Issue no: 900/55
• NOV. 29 - DEC. 1, 2016
• PUBLISHED TWICE WEEKLY
PRICE: GEL 2.50
In this week’s issue... Turkmenistan to Increase Volume of Turnover and Transit via Georgia NEWS PAGE 2
TUMORROW IS ALREADY HERE ISET PAGE 4
Georgian Delegates Participate in Women of the Future Summit in UK
FOCUS ON STRATEGIC PARTNERSHIP Success at the Wardrop Dialogue 2016 sees a strengthening of Georgia-UK relations
PAGE 8 Foreign Minister Janelidze with British Minister of State for Foreign and Commonwealth Affairs, Alan Duncan
New Economics Minister Welcomed to Ministry BY THEA MORRISON
BILISI – Georgia’s new Minister of Economy and Sustainable Development, Giorgi Gakharia, officially took on his duties from Monday. Gakharia, who is a former Business Ombudsman, was introduced to ministry staff by the former Economics Minister, Dimitry Kumsishvili, who was moved to the Ministry of Finance by the Prime Minister of Georgia, Giorgi Kvirikashvili. The former Minister wished success to Gakharia in his new post and expressed hope that the Ministry of Economy would become ever more effective and developed. “The Ministry of Economy is an important, well-organized, fast-acting institute and I hope
Georgia’s new Minister of Economy and Sustainable Development Giorgi Gakharia
it will be even more so while being led by Mr. Gakharia,” Kumsishvili said. The new Minister said he was proud to be a member of the economy ministry team and promised to do his best to develop the economy of Georgia. “Economics is one of the main challenges of our country. I am sure that our new team will overcome all such challenges,” Gakharia said. Giorgi Gakharia served as Georgia’s Business Ombudsman from February 2013 after being named to the role by then-Prime Minister Bidzina Ivanishvili. In December 2014, Gakharia was appointed Secretary of the Economic Council under the Prime Minister, while retaining his position as Business Ombudsman. He graduated from Lomonosov University and holds a Master’s degree in Business Management and Political Studies.
A Lesson in Goodvertising – Creative Advertising That Cares
Winners of the 2016 ADAMI Media Prize Announced
SOCIETY PAGE 12 Prepared for Georgia Today Business by
STOCKS BankofGeorgia(BGEOLN) GHG(GHGLN) TBCBankGroup(TBCGLN)
COMMODITIES CrudeOil,Brent(US$/bbl) GoldSpot(US$/OZ)
NOVEMBER 29 - DECEMBER 1, 2016
Turkmenistan to Increase Volume of Turnover and Transit via Georgia
Georgia’s President Giorgi Margvelashvili and President of Turkmenistan, Gurbanguly Berdimuhamedov met in Ashgabat on Sunday
BY THEA MORRISON
SHGABAT – Turkmenistan intends to increase the amount of turnover and transit through Georgia, according to information released following a joint meeting of Georgia’s President Giorgi Margvelashvili and his Turkmen counterpart, Gurbanguly Berdimuhamedow, in Ashgabat, Turkmenistan on November 26. Georgia’s Presidential Administration reports that the presidents discussed large-scale projects, including the Silk Road. President Margvelashvili noted that the Silk Road project creates broader prospects of cooperation between the two countries in the area of transportation. The importance of the Lapis Lazuli project was also underlined, which envisages the development of transport, transit and trade cooperation from Afghanistan to the West via Turkmenistan, Baku, Tbilisi, the Georgian ports of Poti and Batumi, Kars and Istanbul. The sides noted Georgia’s important role in the region as a transit country connecting east and west. Margvelashvili affirmed his support of Turkmen gas transportation to Europe via Georgia, while President Berdimuhamedow confirmed that Turkmenistan intends to increase the amount of turnover and transit traffic via Georgia.
Margvelashvili stated that Georgia is ready to continue its active participation in projects relating to the transportation of Caspian energy resources to Europe. The presidents further discussed prospects of deepening trade and economic relations between Georgia and Turkmenistan, with Margvelashvili saying that Georgia welcomed the holding of joint business forums and the visits of Turkmen entrepreneurs and investors to Georgia to examine new opportunities to strengthen trade and economic cooperation. Their conversation also touched upon the cooperation of Georgia and Turkmenistan in the area of culture. As noted, such cooperation is conducive to forming mutual understanding and friendship between the Georgian and Turkmen peoples. Prior to meeting the Turkmen President, Margvelashvili took part in the Global Sustainable Transport Conference, which was held on Saturday with the support of the United Nations (UN) and was attended by more than 80 international delegations, the leaders of multiple countries, and heads of international organizations, including UN Secretary General Ban Ki-moon and OSCE Secretary General Lamberto Zannier. “This was a very good opportunity for us to underline Georgia’s role as an important country linking Europe and Asia,” President Margvelashvili stated after the conference. Georgia’s Presidential Administration said a number of interesting transport projects are planned in which Georgia is directly involved.
Georgian Tourism Industry Representatives Attend World Travel Market (WTM) in London
Travel Market, Georgian Stand
BY NINO GUGUNISHVILI
he Georgian National Tourism Agency (GNTA) participated in the World Travel Market 2016 held in London, known as a major event in the travel industry where participants from around 180 countries and almost 50,000 professionals gather annually. Georgian tourism agencies: Info-Tbilisi, Georgia Travel Group, Visit Georgia, Explore Georgia, GeorgiCa Travel, Caucasus Travel and Exotur, were in attendance at the WTM, which is described as a unique opportunity for the “whole global trade to meet, network, negotiate and
conduct business.” The World Travel Market, now in its 37th year, claims to generate more than £2.5 billion in travel industry contracts. Georgian wine-tasting was a part of the presentation made by Georgian representatives. Giorgi Chogovadze, GNTA Head, spoke about the tourism potential of the country and the marketing promotional campaigns held with various international TV news channels. “Our participation in the World Travel Market gave us an important opportunity to introduce our country to the outside world. At the same time, Georgian tourism agencies attending the market had a chance to establish direct contacts with their potential business partners, thus bringing more visitors to Georgia,” Chogovadze said.
NOVEMBER 29 - DECEMBER 1, 2016
2016 Wardrop Dialogue: “Trade & Prosperity between Us!” BY KATIE RUTH DAVIES
he British Embassy hosted a business reception Thursday to welcome British Minister of State for Foreign and Commonwealth Affairs, Alan James Carter Duncan, who had come to Georgia to participate in the third annual Wardrop Dialogue, the first to be held in Tbilisi. Also present during the talks were British Ambassador to Georgia, Jeremy McKenzie Smith, Georgian Minister of Foreign Affairs, Mikheil Janelidze, and Ambassador of Georgia to the UK, Tamara Beruchashvili. Duncan, who earlier in the day announced a £4.5 mln investment in Georgia from the UK’s Good Governance Fund, was emphatic in his message that “the UK may leave the EU but it is not leaving the world.” It was Duncan’s first personal visit to Georgia and he claimed he was very much impressed not just by the wellorganized Dialogue, but also by the access he was given to the President, Prime Minister and other important officials during a “meticulously arranged program.” He opened the business reception by anticipating the big question that would be asked of him: Brexit. “On June 23, a new term was launched: Brexit. And Britain is to do as the democratic system dictates. Yes, we will be leaving the EU, but we are not leaving
the world or closing any doors,” Duncan said. “In the eyes of the voters who asked us to leave the EU, we’ll be set free from being told what to do by somebody else’s parliament and our own parliament will determine our future.” Duncan went on to point out that Britain is open-minded, “open for business, open for free trade and is focused on deepening and strengthening a lot of existing bilateral relations.” This includes Georgia, as demonstrated by Britain’s eager and constructive participation in the third Wardrop Dialogue. According to both Duncan and Minister of Foreign Affairs Mikheil Janelidze,
the 2016 Wardrop Dialogue saw a step up in the strategic partnership between the UK and Georgia regarding mutual interests related to security, prosperity and the development of democratic principles. “During the Dialogue we talked about new opportunities not only in the energy sector but in business- Georgia has one of the most transparent and easy business environments and is corruptionfree,” Minister Janelidze said. “We have a lot to offer British businesses. We are investing not only in foreign policies but also relevant infrastructure to connect the EU with Asia- making us a relevant
bridge and hub for EU businesses within the region and further east. Through the Dialogues, both parties agreed that our trade ties will remain strong on the government level to ensure all opportunities for the UK and Georgia.” “Britain, regardless of Brexit, intends to continue to be busy on the world stage in UN, NATO, G7, G20- in NATO particularly with regards to focusing on the security interests of this region. Russian expansionism cannot just be accepted,” Duncan said. “We need a united global voice in favor of individual countries’ sovereignty and rule of law and should not allow that clear statement of legal
and national decency to de divided and overcome by Russia trying to extend its sphere of influence unreasonably.” Reflecting the British commitment to Georgia’s territorial integrity, Duncan visited the South Ossetian Occupation Line to see for himself the reality on the ground. “Numerous challenges hinder Georgia’s development and its aspiration to be part of the free world and to pursue its foreign policy, which is a choice not only of the government but of our people, as it has been since we achieved independence 25 years ago,” Janelidze said. “Georgia and the UK have excellent cooperation in the field of security,” he added. “Georgia is witnessing the same challenges any country in the EU is facing today- a need for defense against terrorists, cyber threats, and more. I am grateful for the support of the British government, which is committed to the integrity, sovereignty, and de-occupation of our territory.” During the 2016 Wardrop Dialogues, the parties also discussed joint development of new projects and strategic partnership in other important dimensions, namely people-to-people relations and education, with the aim to include more participation from civil society and the private sector. GEORGIA TODAY was fortunate to have an EXCLUSIVE INTERVIEW with Tamara Beruchashvili, Ambassador of Georgia to the UK, who spoke more on the people-to-people and cultural relations aspects. Find out more in Friday’s issue of GEORGIA TODAY.
NOVEMBER 29 - DECEMBER 1, 2016
THE ISET ECONOMIST A BLOG ABOUT ECONOMICS AND THE SOUTH CAUCAUS
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.
TUMORROW IS ALREADY HERE BY ERIC LIVNY
pending a big chunk of their precious summer vacation in Armenia was not exactly my kids’ dream. Their wish list included far more exotic destinations in Africa, the Far East and Europe’s leading capitals – Vienna, Paris or London. And, yet, it did not take too much convincing for them to go on a one-week trial at TUMO’s summer school for creativity in Yerevan. All I had to do was show a few pictures from TUMO’s website: What was supposed to be a one-week trial turned into a four-week immersion into the world of photography, 3D modeling and animation (for Katia, 10), and robotics and programming (for Jan, 12). It also became an eye-opening experience for their parents, giving us a sense of how to organize learning in the 21st century, and how to use education as a lever long enough to move the world.
THINKING OUT-OF-THEBOX, EVERY STEP OF THE TUMO JOURNEY Everything at TUMO is marked with a very special touch of creativity. This starts with TUMO’s futuristic architectural design, which immediately strikes – and inspires -- anybody entering the building. It continues with TUMO’s proprietary learning software (“Tumo World,” a game-style virtual environment that helps students navigate the curriculum) and pedagogical approach. The point is to allow thousands of teens (7,000 of them at any given time, to be more precise) to tailor an individual self-study program and follow it, at their own pace, with a bit of help from TUMO coaches. Some students, “tigers” in TUMO’s lingo, take a few subjects all the way to the top level. Others, the “butterflies,” do the first couple of levels of every subject – an experimental approach encouraged by TUMO. The program is enriched with special workshops led by industry pros, including visitors from all over the world. A lot of creative thinking went into the highly unorthodox learning menu, self-described as “arts, tech, and everything in between.” The main four focus areas are animation, game development, film-making, and web design. However, one also has plenty of opportunities to veer into complementary skills, like 3D modeling, robotics, programming and music. With such a wide range of choices and flexibility, the program allows thousands of “TUMOi-
ans” (aged 12-18) to forge their own, unique paths to success. Finally, TUMO’s ingenious financial architecture is a great model of sustainable philanthropy - development assistance delivered with a fresh business perspective in mind.
TUMO’S PRIVATE SECTOR ROOTS… TUMO is anything but your typical government or donor project. It has its intellectual and financial roots in the Armenian diaspora segment of the global tech and arts community. TUMO’s chief architect and founder, Sam Simonian, is a Dallas-based IT entrepreneur. A self-made man, Mr. Simonian was 19 when he emigrated in 1975 from wartorn Lebanon to the US. Armed with an electrical engineering degree from the University of Texas, he went on to design telecommunication equipment for the U.S. defense industry. In 1989, Sam and two fellow engineers resigned from their well-paying jobs to build their own dream – INET – with 18,000 dollars in start-up capital, a fax machine and a 200 dollar piece of testing equipment. While Sam Simonian is the founder and the main driving force behind TUMO’s concept and content, many others play a key role. Marie-Lou and Pegor Papazian joined early on to provide local leadership and oversee the Center’s development. Having known each other since their childhood in Lebanon, the Papazians came to Armenia with a ton of tech, project and education management experience from all over the world. Marie-Lou designed and managed the construction of the Center’s interior and outdoor plaza. Pegor led a team that developed TUMO’s learning software. Both are intimately involved in TUMO’s current efforts to expand its reach beyond Yerevan and (soon) Armenia’s borders. Finally, TUMO’s board is a rare combination of artistic, tech and entrepreneurial talent, including: the Engineering Director at Uber's Advanced Technologies Center (and formerly Twitter's Vice President of Platform Engineering) Raffi Krikorian, film producer at Pixar Animation Studios Katherine Sarafian, System of a Down’s lead vocalist Serj Tankian, and former Vice President of Game Development at Disney Interactive Studios, and founder of Industrial Toys, Alex Seropian. A dream team, indeed.
SECURE FUTURE… Tumo’s flagship complex in Yerevan occupies about 6,000 m2 on the first two floors of a purpose-designed 6-story
From left to right: TUMO board member and artist Michael Aram, managing director of TUMO Marie-Lou Papazian, and founder of TUMO Sam Simonian
building in Tumanyan park (hence TUMO’s name). The building’s other four floors provide office space for technology and media companies that have the potential to become partners in Tumo’s educational mission. Sam and Sylva Simonian, the founders of TUMO, have invested more than 60 million US dollars since 2001 to build the infrastructure, develop TUMO’s programs, and operate them in Yerevan for the first five years. Yet, it is the rental income from commercial tenants that will ensure the sustainability of TUMO! As Pegor Papazian has stated, building up TUMO’s tenant base took more than two years. Until the third year of the operation, the entire cost of running TUMO’s programs (about 2 million dollars/year, including headquarters and communication) had to be covered by the Simonian Educational Foundation. Today, however, there is very little leftover space in the building, and the thoroughly impressive list of tenants includes the Armenia-based development arms of mobile photo editor PicsArt, electronic design automation giant Mentor Graphics, producer of intuitive human interface solutions Synaptics, as well as VoIP technology pioneer Epygi. Many of TUMO’s former students and coaches stay to work in the building. However, as the vast majority of them are too busy to come down to give master classes, the main synergies, according to Pegor Papazian, are psychological. Newcomers get inspired seeing successful guys and their cool style. The bold decision to make TUMO’s education absolutely free for all students, regardless of their family circumstances, represents a conscious choice by its Board. There is no philosophical reason to make education free for everybody; however, need screening would have placed a hefty administrative burden on TUMO’s administration, while detracting from TUMO’s role as an engine of societal change. TUMO’s Board, its founder, and its management must take a lot of pride in the fact that as early as next year, in
2017, TUMO’s revenues from space rental and summer camp training (TUMO’s only educational undertaking with a commercial twist) will reach over 2 million U.S. dollars, finally catching up with operational expenses, and effectively securing the future of the entire enterprise.
AND EXPORT POTENTIAL! The opening of TUMO’s Yerevan center in 2011 turned out to be but the first step in the process of branching out to Armenia’s provincial towns. While the idea was always there, the initiative came from the National Bank of Armenia (NBA), which was building its new facility in Dilizhan and wanted to stimulate additional investment in the human capital of this once very popular resort town. TUMO responded to the challenge by offering its know-how, and the Dilizhan center opened in January 2013, with its operational costs covered by the NBA. Catering to 200 kids from Dilijan and adjacent villages, the NBA-financed center turned out to be too small from an operational efficiency perspective. This was taken into account when building the next two centers, in Giumri (launched in September 2015, with a capacity of 2000 students) and Stepanakert (October 2015, up to 1000 students). Both centers were built thanks to a vigorous fundraising campaign (to cover start-up costs), and a commitment by the Armenian General Benevolent Union (AGBU) to participate in the initial investment and cover operating costs for the first 5 years. “We now know how to deploy a new center,” explains Pegor. “Construction aside, it takes only 2-3 months.” The main challenge with a network of smaller centers is not deployment, but efficient management. With a collective capacity of 3,000 students, the three new centers cost a half a million USD a year to run (about $13-15 per student per month, excluding fixed costs). One key issue for sustainability is the difficulty of replicating the real estate model outside of Yerevan due to the lack of com-
mercial renters. As there is no shortterm solution to this problem, donor and government funding would be required to bridge the gap. But over time, IT businesses will find it profitable to relocate or branch out to provincial locations, given the availability of well-trained staff. In other words, by producing qualified personnel, TUMO will be investing in its own future sustainability. The second challenge concerns the need for staff rotation. From a financial point of view, it is not possible (and there is no operational justification) to simultaneously run expensive workshops on all 14 TUMO subjects in all four locations. Thus, efficiency requires that workshop leaders be shared: each gets to spend eight months in Yerevan, and one month in each other location. In this way, all expensive experts are fully utilized, and smaller centers are only charged for one month of an expert’s time, while keeping core staff costs to the bare minimum (a director and a handful of locally hired coaches). Accordingly, the number of full-time equivalent (FTE) workshop leaders in each center is commensurate with its size, ranging from seven in Yerevan to only two in Gyumri.
TUMO AS A FRIENDSHIP BRIDGE TO GEORGIA? When attending TUMO’s summer camp with my kids, I watched Marie-Lou’s presentation about TUMO’s ambitious plans to open new branches and/or sell franchises not only in Armenia but also in Brazil, Egypt, Iran and Lebanon. I was surprised and disappointed to hear that Georgia, Armenia’s immediate neighbor, was not on the list of immediate targets. TUMO’s intentions aside, I think it would make perfect sense for Georgia’s Minister of Education, Sandro Jejelava, to include TUMO in his next visit to Yerevan, and engage Sam Simonian and other TUMO stakeholders in a serious discussion of how this amazing initiative could serve as a true friendship bridge between our two countries.
NOVEMBER 29 - DECEMBER 1, 2016
International Forum of Local Economic Development Planned in Tbilisi
International Economic Development cover photo. Source: economicforum.ge
BY NINO GUGUNISHVILI
bilisi Municipality is to organize the 9th International Forum of Local Economic Development (LED) on December 8-9 at Biltmore Hotel, Tbilisi, Georgia. Sustainable development and the transformation of Tbilisi into a smart city are the key themes of the upcoming event, which has been organized since 2007 by the city municipality in collaboration with GIZ (German International Cooperation)
and other international organizations. Throughout its history, the LED has addressed the topics of public-private partnership opportunities, real estate development, city rebranding, environmental issues of city development, urban regeneration, climate change and sustainable cities. This year, too, the Forum is expected to become a platform for an active dialogue in which local authorities, agencies, NGOs and international experts will discuss city development perspectives and talk about the best ways to make modern cities more comfortable and attractive to live and work in.
Afghanistan, Turkmenistan, Azerbaijan, Turkey and Georgia Sign Agreement on â€œLapis Lazuli Corridorâ€? BY DIMITRI DOLABERIDZE
n mid-November Afghanistan, Turkmenistan, Azerbaijan, Turkey and Georgia signed an agreement on the creation of the "The Lapis Lazuli Corridor," which will enable Afghanistan to get the shortest access to the Black and Mediterranean seas. A preliminary agreement was signed at the fourth working meeting of the
delegations of the participating countries in Azerbaijan. According to a press release from the Afghan Foreign Ministry, the agreement concerns the simplification of customs and visa regimes for businessmen. The Lapis Lazuli Corridor is an extension of the idea of the Great Silk Road, connecting South and Central Asia to Europe, and in virtue of the geographical position of Afghanistan, will be the main link between them. The name reflects the fact that in ancient times Afghan lapis lazuli and other semi-
precious stones were exported along the route. The corridor will pass through the commercial ports of Akin in Faryab province and Torghundi in Herat province, Turkmenbashi in Turkmenistan, Azerbaijan Baku, Tbilisi and Batumi in Georgia and Istanbul in Turkey. President of Afghanistan Ashraf Ghani IRA (Islamic Republic of Afghanistan) has repeatedly emphasized the importance of this project, which will allow Afghan goods to gain access to new markets.
NOVEMBER 29 - DECEMBER 1, 2016
Dinehall: Good Food is a Human Right! REALITY? DID YOU NEED TO TAKE INTO CONSIDERATION ANY LOCAL FACTORS? There were previously four types of restaurant: Fast Food, Fast Casual, Casual Dining and Fine Dining. Now, we are adding Fresh Casual with Dinehall. Tbilisi is famous for its fresh and marvelous fruit and vegetables, and meat can be found from a local farmer, so it’s truly the best place to open the first fresh-casual café-restaurant in the world.
WERE THERE ANY CHALLENGES IN TERMS OF OPERATING IN A GEORGIAN MARKET? Pretty much every country has its own rules and standards but we haven’t encountered any obstacles to opening or running our business in Georgia.
DO YOU PLAN TO LAUNCH ANY NEW BRANCHES? Yes, we’re planning to open 50 branches in the most populated cities in the world. In the immediate future, at the beginning of 2017, we’ll be opening two more branches abroad.
WHAT'S YOUR SECRET TO KEEPING CUSTOMERS COMING IN? WHAT HAVE BEEN SOME OF YOUR MOST SUCCESSFUL PROMOTIONS, AND WHERE DID THEY ORIGINATE? We don’t have any secrets: our claim is providing our guests with tasty food in a safe and executive place, served in a sincere and friendly way.
BY NATIA LIPARTELIANI
he new eye-catching restaurant located at Rustaveli 28 in a late 18th century building is the the first fresh-casual café-restaurant in Georgia offering a marvelous mix of food, wine and art. Dinehall Tbilisi combines five venues in one, the design itself exceptional and involving a blending of contemporary and traditional styles. The first floor includes a Café and Restaurant serving local and international dishes while the ground floor houses a bar/wine cellar enclosed by the historical, original, brick walls of the building. There is also a space for special and corporate events in the expo-hall section and the entire space showcases artwork by Georgian sculptors. To find out more about Dinehall Tbilisi, GEORGIA TODAY met with Mr. Taner Icten, Board Member and Group Head.
DINEHALL CLAIMS TO BE
THE WORLD’S FIRST FRESHCASUAL CAFÉ-RESTAURANT, WHAT EXACTLY IS MEANT BY THAT BRAND IDENTITY? The name Dinehall comes from the Middle Ages. It means a place where a good time is spent and good quality food is consumed by many people. We offer just that- a variety of styled halls
to entertain our diners: our Event Expo halls, bar and cellar.
service. We aim to make our guests feel like they are at home.
WHAT IS YOUR CUSTOMER SERVICE PHILOSOPHY?
DOES THE INTERNATIONAL CONCEPT OF FRESHCASUAL CAFÉ-RESTAURANT THAT DINEHALL TBILISI CONFORMS TO FIT THE CURRENT GEORGIAN
Our customer service philosophy is quite simple: good food is a human right! Everyone deserves to be served really good food with sincere and friendly
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Tel: (995 32) 2 45 08 08 E-mail: firstname.lastname@example.org
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NOVEMBER 29 - DECEMBER 1, 2016
Ski Season in Georgia to Open in December At present Tbilisi Minibus Company has around 2500 yellow minibuses in Tbilisi. Source: tm.ge
Transport Service Says Marshutka Travel Fees Not to Rise Goderdzi Ski resort. Source: Ski Georgia
BY THEA MORRISON
BILISI - Deputy Head of Tbilisi Transport Service Me ra b M a m u l a s hv i l i denied information that from 2017 the municipal minibus (marshutka) travel fees will be increased. However, Mamulashvili did confirm that Tbilisi Minibus Company (TMC), which operates around 2500 yellow
marshutkas in the capital, informed the Mayor’s Office that they intend to increase the travel fees from next year. “We received such notice from the TMC many times but the fees never increased,” he said. The contract between Tbilisi City Hall and TMC was signed in spring 2011, when four companies - Tbil Line LLC, Capital Group LLC, Tbil Car LLC and Public Car LLC won in a tender announced by the Mayor’s Office and replaced the old minibuses with ne. In 2012, they increased the travel fees from
50 to 80 Tetris. The agreement reads that the company has the right to increase the travel fees a month after informing the Mayor’s Office, even if the Mayor’s Office objects. Despite the one-sided contract between the Mayor’s Office and Tbilisi Minibus Company, the Deputy Head of Tbilisi Transport Service excludes an increase in municipal transport fees. “The cost of travel by minibus in Tbilisi has remained unchanged for years and it will not be increased,” he stated.
BY NINO GUGUNISHVILI
ocated in the highlands of Adjara on Goderdzi pass, Goderdzi ski resort, first established in 2015, is to open its slopes to visitors from December 10 this year. The opening of Goderdzi will be followed by the Gudauri and Bakuriani season opening during the week of December 10-17. Tetnuldi (Svaneti) and Mitarbi (Baku-
riani), two of the new Georgian ski locations, will start to operate on December 24 and 25 respectively. The ski resort development project was realized in a state-private partnership form, with an investment of GEL 48 million from the state and GEL 70 million from a private investor. Mitarbi resort is set to be developed as an eco-village similar to such ski resorts in France. A hotel with a 300 room capacity is also to be built there by 2018. Three new ski slopes already await visitors at Mitarbi this December.
NOVEMBER 29 - DECEMBER 1, 2016
Georgian Delegates Participate in Women of the Future Summit in UK BY NINO GUGUNISHVILI
ften regarded as the “Mini Davos” for future female leaders, the Women of the Future Summit was held from November 16-18 in London, gathering over 300 participants from over 24 countries, with the theme of ‘The World in 2025,’ exploring how the world’s economy, security and tools of influence will change in the coming decades. Founded eleven years ago by Pinky
It was a very good occasion to present their own success stories and introduce Georgia to a very prominent audience
Lilany, CBE DL, author, motivational speaker and women’s advocate, and organized in partnership with the Foreign & Commonwealth Office and Wilton Park, the Summit brings some of the most influential women from around the globe to participate in the Women of the Future Program. The Program incorporates the WOF Awards, WOF Summit, WOF Ambassadors and WOF Network, a portfolio of events and projects in which, through discussions, meetings and conferences,
the delegates have an opportunity to network, share their experience and build successful professional partnerships for the future. The Women of the Future Awards is a special event held during the Summit that celebrates the achievements of women in arts, business, enrepreneurship, media, science, real estate, technology and digital, sports and public service. Cherie Blair, spouse of Tony Blair, former UK Prime Minister, is a patron of the Women of the Future Awards.
It was on the initiative of Mako Abashidze, Founder-Director of the British Georgian Chamber of Commerce (BGCC), that the Summit had Georgian delegates participating for the first time this year. “I attended the Women of the Future program last year, and was so impressed and made so many useful contacts, that immediately after I started to discuss with founder Pinky Lilany the idea of bringing a Georgian delegation to participate,” Abashidze said. “The top level of the business and political leaders
speaking at the events was very inspiring for the Georgian delegates and I am glad that they found the experience so useful, practical and inspirational.” Ekaterine Maisuradze, CEO of the International Relations Center and Union of Business Ladies (from Tbilisi, Georgia) was a member of the Georgian women’s delegation invited to the WOF Summit. “I was truly delighted with the opportunity to participate in the Summit,” she said. “There, we had a chance to meet women from over 27 countriestop professionals from different spheres. When you’re in business, it’s very important to establish new contacts and we had that opportunity. Overall, it was a great experience, for which I would like to thank the organizers of the event and Mako Abashidze primarily for offering us this excellent chance.” Another participant, Sophie Ibbotson, Board Member and Consultant of the British Georgian Chamber of Commerce, who was nominated and shortlisted for the “Young Entrepreneur of the Year” award, also says that the event was an excellent networking opportunity: “Working as an advisor to the British Georgian Chamber of Commerce, and with the Georgian National Tourism Agency, has given me an invaluable cross-cultural perspective in business. I was thrilled to be nominated for the Entrepreneur category by Mako Abashidze, and inspired by the judges, speakers, candidates, and other attendees I met through WOF. I’m looking forward to future engagement as a WOF Ambassador and to using the platform to bring women together across borders,” Ibbotson said. “Participation in this series of inspiring and eye-opening events organized as part of the ‘Week of Women’ was thrilling and invigorating for me personally,” said Manana Gabechava, Director of Transtransit Ltd. “The connections I made and the stories I heard from the participants and motivational speakers, and the WOF Summit in particular, were indeed the best reflection of the great value of networks of this type, enabling women to excel in their personal and professional lives and to strengthen their long-term impact.” “The inspiring speeches delivered at the Women of the Future Summit by leading professionals, coupled with the Awards ceremony, served as a wonderful opportunity for me to share with my colleagues back home women’s work worldwide and its far reaching impact,” said Nana Tsiklauri, Director of the Strategic Projects and Reforms Department of the Ministry of Justice of Georgia. Tamar Beruchashvili, Georgian Ambassador to UK said: “It indeed presented new opportunities for Georgian female leaders from the government and private sector to meet outstanding likeminded professionals from different countries in a friendly and genuine atmosphere, not to mention giving them the opportunity to listen to some fantastic guest speakers. It was also a very good occasion to present their own success stories and introduce Georgia to a very prominent audience. The Embassy of Georgia in the UK is ready to support this initiative and to work together with BGCC to bring this format of partnership to Georgia,” she said.
NOVEMBER 29 - DECEMBER 1, 2016
A Lesson in Goodvertising – Creative Advertising That Cares BY KATIE RUTH DAVIES
he Center for Strategic Research and Development of Georgia (CSRDG), in cooperation with Nadacia Pontis and with the financial support of International Visegrad Fund, invited Georgian businesspersons, students and media representatives to attend a lecture by Thomas Kolster, a leading international expert in sustainable communication and non-profit marketing, author of the book “Goodvertising.” Kolster has been dubbed an “Inspirational Leader” in the field, and, having attended his lecture, I would agree. Kolster started his two-hour talk by reflecting on his own childhood, spent on an island in the Baltic Sea off the coast of Denmark, where the job prospects for local youth included just fishing, farming, priesthood, or school teaching. When the fishing industry “dried up” those of Thomas’ peers who had trained for this particular profession were left adrift. From this, he learned to think “out of the box.” Going in a totally different direction, Kolster chose advertising, in which he worked for over ten years. But, wanting to make a difference and make a mark, it was the COP15 (Conference of the Parties) which took place in Copenhagen in 2009, and the “empty promises” of the politicians and big companies to make the necessary changes for the better, that really opened his eyes to the potential power of brands to be used for the greater good. Kolster presented a number of good examples where big brands had taken their wealth and used their advertising strength to make a difference in the lives of their consumers. One example was the Pepsi Super Bowl “boycott,” whereby Pepsi took the USD
20 mln it normally spent on creating an advertising campaign during the US Super Bowl and instead turned it back on the people- first asking citizens what projects they would spend the money on and then funding a huge number of those projects. Given a choice between “do-good” philanthropic Pepsi and its rival brand, people that year chose Pepsi. In a product slump, deodorant brand Axe decided to focus on the issue of social responsibility in its #biggerthansuicide campaign- turning people’s attention to the fact that they were using social media to discuss numerous insignificant daily issues and ignoring those that really affected people’s lives- in this case male suicide. Sales of Axe shot up and male suicide in the UK got 45 percent more attention than it had prior to the campaign. Like the example of Pepsi, with Axe, Kolster demonstrated the power of big brands to do something good for society and to reap the financial benefits. “In 2011, the CEO of Puma, Justin Tallis, during his annual report extolling the growth and successes of the company throughout the year, turned around at the end and said: ‘We, PUMA, the company, have ruined the environment for EUR 145 mln,’” Kolster told us. For a time thereafter, PUMA shoes were sold with oversized labels clearly marking the cost of damage (water, air, land use, waste, etc.) that had gone into the making of the product. “What you cannot measure, you cannot change- if you don’t know the impact your company has, you cannot change it,” Tallis said in support of the accountability campaign. In this increasingly transparent world, one in which urban living generates pollution and stress, where all are expected to be accountable for their actions and people actively seek a better, simpler life, the trend is for people to appreciate when they are given the chance to choose a socially responsible brand. This can
be seen in the rising global popularity of organic and biodegradable products, for example. Five factors, Kolster says, need to be taken into account by a company when deciding how to advertise and how to make an impact through advertising: 1. Urbanization- more people moving into the cities (traffic jams, increased housing prices, etc.); 2. Demography- an aging population (requiring product adaptation); 3. Resources- climate change and scarcity; 4. Economic Shifts- changing wealth distribution within societies; 5. Digitalization- mobile phone and internet use over print media. What do these factors mean for companies and brands? It’s time, Kloster says, to think about what people want or need in their daily lives, not just the product you need to sell. In terms of applying this to Georgia, the first company that springs to mind is Geocell, with its popular Movla (Care) campaign against littering (and clearing up areas where litter has already been dropped). Other Georgian or Georgiabased companies also run CSR projectsdonatingtocharity,runninginternal“green” policies, holding fund-raisers, with various advertising campaigns- usually soft onesto advertise the fact. But what Kolster taught those present was that these acts can be magnified, and used in advertising; that “goodvertising” can be used as an effective tool for increasing revenue while also making a sustainable difference to the society- and global environment- in which our businesses operate. The lecture was organized in the frames of the international project: ‘Enhancing Sustainability and Engagement of Civil Society in EaP and V4 Region through a CSR Agenda.’ The project is being implemented in six countries (Slovakia, Czech Republic, Hungary, Poland, Georgia and Belarus).
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NOVEMBER 29 - DECEMBER 1, 2016
Dechert OnPoint: Acquisition of State Owned Property INTRODUCTION On 20 September 2016, the Government of Georgia (the “GoG”) introduced a new project “50 Properties for your Hotel” (the “Project”) which aims to encourage the private sector to invest more in Georgia’s tourism sector. Under the Project, the GoG has identified 50 state properties where investors can build hotels and create recreational and panoramic view areas (the “Listed Properties”). The Listed Properties will be allocated through online auctions. This edition of OnPoint provides a brief overview of the rules and procedures related to the acquisition of immovable state property in Georgia.
TYPES OF PRIVATIZATION According to the laws of Georgia, privatization is defined by the acquisition of state or municipal property by individuals and legal entities. The LEPL National Agency of State Property (“NASP”) is responsible for the management, privatization and transfer of state property. Immovable property owned by the state of Georgia may be disposed of through auction or direct sale. The state entity managing the property is authorized to declare a public auction on the specific property. A direct sale shall be carried out with or without a competitive selection process and with or without a fee, based on the decision of the GoG. The manager of the property is also authorized to sell the land to a lessee who has entered into lease relations before 1 January 2007.
PRIVATIZATION VIA DIRECT SALE Any individual and legal entity, except for companies in which the state owns more than 25% of shares, is entitled to purchase immovable property via direct sale. Any person or entity interested in the purchase of state property shall submit an application with identification documents and information about the property to the NASP. A direct sale can be conducted using competitive
selection procedures. Such sales are conducted when there are alternative proposals submitted by interested parties with regard to a specific property. The decision regarding a direct sale via competitive selection is made by the GoG and, in certain circumstances, the GoG is entitled to authorize the Ministry of Economy and Sustainable Development of Georgia to make such a decision. The GoG shall make the final decision regarding the allocation of the property through direct sale. The terms of purchase as well as the terms of payment of the privatization fee shall be determined by the GoG.
PRIVATIZATION VIA AUCTION A person interested in the property, a third person (also known as a facilitator) or the entity carrying
out the auction is entitled to initiate the auction. The interested person initiating the auction shall submit documents confirming the identity of the buyer and specific identification information about the property. In case of an unconditional auction, the privatization fee shall not be lower than the price determined by an independent expert auditor. In case of a conditional auction, the privatization fee can be lower than that determined by the auditor. Any person or legal entity where the state’s shares do not exceed 25% is entitled to purchase non-agricultural land. Information regarding the auction is published electronically and in periodic publications. Any person interested in the auction shall submit an application form, documentation confirming payment of the advance fee, identification documents and any other documents requested by the manager of the property. In case the public auction is postponed or terminated, the advance fee shall be returned to the interested person. The auction may be carried out electronically or publicly. After the auction is completed and the winner is identified, a purchase agreement shall be signed with the winner no later than 45 days from the date of completion of the auction. The manager of the property shall also determine the deadline for the payment of the purchase price which shall be no earlier than 7 days and no later than 30 days from the execution of the purchase agreement. The ownership is transferred to the winner of the auction after the execution of the purchase agreement and the registration of the new owner at the National Agency of Public Registry.
PRIVATIZATION OF AGRICULTURAL LAND Only the citizens of Georgia and legal entities registered in Georgia are entitled to purchase agricultural land. The privatization of leased agricultural land shall be carried out through direct sale. In such cases, the buyer of the land shall only be the lessee. Privatization of land which is not leased out shall be carried out in accordance with the procedures envisaged for non-agricultural lands. However, land that is situated within 500 meters from the state border of Georgia shall only be sold under the decision of the GoG upon agreement with the Ministry of Internal Affairs of Georgia. In case of sale via auction, the winner shall fully
pay the purchase price within 30 calendar days from the completion of the auction.
CONDITIONAL PRIVATIZATION Immovable property might be privatized conditionally, upon performance of certain investment obligations. In case such obligation is attached to the immovable property, the buyer is responsible for submitting an unconditional and irrevocable bank guarantee in the amount of 10% of the investment obligations (the “Investment Guarantee”). In case of a direct sale, the Investment Guarantee shall be submitted before issuance of a respective governmental decree and in case of the auction – one month from the date of the auction. The term of the Investment Guarantee shall exceed the term of investment obligations by at least four months. In case the buyer breaches its investment obligations, the property is returned back to the state without any compensation. * * * Note: This article does not constitute legal advice. You are responsible for consulting with your own professional legal advisors concerning specific circumstances for your business. Dechert Georgia, through the contribution of partners Archil Giorgadze and Nicola Mariani joined by senior associates, Natia Lapiashvili and Irakli Sokolovski, as well as Ana Kostava and Ana Kochiashvili, is partnering with Georgia Today on a regular section of the paper which will provide updated information regarding significant legal changes and developments in Georgia. In particular, we will highlight significant issues which may impact businesses operating in Georgia. Dechert’s Tbilisi office combines local service and full corporate, tax and finance support with the global knowledge that comes with being part of a worldwide legal practice. Dechert Georgia is the Tbilisi branch of Dechert LLP, an international Law firm that focuses on core transactional and litigation practices, providing world-class services to major corporations, financial institutions and private funds worldwide. With more than 900 lawyers in our global practice groups working in 27 offices across Europe, the CIS, Asia, the Middle East and the United States, Dechert has the resources to deliver seamless, high quality legal services to clients worldwide. For more information, please visit www.dechert.com or contact Nicola Mariani at email@example.com.
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NOVEMBER 29 - DECEMBER 1, 2016
Cannery Kula to Launch Ecotourism: Georgia’s Feeding New Baby Line Forestry Potential Underestimated
Feeding Cannery Kula was established in 2009
BY THEA MORRISON
F BY BAIA DZAGNIDZE
eorgia’s potential to be a top destination for nature and ecotourism is being under-prioritized. The forestry sectors in other countries plays a huge role in developing such tourism, and Georgia should be no exception– 40 percent of Georgia’s land is covered by extremely rich forest which can be utilized for greater profit than mere domestic purposes. Creating recreational areas will contribute to the effective management of forest zones and increase socio-economic development. Georgia’s forests are generally managed by the National Forestry Agency, a LEPL under the Ministry of Environment and Natural Resources Protection. Unfortunately, the agency has little experience with recreational forest management and, therefore, has yet to implement much activity in this direction. However, the country does have a better example of forestry management capability in the Agency of Protected Areas of Georgia, which has demonstrated great success over the past 10 years of operating recreational forests. About 75 percent of the Protected Areas in Georgia is covered by forest, and management is an essential part of the administration duties. For centuries, the usage of forest resources has been associated with timber acquisition. Firewood, agricultural or commercial production of timber has been an intense process, which still continues today. Such practice has seen negative effects in many developed countries where large areas of forest were destroyed. 95 percent of forests in Europe are an example of this destructive practice, resulting in altered landscapes and falling numbers of forest fauna. Consequently, the recreational value of such forests drops significantly. In recent years, the tendency to use forests for recreation and tourism purposes is gaining in popularity. Today’s overly busy and stressful lifestyle creates a demand for recreational areas which allow urban residents to get closer to nature, relax and unwind. Additionally, the creation of recreational spaces contributes to the quality of living, opens employment opportunities, improves the health of the local population and plays its part in the country’s economic development.
One fine example of such a recreational area already up and running in Georgia is “Sviana,” located in Stori Valley in the Telavi Municipality of Kakheti region. The importance of the area is significant because the valley is characterized by rugged terrain and rich biodiversity. In addition, a 30 km road runs along the valley, the only road leading to the Tusheti Protected Areas, which is generally packed with tourists from May to September. The pilot initiative to reinforce the recreational possibilities of the River Stori ravine is being implemented with the financial support of the Austrian Development Cooperation, in partnership with CENN (the Caucasus Environmental NGO Network), within the scope of the project Sustainable Forest Governance in Georgia. The Women’s Committee of Pshavi village, established by CENN in 2010, aims to make the Pshavi women more active in natural resource management and to develop the economy of the village itself. Today, there are 10 members in the Committee. The village’s proximity to Sviana and the Stori Valley led CENN to give full management of the area to them, along with the opportunity to create tourist services and generate their own income. According to Natia Saakashvili, the Sviana Development Project Coordinator, the recreation area already has seven movable and two static tables, with four grills for barbeques. The Committee plans to set up open stands to enable locals to sell various items, such as locally made tone bread, cheeses and handmade souvenirs typical to the region. “Additionally, we will have a children’s playground for family visits and a camping area for backpackers,” she says, adding that the personnel serving in the area will have a branded uniform to raise the awareness among visitors. To reduce the impact on the environment and reduce the use of plastic single-use utensils, the Committee plans to offer multi-use kitchen utensils for rent. And all the profit that comes from the Sviana recreational area will be used by the Committee to strengthen it and the village itself. The pace of urban development and rapidly growing city populations is generating a new wave in the tourism sector – ecotourism. This should be taken as a sign for the need to maintain forests and to give them another purpose besides timber production for the generation of revenue. Take Sviana as a good example.
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George Sharashidze COMMERCIAL DEPARTMENT
Commercial Director: Iva Merabishvili Marketing Manager: Mako Burduli
Editor-In-Chief: Katie Ruth Davies
Journalists: Tony Hanmer, Zaza Jgarkava, Maka Bibilashvili, Karen Tovmasyan, Dimitri Dolaberidze, Maka Lomadze, Tim Ogden, Joseph Larsen, Vazha Tavberidze, Nugzar B. Ruhadze, Nino Gugunishvili, Thea Morrison, Natia Liparteliani
eeding Cannery Kula, which is located in the town of Gori, Central Georgia, plans to start production of special products for children from the end of next year. Founder of Kula, Vano Goglidze, says they will produce preserved vegetables and fruit meals and drinks for babies. “We decided that our country should have Georgian production and so we will launch a children’s line,” the owner of Kula said, adding that from 2017 they are going to build a new factory solely dedicated to producing children’s products. He said that the children’s line is to initially include around 20 different products. “Moreover, at the end of 2016 we are going to be releasing a special lemonade for kids of a homemade lemonade taste, non-carbonated,” he added. Goglidze also said they are planning to produce canned meat products from next year, including
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canned traditional Georgian dishes Chakapuli, Chikhirtma, Chashushuli and others. “These products will be ready to eat, the customers will only have to open them and heat,” the Kula founder noted. Feeding Cannery Kula was established in 2009 producing two brands: Kula, ecologically clean fruit juice and vegetables, and Kula Baby, natural juices for children. At present Kula produces approximately 200 varieties of canned products from fruit and vegetables: natural juices, preserves, jams, sauces (including Tkemali), pickles, salads and compotes. All fruit and vegetables are grown in Georgia, their gathering and processing conducted at the stage of ripening according to Georgian tradition with the use of modern technologies, thus preserving all the useful features of the product. Kula also offers a special assortment of products for diabetics. During its eight years of activity on Georgian and foreign markets, Kula has received many awards and certificates.
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NOVEMBER 29 - DECEMBER 1, 2016
Winners of the 2016 ADAMI Media Prize Announced
eorgian, Moldovan, and Ukrainian journalists were awarded the ADAMI Media Prize for Cultural Diversity in Eastern Europe at a gala ceremony in the Ukrainian capital of Kyiv on November 24. This is the second edition of the ADAMI Media Prize, which awards outstanding films, videos, and websites from Eastern Europe and the South Caucasus that promote diversity and peaceful co-existence. 12 films and projects were nominated by an international jury, out of which five received the prize. The 2016 gala had the patronage of Thorbjørn Jagland, Secretary General of the Council of Europe, and Dunja Mijatovic, the OSCE Representative on Freedom of the Media, who presented the ADAMI Media Prize for Information (non-fiction) at the gala. “This prize puts focus on the importance of free media in the region and the role it plays in informing people on issues of public interest, not least on integration and cultural diversity,” Mijatovic said. The winner of the ADAMI Media Prize for Information (non-fiction) was the film Forbidden Friends, produced by Chai Khana (Georgia). This story of two women living in Tbilisi explores the challenges they face because of their unconventional friendship; one is an ethnic Armenian, and the other is from Azerbaijan.
The ADAMI Media Prize for News and Short non-Fiction was given to the TV series The Foreigner on STB TV by Dmytro Lytvynenko (Ukraine), about Western entrepreneurs who’ve established businesses in Ukraine, and their
efforts at integration. The ADAMI Online Prize for Web Videos was given to Tako Robakidze (Georgia), for A Look Beyond the Headlines. This multimedia video seeks to counter the stereotypes surrounding the
Pankisi Gorge of Georgia by showing the everyday lives of the ordinary people of Pankisi. The website MyAngle by George Gogua (Georgia) won the ADAMI Online Prize for Web Pages. The website is a network-
ing platform for journalists from Armenia, Azerbaijan, and Georgia. The Young ADAMI Media Prize was awarded to Generation Emigration, by Natalia Sergheev (Moldova), broadcasted on TV Moldova 1. The film explores the phenomenon of mass youth emigration from Moldova. ADAMI introduced a new type of award, the ADAMI Fellowship / ARTE prize, within ADAMI’s cooperation with FrenchGerman cultural TV channel ARTE. The inaugural prize was given to nominee Marita Tevzadze (Georgia), who will spend a one-month fellowship working with the team of ARTE Journal in Strasbourg. On top of the prize winners, ADAMI awarded a Special Mention for Web Videos for the interactive video “What is Hate Speech?” by Ihar Nazaranka / mediakritika.by, from Belarus. It is the first Belarusian production to receive a mention from ADAMI. A Special Mention for News and Short non-Fiction was given to the news report “Drastamat vs. Haykandukht: In-House Battle,” by Artak Vardanyan of Armenia. This unusual election story of a husband and wife competing against each other in local elections gives a new perspective on questions of tolerance in gender roles and politics. The ADAMI Media Prize for Cultural Diversity in Eastern Europe is made possible through the support of funders the Federal Foreign Office (Germany), and ProCredit Holding (Germany).
November 29 - December 1, 2016