINING? Essentially, Vahag, not being a fresh graduate nor in his early twenties, had only two options; either to learn by himself or to take a short (typically 6 months) course offered by various centers (such as the Armenian-Indian Center for Excellence in Information and Communications Technology (ICT), the Microsoft Innovation Center Armenia (MIC), the Innovative Solutions and Technologies Center in Armenia (ISTC), etc.), which deliver training on the fundamentals of programming for beginners. As he pointed out, taking those courses alone is not enough, “Either basic and simple stuff is being taught during those courses or the jump from simple to hard stuff is so sharp that it is difficult to keep up. Even if someone takes such courses, they’re required to spend an enormous amount of time to also learn by themselves.” Vahag emphasized that was what he actually did. He spent a lot of time learning by himself, watching thousands of videos and reading literature day and night to fill the gaps in his knowledge. Four years later, having started in a junior position, he has now attained a senior level. He, moreover, highlighted that 90% of his colleagues are hardworking, self-taught programmers too. Therefore, it turns out many people are able to learn the profession. Though, their achievements in the field directly depend on their efforts. “However, I

think that people with backgrounds in computer science or related fields will make the IT sector stronger”, Vahag suggested.

WHAT ADVANTAGES DOES THE IT SECTOR OFFER TO INCENTIVIZE SWITCHING PROFESSIONS? As Vahag and other IT experts mentioned, there are several key reasons: * High wages; * Fairness in IT sector; * Easy entry conditions; * IT Profession is feasible to anyone. In order to highlight the issues, it is important to discuss each one separately and thoroughly. Firstly, although Armenia is still regarded as a low-cost location for outsourcing software development (State of the Industry Report: Information and Telecommunication Technologies Sector in Armenia, Enterprise Incubator Foundation, 2018), salaries are relatively high (the average salary for a junior IT specialist- $350; a mid-level IT specialist- $700; a senior IT specialist$1.500) compared to other local sectors, and in some cases are even more attractive than in Europe. Imagine a retrained IT professional, who worked, for instance, in the banking sector for five years, and switched into IT. Would they take a junior position, where they have to take a lower salary than with the bank? The answer is clear, a freshman IT specialist, with no experience, would be earning at least as much as a retained worker, with five years in the banking system. Clearly, high salaries are the chief factor behind incentivized migration into the sector. Secondly, as the experts stated, fairness prevails in the IT sector. How can one differentiate a bad programmer from a good one? How can one measure the

quality of a programmer’s work? In essence, the quality of a programmer is perceptible within the code developed. Thus, cases where poorly qualified programmers achieve, for instance, a senior level, are at a minimum. Subsequently, everyone attains the levels they deserve. The IT sector therefore offers a level of fairness, which incentivizes people to grow and further demonstrate their positive qualities.

EASY ENTRY CONDITIONS: ARE FRESH IT GRADUATES AND RETRAINED IT SPECIALISTS IN THE SAME SHOES? Many in the Armenian job market will remember how it feels to have recently graduated and to lack any workplace experience. Employers usually require a certain number of unpaid work hours in order to demonstrate employee skills. Could a retrained IT specialist, most probably not in their early twenties, likely having left another job, and in some cases with a family to support, agree to such terms? While a fresh IT graduate may settle on such entry conditions, it is unlikely to be the case for somebody retraining into IT! With this in mind, I interviewed IT experts to discuss the question, and it turns out that, besides the formal IT sector labor market, freshman IT professionals also have the option of the informal labor market- going freelance. As the experts highlighted, many IT workers (regardless of education background) started their career, with ease, by completing freelance jobs. Doing so, they gained necessary experience and were able to move into the formal labor market of various operational IT companies. The experts also crucially pointed out that, regardless of career or past education, everyone with the necessary knowl-

edge and skills has the chance to try and start a career in the IT sector. Moreover, any required unpaid hours are an exception in the sector. Therefore, there are no entry or monetary obstacles for individuals switching into the IT sector.

IT PROFESSION IS FEASIBLE TO ANYONE A 2014 World Bank report, IT Skills assessment in Armenia, shows that, of all technological companies, 87% are IT companies and the remaining 13% are High tech companies. It is thus worth noting the difference between such companies: * IT companies: engaged in software and systems development, web and mobile programming; * High technology companies: engaged in the development of software and hardware to design, build, and utilize engines, machines and automation structures. Therefore, the majority of companies operating in Armenia are concentrated on software and web development. As Vahag and other experts explained, most programming languages are high-level languages, and IT specialists do not deal with computer hardware. The relative ease of learning those programming languages is undoubtedly one of the key reasons why so many people change their professions to IT. *** Finally, returning to whether the advice to my younger brother was appropriate. As he is about to graduate, without work experience, the message of this story is that if you are ready to devote a lot of time and effort into learning a new profession, into IT, only then is it worth a shot. Only then will you have a chance to succeed, otherwise, you will likely remain in a junior role.

From Presidency to Entrepreneurship Continued from page 1 The interior was designed and decorated by the former First Lady Maka Chichua and the furniture was made and painted by both. The cottage can be booked through Airbnb for $80 per night. If you book prior to June 4, a 20% discount will be applied. The reservation handling is managed by Ana Margvelashvili,

the daughter of the former President. The first guests are expected from France next week, who perhaps come with no idea that they will be hosted by the ex-President of Georgia himself. The Margvelashvili family cottage is worthy of attention not only because of the status of its owners: guests will have an opportunity to discover something of the interesting history of Georgia on the short pathway leading to the

cottage via the bas-relief of St. George, which was presented to Margvelashvili by Fereydanian Georgian and currently embellishes the garden wall. Guests will also benefit from the chance to admire the stunning panoramic views of the brilliant green Georgian landscapes from the garden. Dinner will be cooked using products harvested by the famous couple. The cozy cottage close to the capital

city represents an ideal space for a calm and joyful stay in an authentic Georgian atmosphere with famous and lovely hosts. The decision to rent the cottage was made by the former President for two reasons: first for lack of income, as, following his service in the government and changes to the legislation, he has not been provided neither a salary, nor a pension. Secondly, the

couple wanted to raise awareness about Georgia among foreigners and attract them to the country to discover all of its ‘treasures’. “We were quite skeptical at the beginning that we could make this work," said ex-First Lady Maka Chihua. "But now, we are very optimistic about this initiative and hope our guests enjoy their stay at our cottage.” Source: Rustavi 2



AqTushetii: Fighting RuralUrban Migration

Image source: AqTushetii



ne of the most challenging aspects of Georgia’s economic development is fighting rural-urban migration. A lack of infrastructure and employment opportunities are some of the major barriers to developing rural areas; sending smart, ambitious, young people running to the city. Even in places with enormous potential to grow a tourism-focused economy, the lack of tourist infrastructure – hotels, cafes, restaurants, souvenir shops, transportation links, multilingual museums – stunts growth. In one of Georgia’s most remote and most beautiful corners, the region of Tusheti, in the northeast of the country, a small group of international artistentrepreneurs have developed a new concept. The artist collective AqTushetii is breathing new life into the mountainous rural area, accessible by car only half the year. GEORGIA TODAY spoke with the founders to learn more about their project, and what it is doing for the communities of Tusheti.

WHAT EXACTLY IS AQTUSHETII? AqTushetii is a residency program and festival that fosters the arts, culture, history, and traditions of Tusheti while bringing together people from around the world to collaborate, create, and share knowledge. The name AqTushetii is an expression that roughly translates to “here is Tusheti,” which locals use as something along the lines of let’s make the best with what we’ve got on hand when faced with shortages of resources or other hardships.

WHO IS THE AQTUSHETII TEAM? People from various backgrounds and countries – the team is always growing – the space is open to those who understand the house’s ethos and see

its value and want to contribute and get involved. It stemmed from a common motivation to bring something new, creative, and educational to all, particularly those living in the Tusheti area. People are given space to experiment and to incite [an appreciation of art, beauty, and possibility] in others.

WHAT KIND OF EVENTS ARE ORGANIZED AT AQTUSHETII? The main activity is the artist residencies, but we also host workshops, lectures, concerts, screenings, exhibitions, expeditions, presentations, feasts, and more! Our goal for the project is to keep the space fluid and ever-changing so that it cultivates interesting content, situations, scenarios, and new ways of thinking each day.

WHO IS WELCOME TO VISIT THE HOUSE? Day visitors are welcome – particularly for lectures and workshops. Overnight, short-term stays are not encouraged as much – we want the people who participate in Aqtushetii to have enough time to work constructively there, particularly for artists, so that they can hopefully collaborate with or at least get to know one another, and also provide some kind of workshop or presentation. Two weeks is the suggested minimum stay; one month is ideal.

WHAT KIND OF PEOPLE DO YOU WORK WITH? WHO ARE YOUR RESIDENTS? Participants of all ages from a wide range of backgrounds – philosophy, music, art, anthropology, ceramics, science – coming from different parts of Georgia and from all over the world. People find us through applying to our open calls [we have an open call now, open until May, see: http://aqtushetii.com/cfa]. Otherwise they are invited by the various members of the house, or stumble across it some other way.

WHAT DOES “COMMUNITY” MEAN TO YOU? HOW DO YOU INCORPORATE COMMUNITY INTO YOUR RESIDENCY PROGRAMS? Community is a complicated concept, but we try to foster autonomy in each person that takes part while maintaining a hospitable atmosphere. It is completely open to the local community and they are encouraged to participate, and they do and have been involved from the beginning. We engage with local musicians, ensembles, poets and folklorists, as well as local businesses and events; and we’re also amassing a multi-lingual library (accessible to all) to replace the only one [in Tusheti] that was closed down in Omalo some years ago.

WHAT HAVE BEEN THE BIGGEST CHALLENGES YOU’VE FACED SO FAR? Resources and harsh seasons. It’s a real problem that we cannot access Tusheti throughout most of the year to take materials and complete construction, etc. it really is a remote place.





MARCH 26 - 28, 2019

China’s Belt & Road Reaches Europe BY EMIL AVDALIANI


n March 23, in Rome, a ceremony was held where Italy’s Prime Minister, Giuseppe Conte, and the Chinese President, Xi Jinping, signed a non-binding memorandum of understanding (MoU) that will most likely lead to Italy’s participation in China’s Belt and Road initiative (BRI). The event is important as the country is the first among the G7 countries to decide to take part in the Chinese project which seeks cross-continental connectivity and integration between China and Europe. Many in the West even believe that, unlike Russian Eurasianism, Chinese Eurasianism will eventually challenge what we may provisionally call Atlanticism: a situation in which the US has built a security umbrella across the entire Eurasian landmass to prevent the emergence of a unified Eurasia. For weeks before Italy's decision, Rome was being cautioned by its partners that by getting control of critical technologies and infrastructure, China could pose an economic and political threat to the European Union. But Rome pressed ahead with its support for the scheme, playing down these reservations. Chinese and Italian firms signed numerous deals, some worth up to an estimated €20 billion ($22.6 billion) in the energy, steel and gas pipeline sectors. The Italian media mentioned a figure of an estimated €5 billion. A major reason for Italy joining the

Chinese President XI Jinping and Italian Prime Minister Giuseppe Conte signed 29 memoranda of understanding worth an estimated 5-7 bln Euros. Source: Photo: AFP

BRI is that the country has been experiencing economic troubles of late. The country slipped into recession at the end of 2018- its national debt levels are among the highest in the Eurozone. Italy's populist government came to power in June 2018 with high-spending plans but had to peg them back after a

stand-off with the EU. Therefore, from the Italian perspective, the deals with China could see increased exports to the Asian giant in order to correct its trade imbalances and give a boost to Italian businesses and the economy. Yet another reason is that so far, the EU

hasnotcomewithaunifiedstrategytowards China and its BRI. At the same time, France and Germany have more Chinese investments than Italy, causing fears in Rome that the country might be left out from good economic opportunities. Having Italy on board is a success for China and its economic interests in the

Mediterranean basin, but it also comes at a time when Beijing has been increasingly seeing European and the Americans coming out against Chinese moves. Washington has been engaged in a global campaign to warn and stop countries from using Chinese G5 wireless devices for security reasons. Some agreed, some not. On a more serious note, the EU has also voiced concerns that Chinese construction projects use unfair business practices. For example, Europe is worried that most Chinese companies are backed by the central government in Beijing. There have also been cases when foreign firms were asked/forced to give up trade secrets if they wanted to do business in China. Moreover, just days before the ChinaItaly deals, the EU announced it was preparing its own strategy to counter Beijing's influence. Some analysts believe that China's success with Italy is short-lived, that it will not have a geopolitical influence. However, the agreements signed in Rome show that the BRI is still popular and is now reaching the West. The China-Italy precedent fits into the nascent Chinese Eurasianism which will allow Beijing to gain additional foreign policy tools to use against its potential rivals. China’s pivot to the West goes primarily through Central Asia, a region militarily dominated by Russia. At present, as seen, the US is struggling to prevent China from increasing its influence in the region and will have to dedicate more economic and military resources if it wants to counter the Chinese.

Hong Kong Business Delegation Visits Georgia a delegation to Georgia in order foster the economic relationship. The delegates include the professional bodies of accounting, engineering and architecture sectors, as well as startup companies and enterprises,” Yau said. He strongly focused on the significance of the strategic location of Georgia, serving as a major gateway between Europe and Asia, and enabling international companies to allocate impressive investments in the country. “Hong Kong is constantly developing and is ready to connect to the wider world. We believe Georgia can provide a very good strategic gateway. We are interested in developing various fields, but the growth the infrastructure is of paramount importance for us,” he noted. Yau also shared his views regarding the current challenges in terms of Geor-



high-level business delegation of the Hong Kong Trade Development Council (HKTDC), comprising nearly 30 delegates from different professional service sectors, officially visited Georgia on March 18. The delegation was headed by Edward Yau, Secretary for Commerce and Economic Development of the Hong Kong SAR Government. Within the scope of the official visit, the members of the business delegation attended a seminar, where they were provided information regarding Geor-

gia’s investment environment by the Director of Enterprise Georgia, Mikheil Khidureli. The delegates also had a chance to listen to the representatives of the Partnership Fund Georgia and JSC Georgian Railway, who spoke about a number of successful infrastructural projects that have been carried out so far. GEORGIA TODAY attended a briefing held after the seminar by Edward Yau, to discover the major aim of the visit of the delegation and their upcoming plans. Yau first spoke about the prospective collaboration of Georgia and Hong Kong. “Even though Georgia and Hong Kong are separated by more than 6,600km and the flight takes nearly 14 hours, I can say that Georgia and Hong Kong are much

closer in fact. Geographical distance is not able to keep us apart or challenge our partnership,” he stated, going on to emphasize the mutual interest for investments. “The territory of Hong Kong is tiny, but it represents a major international city in Asia and one of the global financial centers.” Yau underlined the recent progress in respect of cooperation between Georgia and Hong Kong, presenting the signing of a free trade agreement in 2018 as one of the major successful examples. As the most important reason of the visit, the Head of the delegation named the desire to strengthen the already existing partnership between Hong Kong and Georgia. “I have taken the responsibility to bring

gia’s business environ. “I believe it is the start of a very long journey, because at the moment Hong Kong’s investments in Georgia are quite limited. Despite the fact that particular logistics companies have entered the Georgian market, there are various largescale projects that the Hong Kong’s business sector is interested in, including the construction of ports, railway and the infrastructural development of cities. However, we do not only focus on the big and powerful companies. We aim to finance the startups and relatively small enterprises.” “The interest of Hong Kong is pretty much the same as the interest of Georgia in Hong Kong," Yau said. "Both represent free economies. While Georgia serves as the gateway to the western part of the world, for Hong Kong can serve as a way to reach the market in China.”




AEPJ General Assembly about Jewish Heritage to Be Held in Tbilisi BY MARIAM MERABISHIVILI


n 28-29 March, Georgia will for the first time host the General Assembly Session of the European Association for the Protection and Promotion of Jewish Cultural Heritage (AEPJ) with the Council of Europe. Up to 30 representatives of the AEPJ and European Institute of Cultural Routes and Israeli Parliament (Knesset) ViceSpeaker Hilik Bar will visit Tbilisi. First Deputy Chairman of the Parliament of Georgia Tamar Chugoshvili and Deputy Minister of Education, Science, Culture and Sport Levan Kharatishvili will attend the opening session. The Jewish route in Georgia is coordinated by the organization Israeli House which, with the support of the ministry and Israeli Knesset, is actively involved in the activities of the AEPJ that are held in Luxembourg, Madrid and other European cities. Israeli House works with the support

of the Knesset to strengthen Hasbara (public diplomacy in Israel), GeorgiaIsrael and Georgia-world Jewish relations. The Jewish cultural heritage route is considered by the organization to be of high value to Georgia and an effective tool in relations with the Jewish world. According to Itsik Moshe, the Head of Israeli House, the organization actively cooperates with the friendship groups of the Israeli and Georgian parliaments, led by Vice-Speakers Hilik Bar and Tamar Chugoshvili. “These Friendship groups agreed on an annual action plan at a meeting in Israel. The Jewish cultural heritage route promotes the popularization of Georgia in Europe and gives Georgia the chance to attract as many Israeli tourists and representatives of the global Jewish community as possible,” Moshe said, going on to state his belief that “200,000 tourists will visit Georgia from Israel in 2020, which is $200 million for the Georgian economy.” According to the Head of Israeli House, the Jewish cultural heritage route can be expanded to cover the Caucasus

region. “Israeli House is going to introduce this idea to the AEPJ,” he noted. On March 29, a reception will be held for the representatives of the European

Institute of Cultural Routes, AEPJ and Israeli Delegation members at the Georgian Parliament. The guests will also visit Mtskheta, the

National Museum, the Jewish library created by Israeli House at the National Library and will attend a performance based on Jewish themes at Marjanishvili Theater.

UN Human Rights Committee Adopts Resolution on Georgia

Image source: wlrn.org



he United Nations Human Rights Council adopted a resolution about Georgia’s occupied territories on March 22, at the 40th session in Geneva. The resolution is called ‘Cooperation with Georgia’ and was supported by 18 in favor to 5 against, with 24 abstentions. The states which supported the resolution are: Albania, Belgium, Botswana, Croatia, Georgia, Germany, Ghana, Hungary, Japan, Latvia, Netherlands, Panama, Paraguay, Portugal, Slovenia, Togo, United

Kingdom of Great Britain and Northern Ireland, and the United States of America. Bolivia, Burundi, China, Cuba, and Venezuela were against the adoption of the resolution. Deputy Minister of Foreign Affairs Lasha Darsalia presented the resolution at the UN Human Rights Council session. In his speech he spoke about the close cooperation between Georgia and the Council. Darsalia informed the delegates about the grave humanitarian situation in Georgia’s Russian-occupied regions of Abkhazia and South Ossetia regions and talked about the alarming tendency of detention of and human rights violations involving Georgian citizens.

In the adopted resolution, the UN Human Rights Committee once again expresses support for Georgia's sovereignty and territorial integrity within its internationally recognized borders. The Council also expresses serious concern at the continuous process of installation of barbed wire fences and different artificial barriers along the administrative boundary line in two breakaway regions of Georgia. The document welcomes the cooperation of the Government of Georgia with the Office of the United Nations High Commissioner for Human Rights and other human rights, regional and international mechanisms and recognizes the efforts of the Government of Georgia for strengthening democracy, the rule

of law and human rights in the country. In addition, the Council express serious concern about the cases of discrimination, violation of the right to life, deprivation of liberty, illegal detention and abduction, violation of property rights and the right to health, as well as restriction of the right to get education in the mother tongue and demolition of IDPs’ houses in breakaway Abkhazia and South Ossetia. The Council also emphasized the importance of the Geneva International Talks, launched on the basis of the 12 August 2008 ceasefire agreement, and expressed concern over the fact that IDPs and refugees were still unable to safely return to their homes. The document expresses concerns that

regional and international monitoring mechanisms are not allowed to enter Abkhazia and Tskhinvali regions. The resolution asks for immediate access of the High Commissioner's office and other monitoring mechanisms to the occupied regions. Ketevan Tsikhelashvili, State Minister for Reconciliation and Civil Equality, said the resolutions adopted by the United Nations Human Rights Council serve as important and efficient mechanisms to keep the international community regularly informed about the situation across Georgia’s occupied regions. The Minister said the UN is an organization which will repeatedly remind Russia of its internationally taken commitments from its tribune.




MARCH 26 - 28, 2019

Outsmarting Laziness: The Most Evil of All Giants BY ERIC LIVNY AND LEVAN BZHALAVA


reativity is the ability to produce new ideas and to find innovative solutions to problems. It is crucial for economic growth because creative ideas translate into new products and more efficient technological processes, which, in turn, generate new (more productive) jobs and better (more competitive) products. Besides, the “creative class” (e.g. scientists, engineers, writers, artists, designers, painters, actors, firm producers, musicians, choreographers and just anybody able to think out-of-the-box) affects economic performance in a myriad of indirect ways, through knowledge spillovers that boost labor productivity and innovation activities throughout the economy. It is well-documented that innovative ideas are often born over beer! While we all love creativity and innovation, the million-dollar question is how to raise a new generation that will think creatively. Which is related to another question: can creativity be learned or is it an innate talent?

CHILDREN ARE CURIOUS AND CREATIVE! Children are naturally curious; observing and questioning everything they see and hear. Moreover, the vast majority of children have a very well-developed imagination which is key for creativity. To measure just how creative children are, George Land used a test similar to the one he devised to help NASA select innovative engineers and scientists. His results are truly mind boggling! Around 98% of 4-5-year-old children have very strong creative imagination and fall into the “genius” category according to the NASA test. When the same children were re-tested at the age of 10 and 15, however, only 30% and 12% of them, respectively, had creative capability. Still worse, when re-tested at the age of 31, the share of creative individuals shrank to only 2%!

SCHOOLS KILLING CREATIVITY? Sir Ken Robinson, an education specialist, argues that creativity and talent are effectively killed by … schools. Modern schools were created in the 19th century to deliver basic education to the illiterate masses. What is increasingly needed in the 21st century, however, is an individual approach. Robinson’s favorite example is Gillian Lynne, a renowned ballerina who was diagnosed with a learning disorder at the age of eight. Lynne’s teachers were annoyed by her constant fidgeting and lack of concentration. A psychologist who was asked to examine her case was clever enough to turn on music and leave Gillian alone in the room to observe her behavior. His verdict surprised Gillian’s parents: “your daughter is not sick – she is a dancer”. Gillian went on to a ballet

school and became one of the greatest choreographers in history, authoring such musical productions as "Cats" and "Phantom of the Opera”. What Lynne’s story illustrates is the obvious advantage of an individual approach to education, an approach that encourages curiosity and develops innate talents.

AN EXPERIMENT IN NURTURING GENIUSES: THE CASE OF JUDIT POLGAR Laszlo Polgar, a Hungarian cognitive psychologist, believed that “any healthy born child has the innate capacity to become a genius”. Driven by this idea, he examined the biographies of 400 great intellectuals and concluded that “geniuses are made, not born”. To test this theory, he chose to marry a Ukrainian foreign languages teacher who agreed to run an experiment. As crazy as it sounds, the purpose of the experiment was to check whether they could turn their children into geniuses using a very simple prescription: “early and intensive specialization in a particular subject”. Being homeschooled, the couple’s three daughters (Susan, Sofia and Judit) specialized in chess at the age of 6. By their early teens, the Polgar sisters started dominating the female chess world. In particular, Judit is considered to be the best woman chess player in history. She has also fascinating memory and is among the top 10 most intelligent people of the world according to an IQ brain test. Susan and Sofia came to be ranked 2nd and 6th in the world. Polgar and his wife said later that “they could do the same thing with any subject, if

a child starts early, spends lots of time and gives great love to that one subject”. In other words, they believed that innate talent is less important for success. Instead, greatness is all about curiosity and hard work. With ‘literacy’ and ‘knowledge’ no longer being the key challenges facing humans, we have to make sure that tomorrow’s schools are fit for tomorrow’s challenges. Which is all about creativity and innovation. Incidentally, this very idea was not lost one of Georgia’s greatest educators, Ilia Chavchavadze. The main purpose of a school, he would often say, is not to endow knowledge but to enhance children's curiosity. And what was true already in Ilia’s time is especially true today, at a time when ‘knowledge’ as such is easily accessible through the internet. What is demanded nowadays is the ability to synthesize, to connect seemingly unrelated pieces of knowledge, concepts and theories, and come up with new solutions.

AND GEORGIAN SCHOOLS? It is worth considering that Georgian schools still follow the basic 19th century school model with an emphasis on memorizing standard texts and formulas rather than independent thinking. Students are rewarded for giving good (standard) answers rather than for asking good (original) questions. Achievement is measured based on standardized test and grades. In other words, learning is supposed be driven by extrinsic incentives (e.g. tests and grades), whereas curiosity and creativity are always a function of intrin-

sic motives such as passion for a subject. This may be a key reason for poor attendance and, generally, a lack of interest in education that we often observe among Georgian schoolchildren (particularly in rural areas). An additional problem with this outdated school education model is that creativity requires a mindset that considers failure as a legitimate part of the process, which is clearly not how Georgian schools operate. As Sir Ken Robinson suggests, “children are creative because they are not afraid to make mistakes, but they are educated out of it with systems that make them afraid of making mistakes”. This is certainly true for most Georgian schools.

BUT AREN’T WE, GEORGIANS A CREATIVE PEOPLE?! Georgians are a very artistic people. When a Georgian man suddenly discovers he has only one more day to live he decides, rather creatively, to throw a huge party (as the Georgian classic ‘Ardaidardo’ knows to tell). Indeed, Georgians have an international reputation for being very good in arts and design, as well as in dancing, singing and winemaking (and wine-drinking). Importantly for the purpose of this essay, most Georgians are themselves convinced they are a talented nation, believing, in addition, that talent is passed on genetically from generation to generation. For a typical Georgian, success is rarely achieved through hard work. Moreover, as some popular jokes and stories go, those people who work hard demonstrate a lack of talent. The role model for many

Georgian boys is the “talented but lazy” Natsarkekia, the main character of a popular fairy tale, who spends all his time sitting in front of a fireplace (hence his name, which literally translates as "Cinder-man") and doing nothing. Natsarkekia finally gets his act together when thrown out of his house. Using his smarts, he defeats evil giants and becomes very rich. In contrast to Georgia, talent is not assumed in the Korean culture. Instead, Koreans believe in hard work and discipline, sometimes at the expense of creativity. By copy-pasting and efficiently applying existing technological solutions, Korea has been for many years considered a miracle of economic growth. Its development, however, has slowed down once true innovation was required in order to remain competitive. Lacking in organizational skills and discipline, Georgia would not have any comparative advantages in trying to copy-paste existing technologies. We can only rely on our fabled talents. Maybe, just last Natsarkekia, we are waiting to be kicked out of our house before outsmarting the most evil of all giants, our own laziness.

ABOUT THE AUTHOR: Eric Livny is Founder and President at Tbilinomics Policy Advisors, and Chair of Economic Policy Committee at the International Chamber of Commerce (ICC Georgia). A graduate of Max Planck Institute of Economics, Levan Bzhalava is currently a Research Fellow at Mälardalen University, Sweden, focusing on innovation and entrepreneurship.




Gallery Palace: Calm Comfort with Professional Service BY KETEVAN KVARATSKHELIYA


ocated on Ingorokva Street in Sololaki, one of the oldest, most beautiful and authentic ‘Tbilisian’ districts of Tbilisi, Gallery Palace is one of the most outstanding, among the great variety of hotels, offered by the colorful city. Just a two-minute walk from the busy and noisy city center, Gallery Palace is distinguished with its calm and cozy atmosphere and offers guests a pleasant and most importantly, secure, stay. The hotel’s proximity to the Chancellery of the Government of Georgia guarantees a permanent high level of security for guests. A marvelous mélange of classical and modern styles inside Gallery Palace, combined with the utilization of soft tones, creates an exceptionally relaxing atmosphere for vacationers. One of the most outstanding features of the hotel is its gallery area, which is ever-changing and always displays the works of prominent Georgian artists. As well as enriching the interior, the exhibition hall serves to present Georgian painting as one of the country’s cultural treasures, particularly to foreign guests, who have the chance to purchase the displayed works and take away a fine memory of Georgia while supporting local painters. Gallery Palace is located in an elegant five-floor building and boasts spacious 70 rooms of modern design in four dif-

ferent categories: Standard, Deluxe, Superior and Junior, all of them coming with free Wi-Fi, an LED-TV and a climate control system that ensures guest comfort. Welcoming staff members are exceptional in the care they offer and always ready to assist. Gallery Palace is as ideal a destination for family stays, romantic dinners, business travel, and corporate or entertaining events. Guests can relax in the fitness center, enjoy the sauna, Jacuzzi and massage services offered by the hotel, and spend evenings tasting delicious specialties of the ‘Gallery’ restaurant, having a drink or two on the airy terrace. GEORGIA TODAY spoke with Tamar Sikharulidze, General Director of Gallery Palace, about the hotel and its goals. Gallery Palace is a logical continuation in Tamar Sikharulidze’s career as, before taking on her role as General Director, she worked as the Food and Beverage Department Director at the Rixos Borjomi Hotel. She is also cofounder of a hotels and restaurants ruling organization and was part of the President’s Administration team for 11 years. “What makes Gallery Palace hotel so distinguished is its team, who never spare effort to provide guests a premiumquality service that contributes to their pleasant, cozy stay,” she told us. “Social responsibility is also incredibly important for us, as we think it plays a significant role in terms of making society and the environs we live in much better. Having this approach very much in mind, our exhibition hall was devoted to the thematic exhibition ‘La Femme’

of the Georgian artist Teona Paichadze for International Women’s Day. In this way we wanted to somehow contribute to gender equality and female encour-

agement,” Sikharuldze told us. “We have major plans for the future, including inviting international experts of the hospitality field. It will represent

a unique opportunity for our staff members, as well as all interested individuals, to acquire knowledge and share experience in this sphere,” she noted.




MARCH 26 - 28, 2019

Average Hotel Prices & Hotel Price Index – February 2019


n February 2019, in Georgia the hotel price index decreased by 1.7% compared to January 2019. In Tbilisi, the hotel prices decreased by 1.9%. The decrease of hotel prices in Georgia, can be linked to decreased number of tourists’ trips. In February 2019, compared to January 2019, the number of international travelers trips in Georgia decreased by 11.2%, while among the international travelers, the proportion who stayed in Georgia for 24 hours or more (classified as tourists) decreased by 19%. The number of international travelers visiting Georgia in February 2019, compared to February 2018, decreased by 0.4%. However, of these international travelers, the proportion who stayed in Georgia for 24 hours or more (classified as tourists) increased by 5.1%. This was expected to have a positive effect on hotel price increases, however in February 2019, compared to February 2018, in Georgia the hotel price index decreased insignificantly by 0.4%. This was mainly due to price decreases of guesthouses. While, the 3-star, 4-star and 5-star hotel price index increased by 2.2%, for guesthouses, the price index decreased by 2.9%. It's worth to be mentioned that the revenue from international travelers amounted 3.2 billion USD in 2018. According to countries, the most revenue from international travelers was received from Russia - 26.3% (USD 842 mln), followed by Turkey - 13.7% (USD 437 mln), and EU countries - 12.3% (USD 394 mln). In 2018, compared to 2017, the shares of revenues from internationals travelers from Turkey, Ukraine, Armenia and Iran decreased, while shares of Russia, EU countries and Iran increased.

AVERAGE HOTEL PRICES In Georgia, the average cost of a room1 in a 3-star hotel was 122 GEL per night in February 2019. The most expensive 3-star hotels in February in Georgia was

in Mtskheta-Mtianeti – 200 GEL. The average cost of a room in a 4-star hotel in Georgia in February 2019 was 221 GEL per night. The most expensive 4-star hotels in February was found in Mstkheta-Mtianeti– 322 GEL. The average cost of a room in a 5-star hotel in Georgia in February 2019 was 488 GEL per night. In Tbilisi, the average price was 601 GEL, followed by Adjara – 475 GEL, Samtskhe-Javakheti - 383 GEL, and Kakheti - 353 GEL. In February 2019, the average cost of a room in a guesthouse2 in Georgia was 69 GEL per night. The highest daily rates for guesthouses, were found in Guria – 106 GEL.

HOTEL PRICE INDEX In February 2019, in Georgia the hotel price index3 decreased by 1.7% compared to January 2019. The daily rates for standard double hotel rooms decreased the most in Guria (-4.6%) and Kvemo Kartli (-4.3%). In Tbilisi, the hotel prices decreased by 1.9%. Among ten regions of Georgia and Tbilisi, in February 2019, compared to January 2019, the hotel prices increased slightly only in Kakheti (0.6%). The 3-star, 4-star and 5-star hotel price index decreased by 1.8% in February 2019, compared to January 2019. In these types of hotels, the highest price decreases were recorded in Kvemo Kartli and Guria. In Tbilisi, the 3*, 4* and 5* hotel prices decreased by 2.1%. In February 2019, compared to January 2019, the 3*, 4* and 5* hotel prices increases was recorded only in Kakheti. For guesthouses, the price index decreased by 1.7% in February 2019, compared to January 2019. Like 3*, 4* and 5* hotels, in this type of accommodation, the biggest percentage price decreases for standard double rooms were recorded in Guria and Kvemo Kartli. The price increase of guesthouses was not recorded in any of the regions. In Tbilisi, the prices of guesthouses decreased by 1.1%.

Table 1: Percentage change of prices in February 2019 over January 2019 and over February 2018.

Graph 1: In the graph, average prices for standard double rooms in 3 and 4-star hotels and guesthouses are given by region. 5-star hotel prices are provided above.

In February 2019, compared to January 2019, the decrease of hotel prices in Georgia, can be linked to decreased number of tourists trips. In February 2019, compared to January 2019, the number of international travelers trips in Georgia decreased by 11.2%, while among the international travelers, the proportion who stayed in Georgia for 24 hours or more (classified as tourists) decreased by 19%4. In February 2019, compared to February 2018, in Georgia the hotel price index decreased insignificantly by 0.4%. This was mainly due to price decreases of guesthouses. The daily rates for standard double hotel rooms decreased the most in Shida Kartli (-7.2%) and Racha (-6.4%). In Tbilisi, the overall price level of hotels decreased by 4.3%. Among the regions of Georgia and Tbilisi, in February 2019, compared to February 2018, hotel prices increased in Adjara (6.9%), SamtskheJavakheti (5.5%), Guria (5.1%) and Mtskheta-Mtianeti (2%).

It’s worth to be noted that the number of international travelers in February 2019, compared to February 2018, decreased by 0.4%. However, of these international travelers, the proportion who stayed in Georgia for 24 hours or more (classified as tourists) increased by 5.1%. In Georgia, the 3-star, 4-star and 5-star hotel price index increased by 2.2% in February 2019, compared to February 2018. In these types of hotels, the highest price increases were recorded in Samtskhe-Javakheti and Adjara. During this period, in Tbilisi, the prices of these types of hotels decreased by 4.5%. In February 2019, compared to February 2018, for guesthouses, the price index decreased by 2.9%. In this type of accommodation, the biggest percentage price decreases for standard double rooms were recorded in Samegrelo-Zemo Svaneti and Racha. During this period, in Tbilisi the prices of guesthouses decreased by 3.4%.



Int’l Interest in Georgian Real Estate Sector Up

Fady Asly

nterest in the real estate sector of Georgia from international investors is increasing, and to celebrate, the Sheraton Grand Tbilisi Metechi Palace is soon to host the country’s leading developers, international investors and customers at the two-day Area Expo 2019. This year's expo, on May 4-5, will be both outstanding and very useful for developers and consumers. Seminars and talk-series organized by Marketer.ge will cover important topics about which investors, developers and those interested in purchasing an apartment are equally concerned, including: the investment environment in Georgia in the real estate direction, banking regulations, new planning in construction and changes in the development market. The first large-scale exhibition-sale of real estate was organized by Area Group last year, preceded by market research which emphasized the necessity of holding such an exhibition. More than 2000 visitors, 95% of whom were directly interested in purchasing an apartment; dozens of reserved apartments and successful communication between consumers and developers at the 2018 Expo proved this. The event indicated how important such exhibitions are for the Georgian market when interest in Georgian real estate is growing annually, is increasingly in the spotlight of international companies, and when 9% of GDP comes from this sector. Area Group is an intermediary between developers and customer; providing various services to developing companies, from market research and creating company brands to sales management and reporting. "Last year's focus was on the customer, people who were interested in buying real estate, and saw the gathering of developers offering a variety of products in a single space,” said Tamar Mashava, Director of Area Group. “Today, we see international organizations clearly expressing their interest in the event, especially those wanting to invest in Georgia.” This year’s partner was the International Chamber of Commerce (ICC), which notes that the event plays an important role in the development of the Georgian real estate sector. "The interest of international and local investors in Georgia's real estate sector is very important- in this regard, Area Expo

2019 has extraordinary potential. We invite investors and stakeholders through our own representations in neighboring and regional areas, including Azerbaijan, Armenia and Ukraine, to come to the Expo and thus increase their awareness of the country and their interest in real estate here,” the ICC states. Another partner of the event is the National Agency of State Property, whose participation aims to move amortized passive real estate belonging to the state into the private sector, which will promote business development in the country. "Customers looking for a particular product or service have a good opportunity to discover a lot of offers in a single space, consult with financial institutions and thus be better able to make the decision that is right for them," said George Dugladze, Chairman of the National Agency of State Property. Similar exhibitions are often held abroad. One of the most successful examples is Dubai's annual large-scale real estate exhibition. More than 20,000 people from around the world take part in the event, and more than 1200 items of real estate are sold during the exhibition, with revenues exceeding $1 billion. Although the scale of Georgia is small due to the local market, it is interesting and necessary for Georgian consumers and developers to share a similar experience of international competence. The company Ocean Capital has been operating on the Georgian market since 2016. This is an international company that carries out work in 15 countries and now counts 60 years of history. The company operates mainly with investments attracted from The Netherlands, Britain, the Middle East and Germany and works to European standards. Its Georgian projects guarantee safety standards, including structural basin preparation methodology. Ocean Capital recently completed a project in the vicinity of Vake Park, Tbilisi, and has three ongoing constructions, also in the Vake district and all premium class products. The first time they are taking part in Area Expo, as Director General of Ocean Capital Tamar Akhaladze explains, they will present the completed project and offer clients special purchase conditions. “Area Expo is very interesting in content and format, encouraging market development, and, most importantly, direct communication with potential consumers. Our expectations are positive for this year’s event,” Akhaladze said. Don’t miss out on May 4-5 at the Sheraton Grand Tbilisi Metechi Palace, Tbilisi!

George Dugladze

Tamar Akhaladze







MARCH 26 - 28, 2019

Investors List 8 Demands for Anaklia Deep Sea Port Development BY AMY JONES


n March 21, the Georgian Minister of Regional Development and Infrastructure Maia Tskitshvili announced that the international financial institutions involved in the construction of Anaklia Deep Sea Port have outlined eight demands that must be fulfilled before they will invest in the project. The Anaklia Deep Sea Port is one of the most important infrastructure development projects in Georgia. Hailed as the ‘project of the century’, the port will enable Georgia to become a transport hub for trade between Asia and Europe. Speaking at a plenary session in Parliament, Tskitshvili listed the demands made by The European Bank for Reconstruction and Development (EBRD), Overseas Private Investment Corporation (OPIC), Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB). The current agreement states that the project’s first phase must be completed within 3 years after construction begins. Currently, the first phase is due to finish by November 20, 2020. However, “regrettably there are no finances for this project,” said Tskitishvili. “I presume this deadline will not be met.” Investors are now demanding a feasibility study be conducted at each phase of the project. Rather than tying the

project to specific deadlines, the investors would like to decide after each feasibility study whether or not the project should progress to the next phase. In addition, investors made demands regarding the port’s road and railway connections, saying they would like all works and processes to be conducted according to their rules, which was not initially planned. Loan agreements were also listed among the demands. “At this stage, we have a deal that if the contract is terminated due to the government’s of investor’s failure, the port will be returned to state ownership and the process of searching for a new investor will begin,” said Tskitishvili. “The liabilities that the previous investor had with the banks will be passed on to the new investor,” she continued. “Now the banks demand that the state guarantees the loans.” The investors’ also made demands regarding shares and the so-called ‘golden share.’ Currently, the government has one share in Anaklia Development Consortium, the consortium responsible for developing the port. However, the government’s ‘golden’ share allows them to require a consensus on various vital issues. Investors propose to reduce this power significantly. The demands restrict the states’ involvement in the project: “the changes are harmful to the state’s interests in comparison with the existing agreement,” said Tskitishvili. The other demands regarded compensation and the continuation of terms.

Image source: Anaklia Development

Anaklia Development Consortium (ADC) released a statement in response to Tskitishvili’s speech and the investors’ demands. ADC insists that Tskitishvili made ‘false, biased and distorted statements which harm the project and its construction process as well as international investors who are willing to take part in the port’s construction and who

took risks to invest just 4 kilometers from a conflict zone, near Abkhazia.’ The Consortium also stressed that such statements are damaging to the investment environment of the project and the country as a whole. The Consortium said it also believes the demands to be an attempt to discredit the US company SSA Marine, the largest

shareholder in the project. “Such statements may have a negative impact on Georgian-American relations,” reads the statement. The Anakalia Development Consortium has stated that it is ready for business dialogue and construction. The negotiations with investors are continuing. See page 14 for more on this.

Aptos Factory to Be Built in Georgia Revenue Service Director Meets with Business Sector Reps TRANSLATED BY KETEVAN KVARATSKHELIYA


irector General of the Revenue Service of the Ministry of Finance of Georgia Vakhtang Lashkaradze hosted the first working meeting with the representatives of the Business Association, where he spoke about the challenges faced by the Revenue Service (RS) and plans for the future. Lashkaradze said that partnership and transparency are the paramount values of the RS and outlined the administration of tax law violations and their prevention as the major strategic tasks for future implementation. “The Revenue Service does not inspect businesses in order to apply fines or other punitive means. On the contrary, we believe that risk-based attitudes will enable us to prevent violations and the business sector will be able to work in an appropriate, legal environ,” Lashkaradze said. He then focused on the efforts made to raise awareness of the importance of paying taxes, noting that the RS works in close cooperation with a number of higher education institutions and imple-

ments cognitive as well as education programs annually. Within the scope of the meeting, Lashkaradze outlined plans to update the official RS website. “Bilateral collaboration and fast information exchange is very important for us. Our website is one of the best ways to do so and we will do our best to make it easily accessible and transparent for Georgian, as well as foreign customers,” he promised. The meeting was held in a dialogue format. At the end of the meeting, on behalf of the Revenue Service, Vakhtang Lashkaradze expressed his gratitude to the guests and noted that the dialogue with the business sector will continue in future. The meeting was attended by the Heads of 10 companies: the Business Association of Georgia (BAG), Georgian Employer’s Association (GEA), American Chamber of Commerce in Georgia (AmCham Georgia), Georgian Small and Medium Enterprises Association (GSMEA), EUGeorgia Business Council (EUGBC), European Business Association (EBA Georgia), Taxpayers Union Georgia (TPU), Georgian Farmers Association, Georgian Distributors Business Association and Gambling Business Association.

Image source: Ministry of Economy



eorgian company Aptos which has 23 years’ experience and is the inventor and producer of the world famous face-lifting Aptos threads, is to open a factory in Georgia. The project was funded within the frames of the state program Enterprise Georgia. The company started developing a Georgian production complex in 2016. In 2018, in the framework of the Enterprise Georgia project, Aptos was granted 10,000 square meters of land to build the first Georgian enterprise for aesthetic

medical products. City Hall issued the permit to build the factory in December 2018. It also received financial support, with the Enterprise Georgia Agency to co-finance the interest rate of the loan for the next two years. On March 21, the official foundationlaying ceremony was held in Tbilisi. This will be the first enterprise in the Caucasus to provide a space for producing aesthetic medical products. The complex consists not only of a production line but also office infrastructure. Aptos is also the first Georgian company to have a CE (Conformité Européene) label on medical products, which allows their export to any European market. At this point, Aptos threads are sold

in over 50 countries through a large-scale distribution network. However, the threads are currently manufactured in Russia for the Russian and Chinese market and in Germany for the global market. This entirely Georgian invention is spread under the “Made in Germany” label among plastic surgery and aesthetic medicine specialists of several dozen countries around the world. Georgia’s Ministry of Economy says that the project has a strategic advantage. “The label ‘Made in Germany’ on the Aptos products will be changed to ‘Made in Georgia’ and the products themselves will reach different markets with that label. Over the next two years, the company plans to enter important markets like Brazil, the USA, Canada, Mexico, Thailand and Singapore,” the ministry said. Construction is set for completion next year and the factory will start functioning in December 2020, able to produce 300,000 units annually. At the first stage, the company will provide jobs for 100 people, with an investment of 15 million GEL. Georgia’s Minister of Economy and Sustainable Development Giorgi Kobulia said that the government will do its best to promote and support such projects. “Such projects can become the driving force of the Georgian economy. These are the projects that will defeat poverty. The initiation of such a project is another justification that Georgia has a favorable business environment and is ready to accept and develop such projects,” the Minister noted at the official foundationlaying ceremony.




MARCH 26 - 28, 2019

Anaklia Development Consortium CEO Responds to Rumors BY KETEVAN KVARATSKHELIYA


he Anaklia Deep Sea Port is one of the major and most strategically vital projects being implemented in Georgia today. The construction works of the Port are underway, being run by the Anaklia Development Consortium (ADC), which is made up of specialized firms with diverse backgrounds: TBC Holding, Conti International, SSA Marine, Wondernet Express and G-Star Ltd. However, the recent developments surrounding the TBC Holding and its founder Mamuka Khazaradze, who is also an ADC founder, have given rise to a number of questions and rumors regarding the progress of construction of Anaklia Deep Sea Port, with one Georgian TV channel claiming that ADC failed to commence works on the planned date. To clarify the situation, the CEO of the Anaklia Development Consortium, Levan Akhvelidiani hosted media representatives at the Tbilisi Marriott Hotel on March 20 and expressed his readiness to answer any question regarding the Port. GEORGIA TODAY was among the attendees. Akhvlediani started his presentation with a thorough explanation of the project, and by outlining the importance of Anaklia Deep Sea Port for the country. “The Port project was initiated at the end of 2013 by Giorgi Kvirikashvili, who was Minister of Economy at the time. Prior to the announcement of the tender, the Partnership Fund was asked to finance and carry out comprehensive studies which would answer two major questions: is it necessary to have a deep-sea

port on the territory of Georgia, and, if so, what would be the best location for it?” Akhvlediani told us. “As a result of the explorations, Anaklia was chosen as the most suitable location for the construction of the deep-sea port. The proximity to the occupied region of Abkhazia played no minor role in the decision-making process.” Akhvlediani also spoke about the success of the Anaklia Development Consortium in the tender and stressed the complex procedures needed to implement the project. “An international tender was announced in July 2014 and saw 12 major companies participating, of which only two succeeded. On February 8, 2016, Anaklia Development Consortium was named winner of the tender.” The CEO of the Consortium noted the skepticism of a number of governmental representatives towards the Anaklia Deep Sea Port project, saying: “I am making a political statement now, but I can firmly say that those who were against the given project at its inception are now speaking about its crucial importance for the development of the country.” Akhvlediani presented the global partner companies and financial institutions involved in the project and briefed us about the major maritime works that have been carried out on site since 2017. The Anaklia Deep Sea Port will be operational from December 2020 and is being constructed in nine phases. The total investment value of the project is $2.5 billion. “We are the only country in the region without a deep-sea port, which is certainly a must-have in the contemporary world,” Akhvlediani noted. “Georgia is a country with an incredible strategic

Image source: Georgian International Maritime Forum

location, serving as a gateway between Europe and Asia, and the deep-sea port will enhance its role on the Silk Road and contribute to its economic growth. After completion of the 1st phase, in 2021, the Port will be able to handle 1 million TEU containers and 1.5 million tons of dry bulk.” “Quite frequently, we hear the opinion that Anaklia Port will become rival to other Georgian seaports and lead to their shutting down. That is not true! We are working on such a large-scale project that cannot be considered a rival to other ports in our country; rather, we aim to compete with our neighboring countries, including Russia and Turkey,” Akhvledi-

ani told us, going on to emphasize the potential of infrastructural development of Anaklia and its adjacent territories and the prospective of Georgia becoming a regional hub. The ADC CEO also noted that the project is set to create more than 16,000 workplaces and become a source of additional income for the local population. He spoke about the challenges faced by ADC in the process of implementation of the project, stating that due to the recent developments surrounding TBC Bank and its founder Mamuka Khazaradze, there has been a lot of misinformation and propaganda spread about the Port project. “It has been stated

that the Consortium is failing to meet the requirements of the international partners and is not carrying out the planned construction works on time. There has been no delay in the construction of the port since 2016, when the investment agreement was signed with the government. The shareholders of the Consortium have allocated investments amounting to $70 million so far, without the involvement of the government. The 8-point demands of our international investors represent the most significant global companies. Thus, it is expected that they insist on particular guarantees before approving a project,” he highlighted.

Ivane Matchavariani Meets with Director of Asian Development Bank dynamics of the partnership and expressed hope regarding the enhancement of the fruitful cooperation in the future. The Minister praised his guest for the support, the ADB is showing towards Georgia in terms of implementation structural and economic reforms throughout the country. The significance of ADB’s assistance for the development of municipal and urban infrastructures, as well as power engineering and road construction was also noted at the meeting. Construction of the Kvesheti-Kobi



he Minister of Finance of Georgia Ivane Matchavariani held a meeting with the Director of the Asian Development Bank (ADB) Tony McDonald on March 21 at the Ministry of Finance, where they discussed the prospective of the further collaboration between Georgia and the ADB. The parties underlined the positive

22.7km road section and 9km tunnel, which is set to increase the transit potential in the North-West direction, is implemented with the ADB funding. In addition, the ADB’s aid regarding the development process of the East-West Highway is also of note. The partnership sectors for 2019-2021, including the scheduled education reforms, were strongly accentuated at the meeting. The meeting at the Ministry of Finance was attended by Yesim ElhanKayalar, the ADB Country Director for Georgia.

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Digital Media Trends Discussed at Pechakucha Night BY GABRIELLE COLCHEN


he 7th edition of Pechakucha Night was held last Friday in Fabrika hostel’s jungle room, with 12 speakers invited to give their opinion on new digital media trends, each with a presentation of 20 images they had 20 seconds to comment on. The event lasted over two hours and the presenter made sure the guest stayed energetic and motivated. Some very interesting issues were raised, such as the problem of fake news and sensationalism in today’s media. Dominik Cagara, founder of OC Media, explained how journalists tend to look for breaking news and fast information, sometimes forgetting to properly check the sources. This often leads to the spread of fake information and the distrust of the audience. Cagara advised those present to always check information from different sources. He explained that in terms of information linked to the conflicts happening in Georgia, a lot of European Union experts are working in these zones to specifically observe what is happening and as such are best placed to deliver the right information and check facts without being biased.

Several documentary film-makers talked about the challenges linked to this specific field. Thomas Burn, Creative Director of Coda Story, explained how documentary film-makers tend to put more emphasis on the information they want to deliver instead of what the audience is looking for. They sometimes create amazingly interesting documentaries that find almost no audience because they are not well marketed. Stories do not speak for themselves, and producers have to take into account the experience of the viewer at the same time as the content of their film. Stephen Steim, Executive Director of New Media Advocacy Project, creates audience-focused documentary videos raising human rights issues. His non-profit organization is based in Brooklyn, USA, and works in collaboration with other human rights focused NGOs all around the world. He stated that “human rights experts are terrible at talking to non-experts” and his goal is to work with them and create efficient videos that can talk to the audience. This enables vulnerable communities to actually have a voice and fight for justice. His videos are sometimes of great use for legal cases and can find them at this address: www.nmap.com. Other speakers talked about their own way of producing attractive information, such as giving ideas or news through “top 10” lists and the special

Photo by Doru Avram

power of photos. Sophie Datishvili, for her part, uses Instagram (Tavisupleba) to make people think about news topics. She asks questions through 15-second videos on Instagram and gets a lot of feedback from her public. It is a way to create content perfectly adapted to her audience as well as make people fully active in their search for infor-

mation. She also created Factmzomi, a blog that can check for people the information they found online. Overall, the event was a very nice insight into the need for fact checking as well as the need to deliver content in an attractive way and to distinguish oneself in a world saturated in information.

Batumi in Running for World Travel Awards



atumi has been nominated by one of the most prestigious awards, the World Travel Awards, in the Europe’s Leading, Emerging Tourism Destination category. Sofia (Bulgaria), Matera (Italy), Bako (Azerbaijan), Ljubljana (Slovenia) and Kutna Hora (Czech Republic) are also among the nominees. The winner will be revealed on June 8, 2019 at an award's ceremony in Madeira, Portugal. “Being nominated in this category is extremely important for us," stated Sulkhan Glonti, Chairman of Ajara Tourism Department. "We have high chances of succeeding, though our rivals are very strong, and naturally, all of us are interested in winning. Recognition by such a prestigious and prominent organization will be positively reflected on the promotion of our region and increase its popularity on the international arena." "We have spent a lot of time on collaborating with international media platforms in recent years,

including direct commercials, as well as press tours," Glonti went on. "More than 1000 journalists and tourist agencies were hosted in 2017-2018 by our region, which had reciprocal fruitful outcomes in terms of elevation of the number of travelers, as well as improving awareness in the international respect. Our campaign GoBatumi is part of our aim to win the mentioned award," he said. "In order to overcome the challenges faced by our country and region, efficient communication and campaigns on the international markets are vital," the Ajara tourism chair noted. "Tourism is the business with strong rivals and we are clearly aware of the importance of each success, especially while being nominated as Europe’s Leading, Emerging Tourism Destination of 2019." The World Travel Awards was established in 1993 to acknowledge, reward and celebrate excellence across all key sectors of the travel, tourism and hospitality industries. Today, the World Travel Awards™ brand is recognized globally as the ultimate hallmark of industry excellence. You can vote for Batumi until 28 at the official website of the World Travel Awards.



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Profile for Georgia Today

Issue #1136 Business  

March 26 - 28, 2019

Issue #1136 Business  

March 26 - 28, 2019