Page 1 georgiatoday

Issue no: 848/29

• MAY 31 - JUNE 2, 2016



In this week’s issue... Patience, Genatsvale! ISET PAGE 4

Khareba Winery n Enjoys Success in ts European Contests PAGE 6

Maqro Continues its Green Construction Business in Georgia


Georgia's trains become first class.



Switzerland's Stadler trains will run on Georgian tracks from the summer.

Meet Pasha Banks “Meeting Room” Initiative

Georgia marks World Rheumatoid Arthritis Day under the aegis Everything is in Our Hand

Govt and Business Sector Join Hands At Major Conference On Hotel Management



Fifth Wave of Natakhtari Fundraising Campaign Starts

eorgian Hospitality is legendary and certainly a boon to the country’s tourism industry. However, as is the case with the modernized nature of our society, to fully capitalize on it and reap the rewards, the state and business sector alike should join hands into turning a tradition into a mundane obligation. One example of such cooperation was hosted by Pasha Bank as an entry point to their new project, aptly dubbed “Meeting Room”. The project represents a cycle of business conferences aimed towards bringing together participants from various industries and providing a platform for sharing ideas and best practices for raising the capital for various projects in respective industries. Continued on page 2


Four double-deck railcars to operate in Georgia from July PAGE 12 Prepared for Georgia Today Business by

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MAY 31 - JUNE 2, 2016

Meet Pasha Banks “Meeting Room” Initiative - Govt and Business Sector Join Hands At Major Conference On Hotel Management Continued from page 1 The first business conference of Meeting Room was held at the Radisson Blu Iveria Hotel on May 25th with the topic “Hotel Development in Georgia – The Best Practices”. The conference, supported by the Georgian National Tourism Administration and Colliers International, dealt with vital topics for hospitality management. An overview and overall assessment of the hospitality field, trends and expectations by Georgian National Tourism Administration, nuances of International Operator Identification and contracting for Hotel Management were all highlighted. Most importantly, what was basically a HowTo guideline for attaining financing (government grants, among others) for startup hotel business projects for small and medium scale enterprises were discussed in-depth. With presentations from noteworthy figures from the field and moderated by Georgia Today’s very own publisher & general manager, George Sharashidze, the conference was an occasion for interesting debate and insights into hotel management. “It was a very useful meeting, particularly for tourism industry professionals,” he stated in a post event comment. “Pasha Banks’ new initiative of a ‘Meeting Room’ was highly appreciated by participants and speakers alike. It was a good chance for both the guest speakers and participants to find out recent trends in the hotel business and the tourism sector in general. The presentations were

extremely interesting!” According to the statistics provided by the National Tourist Administration, compared with the year before, there was a substantial growth in numbers in regard of both international passengers and tourists arriving in Georgia (15 % and 20 %-s, respectively). India, Iran, Israel and Ukraine were prevalent countries of origin, while Estonians, Danes and Italians seemed to be the most eager Europeans to visit Georgia. This positive growth was reflected on the economy of the country, with an 8 % growth in income. Similarly, it meant more investment poured into the hotel business, with about 60 new hotels emerging this

year alone, some of them belonging to world famous brands. To further necessitate the creation of more hotels - predominantly in the regions which have touristic potential - the government has devised a loan securing system for both up-and-coming and established investors. Intricate and multidimensional, it covers a wide array of aspects and offers significant leverage for the hotel development business: if an investor intends to bring a well-established and famous international brand to the country, the government is offering co-financing up to 300000 Gel. Even if a brand name is unavailable, the authorities are ready

to co-finance a loan with substantial 8 to 10 % interest rates (for Gel and EUR, respectively) for the first 2 years. They also pledge to co-finance property mortgages and other forms of loan also for the first 24 months, from 500000 up to 2,500000 GEL, an international brand once again being the deciding threshold. However, it is required that 80 % of the loans should be directed towards purchasing more hotel infrastructure, the chief requirement being either building a new hotel in the region or expanding an existing one. However, quality infrastructure should be complimented with quality service and hospitality management, which

served as major talking points at the conference. Once again, according to the National Tourism Administration, about 2700 professional hotel staff participated in the state's organized free training in 2015. The agency also created a special department responsible for offering webinars to interested individuals. An expanded hotel database and interconnecting “convention” bureau were set up, tasked with assisting incoming investors with finding the right audience for MICE-tourism. Significant attention was given to country-branding as a whole, with Giorgi Chogovadze, the head of the agency, pointing to the video ads aired by CNN and Euronews, adding that particular attention was given to the areas of India and Gulf states, destinations from where substantial amounts of passengers visited Georgia in recent years. Media significance was also underlined, with apparently more than 400 journalists visiting the country on government (i.e. embassy) invitations to share their impressions afterwards. The event was wrapped up by a call to action for potential investors to register themselves in the database, with the government's assurances that they would be ready to financially support them when needed. The audience (and the author) left the event deeply satisfied, with a sense that this sort of involvement might just be the perfect predicament that Georgian tourism needs to continue to flourish.




MAY 31 - JUNE 2, 2016


The ISET Policy Institute (ISET-PI, 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.

Patience, Genatsvale!

Dohmen et al. offer a detailed discussion of how patience ultimately fuels growth and development by encouraging the accumulation of human and physical capital, investment in new technology and design of more future-oriented institutions. Consequently, the logic goes, economies dominated by patient individuals grow faster. This is a credible theoretical argument, but do we really observe this complicated relationship in practice? The answer is yes. The same paper, based on the data from 76 countries and 80 000 observations, posits that 40% of growth in national wealth might be due to patience. Moreover, patience strongly correlates with education and savings both at the aggregate (comparing countries) and at the individual (comparing individuals within the same country) level. Given the key role of patience in economic development, it is essential to understand what can be done to foster farsighted behavior in the population. There is no point in alleviating the symptoms of an illness without identifying and tackling its root causes.

izing, Louis XV “accelerated the general decline that culminated in the French Revolution in 1789”. Just like with pure impatience, also in this case, all humans have some selfish-selfless balance in themselves, which could be affected by history and geography. Analyticlimits and vulnerability are also common drivers of impatience, but are especially pronounced in developing countries, as argued by Ascher. Analytic limits become particularly influential in uneducated societies and societies with distorted images about the future, including excessive optimism. Judging by data on adult literacy and the share of labor force with tertiary education, we cannot blame Georgians’ shortsightedness on a lack of (formal) education. Leaving quality of education issues aside, according to these standard indicators Georgia is quite comparable to most EU countries and the US. On the other hand, according to ISET-PI’s Consumer Confidence Index, Georgians are incorrigible optimists. People’s expectations about the future (as described by our Expectations Index) have been higher than their evaluation of the present (measured by the Present Situation Index) in every month since the survey’s launch in May 2012. One can think of this as a widespread phenomenon but, if we look at other countries, for example Russia and the USA, this does not appear to be true. How could this optimism explain Georgia’s position in the international impatience ranking? A typical question used to measure impatience is whether people prefer a certain amount today or a larger amount at a later date (for example one year later). An optimist, who expects to be richer one year from now, is more likely to accept a smaller amount now, because it will add a lot more utility today (when the individual is “poor”) compared to the utility generated by the larger amount tomorrow (when the individual will be “rich”). Vulnerability is another important impediment to farsighted thinking. According to the World Value Survey, out of 60 countries engaged in wave 6 of the survey, Georgia had the lowest share of families (2%) able to save in the previous year and the largest percentage of families (55%) who had to borrow. This means that, in case of negative shocks (at the country or even at the household level), Georgians are significantly more likely to be concerned about their immediate survival rather than long term planning.



William Ascher, the author of “Bringing in the Future: Strategies for Farsightedness and Sustainability in Developing Countries”,identifies four broad drivers of shortsighted behavior: the time preference (or “pure” impatience), selfishness, analytic limits, and vulnerability. In general, people have a preference for benefits to come earlier rather than later and for negatives or costs to come later rather than earlier. This happens because the present value of future benefits and costs is discounted to some degree. The higher this degree of discounting (or, the “discount rate”), the lower value one attaches to future costs and benefits. “Pure” impatience is not something only peculiar to Georgians, it is a personality trait present in all humans. But, of course, time preferences might differ across cultures or geographic areas due to context or historical reasons. For example, in places where food was difficult to produce and/or store (for example, due to a hot climate, frequent droughts or wars), consuming today rather than tomorrow might have been a better survival strategy. So “impatience” genes would be more likely to be passed to future generations, leading to selection in favor of more impatient people. Selfishness is another driver of shortsightedness as illustrated by the famous phrase by Louis XV, “after me, let the deluge come” (“Après moi le déluge”). According to some historians, having indulged in his hobbies of hunting and woman-

How important are these four “ingredients” in explaining Georgians’ impatience? Understanding the weight of each contributing factor to impatience will be very useful for designing policies that combat shortsightedness and, as a result, promote development. For example, if the problem is analytic limits (including excessive optimism), it is important to help the shortsighted subjects raise their selfawareness. Thus, the government and media could provide information about current and future developments in the country to prevent people from building excessively optimistic expectations (e.g. related to availability of government subsidies or the immediate impact of closer integration with the EU). If vulnerability is a major driver of impatience, it can be dealt with by strengthening safety nets (unemployment or disability benefits, for example) and by promoting other mechanisms to insure the most vulnerable against risks. As for pure impatience and selfishness, there is no way other than to start building patience and selflessness traits from early childhood. This could be done by emphasizing how postponing benefits brings ever greater benefits in the future and how important it is to do a costly task today rather than leaving it for the future. Also, playing games that encourage selfless behavior and reward children for altruism could be a great way to educate a more farsighted generation.

“The one who is patient, wins.” Georgian proverb



ne of the first things tourists in Georgia notice is how crazy the drive from the airport to the city is. Jumping red lights, breaking rules to take over the jeep in front, the Georgian taxi driver risks his (and not only his) life to deliver his passenger to their destination. As a distraction from the dangerous ride, the driver might offer the famous “dzhigit” (a brave equestrian) joke: a dzhigit passes on red light, but stops on green – in case another dzhigit is crossing the road. Dzhigit-style driving is not the only example of Georgians acting in a shortsighted manner. The prevalence of early marriages, young parents, poor business ethics and low saving rates are some of the most obvious manifestations of Georgians underestimating the importance of farsighted behavior. Earlier on this blog, Florian Biermann and Robizon Khubulashvili hypothesized that Georgians are very impatient. New evidence by Thomas

Dohmen and his colleagues supports this claim by providing patience measures for 76 countries by asking interviewees to choose between a certain amount of money today and a larger amount one year later. The amounts were set to imply the same purchasing power in each country. Georgia turns out to be the #3 most impatient country, after Rwanda and Nicaragua!

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What’s wrong with being impatient? Isn’t it just part of the rich Georgian culture, something that distinguishes Georgian temperament from other nationalities? Indeed it does, but not always in a good way.





MAY 31 - JUNE 2, 2016

Khareba Winery Enjoys Success in European Contests BY ZVIAD ADZINBAIA


et more good news for Georgia and Georgian wine-makers: the Winery Khareba company has achieved success at a prestigious wine contest, “Citadelles du Vin” (, which is held annually held in the city of Bordeaux. This year, Khareba achieved a Gold Trophy and two Gold Medals with its “Kindzmarauli 2014” semi-sweet red and its “Mtsvane 2015” dry white vintages. This is not the inaugural honour for Winery Khareba; last year, its “Chateau Lipartiani” was also awarded a Gold Trophy and the title of “Best Wine” for Central Europe, Eastern Europe and Asia. Citadelles du Vin is held under the patronage of the International Organization of Vine and Wine (OIV). The organization “Vinofed” (http://www. is a member of the above-mentioned contest, which brings together seven core wine competitions from across the

world, “Citadelles du Vin” among them. Each May, the world’s top 50 tasters spend a few days together in order to identify the best wines from 30 countries. Khareba remains ambitious despite its remarkable achievements in Georgia and beyond. At the Mondial de Bruxelles in Belgium - which is held annually since 1994 - Khareba’s exemplary wine, “Chateau Lipartiani 2012” (white dry wine) earned a Gold Medal. Khareba is loyal to the ancient traditions of winemaking which has made Georgia one of the leading wine makers in the world. The company works to maintain Georgia's unique vine culture and winemaking, and successfully unites ancient methods and modern technologies to produce a number of high quality wines. As the modern market and technologies develop rapidly, Winery Khareba reorganized and considerably advanced its winery's equipment. The company owns a land plot of 1000 hectares, where unique Georgian and European vine species are cultivated and high quality wines produced. Khareba Wines are made in the regions of Kakheti, Imereti and Racha-Lechkhumi.




Maqro Continues its Green Construction Business in Georgia BY EKA KARSAULIDZE


n May 28, a presentation of MAQRO Construction’s new Green Diamond project was held. The investment value of the new project is up to 115 million USD. As part of the event, the successful completion of the Green Budapest residential complex was also celebrated. The grand ceremony was attended by Ketevan Bochorishvili, the Deputy Minister of Economics and Sustainable Development of Georgia, along with representatives of the government, the diplomatic corps and the company’s management, as well as residents of Green Budapest and potential customers interested in the new project. “We believe that MAQRO construction’s investments support and contribute to the strengthening of the economy and deepens the relations between Turkey and Georgia. We have the honor to enrich the capital of Georgia with a unique and completely different residential complex in Green Diamond,” said the Deputy General Director in

Project Development, PR, Sales and Marketing, Mr. Oguz Kaan Karaer. During the presentation, which was held in the inner territory of the recently completed residential complex Green Budapest, it was announced that the Green Diamond project had started in May in Dighomi, an ecologically clean district of Tbilisi, next to the Olympic facilities. A unique residential complex is being built in Tbilisi on the area of almost 70.000 m2 with 23.143 m2 inner, green territory and will offer a unique, affordable home in Tbilisi. A total of 23 living blocks and 1772 apartments will be built, along with swimming pools, children's playgrounds and outdoor and indoor sport facilities, basketball courts, walking and running tracks, commercial areas, social terraces, as well as a kindergarten and a school. Since 2013, MAQRO Construction has invested up to 70 million USD in the Georgian market and plans to invest an additional 150 million USD. Along with its own Green Budapest project, the company implemented France's Accor Group’s 4-star hotel brand Mercure Tbilisi Old Town construction, as well as the Bellissa furniture store chain. Maqro Construction will also celebrate the opening of the new Dinehall 5-star restaurant on Rustaveli avenue this June. In the near future, the company also plans to start the construction of Accor Group's Ibis Styles hotel. Maqro Construction also owns 20 000 sq.m of land next to the airport highway, where it plans to build a shopping center for home and decorative items.




MAY 31 - JUNE 2, 2016

Georgia marks World Rheumatoid Arthritis Day under the aegis Everything is in Our Hand


atients with Rheumatoid Arthritis Found Union Patients with rheumatoid arthritis (RA) have founded a union to provide mutual support and raise public awareness over the challenges faced by arthritis sufferers. In addition, Georgia will mark World Autoimmune Arthritis Day for the fourth time; the event aims to raise public awareness of the disease in an effort to provide timely diagnostic and treatment services. The meeting brought together Inga Mamuchishvili, a chairperson of the Union of Patients with Rheumatoid Arthritis, Marina Sagharadze and Rusudan Ediberidze, founders of the Union, as well Tinatin Samkurashvili, a PR consultant at GEPRA, a company supporting the Union. Representatives of the Ministry of Labor, Health and Social Affairs, Parliament, the Health Care Committee of the City Council, doctors, patients and other guests were invited to the meeting. “The Union of Patients with Rheumatoid Arthritis has now officially been founded in Georgia. We plan to play a mediator’s role between patients and government structures. This is a terrible disease, which causes chronic from pain for years. There are some methods of treatment, some of which have been financed; patients under 18 have received support, but this disease does not depend on the age. It may occur both in a 2-year old child and an elderly person. Our aim is to raise awareness of the problem. The treatment is quite expensive. We would like to make public and government structures aware of the need of permanent treatment required for the disease. This is a chronic disease causing disability. I have personally suf-

This is a terrible disease which causes chronic pain. Our aim is to raise awareness of the disease.

fered from the disease, I am an RA patient myself, this is why I have decided to speak out about the issue. However, it is rather difficult for an individual citizen to raise such a substantial amount of funds for the treatment,” said Marina Sagharadze, one of the founders of the Union of Patients with Rheumatoid Arthritis. Inga Mamuchishvili, a founder of the Union of Patients with Rheumatoid Arthritis and a doctor herself, said that

the main goal of the Union was to raise public awareness of the disease to make sure that people who have already noticed some RA symptoms go to a doctor in a timely manner “to make tests and start treatment. First a family doctor, then a radiologist and rheumatologist should be involved in the process to diagnose the disease timely. RA is rather an aggressive disease, which

A person with rheumatoid arthritis is doomed to be disabled unless the right treatment is provided.

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damages the connecting tissue basically located in the osteoarticular system. The body is in chaos and the immune system starts fighting the joints. Therefore a person with rheumatoid arthritis is doomed to become disabled unless the right treatment is provided.” “Today’s initiative and the foundation of the Union makes me happy because I am an RA patient myself and have had the disease for already 20 years. It is rather challenging to live with rheumatoid arthritis. Therefore I think that this organization will raise patients’ awareness; improve communications and will do a lot of good for arthritis sufferers” said Rusudan Machabeli, one of the founders of the Union of Patients with Rheumatoid Arthritis. Finally, an online petition has been published urging the Ministry of Health, Labor and Social Affairs and the City Council of the Tbilisi Municipality to increase access to medication for RA patients. Rheumatoid arthritis is a chronic, progressive, autoimmune disease causing joints swelling and damage and ultimately leads to disability of an RA patient. According to statistical data,

every third person in the world is suffering from the disease. The incidence of the disease among women is three times higher compared to men. Rheumatoid arthritis may begin at any age but mostly occurs in people aged from 35 to 50. Rheumatoid arthritis may damage all the joints, but it affects mostly hand, leg and wrist joints. The progressive damage to joints is accompanied by decreasing a person’s ability to work and move independently. RA patients, in particular, are unable to make such simple movements as comb their hair, walk on the stairs, cook etc. In developing countries more than half of patients lose their job and source of income in 10 years. RA patients may have complications like cardiovascular or lung diseases, osteoporosis, anemia etc. An RA patients’ life span may decrease by 5-10 years. Early diagnosis and treatment hampers disease progression and prevents irrevocable damage to joints. However, unfortunately, most of the diagnosed patients in Georgia are unable to receive adequate treatment because they cannot afford medication. The Union of Patients with Rheumatoid Arthritis was founded in 2016. The key goal of the organization is to increase public awareness of the disease; provide adequate treatment for patients resistant to standard therapy (those with particularly serious forms of the disease); communicate on an ongoing basis with the Association of Rheumatology of Georgia, representative of pharmaceutical companies and other medical institutions to exchange disease related news, methods and information about new medications.

Tel: (995 32) 2 45 08 08 E-mail:




Unemployment rate declines; reaches 12-year low


he annual unemployment rate in Georgia declined by 0.4 per cent and equaled 12.0 per cent in 2015, the lowest level of the past 12 years, according to the National Statistics Office of Georgia (Geostat). According to its latest data, about 1.8 million people were employed in Georgia last year and most of them were selfemployed. Figures showed 1,018,100 people were self-employed while 753,400 were hired by other individuals or business entities; the remaining 8,400 workers did not specify their employment status. Unemployment is more characteristic for urban residents (21.5 per cent) than rural (4.8 per cent). In this case, Tbilisi

shows one of the worst rates (-1.1) compared with 2014. The largest percentage of unemployed people (32 per cent) is among young people aged between 20 and 24. Unemployment in Georgia is more prevalent among men (13.5 per cent) than amongst women (10.2 per cent) of women. The employment rate among women is 52.9 per cent, and 67.6 per cent among men. Geostat also shows that just over two million people were capable of working in Georgia; however, only 1,779,900 (60 per cent) were employed last year. In general, 2,021,500 people in Georgia’s made up the national workforce with 958,300 people outside the labor force category.

Autograph Collection to manage Marriott Hotels


hree Marriott hotels currently under construction in Georgia will be united under the banner of Autograph Collection management, which is one of the three most prestigious brands in the world. The Georgian Co-Investment Fund stated that it will be the first time that a brand of this class will simultaneously manage three hotels: two hotels in the framework of the Panorama Tbilisi project (located in Sololaki and on Freedom

Square) and another one in the coastal village of Shekvetili, situated in the Guria region. “This confirms that Georgia not only has stable development; moreover, it is becoming increasingly important and popular for international business,” said the Prime Minister of Georgia, Giorgi Kvirikashvili. The total investment cost of the projects amounts to 365 million USD. The Georgian National Tourism Administration stated that 13 international brand

hotels would be completed by the end of 2017. Among them are seven hotels in Tbilisi: the Hilton Garden Inn, Park Inn by Radisson, Millennium Hotel, Rixos, Hyatt Regency, Moxy Mariott and the Intercontinental. Batumi will host another four: Crown Plaza, Babylon Tower, Cube Tower and Princess Hotel. Another two will open in separate Georgian regions; a Radisson Blu Resort will open in Tsinandali, Kakheti, and a Best Western in Kutaisi, Imereti.




MAY 31 - JUNE 2, 2016

EBRD Distinguishes 100 Million USD to Support Georgian SMEs


he European Bank for Reconstruction and Development (EBRD) is extending a loan of 100 million USD (220 million GEL) to the Bank of Georgia to support the development of local small and medium-sized enterprises (SMEs). It

Contact: Phone: 599 461908

The EBRD is committed to supporting businesses and companies in Georgia through investment, know-how and policy dialogue with the government.

includes the Deep and Comprehensive Free Trade Area (DCFTA) SME fund worth up to 50 million USD, SME finance of up to 40 million USD and the Women in Business SME fund of up to 10 million USD. “The DCFTA opens up an important new market to Georgian companies. The EBRD is ready to help local SMEs become more competitive on regional markets with the provision of long-term local currency financing. The EBRD is committed to supporting businesses and companies in Georgia through investment, know-how and policy dialogue with the government to help the economy make the most of new market opportunities,” said Bruno Balvanera, EBRD Director for the Caucasus, Moldova and Belarus. The facility will help local SMEs invest in improvements to product quality and modernize their services to meet EU standards. The EU will provide interested SMEs with investment incentives of up to 15 per cent as well as technical assistance in the form of advisory services from international consultants and the EBRD’s Advice for Small Businesses. In addition, the financing package will also increase access to credit in local currency and specifically support businesses that are managed or owned by female entrepreneurs for better access to finance and advice. The EBRD is the largest institutional investor in Georgia and has already invested 2.6 billion euros in the country.

Georgia Receives 50 million euros to Develop Agriculture


n the framework of the second phase of the European Neighborhood Program for Agriculture and Rural Development (ENPARD), the European Union will allocate 50 million euros to establish food safety standards in Georgia. The program, which is scheduled to be implemented for the years 2016-2019, aims to develop agriculture in the village, the reforms in the agricultural sector and improvement of services. The program budget includes the allocation of grants and technical assistance. The main goals of the ENPARD Georgia II project are to improve competitiveness and sustainability of the agricultural sector, improve sanitary, phytosanitary and safety standards, improve the quality of food, as well as control and inspection measures. In addition, the program will support the

improvement of working and living conditions in rural areas. The EU will allocate a portion of the funds to the Governmental budget, with the remainder to be distributed to ongoing rural development projects and NGOs. The program started in 2013 with an initial budget of 265 million GEL. ENPARD Georgia II has already launched three pilot projects in the municipalities of Lagodekhi (Kakheti region, eastern Georgia), Stepantsminda (Mtskheta-Mtianeti region, eastern Georgia) and Borjomi (Samtskhe-Javakheti region, southern Georgia) in 2015. The aim of the project is to strengthen and support communities and local government bodies, so that they are able to determine the priorities of the region and to implement local development strategies.




Fifth Wave of Natakhtari Fundraising Campaign Starts



n May 16, the Natakhtari Fund organized a press conference dedicated to the fifth wave of its fundraising campaign at the Holiday Inn Hotel Tbilisi. The company's management and representatives of the Our Home Georgia association introduced journalists and the audience to the projects aimed at educating and employing adolescents deprived of care. Cuneyt Arat, CEO of the Natakhtari Company, discussed the Fund’s past activities and future plans. He thanked the Fund's partners and all those people who had been engaged with the charity. “We decided to establish the Fund approximately 5 years ago in order to take care of needy young people. Our

We decided to establish the Fund five years ago to equip needy young people with skills necessary for an independent life.

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goal is to equip them with the skills necessary for an independent life and make them feel that they are not alone. It was very hard, but the outcome of the project was the most important. Over half a million lari was collected for about 200 people as a result of the public's activities. Profits generated from the sale of Natakhtari Lemonade were all transferred to the Fund. Therefore, we would like to thank our consumers. The team of psychologists of the Our Home Georgia NGO showed great enthusiasm and professionalism. Also, we highly appreciate the efforts of teachers and employers who have been working on a daily basis for implementing the project. Special gratitude needs to be expressed to His Holiness the Patriarch of All Georgia, under whose blessings the project is being implemented, and to the Ministry of Labor, Health and Social Affairs.”

Nikoloz Khundzakishvili, Corporate Director of the Natakhtari Company, said: “[Young people] should be well prepared [for life] and this is our goal. Here we see the social responsibility of our company. We have nearly 200 beneficiaries whose lives have been changed for the better and will continue to improve. This project is distinguished from the other ones by its sustainability and what is more important continuity. I hope that the project will continue and every year we will be able to obtain funds to provide respective assistance to adolescents deprived of care.” According to Manana Omarashvili, head of the Psychology Service of Our Home Georgia, the project turned out to be very successful. “The Natakhtari Company took on a lot of social responsibility when it started this long, needsoriented project. The company appealed to those professionals who are familiar

with the needs of children deprived of care. Also, significant activity was shown by our civil society. For instance, one of the teachers decided to train one of our beneficiaries for one of the national exams (GRE) for free; there were many cases such as this. It is noteworthy that the decision on allocating funding and incurring expenditure is not made by one person; there is a Coordination Council within the organization comprising of 11 people of various occupations. With a majority of votes, we decide which child needs assistance and in what ways. We are serving 167 beneficiaries, though the number of beneficiaries will increase from September. Apart from financial assistance, our organization is providing psychological assistance to beneficiaries. Of those we have assisted, 80 beneficiaries out of 167 are already working, and 66 adolescents acquired vocational education; 67 beneficiaries are studying at school and 15 at university. Five adolescents are currently preparing for the national exams. In addition, funding is provided for renting apartments for 77 full-aged beneficiaries. They are employed at cafes and restaurants, beauty salons, and the Natakhtari factory itself.” Mariam Gelashvili, representative of the Social Service of the Patriarchate of Georgia said: “We are delighted with the success of the Natakhtari Fund and are actively supporting the project. Cooperation between the Patriarchate and the Fund creates even better opportunities for assisting more young people. Today we are talking about the future generation, and it is important that youth without a home have a stable residence. I, as a representative of the Patriarchate’s Social Service, would like to ask our citizens to be more active and support similar projects.” Representatives of the company and the Fund thanked those organizations and people who, over the last five years, were engaged in the Take Care of the Future project, which provided employment and education for adolescents deprived of care.




MAY 31 - JUNE 2, 2016

Four double-deck railcars to operate in Georgia from July


tadler KISS double-deck railcars will start servicing passengers on Georgian railways from Tbilisi to Black Sea resort cities from this summer, stated the Georgian Railway company. An official agreement between Georgian Railways and Swiss Stadler Bussnang AG to bring new railcars to Georgia was signed on May 25. The new double-deck railcars meet all international standards and are equipped with a modern security system. The trains’ technical data is also fully compatible with the requirements of Georgian railway lines. Stadler KISS model trains are also designed to

cater for people with disabilities. The double-decker cars have elevators and low floor entrances with sliding steps, which allow disabled people and children to easily get in and out, as well as specially equipped bathrooms for the handicapped. The double-deck trains will appear in Georgia on July 17, and after passing technical regulation inspections, will start operating from Tbilisi to the Black Sea stopping only at the resort towns of Batumi, Kobuleti and Ureki. The trains will be able to transport over 400 passengers. In addition, the staff who will serve the passengers are currently being trained in different countries to meet European rail standards.

3rd IGCAT Experts’ Meeting on Innovation and Entrepreneurship to be held 31 May – 1 June 2016

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he 3rd IGCAT Experts’ meeting will take place in the framework of Catalonia, European Region of Gastronomy 2016, with three hot topics on the agenda: 1) Transatlantic Trade and Investment Partnership (TTIP), 2) new interdisciplinary training opportunities and 3) innovation/entrepreneurship for local development. IGCAT is a global network of experts interested in the convergence between gastronomy, arts, culture and tourism with the common aim of empowering local communities through guiding, facilitating and supporting cities and regions to recognize and develop their unique potential. This network, from different countries and disciplines (cultural and tourism managers, professors, researchers, consultants, chefs, local authorities) contributes to the enrichment and further development of dialogue, investigation and activities in this expanding interdisciplinary sector. The annual meetings of IGCAT bring together its members to explore particular concerns, as well as to share and exchange knowledge, expertise, and ideas revolving around these fields of interest. This year, the IGCAT Meeting will take place in two beautiful locations. On May 31, the meeting will have its official start in Sant Pol de Mar, home to IGCAT’s secretariat offices, a 3-star Michelin restaurant headed by

Carme Ruscalleda, and EUHT StPol, the oldest University School of Hospitality in Spain. During the morning session, the discussion will focus on the highly debated TTIP between Europe and the United States, featuring Mark Jeffery, Analyst and Advisor in Communications and EU Affairs at the European Commission office in Barcelona, that will present arguments in favour of TTIP, and Estefanía Coral, IGCAT Researcher from Colombia, who will make the case against it, presenting the consequences of an analogous agreement between Colombia and the USA. The afternoon will be dedicated to a roundtable session about the convergence of sectors in professional training, capacity building and skills development followed by the IGCAT Annual General Assembly. On June 1st, IGCAT activities will move to Tossa de Mar, hosting the Euro-Mediterranean Food Tourism Congress; during the first half of the day the experts will explore the theme ‘Innovation and Entrepreneurship in the arts, culture and tourism sectors’, introduced by Lidia Varbanova, author of International Entrepreneurship in the Arts. In the afternoon, Jordi Tresserras, Director of LABPATC - Lab of Heritage and Cultural Tourism at the University of Barcelona, will offer participants a guided visit to the Catalan Cuisine Museum Project where we will also discuss plans to launch an IGCAT Sustainable Food Products Award.




Voice Of America – 65 % of the Century T

his is the voice that Georgians heard for the first time 65 years ago today. And ever since that day they have been tuning in to listen to once-prohibited programs and music on Voice of America. Many would call Voice of America a broadcaster that gave people a sense of outside world. For 65 years, the news has swung between the good and the bad; the dissolution of the Soviet Union, ethnic conflicts, civil wars, upheavals, demonstrations and revolutions have been covered along with Georgia's successful bid for independence, the adoption of its constitution and its first democratic elections. Today, the VOA Georgian Service is present on TV, radio and web. Through its weekly TV magazine Washington Today, and as a result of partnerships with Georgia’s Public Broadcaster, the Imedi and Maestro private TV channels, as well as weekly newspaper Georgia Today, VoA Georgian provides its audience with firsthand information on U.S. foreign policy, government and independent expert commentary on important issues, as well as the American way of life and


Georgians living in and visiting the United States. Friends of Georgia will tell you VoA has made a significant contribution to Georgia’s democratization.

to communicate things that should be on the table between friends and talked about.”

“Today Georgia is a thriving, Europeanstyle democracy with a vibrant American-style media. So, I want to congratulate Voice of America and the talented, hardworking journalists of the VOA Georgian Service and I also want to remind the audience that VOA continues to deliver good information in Georgian and I want to encourage you to continue to tune in… გილოცავთ, best wishes from Mary and me, we miss Georgia very much.” VOA Georgian service chief Anna Kalandadze says that after 65 years on air, VoA Georgian maintains an audience through its exclusive TV and digital programming across its target area:



“It’s important that you are able to give a voice to other parts of the world that they are not going to hear by any other source except by you. So I congratulate you on making sure that there is an alternate voice to what people are hearing, especially those people who are in totalitarian countries who get the government view on everything”

“VOA Georgian audiences can always expect us to provide exclusive, reliable and objective news and information.” Georgia Today would like to extend its own congratulations and admiration to the Voice of American Georgian Service, and thanks VoA Georgian for over its years of cooperation.


“The VOA Georgian bureau should be very proud of the high quality reporting which they have done through the decades. Especially at a time when, quite frankly, the VOA has some difficulties maintaining the high level of service that it had during the Cold War, for example. I am very pleased that the Georgian Service is alive and continuing to do extremely high quality work. I always treasured it; I treasured it when I was there, and I still treasure it.”

DAMON WILSON, ATLANTIC COUNCIL: “The past 25 years have been a remarkable opportunity for the Georgian people to find their voice, to determine their future, to begin to shape their own destiny, whether it is in shaping their needs of government, their economy or their relationships with the rest of the world. And I think as the Georgian people have gone through that, which

has neither been linear nor smooth, the VOA Georgian Service has been an important light and an important voice to help inform, educate and broaden the perspective for Georgians to take their future in their own hands.”

SENATOR JAMES RISCH: “Georgia has come a long way. And everybody who has watched that is very proud of what Georgia has done, and I think Voice of America Georgian has been a real contributor, not only in bridge building but also in being able

Iconic monuments in many countries of the world were lit up in the colors of the Georgian flag to mark the 25th anniversary of the restoration of Georgia’s independence


t the initiative of Georgian embassies abroad, receptions dedicated to Georgia’s Independence Day, concerts and exhibitions of various Georgian musicians and artists, as well as photo exhibitions displaying important aspects of Georgian culture and history were held in many countries of the world. Photo exhibitions showing the country’s scenic sights and tourism potential were also showcased. Iconic landmarks that were lit up in the colours of the Georgian Flag to mark the 26 May holiday celebrations included: the Old Parliament House in Australia, Erzsébet Bridge in Hungary, Košice municipality of Slovakia, Ljubljana Castle, Kingdom Tower (Saudi Arabia’s highest skyscraper), Estonia’s business centre housing the embassy of Georgia, the Bosphorus Bridge in Istanbul, tourism

centres in Cyprus and Indonesia, and the Kaunas Cathedral Basilica in Lithuania. A gigantic Georgian flag was flown on the bank of the Neris River in Vilnius, and kites painted in Georgian and Lithuanian flag colours were sent up into the sky. Balloons in Georgian flag colours were launched in Greece; a Georgian flag was flown in front of the city council building in Canada; banners displaying Georgian national symbols were exhibited throughout the capital of Kazakhstan, and Georgian flags were also flown at the centre of Dublin. Belgium’s landmark sculpture of Manneken Pis was dressed in Georgian national costume; Moldova’s Led billboard displayed the Georgian flag, emblem and Independence Day inscription; finally, the Georgian flag was hoisted in the world flags corridor leading up to the Corcovado mountain in Brazil.




MAY 31 - JUNE 2, 2016

SOCAR Winners for the Euro 2016 revealed Another 30 tickets for the European Championship final match will be distributed to lucky winners on June 5, 12, and 19.


OCAR Petroleum granted free tickets for Euro 2016 to 20 competition winners on May 28. The winners will attend the opening of Euro 2016 in France. Another 30 tickets for the European Championship final match will be distributed to lucky lottery winners on June 5, 12, and 19.

“Our campaign still continues, so anyone can become another lucky winner to go and witness the final game of the European Championship on their own eyes,” Temur Japharidze, Deputy Director of Gas Import and Export at SOCAR Georgia Petroleum said. In order to become a lottery participant, SOCAR customers need to fill 25

liters fuel at a SOCAR gas station to receive a ticket. SOCAR started a lottery for tickets for the European Championship in March which will continue until June 15th. The company will cover all expenses of the 50 winners. The lottery is held on Sundays on Rustavi 2 after the 20:00 News. -

App to help farmers to be launched in September


raktor, an online and mobile application for farmers in emerging markets that is currently under development by Elva, competed in an important startup competition in The Netherlands on Wednesday 25 May and Thursday 26 May. In the Netherlands, a weeklong event, Startup Fest Europe, has attracted top American businessmen, including Tim Cook from Apple, Eric Schmidt from Google, and Travis Kalanick from Uber. Throughout the country, there are numerous events being held for startups. Traktor is participating in two events in Wageningen and The Hague. In Wageningen, 20 startups that are active in food and agriculture presented their ideas to a group of international investors. In The Hague, Traktor is also among 20 startups that pitched their ideas to investors.

Traktor is planned to be released in September this year, and will be free to use by farmers and businesses throughout the country. Traktor is a pioneering mobile platform that will provide farmers with training videos on a range of different crops, advanced weather data, agro-consults by local agricultural experts on problems they face on the farm, and a crop calendar: a personalised schedule showing when best to plant, irrigate and harvest their crops. The team behind Traktor also leads Elva, an IT development agency based in Tbilisi. Traktor works with a growing number of organizations. In particular, Traktor maintains a close partnership with Mosavali, a non-profit initiative of Elva to produce and disseminate educational content on agriculture in Georgia. On June 16 up to 10 developers from Google will assist Elva’s team in developing and tuning specific components for Traktor.




Dechert OnPoint: Georgian Law Developments


echert Georgia, through the contribution of partners Archil Giorgadze and Nicola Mariani, joined by senior associates Ruslan Akhalaia 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, a global specialist law firm that focuses on core transactional and litigation practices, providing worldclass 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 or contact Nicola Mariani at

OVERVIEW: REGULATIONS FOR PROTECTION OF ENVIRONMENT Georgia’s legal framework for environmental protection is aimed at protecting the country’s natural environment and ensuring a rational use of resources as well as the rights of its citizens to live in a healthy environment. For these purposes, the Law of Georgia on Environmental Protection (the “Law on Environment”) sets out the main goals and principles applicable in this regard, defining the role that the government is to play in guaranteeing that these principles are safeguarded.

MAIN GOALS AND PRINCIPLES The main goals of the Law on Environ-

ment include protection of the environment and rational use of resources, maintenance of a healthy environment for the ecological and economic interests of society, support for the maintenance of rare, endemic flora and fauna in Georgia and assistance with solving global and regional problems. According to the Law on Environment, citizens have a number of rights in the environmental protection sector, including: i) the right to live in a healthy environment; ii) the right to use natural resources; iii) the right to receive complete, objective information about their working and living environment; iv) the right to be a member of environmental organizations; and v) the right to be compensated for damages suffered by violations of applicable environmental law, among others. Citizens are also obliged to comply with environmental protection regulations and to preserve the country’s natural and cultural habitat, be considerate of the environment and take measures for its protection in compliance with the requirements of Georgian legislation.

STATE CONTROL OVER ENVIRONMENTAL PROTECTION The Ministry of Environment and Natural Resources Protection of Georgia (the “Ministry”) is the main governmental authority responsible for executing state control over environmental protection and natural resources. The Ministry organizes monitoring activities, supports continuous research of ecological conditions, establishes and manages protected areas, ensures the accessibility of information to the public, prepares annual environmental protection programs and oversees waste management, all while performing other functions established by the relevant legislation. The Ministry is authorized to conduct environmental audits in order to verify the depletion of used natural resources and the degree of harmful impact that certain activities have on the environment, as well as to reveal means and tools available for minimizing that depletion. The Ministry organizes the recording and assessment of qualitative and quan-



Commercial Director: Iva Merabishvili Marketing Manager: Mako Burduli



Editor-In-Chief: Katie Ruth Davies

titative indicators regarding the country’s natural environment, which includes the creation of respective cadastral maps and statistics and procurement of necessary inventory. The Ministry has established a special center tasked with making such assessments. The center collects data and ensures that the respective findings are accessible to the public.

ENVIRONMENTAL PERMIT To further the interests of the state and the public, the Ministry also oversees the issuance of environmental permits (the “Environmental Permit”). The Environmental Permit is issued to respective corporate actors conducting certain activities, a list of which is established by the Law of Georgia on the Environmental Permit (the “Law on Environmental Permit”). This list includes, inter alia: i) mining; ii) operation of oil rigs; iii) construction and operation of power plants and chemical factories; iv) exploration of natural gas; and v) construction of roads and railways. These activities are subject to mandatory ecological expertise and the assessment of their respective impact on the environment. The above-listed activities are subject

Journalists: Tony Hanmer, Tamar Svanidze, Zviad Adzinbaia, Beqa Kirtava, Meri Taliashvili, Eka Karsaulidze, Zaza Jgharkava, Maka Bibilashvili, Karen Tovmasyan, Dimitri Dolaberidze, Maka Lomadze, Tim Ogden, Ana Akhalaia, Robert Isaf, Joseph Larsen, Will Cathcart, Vazha Tavberidze, Nugzar B. Ruhadze

to the Environmental Permit and cannot be legally performed without such permit. The Law on Environmental Permit establishes respective rules and procedures for securing the Environmental Permit. The Ministry carries out an administrative procedure and bases its decision on the assessment of ecological experts. In case the assessment is negative, the Environmental Permit will not be issued. The recipients of the Environmental Permit are obliged to follow the provided instructions from ecological experts. The recipients are mandatorily required to implement measures which are specified for the purpose of minimizing the harmful impacts of the activity. The Department of Environmental Supervision of the Ministry is responsible for control over implementation of the Environmental Permits. Violation of the Environmental Permit requirements can be subject to a fine or cancellation of the Environmental Permit.

TECHNICAL REGULATIONS OF ENVIRONMENTAL PROTECTION The Law on Environmental Permit also envisages the obligations of corporate actors to observe the requirements of

Photographer: Zviad Nikolaishvili Layout: Misha Mchedlishvili Webmaster: Sergey Gevenov Circulation Managers: David Kerdikashvili, David Djandjgava

technical regulations. Technical regulations are notably established for handling radioactive waste, observing sanitary norms in biological factories, packaging materials, air pollution, waste disposal sites and safe operation of regional gas pipes and oil bases, among others. Violations of such technical regulations are subject to fine in each instance. The amount of the fine varies and is established by law.

CONCLUSIONS The regulations established under the Law on Environment and the Law on Environmental Permit intend to enhance the protection of the environment and natural resources in Georgia. The control mechanisms in this regard demonstrate that the Government of Georgia is actively involved in the process and oversees the protection of the environment in order to safeguard the rights and interests of the public. *** 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.


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Profile for Georgia Today

Issue #848 Business  

May 31 - June 2, 2016

Issue #848 Business  

May 31 - June 2, 2016