Issue #1222 Business

Issue no: 1222/216

• JANUARY 28 - 30, 2020 • PUBLISHED TWICE WEEKLY

PRICE: GEL 2.50

In this week’s issue...

Weekly Entrepreneurial News @entrepreneur.ge NEWS PAGE 2

Ex-Speaker of Parliament: TI's Corruption Perceptions Index is "self-contradictory" BUSINESS PAGE 3

FOCUS ON EATING HEALTHY

Delivery service www.inebe.ge takes going on a healthy diet to new levels

PAGE 6

Georgia in Davos, Part 2: A Summary

BY ANA DUMBADZE

T

he Prime Minister of Georgia, Giorgi Gakharia, participated in the World Economic Forum, which took place on January 21-24 in Davos, Switzerland. The Georgian delegation, led

by Gakharia, consisted of Finance Minister Ivane Machavariani, the Prime Minister's Advisor on International Affairs Irakli Chikovani, and Economic Advisor Beka Liluashvili.

The Georgian delegation's working visit included meetings with heads of international financial institutions and the world's largest companies, including Siemens Energy, Camille Bloch, Coca-Cola, and OneWeb. GEORGIA TODAY took a look at some of the most important moments of the last two days of the Forum.

Monthly Tourism Update – December 2019 BUSINESS PAGE 4

Veon Georgia Representative on the Effectiveness & Benefits of a Compliance Program BUSINESS PAGE 5

It Is Never Too Late to Do Right BUSINESS PAGE 7

CENN to Set Up Modern Strawberry Greenhouse in Zendidi Village within Keda Leader Project BUSINESS PAGE 8

The Fate of the Gray Area in Europe POLITICS PAGE 11 Prepared for Georgia Today Business by

Markets

PM DISCUSSES ENERGY OPPORTUNITIES WITH CEO OF GLOBAL OPERATOR IN RENEWABLES One of the world leaders in the field of renewable energy, ACCIONA is considering the possibility of developing wind and solar power stations in Georgia. As CEO of the company Rafael Mateo stated at a meeting with Georgian Prime Minister Giorgi Gakharia in Davos, a company delegation has already visited Georgia to explore the available opportunities.

ACCIONA is a world leader in renewable energy and water management, operating in the five continents in 20 countries, exclusively in the renewable energy sector. The company is also involved in the production of wind turbine generators. ACCIONA's annual revenue is €7.5 billion and the company employs more than 38,000 people.

Continued on page 3

As of 24ͲJanͲ2020

STOCKS

Price

w/w

m/m

BONDS

Price

w/w

m/m

Bank of Georgia (BGEO LN)

GBP 15.08

Ͳ4,6%

Ͳ7,3%

Georgia Capital (CGEO LN)

GBP 8.12

Ͳ4,4%

Ͳ13,2%

GBP 1.25

Ͳ2,3%

Ͳ16,4%

GRAIL 07/22

109.99 (YTM 3.47%)

+0,0%

Ͳ0,0%

GBP 12.52

Ͳ1,4%

Ͳ2,9%

GEBGG 07/23

105.95 (YTM 4.15%)

+0,0%

+0,2%

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

GEOROG 04/21

104.42 (YTM 3.10%)

Ͳ0,2%

Ͳ0,1%

GEORG 04/21

105.53 (YTM 2.20%)

+0,0%

Ͳ0,1%

COMMODITIES

Price

w/w

m/m

CURRENCIES

Crude Oil, Brent (US$/bbl)

60,69

Ͳ6,4%

Ͳ9,7%

GEL / USD

Price

w/w

m/m

2,8867

+0,6%

+1,4% +0,8%

1 571,53

+0,9%

+4,8%

3,1819

Ͳ0,0%

GEL / GBP

3,7732

+1,1%

INDICES

Price

w/w

m/m

GEL / CHF

2,9705

+0,0%

+2,1%

FTSE 100

7 585,98

Ͳ1,2%

Ͳ0,6%

GEL / RUB

0,0465

Ͳ0,2%

+1,1%

FTSE 250

21 763,94

Ͳ0,6%

Ͳ1,0%

GEL / TRY

0,4859

Ͳ0,3%

+1,5%

DAX

13 576,68

+0,4%

+2,1%

GEL / AZN

1,6976

+0,6%

+1,1%

DOW JONES

28 989,73

Ͳ1,2%

+1,7%

GEL / AMD

0,0060

Ͳ

Gold Spot (US$/OZ)

NASDAQ MSCI EM EE MSCI EM

GEL / EUR

+2,4%

Ͳ

9 314,91

Ͳ0,8%

+4,0%

GEL / UAH

0,1182

Ͳ

Ͳ3,5%

195,71

Ͳ2,4%

+1,9%

EUR / USD

0,9070

+0,6%

+0,6%

1 119,39

Ͳ2,4%

+0,9%

GBP / USD

0,7650

Ͳ0,5%

Ͳ1,0%

SP 500

3 295,47

Ͳ1,0%

+2,2%

CHF / USD

0,9716

+0,4%

Ͳ0,9%

MSCI FM

2 751,23

Ͳ0,5%

+0,2%

RUB / USD

62,1648

+0,9%

+0,3%

GT Index (GEL)

1 582,68

Ͳ

Ͳ

TRY / USD

5,9390

+0,9%

Ͳ0,2%

GT Index (USD)

1 208,13

Ͳ

Ͳ

AZN / USD

1,6981

+0,0%

+0,0%

2

NEWS

GEORGIA TODAY

JANUARY 28 - 30, 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: Satori center supports mental health through personalized coaching, aiming to create a comfortable, loving space so everyone who comes in feels safe and at peace. Satori was founded by Daduna Samadashvili and Gvantsa Gadelia who, despite the differences in their career paths, united in interests at Satori. The center is active in the business of helping people to develop their skills and attitudes, and to have a well-functioning, better life.

Georgian FM to Speak at PACE Winter Session & OSCE Permanent Council

BY BEKA ALEXISHVILI

G Marte is a Georgian universal journal which makes life easier for those who love journaling. While working on the product, the producers studied the market, figured out their strategy, worked on the brand’s image, design and content, and after a month, presented Marte to consumers – a journal to become an integral part of everyday life for people who seek success and value time, quality, and productivity.

Based in Kakheti, Mariam Gorashvili produces three types of wine from Rkatsiteli, Saperavi (medium sweet), and Saperavi (dry) grapes grown in the village of Velistsikhe.

“Each product is ecologically clean.

Our Rkatsiteli vineyard is around 40 years old, and has never had poisonous pesticides sprayed on it, only Kakhetian traditional alum and lime. What makes it stand out is the specific processes of its cultivation and processing into wine,” she says.

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

eorgian Foreign Minister Davit Zalkaliani will address the audience at the Winter Session of the Parliamentary Assembly of the Council of Europe (PACE) in Strasbourg, January 27.

Adhering to the context of Georgia’s Presidency of the Committee of Ministers of the Council of Europe, Zalkaliani will converse on Georgia’s activities and will introduce the expectations of the Georgian Presidency. The Georgian FM will also be answering questions from Assembly participants.

On January 30, the Georgian Foreign

Minister will appear at the OSCE Permanent Council meeting in Vienna, Austria.

The President of Georgia will similarly depart for Strasbourg. On January 28,

Salome Zurabishvili will make a statement to Assembly members and will discuss developments in Georgia and the human rights conditions in the occupied regions.

On the Coronavirus

BY NINI DAKHUNDARIDZE

C

oronaviruses are a group of viruses that cause diseases in humans, animals, and birds. In humans, the virus causes respiratory infections which are typically mild but, in rare cases, can be lethal. The virus that originated from Wuhan, China, last month, has spread around the world rather quickly. Currently, the death toll

stands at 81, while approximately 2800 people have been infected. Outside mainland China, at least 13 other locations have reported cases of the virus, including France, Australia and the United States. International laboratories are actively working to find a specific treatment for the coronavirus.

While flights are being more and more limited from China, the governments of different states are evacuating their citizens from Wuhan, including those of Japan and France.

Although, as the Ministry of Health

reports, Georgia is in the green “lowrisk” zone for the spread of the coronavirus, safety measures have been taken at the airports, and flights canceled.

“Direct flights from China to Georgia have suspended for the time being," Health Minister Ekaterine Tikaradze stated on Monday.

“Today, the Ministry will discuss the cancellation of future flights from China,” she added.

A January 25 flight from China to Georgia was cancelled by the Chinese side.

Continued on page 11

BUSINESS

GEORGIA TODAY JANUARY 28 - 30, 2020

3

Georgia in Davos, Part 2: A Summary Continued from page 1 The head of the Georgian government informed the investor about the favorable investment environment in Georgia and the potential of development of renewable energy sources, noting that Georgia is a trustworthy and reliable partner, among the leading positions in the world in terms of ease of doing business.

Both sides emphasized the growing demand for electricity, responding to the emergence of new sources of world generation. The development of wind power projects, the country's rich hydro resources and the prospect of electricity transit, as well as Georgia's role as a transit hub in the region leading to the EU market, was also highlighted.

The ACCIONA delegation plans to continue negotiations with the Georgian government on the possible construction of 200 MW wind power plants in the country.

SWISS CHOCOLATE COMPANY TO CREATE HAZELNUT PLANTATIONS IN GEORGIA We had already heard that Swiss chocolate producer Camille Bloch intends to create hazelnut plantations in Georgia and to use Georgian hazelnuts in the production of Ragusa, Swiss chocolate, and this was again confirmed when the Georgian PM and CEO of Camille Bloch, Daniel Bloch, met to discuss the details of the project at a meeting in Davos.

Camille Bloch produces 3,700 tons of chocolate per year. The annual revenue of the company is more than $45 million.

It wants to integrate new technologies in the hazelnut plantation field in Georgia, which itself will increase productivity.

Bloch has already registered the company in Georgia and chosen a 561 ha area in Lagodekhi municipality, eastern Georgia. It will employ up 40 people.

OPPORTUNITIES IN THE EU FOR EAP COUNTRIES As part of his working visit to Davos, PM Gakharia participated in a panel discussion, with the representatives of the European Commission, on the opportunities Europe and the EU create for the Eastern Partnersip (EaP) countries.

He highlighted the tangible results of the last five years in Georgia's relationship with the EU, including a deep and comprehensive free trade agreement with the EU, and visa-free travel.

“According to recent sociological surveys, more than 70% of Georgia's population supports Euro-Atlantic integra-

tion,” the PM said. “However, when it comes to economics, and when we think about making all our achievements accessible to ordinary citizens, we face the real problem of connectivity. This is our first priority. We consider Georgia a gateway to Europe and Central Asia. We fully understand that investment in the Georgian economy means the security of our country. When it comes to safety, we certainly see problems in the Black Sea. The Black Sea is a top priority not only for Georgia but also for the North Atlantic Alliance. This is a new dimension for us”.

Gakharia noted that Georgia needs more cooperation with the EU. “In future relations between Europe and Georgia, we certainly understand that we can play a very important role in security, in particular, Black Sea security. After the developments in Crimea, we understand the importance of security in the Black Sea region. We need more cooperation with the EU and more emphasis on connectivity. This is our goal for the next few years,” he said.

He added that EU and NATO membership is the only guarantee for Georgia's security and Georgia is ready to do its “homework”.

“We believe this is our country's chance to get closer to the EU. Membership of the European Union and NATO is the

only guarantee for our country's security.

This is how we see the prospect of cooperation with Europe in Georgia. Of course, we will do our best for Georgia to always be a topic of discussion when you - our friends, talk about the future of Europe," he said.

The Georgian PM also highlighted the daily challenges Georgian citizens face regarding the occupation.

TURKISH FOREIGN MINISTER CALLS FOR GEORGIA’S NATO MEMBERSHIP One of the most remarkable and memorable moments related to Georgia during the forum was the Turkish foreign minister’s call for the country’s NATO membership.

Turkish FM Mevlut Cavusoglu called for the enlargement of NATO and the addition of Georgia to the body in Davos, Switzerland, on Thursday.

“I don’t understand why we have not invited Georgia, or we haven’t activated the action plan for Georgia to become a member,” Cavusoglu said during a panel discussion. “We are criticized for having relatively better relations with Russia as a neighbor, yet our western friends are not agreeing to invite Georgia because they don’t want to provoke Russia. Georgia needs us, and we need an ally like Georgia. So, we need enlargement and

Georgia should be made a member,” the Turkish FM concluded.

PM SUMMARIZES DAVOS VISIT “Davos is a format where business leaders and politicians, as well as civil society representatives, discuss global topical issues; we had important meetings with our counterparts, our European partners, where we discussed Georgia's European aspirations, the problem of occupation, and developments on the occupation line,” Georgian Prime Minister Giorgi Gakharia said when summing up his visit to the World Economic Forum in Davos, noting that Georgia should become a member of the EU, however, the country has some “homework” to do.

At the Eastern Partnership Summit scheduled for 2020, Georgia will present a concrete vision of how it sees the further process of EU integration, and these were the main topics the PM discussed with the Estonian, Lithuanian, Latvian, and Croatian presidents and prime ministers during WEF 2020.

“Our political partners appreciate the progress made in terms of democratization in Georgia; they say the upcoming elections should be exemplary, and that responsibility is absolutely clear to us,” the Prime Minister said. “We talked a lot about the security context, especially

in the Black Sea, and Georgia can today make a significant contribution to the concept of European security. Our partners appreciate this, as well as the quality of Georgia's integration with NATO, and say that the results of 2019 in NATOGeorgia cooperation are truly impressive”.

Gakharia noted it is very important that transnational financial corporations positively assess the current financial situation in Georgia and the degree of financial sustainability of the country.

He added that during the visit, specific conversations took place with companies interested in Georgia or whose entry into the country is of great importance.

“There was a meeting with the Vice President of Coca-Cola, who talked about specific investment plans and ongoing projects. Of course, we pledged our full support to new projects, as this is particularly important in terms of jobs. We also had a meeting with representatives of Citibank, where we discussed the sustainability and further development of the Georgian financial sector, and the reforms we are undertaking in that sector. It is very important how transnational financial corporations evaluate the current financial state of Georgia and the degree of our financial sustainability,” he said.

Ex-Speaker of Parliament: TI's Corruption Perceptions Index is "self-contradictory"

BY TEA MARIAMIDZE

G

eorgia’s former Speaker of the Parliament, Irakli Kobakhidze has criticized the Corruption Perceptions Index (CPI) 2019, published by the global anti-corruption organization Transparency International (TI) last week, which claimed Georgia’s position had worsened compared to the previous report.

Kobakhidze, a member of the ruling Georgian Dream (GD) party, says that Georgia has made significant progress in the anti-corruption direction and this report and other studies cannot ignore this reality.

"The data provided in the index is contradictory because, on the one hand, Georgia has been identified as a clear leader in anti-corruption in the region, and even ahead of EU countries, and on the other hand, the term used in the study 'state capture' is ridiculous. This research contradicts itself,” Kobakhidze stressed.

The ex-speaker also said that it is well-

known that Georgia has made “fundamental progress” in terms of corruption, and negative terms used in the study do not describe the reality.

Anri Okhanashvili, Head of the Parliamentary Committee on Legal Issues, said that Georgia’s position in the Corruption Perceptions Index, as of 2019, is much better than it was before 2012, when the GD came to power.

“The result and the output are clear: we are in first position among the countries of the region, Eastern Europe and Central Asia,” Okhanashvili said.

TI’s CPI 2019 reads that Georgia received a score of 56 and shares 44th place with Costa Rica, the Czech Republic, and Latvia in the 2019 edition of the index.

Last year, Georgia had two points more in the rating, where 100 points indicate the lowest level of perceived corruption while 0 – its highest level.

The Index states that a two-point change is considered statistically insignificant and that Georgia still ranks top in the Eastern Europe and Central Asia region.

However, the organization stressed that the lack of progress in terms of Georgia’s score in recent years points to the stag-

nation of anti-corruption reforms in the country.

“State capture and the concentration of power in private hands remain a major stumbling block in the region. Undue influence over key institutions continues to present the utmost challenge to political integrity in Georgia, which dropped two points on the CPI last year,” the study reads.

TI says that Georgia’s 2019 CPI score indicates that the country has not addressed the problems highlighted in last year’s report regarding the lack of accountability of the law enforcement bodies, corruption and political interference in the judiciary, state capture, government-sponsored attacks on independent civil society and the absence of an independent anti-corruption investigative agency.

The agency called on the authorities to take steps toward strengthening the country’s anti-corruption system and democratic institutions and ensure an effective system of checks and balances, establish an independent anti-corruption agency as a mechanism for effectively addressing instances of corruption, ensure

Image source: Emerging Europe

a free and competitive electoral environment and also effectively address violations of party and election campaign financing rules.

In general, this year’s CPI revealed that the majority of countries are showing little to no improvement in tackling corruption. The study showed that corruption is more pervasive in countries where big money can flow freely into electoral campaigns and where governments listen only to the voices of wealthy or wellconnected individuals.

The index ranks 180 countries and territories by their perceived levels of public sector corruption, according to experts

and business people.

Western Europe and the EU is the highest scoring region with an average of 66/100, while Sub-Saharan Africa is the lowest scoring region with 32 points.

The research revealed that the top countries are New Zealand and Denmark, with scores of 87 each, followed by Finland (86), Singapore (85), Sweden (85) and Switzerland (85).

The bottom countries are Somalia, South Sudan and Syria with scores of 9, 12 and 13, respectively. These countries are closely followed by Yemen (15), Venezuela (16), Sudan (16), Equatorial Guinea (16) and Afghanistan (16).

4

BUSINESS

GEORGIA TODAY

JANUARY 28 - 30, 2020

Monthly Tourism Update – December 2019

T

he year 2019 was a successful year for the Georgian tourism sector. The number of international traveler trips in Georgia reached 9.3 million, 7.8% higher compared to 2018, whilst the number of international visitor trips increased by 7.3%. This number is still lackluster compared to the previous years’ 9.8% and 17.6%. In general, tourism inflow growth seems to be slowing down, or rather, stabilizing, which is probably caused by natural constraints. In fact, if the growth of tourism inflows does not slow down (which is unlikely), number of international traveler trips in Georgia could hypothetically reach 89 million by 2050. Nevertheless, this decade has been remarkable for traveler trips, as the number of annual arrivals since 2011 has increased by 200.4%.

It is also important to point out the seasonality in tourist inflows and how it has shaped tourism industry. Each year, the number of tourists visiting Georgia peaks in August and reaches its lowest point in February (even when accounting for the least number of days). However, this gap between August and February is not narrowing. On average, 2.8 times as many foreigners visit Georgia in August compared to February.

The desire to tap the potential of winter tourism has been reflected on new promotional campaign of different ski resorts.

There are multiple reasons why winter tourism is more lucrative than summer.

First, the revenue from ski resorts is usually higher compared to summer resorts.

With the declining tourism industry in the Alps, there is an opportunity to attract additional European tourists. Secondly, Georgian state company, Mountain Resort Development Company, experienced a loss of 16.5 million Lari in 2018. This public company provides tourism infrastructure (mainly ski lifts) maintenance in different Georgian ski resorts and this loss indicates that a sufficient number of tourists are required for the economic sustainability of winter resorts.

HOTEL PRICE INDEX In December 2019, in Georgia the hotel price index increased by 9.1% compared to November 2019. The 3-star, 4-star and 5-star hotel price index increased by 6.4%, while for guesthouses, the price index increased by 13.9%.

In December 2019, compared to December 2018, hotel prices in Georgia increased by 1.2%. The prices of 3*, 4*, 5* hotels decreased by 0.8%, while the prices of guesthouses increased by 1.2%.

AVERAGE HOTEL PRICES In Georgia, the average cost of a room in a 3-star hotel was 140 GEL per night in December 2019. While the average cost of a room in a 4-star hotel in Georgia was 213 GEL per night and the average cost of a room in a guesthouse was 69 GEL per night.

In December 2019, in Georgia the hotel price index increased by 9.1% compared to November 2019. The 3-star, 4-star and 5-star hotel price index increased by 6.4%, while for guesthouses, the price index increased by 13.9%.

The average cost of a room in a 5-star hotel in Georgia in December 2019 was 426 GEL per night. In Tbilisi, the average price was 530 GEL, followed by Kakheti - 400 GEL, Adjara – 381 GEL and SamstkheJavakheti - 360 GEL.

BUSINESS

GEORGIA TODAY JANUARY 28 - 30, 2020

5

Veon Georgia Representative on the Effectiveness & Benefits of a Compliance Program

I

n general, compliance is the action or fact of complying with a wish or command. As for its meaning in business, corporate compliance is the process of making sure a company and its employees follow the laws, regulations, standards, and ethical practices that apply to the organization. Effective corporate compliance covers both internal policies and rules, and federal and state laws, and emphasizes the high sense of responsibility from the company managers’ side. Introducing a compliance mechanism in a company means that the governing body really cares about offering its customers quality products, and strives to develop the highest ethical and business standards.

There are a few companies using the compliance mechanism for better development of their business and activities in Georgia, and the Veon Georgia/Beeline team is one of them.

Veon Georgia developed a separate compliance function and has had a designated Compliance Officer since 2015.

GEORGIA TODAY spoke to Ia Mameishvili, Local Ethics & Compliance Officer at LLC VEON Georgia, for a better understanding of the compliance mechanism and the benefits it brings to both company employees and customers.

WHAT IS THE EXACT MEANING OF COMPLIANCE? In general, compliance means conforming to rules, laws, policies and standards.

It is more about rules, policies and procedures which need to be followed to meet regulatory expectations. The key function of compliance is to manage and mitigate compliance risks the company is facing by Identifying, Preventing, Monitoring and Testing, Investigating, Managing, and Mitigating and Advising.

In fact, the compliance function man-

ages the integrated and efficient coordination of a company’s compliance with all of its ethical and legal standards.

Development of compliance programs addresses new or material legal risks that a company determines to achieve a focused and pro-active management.

WHAT BENEFITS DOES IT BRING TO THE COMPANY AND ITS EMPLOYEES? The benefits compliance brings to the company is more than just regulatory compliance and avoidance of penalties and sanctions. Compliance should not be discussed in isolation: in order to keep a compliance program successful, a company needs to develop and enhance its compliance culture based on values, ethics and integrity: a system of values and moral principles that guides our behaviors and moral decisions (Ethics) and adherence to personal moral and ethical principles (Integrity).

The benefits values-lead compliance brings a company and its employees are personal reputation, company reputation that itself equals to increased shareholder value, better recruitment and retention process, increased revenue streams and more. It also increases internal and external stakeholder trust, improves company performance, and reduces administrative and legal costs. It is argued that reputation is half the job done! Reputation is one of a company’s most important assets, and one of the most difficult to rebuild should it be lost.

HOW AND WHEN DID VEON GEORGIA/BEELINE INTRODUCE THE COMPLIANCE MECHANISM AND WHAT WAS THE MAIN AIM BEHIND IT? Veon Georgia developed a separate compliance function and designated Compliance Officer in 2015. As a Veon Group member company, Veon Georgia shares

the same high ethical and business standards, as it is represented in well developed countries with mature regulatory models.

WHICH ACTIVITIES ARE BEING CARRIED OUT AT VEON GEORGIA FOR IMPLEMENTATION OF COMPLIANCE? We started development of compliance program from scratch on a 10 hallmark principal that included different streams

In the very heart of the city

Address: 17 Wine Ascent Tbilisi, Georgia Tel: (+995) 322 22 11 16 www.facebook.com/BricksTbilisi/

of activities: implementation of policies and procedures, trainings and communications with various stakeholders, and the adoption of new processes by setting systems and controls in place, e.g. risk assessment and self-assessment.

HOW ARE YOU GOING TO FURTHER DEVELOP COMPLIANCE AT VEON GEORGIA? Moving forward, Veon Georgia will be enhancing its compliance program by strengthening the culture of ethics and

integrity, and continuing development of compliance teams that run the bestin-class standards to keep the program efficient and live, which is an integral part of the Veon Georgia business operations. We plan to enhance our program not only internally but by sharing our experience and gained knowledge with our business community that overall will increase understanding of ethics and integrity and how a compliance program can help companies in their overall performance.

6

BUSINESS

GEORGIA TODAY

JANUARY 28 - 30, 2020

Inebe.ge – Supporting a Healthy Diet with Home Delivery Service

Y

oung couple Marita Genebashvili and Leko Shatirishvili started their own business when the word ‘startup’ in Georgia was associated with a failed corporate career.

However, their career was anything but a failure. Leko and Marita worked in managerial positions at major Georgian and international companies, but a tough work schedule, fixed wages and dreams about Friday coming round proved uninspiring, while the dream to start their own business gained ever greater clarity in their minds. They started seriously working on their ideas in 2014 and put those ideas into action two years later.

This is how www.INEBE.ge - a web platform offering a healthy diet and delivery service, was created. The young entrepreneurs had plenty of unforeseen problems to solve, but the nights spent in experimentation were definitely worth the setting up of this unique Georgian product.

“We worked in many corporations, and saw numerous employees around us. We realized that if a person, regardless of position or income, can’t wait until Friday and lives for the day they get their salary each month, he or she is unhappy with life and needs to change something.

There is only one solution: you have to do something that you love so much you will be ready to dedicate any day to it,” Leko says.

Prior to launching their innovative platform came marriage, years spent in successful companies, a master's degree at Grenoble University and never-ending preparations to make their business ideas a reality. And this at a time when startups were not as popular and respected as they are today.

A HOBBY AS A BUSINESS IDEA The couple had common passions. They mastered photography and the culinary arts together. “Unless you have a health problem yourself, you cannot appreciate the importance of a balanced diet.” Marita first mastered the preparation of simple dishes and then started preparing new dishes every week. “We even watched TV series about cooking available online. The topic fascinated us, and it turned out that we were doing it well,” recalls Marita.

Leko worked at the company Natakhtari, while Marita worked at Bank of Georgia in the field of e-commerce. Their hobby was added to their professional experience and the idea of creating an e-commerce platform for food by combining both was born.

The couple started working on the concept even before Foodpanda entered the Georgian market. However, it took some time for the implementation of the idea: when ‘Inebe’ appeared on the market, several companies were already providing food delivery services.

“It took us almost two years to mobilize finances and create the web platform.

We took a loan and renovated a commercial kitchen to meet all standards,” says Leko.

There were many obstacles from the start. For example, they didn't have the finances to hire a big company to build an e-commerce platform, so they used the service of freelancers, which made the website time-consuming and delayed delivery of the final product.

“There was no grant program at that time to help startups to develop. Highrisk loans for start-up businesses were not allowed at all,” Leko recalls, noting that they used part of their mortgage loan for their business instead of home repair.

THE WRONG BUSINESS MODEL In 2016, www.inebe.ge appeared on the Georgian market. The platform offered lunch services and home delivery. About 10 couriers served the company, on bikes the founders bought themselves. Leko

The price of a one-week diet starts from GEL 199, and those who can't decide which 7-day menu they want can try the various options of Inebe.ge with a one-time subscription and order for 30 GEL per day. It is also possible to subscribe to a 5-day diet if the customer is out of town on the weekends or just wants to have so-called cheat days and eat whatever they want

says they preferred to hire their own couriers rather than hiring a courier service so as to keep better control. “And that was one of our big mistakes. Any logistics-related issue further complicated daily operations.”

In the working process, it became clear that the couple was leading not one, but two very difficult business processes: the first was a commercial direction and the second was a courier service.

“Compared to 2016, today the number of courier services has increased and developed. At the time, even finding someone who knew how to ride a moped was difficult,” recalls Marita. “Even if we found one, they were then difficult to manage.”

For example, in rainy weather, when the number of orders significantly increased, the entrepreneurs would often get calls from staff in the morning claiming illness. The couple made a mistake by putting delivering ordered lunches into the business model. Initially, www. inebe.ge created standard lunch menus.

The demand was great. However, the highest demand was at about two o'clock in the afternoon. Accordingly, both the cooks and the couriers had to work to time pressure. There were two types of problem here: timing and financial.

In the first case, deliveries were often delayed because cooks and couriers had to work under pressure within a short period of time.

“Restaurants and cafes have the advantage where customers can see the rush hour queue at the eatery and decide themselves whether to wait or go elsewhere. In our case, the queue was invisible to customers. One has to wait 30 minutes and the order is delayed for an unknown reason. You don’t see the reason and aren’t even interested why it is happening: You just get angry,” says Leko.

The second problem was financial.

Although the most active period was the first half of the day, the couple had to hire cooks for full-days as it was impos-

sible to hire a professional cook for just two hours. In addition, it required a large number of cooks and couriers to prepare and deliver large quantities in a small amount of time. These factors significantly increased the wage bill.

The unexpected expenses didn't end there. When the idea of www.inebe.ge was born, Marita and Leko agreed that the food they produced would be of the highest quality.

“We have the best suppliers,” says Marita. And despite the high price of high quality products, the entrepreneurs wanted their menu to be accessible.

When it came to value, the couple calculated everything. “Take, for example, spaghetti 'Carbonara'. Its market price is 17 GEL on average. When calculating the price of food, it turned out that the value of the ingredients did not exceed 7-8 GEL. We thought that 17 GEL was expensive and that we’d able to sell it for 12 GEL, however, while working, we found a lot of hidden costs, such as expenses in the kitchen.”

A NEW BUSINESS MODEL When the couple faced so many problems, they realized that urgent action was needed. They canceled their lunch delivery service and fully replaced it with a delivery service of healthy dishes.

“Lunch menus took away all our resources - both emotional and financial.

It was a difficult decision, but all startups have a stage in life when you have to admit that something has gone wrong and you have to move in another direction. We stopped serving lunch and concentrated on diets,” says Marita.

Replacing lunch menus has brought some benefits. As the healthy menu is a pre-planned product, the company can send a ration for each subsequent day the previous evening. This factor has significantly reduced the number of employees, hence the budget needed for salaries. Three out of six couriers and only five out of ten cooks continued to

work. The courier service has also improved. In addition, customers were no longer in a hurry to receive their meal.

However, the transition to dietary menus brought its own problems. It was difficult to find chefs who could prepare low-fat or sugar-free but still delicious meals. “You should know how to fry an egg without pouring oil in the pan, or how to make a sauce base without the use of flour and butter. We researched numerous materials online and discovered everything about healthy eating.

We also started working with endocrinologists and dieticians,” recalls Marita.

The variety of www.inebe.ge’s dietary menus count the Dukan Diet Menu, Express Menu, Fitness Menu, Vegetarian / Vegan Diet, Mothers’ Diet, and Premium Diet.

FOR THOSE WHO WANT TO LOSE WEIGHT AND MORE Healthy eating means eating a balanced meal four times a day in small portions.

With the calculator available on the website, you can find out how many calories you need to maintain or lose weight, and then select your desired menu. The nutritional value of each varies from 1200 to 1800 calories.

The variety of diets suits almost every type of consumer. For example, if you aim to lose a lot of weight, you can choose the Dukan Diet, the results of which you’ll see even in the first week. It encourages people to continue their diet and move to well-balanced eating by offering four days filled with protein, then vegetables added daily.

Another direction is Paleo. “Paleo is based on the idea that humans need only the foods that our ancestors ate in the Paleolithic era, that is, meat, vegetables and fruits. However, we made a small modification to this direction and added a very small amount of cereal to the menu, because nowadays this type of food is very important for the body," says Marita.

When ordering a vegetarian diet, con-

sumers get vegetables, nuts, milk products and eggs, everything except meat.

A full vegan diet is a menu that no longer includes milk products and eggs. This diet is often used during the fasting period.

The price of a one-week diet starts from GEL 199, and those who can't decide which 7-day menu they want can try the various options of Inebe.ge with a onetime subscription and order for 30 GEL per day. It is also possible to subscribe to a 5-day diet if the customer is out of town on the weekends or just wants to have so-called cheat days and eat whatever they want.

“In total, there are 5,000 unique users on the site. There are those who subscribe to our menu from the first day and those who order different types of diets every week. Of course, there are also those who ordered once and then never returned,” says Leko.

Since its establishment, www.inebe.ge has been keeping a close eye on its customer satisfaction index. First, it aims to consider the interests of unsatisfied customers. According to Leko, “customers don't care who you are or how you got where you are. Even if we are confident that we are delivering the perfect dish, if a customer does not like it, we return the money unconditionally. We believe that if you have a long-term business plan, you have to listen to your customers."

Inebe.ge has no competitors in the Georgian market at this stage. Although several new companies have tried to create similar products and many cafes have developed dietary delivery services, it is difficult for Marita and Leko to name a direct competitor. After overcoming their mistakes and beating the difficult times, Inebe.ge has been in existence for two years and is constantly looking for new ways to develop.

First published in Georgian in Entrepreneur Georgia magazine.

BUSINESS

GEORGIA TODAY JANUARY 28 - 30, 2020

Global Finance & Euromoney Recognize TBC Bank as Leader Trade Finance Franchise in Georgia

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BC Bank announced that it has won a number of leading awards from the leading industry magazines. TBC received the Best Trade Finance Provider in Georgia award 2020 by Global Finance and has also been named the Market Leader and Best Service Provider in the Trade Finance Survey 2020 by Euromoney. These awards recognize TBC’s top position in trade finance and emphasize its successful cooperation with international networks.

A panel of industry analysts and experts judged banks according to select criteria, which included transaction volume, scope of global coverage, customer relations, competitive pricing and use of innovative technologies.

“We are glad that TBC Bank continues to receive recognition from Global Finance,” said Deputy CEO of TBC Bank George Tkhelidze. “TBC Bank accounts for 49% of the country’s trade finance market. We have been cooperating on trade finance with all major international banks and financial institutions worldwide and within the framework of this partnership we have offered a number of products and services to our customers over the years”.

“TBC has been chosen as a winner for its outstanding contribution to the sector and continued striving for excellence,” said Clive Horwood, Euromoney editor.

Along with Global Finance and Euromoney, in the field of trade finance TBC Bank has gained international recognition as a top service provider from other financial institutions, including EBRD, ADB and Commerzbank.

ABOUT EUROMONEY For almost 50 years, Euromoney has been the leading publication for covering the growth of international finance. Euromoney's Awards for Excellence are the awards that matter to the banks and bankers who matter. They were established in 1992 and were the first of their kind in the global banking industry. This year Euromoney received almost 1,500 submissions from banks in an awards programme that covers 20 global awards, more than 50 regional awards, and best bank awards in close to 100 countries.

About Global Finance Global Finance, founded in 1987 and its audience includes senior corporate and financial officers responsible for making investment and strategic decisions at multinational companies and financial institutions. Global Finance is headquartered in New York, with offices around the world. Global Finance regularly selects the top performers among banks and other providers of financial services.

These awards have become a trusted standard of excellence for the global financial community.

It Is Never Too Late to Do Right OP-ED BY NUGZAR B. RUHADZE

P

eople usually ignore economy until it goes wrong. We start fretting about it only at times of runaway inflation, rampant unemployment, arrested growth, frightening recession, financial crisis, supply and demand falling out of harmony, or gasoline prices and interest rates going through the roof. Otherwise, we feel warm and comfortable.

The politicians running for office get scared if something goes wrong with the country’s economy during their electoral campaigns because their vulnerability is directly proportional to economically-driven public moods and attitudes. When it comes to fiscal notions, many of us non-economists, come off as ignorant. For example, when we hear on the radio or television about the government’s debt, we almost want to laugh it off because we are never aware of its actual meaning, having no idea that the governmental indebtedness might be worse for the nation’s future than our own being in the red. The currency exchange rate is another example of a person’s lack of knowledge in matters financial: when national currency goes up or down, we all gape ignorantly at the currency boards, having no idea who is doing it to us or why; our thoughts are on the prices of various commodities: we only know that they go up, and never down, but have no clue of the mechanism of price increases. We then just put up with the recurring facts of price increase. The same with inflation, and this is something that never leaves us in peace to enjoy life to a reasonable extent.

And the worst part of the whole thing is that our economic ‘commentariat’, so to speak, uses arcane language to explain the ongoing processes, making us look even more stupid than we actually are.

I am not an economist and I feel for those like

me: we want to hear in plain language what we come across on a regular basis as part of our daily lives. Our general understanding is that saving is good, but what we don’t realize is that saving and not borrowing from the banking system is an anomaly that forces interest rates to drop drastically, meaning spending becomes almost nonexistent. And if people don’t spend whatever they’ve earned or borrowed, life stops developing.

Anything overdone is bad: too much saving, too much borrowing, too much spending. All of this done moderately and regularly might create a substantial prerequisite for development without fits and starts. I did not know that that my manner of borrowing, spending and saving earnings made that much difference. So I applied to pertinent literature to learn how to navigate the deep and murky waters called economics. Not easy! Having shuffled through the economic truths of life, I have reinvented myself as a living participant in the processes that are shaping my wellbeing with newly detected opportunities. The conventional wisdom is to honor the importance of the compatibility between politics and economy. Even then, in the weird era of socialism, we were taught that a bad political decision can lead to bad economic consequences, and vice versa, with incorrectly applied politics opening erroneous economic prospects.

The economy will always need to take the political test, and its failure may end in general poverty.

The resulting pains are always dealt to us, the people, seeing us suffering the consequences of a mistaken economic decision, made against the wrong political background. Georgia cannot operate independently in a globalized world. Any significant international shock has an impact on our wallets: somebody shoots a rocket in the Middle East and we see the petrol prices going up here in Georgia.

So, a little self-imposed briefing on economics might be helpful so as to better predict when and where a threat is coming from.

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BUSINESS

GEORGIA TODAY

JANUARY 28 - 30, 2020

CENN to Set Up Modern Strawberry Greenhouse in Zendidi Village within Keda Leader Project

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ithin the framework of the project ‘Optimizing the Potential of Local Assets for Rural Development of Keda Municipality,’ CENN, a nongovernmental organization working to protect the environment by fostering sustainable development, is to set up a modern strawberry greenhouse in the village of Zendidi in the Adjara region of Georgia.

The project beneficiary is a local resident, Jumber Bezhanidze, whose project envisages the establishment of a modern strawberry greenhouse with a system of strawberry cultivation on multistory shelves. The system will enable a longer vegetation period and will increase production. Two men and one woman will be employed to run the project.

The project budget is 18,000 GEL, and the European Union is funding 14,400 GEL. The objectives of the ‘Optimizing the Potential of Local Assets for Rural Development of Keda Municipality’ project are to diversify local economic activities, foster investment, and empower competitive agricultural and environmental practices in Keda Municipality via bottoms-up strategic planning of rural development. The priority of the project is to increase Keda Municipality’s development potential and make optimal use of local resources.

The project is being implemented by CENN in a partnership with the Center for Strategic Research and Development of Georgia (CSRDG), Institute of Democracy (IOD) and Austrian Institute for Regional Studies and Spatial Planning (ÖIR).

The project is supported by the European Union, which supports agriculture and rural development in Georgia through its ENPARD Program. Implemented since 2013 with a total budget of EUR 179.5 million, the main goal of ENPARD is to reduce rural poverty in Georgia. The first phase of ENPARD in Georgia focused on developing the potential of agriculture. The second and third phases of ENPARD focus on creating economic opportunities for the rural population that go beyond agricultural activities.

The following activities are carried out within the project: • Establishment and capacity building of the Keda Local Action Group (LAG), involving AMAGs, and communitybased institutions; awareness raising of the EU’s rural development approaches; the institutional building of the Keda LAG, linking and networking with other LAGs nationwide.

• Participatory development of a gender and youth sensitive Keda Rural Development Strategy (RDS); development of monitoring and evaluation (M&E) tools for implementation of the Keda RDS; approval of the Keda RDS by the relevant state authorities in Adjara.

• Implementation of innovative projects (through sub-grants within the strategy) to foster economic and investment opportunities and inclusive rural growth, and

improve the well-being of rural communities (identification of sustainable projects generating new employment opportunities, financing and implementation of innovative projects); participatory development of the Keda Marketing and Communication Strategy; investment in an active media outreach and marketing campaign for Keda; organization of the Keda Business Forum and Keda Rural Festivals; exchange and site visits to promote projects and attract investments; capacity building and promoting opportunities for rural youth (organization of youth camps, support of youth initiatives/projects).

FUNDED PROJECTS Within the framework of the EU-funded project “Optimising the Potential of Local Assets for Rural Development of Keda Municipality” (Keda LEADER) implemented by CENN, the results of the second grant competition for rural development have been announced.

In the first stage of the second grant competition, 124 applications were submitted, and in the second stage - 53 applications.

The financial-administrative examination, evaluation and selection of applications was carried out jointly by the Grant Commission, CENN, Institute of Democracy, Keda Local Development Team Governing Council. As a result, 22 projects were selected.

The project allocations, according to the priority directions defined by the Keda Municipality Local Development Strategy, are as follows: • Agriculture - 5 • Diversification of economic activities - 8 • Tourism – 9 GEORGIA TODAY interviewed Project manager - Nino Gaprindashvili, to find out more about the project.

THE ‘KEDA LEADER’ PROJECT IS BEING IMPLEMENTED WITH THE DIRECT PARTICIPATION OF CENN. TELL US MORE ABOUT CENN'S ROLE. The project aims to diversify local economic activities, attract investment and promote competitive agricultural and environmental practices through participatory, strategic planning of rural development.

The initiative has three main areas: Formation of the Ridge Local Action Group (LAG) and its institutional strengthening; elaborating a participatory method of rural development strategy for the Keda municipality on gender and youth aspects; and implementation of innovative projects (by sub grants, in accordance with the priorities of the municipality strategy).

Within the project, a Local Action Group (LAG) was formed, bringing together local people, authorities, private and civil sectors. With the participation and efforts of LAG, a local development strategy was prepared.

The strategy made it possible to select / finance local projects that create local jobs and income sources, and improve the socio-economic direction and environment of the municipality.

With the active involvement and participation of the Keda LAG, CENN, among other activities, actively works to raise youth awareness and organize green camps within the framework of which youth of the municipality are able to raise awareness of environmental protection, sustainable management of natural resources, and climate change.

WHAT ARE THE EXPECTED RESULTS AFTER AND WHY WAS IT SPECIFICALLY DECIDED TO SELECT KEDA MUNICIPALITY? Given the potential available, the EU chose Keda as one of the target municipalities. One of the major challenges of our time is the well-being of rural people and the creation of a healthy living environment, and as a result, the reduction of economic inequality between the village and the city, which has become even more important given the growing urbanization.

The village plays an important role in the overall solution of global environmental problems. Amid the current challenges, the demand for the Village of the Future has changed and requires a climate-based and sustainable visionbased approach. It is important to maintain a healthy environment, which is a major asset of rural life.

First of all, it is necessary to empower the local population and ensure its involvement in the decision-making process. Given these issues, our aim is to diversify rural economic activities

and create inclusive growth opportunities through the implementation of innovative projects funded in accordance with the priorities of the Keda Rural Development Strategy; project implementation should improve the quality of life in rural areas - through increased diversification of economic activities, sustainable and competitive agricultural practices and climate change and sustainable use of natural resources.

The project provides equal access to employment and business opportunities for vulnerable groups of youth, women and society.

ONE OF THE PROJECTS SPONSORED BY KEDA LEADER ENVISAGES THE ESTABLISHMENT OF A MODERN STRAWBERRY GREENHOUSE. TELL US MORE ABOUT THIS PROJECT. The project developer is Jumber Bezhanidze and it is being implemented in the village of Zendidi of Keda municipality. The total cost of the project is GEL 18,000, while beneficiary participation is only 20% (GEL 3600).

The project envisages arrangement of a modern strawberry greenhouse over an area of 250 m2, which implies cultivation of crop / strawberry on pyramid pallets, setting up a heating and ventilation system, irrigation system and automatic supply of nutrients (fertilizers). The superiority of such technology is that it is possible to get a maximum amount of harvest in a relatively small area, which is important for small-scale municipalities such as Keda. In addition, such technology can increase or prolong the production period, which means delivery of a strawberry market in early spring, autumn and partially in winter, when the price of strawberries is relatively high.

The promotion and implementation of such projects will promote the popularization of modern agricultural production technologies in Keda Municipality, increase local production volumes, promote employment of the local population and improve farmers' economic conditions.

HOW ARE THE PROJECT BENEFICIARIES SELECTED AND HOW CAN THEY BE FUNDED?

Beneficiaries are selected on the basis of grant competitions announced within the project.

Detailed requirements for beneficiaries are given in the project grant guideline.

The grant competition is divided into 3 stages: 1. Submission of a grant application, which involves the submission of an idea at the first stage. If the idea is approved, the beneficiary should submit the complete project application with a detailed budget.

2. Interview / monitoring, carried out

by Keda Local Development Group Grant Commission, for a detailed study of the projects.

3. Grant approval / contracting, i.e. projects that successfully pass the above two stages will be considered approved.

Currently, 46 funded projects are being implemented in Keda Municipality.

HOW WILL THE PROJECT SUPPORT THE EMPLOYMENT OF LOCALS? One of the main goals of the project is to create additional jobs on the ground.

That is why, when evaluating projects, special attention is devoted to the employment component.

For instance: about 290 jobs were created within the projects funded by the first and second grant competition.

WHAT FURTHER ACTIVITIES ARE PLANNED WITHIN THE PROJECT? Currently, the process of accessing grant applications submitted within the framework of the 3rd grant competition is underway for funding, and the development and promotion of various local initiatives is planned, along with organizing festivals, campaigns, training of project beneficiaries and local development group members to strengthen their abilities. In addition, measures are planned to attract additional investment that will contribute to the economic development of the municipality.

The project and the Local Action Group (LAG) will continue to collaborate with the Ministry of Agriculture of Adjara, UN Food and Agriculture Organization (FAO) and UNDP to fund various initiatives in the municipality.

BUSINESS

GEORGIA TODAY JANUARY 28 - 30, 2020

9

Former Batumi Mayor Sentenced to 7 Years in Prison

BY ANA DUMBADZE

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ormer Batumi Mayor Giorgi Ermakov has been sentenced to 7 years in prison.

Another former senior official of Batumi City Hall, Archil Vanadze, who was arrested in the same case, has been found innocent by the court, while another, Egraslan Lomadze, was sentenced to one year and 6 months in prison.

Prior to that, the defendants delivered final speeches.

Adjara Prosecutor's Office detained the former Batumi mayor and other former and acting highranking officials of the Batumi Municipality City Hall for embezzlement of state money and abuse of power in May 2019.

The current and former officials who were arrested were: Former Batumi Mayor G.E., Deputy Minister of Education, Culture and Sports B.M., Deputy Minister of Finance and Economy A.V., Batumi Vice-Mayor T.P., Head of Municipal Property and Services Management Service of Batumi City Hall, Deputy Head of the City Infrastructure and Improvement Division of Batumi City Hall and Head of the Procurement Division of Batumi City Hall.

According to the Prosecutor's Office, the investigation established that upon the decision of the above-mentioned persons, who were members of the Permanent Tender Commission of Batumi City Hall and held various positions in Batumi City Hall, on October 9, 2015, Batumi City Hall announced an electronic tender on the construction of socalled "affordable houses." According to the tender conditions, the facility should have been constructed using lightweight stainless steel material.

“Before the announcement of the tender, the members of the Tender Commission were informed that there was just one company which had the necessary experience building facilities using light-

weight stainless steel,” the investigative agency said, adding that after this Batumi City Hall announced a tender based on the design and building cost estimations prepared by Convert Georgia ltd, which provided them free of charge.

The agency stated that during the electronic tender, the branch of foreign company Convert Georgia submitted fake documents to the unified elec-

Unique Editions Added to National Library's Museum of Immigration

BY ELENE DZEBISASHVILI

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he past two days marked the beginning of a very fruitful collaboration in Burgundy, France, when Bernard Outtier, a renowned French Kartvelologist, delivered hundreds of unique editions to Georgia’s National Library's Museum of Immigration and Book Museum.

The good news was announced in a Facebook post by Giorgi Kekelidze, General Director of the National Parliamentary Library of Georgia. He went on to thank the historian Lasha Quetzamor and former Ambassador to Georgia Eka SiradzeDelone for their invaluable assistance in negotiations.

Following his appointment as Director of the National Parliamentary Library of Georgia in 2012,

Kekelidze has gained due respect as the initiator of a variety of reforms directed at the library’s sustainment and advancement. Georgian libraries have been opened in Istanbul, Kiev, and Vienna. He has created a library based on e-learning, uniting several regional libraries. As a result of Kekelidze’s activities in 2012, the National Library was awarded with the name of Tolerance of the Year.

In 2017, on Kekelidze's initiative, the biggest Book Museum in Georgia was founded, aimed at providing space for various educational meetings and seminars.

Kekelidze’s efforts prompted the opening of The Folklore Hall in Building 2 of the National Parliamentary Library of Georgia on January 20. The restoration works were performed with the support of the Shilda Winery and Georgian Chant Foundation, as part of a joint mission to support and promote the Georgian chant tradition and other forms of Georgian folklore.

tronic system of state procurement.

“The members of the Permanent Tender Commission of Batumi City Hall did not discuss the submitted documents, while the same documents submitted by Convert Georgia for the same e-tender announced by Batumi City Hall on May 1, 2015, should have led to the company’s disqualification.”

The Prosecutor’s Office said that despite the fact

the submitted documents were not in line with the tender conditions, the members of the Permanent Tender Commission of Batumi City Hall did not disqualify the branch of foreign company Convert Georgia, announced it as winner and signing a GEL 4,279,990 contract with the company.

The Agency stressed this step led to the embezzlement of GEL 1,370,076 of state money.

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BUSINESS

GEORGIA TODAY

JANUARY 28 - 30, 2020

Georgia’s Ministry of Economy to Supervise Toy Sales

Image source: 1TV

BY TEA MARIAMIDZE

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eorgia’s Ministry of Economy and Sustainable Development will begin the supervision and monitoring of toys on the mar-

ket.

The information was released by the ministry and reads that the Government of Georgia adopted a technical regula-

tion on toy safety prepared in accordance with the European Union Directive, which applies to toys for children under 14.

"The technical regulation envisages the assessment of product conformity and documentation before a toy is placed on the market, confirming compliance with the safety requirements of the toy, including both the chemical composition and physical characteristics of the product,” the statement reads.

The ministry says that the monitoring

of toys throughout Georgia will be carried out by representatives of the new agency created by the Ministry of Economy - the Market Supervision Agency, who will check the conformity of the toys placed on the Georgian market with the established requirements and issue recommendations which will be mandatory from 2021.

The agency will also check the toys on the market in terms of documents, and visual and laboratory testing will be carried out.

During the documentary check, the seller will be required to provide a unique identification number for the toy, the manufacturer's name, trade mark and name and address, guidelines, proof that it meets safety standards and a description of the toy. The product should also have instructions for usage, safety rules and technical documentation, including the list of materials it is made of.

The ministry also stressed that the absence of relevant laboratories for mechanical and chemical inspection of toys remains a significant challenge in Georgia, adding the supervisory agency will have to send samples of toys to foreign accredited laboratories.

Should safety violations be found on the market, various enforcement measures will be implemented, depending on the severity of the potential threat caused by the mismatch of the product with the standards. Particular fines will be given for different violations, but if the toy contains dangerous chemicals mixtures, it will be immediately removed from the shelves.

Second-hand toys, although widely regarded as high-quality products among the general public, must also necessarily have documentation – a certificate of conformity, laboratory test results or other documents, without which it is impossible to verify the safety of the toy.

“Laboratory testing of imported toys, based on risk analysis, may also be carried out in the customs control zone, but only on those products where there is reasonable suspicion,” the ministry noted.

Businesses have been given a one-year period to prepare for the regulations.

Consequently, sanctions will not apply until 2021. Companies will only be given recommendations to eliminate violations, which the supervisory authority will verify after monitoring.

Deputy Minister of Economy Genadi Arveladze says that the technical regulations prepared by the Ministry of Economy are in full compliance with the EU directive, which ensures the safety of toys, set standards and technical requirements regarding the characteristics of both the physical and chemical composition of toys.

“We have been working on the toy safety regulations for years. This was, on one hand, requested by the public because there was no toy control system, and on the other, we fulfilled our commitment to the EU within the deep and comprehensive free trade agreement.

EU experts were involved in the preparation of this regulation, after which we had meetings with private sector representatives in the regions and Tbilisi, "he said.

The Deputy Minister says that supervision specialists have been prepared to carry out proper monitoring of the toys on the Georgian market.

He added that at first, as there is no special lab to test the toys in Georgia, the agency will have to send the product samples to European countries, where there are accredited laboratories.

“As there was no prior regulation on toys in Georgia, there was no demand for a special lab, so as soon as the demand increases, we hope the private sector will become interested and we will establish a laboratory here,” he said.

94% Increase in Visitors to Mountanous Adjara

BY NINI DAKHUNDARIDZE

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he number of tourists visiting the routes of mountainous Adjara has increased by 94%. Over the last year, the number of visitors who checked into hostels, house-hotels, touristic and dining locations there was 238,665, 94% more than in 2018.

The greatest number of travellers was to be found in tourist hot-spot Kobuleti, 137% more than in 2018. Another leader when it came to visitor numbers is the Keda Municipality with a 57% increase.

Then came Khelvachauri (up 94%), Khulo (up 61%), and Shuakhevi, which saw a year-on-year increase of 30%.

Tinatin Zoidze, Head of the Department of the Tourism and Resorts in the Adjara region, commented on the rocketing number of tourists in the region. While assessing the progress, she highlighted the importance of the increase and the effect it is likely to have on the overall picture of Georgian tourism, and consequently the economy.

She also revealed what the department’s focus will be in future so as to make the increased number of visitors coming to the region an ever-growing tradition.

“It’s certainly good news that the number of tourists in Mountainous Adjara has grown. This can be seen not only in the data of touristic routes, hostels and hotels, but also that of museums, wine cellars, and touristic attractions. This

gives an additional incentive to those in the agricultural and touristic businesses to develop their services and the general touristic infrastructure. At the moment,

we have 15 touristic routes marked down in the municipalities of Adjara and we vow to work actively to further develop these places, and offer new tourist prod-

ucts to visitors. It is by developing the tourist spots in the mountainous region of Adjara that we will achieve our overall goal: make the region attractive to tourists year-round,” Zoidze said.

The statistics of travellers coming to the region was prepared following a study of the hostels, hotels, tourist hotspots, and attractions by the tourist information centers of the Adjara Tourism Department.

Additionally, this year, the Adjara Tourism Department plans to popularize the region’s touristic attractions at 28 international tourism fairs. At 11 of these fairs, Adjara will have its own stand where visitors will get a chance to grab the latest promotional materials of the region, while also being able to taste Georgian sweets and wine.

USAID/Georgia Announces New Partnership with Ministry of Education, Science, Culture, and Sports

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SAID/Georgiaannounced ‘Achieving Student-Centered Education for a New Tomorrow,’ a four-year program aimed at promoting student-centered instruction in primary education. USAID will provide technical assistance to the Ministry of Education, Science, Culture, and Sports of Georgia (MoECS) to support education reforms prioritized by the Government of Georgia to ensure sustainable, inclusive, and student-centered education in all of Georgia’s primary schools.

The program emphasizes local partnerships and institutional capacity building.

The new program will strengthen Georgia’s teacher training institutions, thereby supporting primary schools to design and deliver interactive curricula.

Student-centered teaching methods emphasize students’ literacy, numeracy, problem solving, and critical thinking skills. By supporting schools to better meet the needs of girls, ethnic minorities, and children with disabilities, the program will foster a more inclusive society where young people from all backgrounds have opportunities to contribute to Georgia’s social and economic development.

Achieving Student-Centered Education for a New Tomorrow will advance

the following specific objectives: 1) implement student-centered curricula in Georgia’s primary education institutions; 2) build the capacity of teacher training programs at universities to ensure that teachers and administrators acquire state-of-the-art professional skills; and 3) promote the development of education policies using evidencebased approaches. USAID will coordinate its efforts with the World Bank and other donors supporting the Government of Georgia’s education reform.

ABOUT USAID IN GEORGIA As the leading development agency of the US government, USAID supports

Georgia to build the capacity to finance, plan, and implement its own solutions to development challenges. USAID has worked in Georgia since 1992, supporting the country’s transformation into a developing democracy that is increas-

ingly integrated into Western political, security, and economic institutions.

More than 30 USAID programs stimulate inclusive economic growth, develop democratic governance, enhance energy security, and foster social inclusion.

POLITICS

GEORGIA TODAY JANUARY 28 - 30, 2020

11

The Fate of the Gray Area in Europe

BY EMIL AVDALIANI

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here is a considerable territory between Russia and the European heartland. It runs from the Scandinavian peninsula in the north to the Black Sea in the south. These lands include Finland, Estonia, Lithuania, Latvia, Belarus, Ukraine, Moldova and the South Caucasus states, and can be provisionally called a “gray zone”: lands

where Russia and Western/Central European states have clashed militarily for hundreds of years.

If we look at the history of last several centuries, those clashes were often conditioned by military goals: Russia did not want Western states be influential along its borders or Western states, fearing Russia's size, tried to prevent the Slavic state's domination over Central Europe.

However, though these military confrontations are indeed important, they overshadow economic developments on the ground in the “gray zone”.

Let us for a minute take a look at the global context. European civilization, once it attained economic and most of all technological superiority, started to export it to other continents via the oceans. France, Great Britain, Spain, Portugal and others did little to extend their influence to the “gray area”. There was the invasion of Russia by Napoleon in 1812 or the Crimean War (1853-1856) when the western Europeans were operating along the Russian borders, but their interest was mostly military – to contain Russia – rather than the spread of eco-

nomic influence.

For the westerners, the lands which today constitute that gray zone were not interesting economically and were very hard to reach geographically. Moreover, their geopolitical focus was elsewhere, across the oceans, in Africa and Asia. As a result, Russia, for centuries, was able to operate quite successfully from Finland to the Black and Caspian seas.

Only with the creation of unified Germany, did Russia see a real economic threat to its western territories. And this matters a great deal, as in the long term Germany's economic power will make a difference.

But with the two world wars, where western Europe, along with Germany, lost its pre-eminence, they started to think about unifying Europe. There was also a change in the geopolitical outlook: moving eastward. This involved systematic attempts to spread economic influence in the gray area, particularly seen since the break-up of the Soviet Union.

Western European economic influence was soon reaching deep into what Moscow considers as its sphere of influence.

While these days many Russian politicians and their western counterparts view the battle in the “gray zone” a military one, on the ground it is economy which matters. As long as direct military conflict is unlikely to happen, populations even in the most pro-Russian countries, such as Belarus, are starting to gradually move away from the Russian world.

In summary, the late 20th century, the world saw a fundamental change in Europe's geopolitical outlook. For centuries, the continent had been extending

outwards via the oceans, to various territories in Africa and Asia. Little if anything was done to attain economic predominance in Eastern Europe, where the border with Russia was. This process is now reversed: it is clear that the only geographic avenue for Europe's projection of power is in the Easternmost parts of the continent: the very gray area I mentioned above. There might be troubles along the way, such as we see nowadays, when talks on enlargement of the European Union are effectively stalled.

However, it is likely to be only shortlived: in an age when the US still dominates the world’s ocean, the only route for Europe to gain larger economic and military say lies eastwards - the route which is also geographically convenient as it passes over the East European plain to the Ural mountains.

This explains why Russia is unable to withstand the European pressure. Poor economic capabilities minimize Russia's chances to retain even culturally close Ukraine. Some signs of Moscow's inability to control Belarus are also visible.

From this perspective, there are historic opportunities for Georgia. For centuries, Georgian kings were active in searching for European economic and military support for the country. Most of those attempts failed, beaten back by western European disinterest. But with this geopolitical reorientation in Europe, there are a lot of opportunities for having European economic and military structures spread to Georgia. This will take years if not decades, but it is important to view the whole process from a longterm perspective.

medical assistance to persons who are detected with symptoms of fever, headache, sore throat, breathing difficulties and coughing.

China announced an emergency mode on Friday as the number of confirmed cases of the new coronavirus rose to 830 and the death toll hit 26. The country has extended the Chinese New Year celebration to February 2, warning citizens to keep away from large family gatherings, in hopes to decrease the risks of the virus spreading. Despite the growing numbers, the World Health Organization has not declared the virus a global public health emergency.

New reports say that those carrying coronavirus might be unaware of the

infection as, in some cases, the symptoms show late. It may also be too soon to tell whether the efforts of international society will be enough to prevent and defeat the fast spreading virus. The effects of coronavirus on the global economy can be seen already, however, as, according to CNN, large international companies, major shops, restaurants and tourist destinations are shutting their doors in China, among them Disney, Starbucks, KFC, and McDonald’s.

“With over 57 million people in 15 cities across China on lockdown, the crisis is hitting the retail, travel and tourism industries particularly hard during the peak Lunar New Year season,” writes CNN.

On the Coronavirus Continued from page 2 The Minister noted that citizens of Georgia are advised to refrain from traveling to Asia.

"At this stage, we can only tell citizens that it is their personal responsibility whether they comply with these recommendations and refrain from traveling to Asia. We have established an Emergency Coordination Group that is working actively with international organizations. Our air traffic is under control and we receive information from all airlines operating in Georgia. Therefore, all preventive measures are being taken,” she said.

She denied information that doctors are refusing to work at the airport and check passengers via remote thermometers due to the lack of proper equipment.

“To date, there has been no refusal by any physician to do the necessary work at the airport. We, the doctors, have all taken the oath and always do our best at our own risk. At this stage, the World Health Organization has not provided specific guidelines to impose strict regulations at airports, but we are ready and responsive if necessary," she said.

Tikaradze added that the ministry has not given any recommendations to the government regarding trade restrictions.

Screening is carried out on passengers, particularly those coming from China, via thermo-screening, which means checking passengers’ temperature with a remote thermometer. If the temperature is above 38, the passenger is examined by medical personnel at the airport”.

The Ministry of Health assures citizens that the ambulance brigades working at the airport are safe themselves, since they wear c-level clothes.

The Ministry also states it is in close communication with the World Health Organization (WHO).

“There is no need for further steps at present. The crews wear special clothes.

Georgia is in the green zone. We are in constant communication with the World Health Organization and if other measures are needed, of course, we will take them,” the Ministry reports.

Ambassador Extraordinary and Plenipotentiary of Georgia to the People's Republic of China, Archil Kalandia, said he sees no reason to panic so far.

“I am in constant contact with all three of our fellow citizens who are in Wuhan now. I talked with the officials from Wuhan municipality and the Ministry of Foreign Affairs of China. Preventive measures are being implemented throughout China, not just in Wuhan, which is the source of the infection. In addition, the city is being provided with food and drinking water. Accordingly, the city is not facing food and water shortages. All facilities of the city are disinfected daily and the situation is under control at this stage. Obviously, the number of infected is increasing and will probably rise in February, but taking these large-scale preventive measures into consideration, local authorities are doing their best to reduce the scale and the number of infected people. In addition, through various social networks, we are in constant contact with our fellow citizens in var-

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ious regions of China. Fortunately, they are healthy and safe,” said Kalandia.

Amiran Gamkrelidze, Head of the National Center for Disease Control and Public Health, said that, despite the fact that the country is in the low-risk one, there is still a chance of the virus coming from China. But, he adds, Georgia is doing its best to prevent the infection.

Information about the virus has been elaborated by the World Health Organization and the text is translated into three languages to be distributed for incoming tourists, especially those from China.

Four medical institutions, the Hospitals of Infectious Diseases in Tbilisi, Kutaisi, Batumi and Zugdidi, are ready to provide

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

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