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BUSINESS WEEK September 23, 2013 #22

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September 23, 2013, Issue 22

GEORGIA

INVITATION FOR EXPRESSION OF INTEREST

Black Sea Project

Pg. 5

EBRD ADOPTS NEW STRATEGY FOR GEORGIA

caucasian1

BE INFORMED, DO BUSINESS

SOCAR SETS HIGH TARIFFS ON FUEL IN GEORGIA

“Lithuanian President Dalia Grybauskaitė stated that the EU would fight for Ukraine and Moldova, but when asked about Georgia she said Georgia had signaled that it was interested in both options”

Petrol will not Cheapen without SOCAR’s Will

he Board of Directors of the EBRD has adopted a new strategy for Georgia, setting out the Bank’s priorities in the period Pg. 2 of 2013-16.

Pg. 12

“DEXUS” COMPANY SUPPORTS THE IDEA OF TAX AMNESTY

enter - Point” former manager “Dexus’’ supports an idea of tax amnesty, however, doesn’t share an initiative proposed by “Center - Point’’. Pg. 6

THIRD TURKISH AIRLINE ENTERS GEORGIA

hird Turkish air company entered to air market. Atlasjet (Atlasjet International Airlines) will start regular flights to Istanbul direction on October 2. Pg. 6

Pg. 3

RUSTAVI METALLURGY PLANT PRODUCES LOW-QUALITY REINFORCEMENT OF SCRAP IRON

KFW INTERESTED IN ADDITIONAL PROJECTS IN GEORGIA

eorgian Ministry of Regional Development and Infrastructure declared that German Bank for Reconstruction (KfW) expressed readiness for more active cooperation with the Ministry. Pg. 7

AIR COMPANIES RATING ACCORDING TO 8 MONTHS STATISTICS

y September 1, 2013 Turkish Airlines is the market leader according to passengers flow. Its market share has increased by 0,9% since the beginning of the year. Pg. 8

AZERBAIJAN AZERBAIJAN CUTS CAR IMPORTS

he Azerbaijani State Statistical Committee reported that around 4,486 trucks were imported into Azerbaijan in January-July 2013, which is 19.8 percent less than in the same period of 2012. Pg. 10

ARMENIA ARMENIAN SOCKS AND TIGHTS DEMANDED IN UAE, GEORGIA AND FRANCE

he socks and tights produced in the Republic of Armenia are mainly sold in the local market, but they are demanded abroad as well. Pg. 11

CIS TRADE TENSIONS WITH RUSSIA MAY HELP UKRAINE SEAL PARTNERSHIP WITH EU

ith more than two months left before the scheduled signing of key political and economic agreements between Ukraine and the European Pg. 12 Union (EU).

WORLD NEWS SCANDALS COST JPMORGAN $1 BILLION IN FINES

t’s $1 billion in payouts that JPMorgan Chase & Co most likely wants to forget. In agreements with regulators totaling $1 billion and made public on Thursday. Pg. 13

he plant produces low-quality construction materials. A major part of housing companies uses imported product. Even Azerbaijani media agencies have published an article on the low quality of Rustavi Metallurgy Plant

Pg. 2

reinforcements. Baku Steel Company owners accuse Rustavi Metallurgy Plant of exports of low-quality reinforcements that are hazardous for construction works. Rasim Mammedov says Rustavi Plant uses wastes from Dashqesani oredressing complex, as well as the cheapest ferroalloy. According to the Azerbaijani state committee for statistics, in 2012 Georgia exported 28 00 tons of reinforcements to Azerbaijan. Construction works specialist Nugzar Tsitaishvili says Rustavi Metallurgy Plant manufactures reinforcements from scrap iron and the product quality is low. Therefore, Georgian companies have to refuse Georgian reinforcements to ensure high-quality constriction works. Pg. 3

GEORGIA LOSES TWO POSITIONS IN THE GLOBAL INNOVATION INDEX 2013

Matthew Bryza: Sometimes US was rudely warning Georgia not to Think of Military Confrontation with ith Russia

eorgia has lost two positions in the Global Innovation Index 2013 and currently the country ranks 73rd among 142 countries. Ukraine, Mongolia and Brunei Sultanate share the same position. The index has been developed by the Cornell University, INSEAD and the World Intellectual Property Organization (WIPO). Pg. 3

Giorgi Kvirikashvili – Georgia’s economy rises Pg. 2

Emzar Jgerenaia: Major Part of Georgian Citizens will Be Wealthy by 2020 Pg. 4

Ilya Eloshvili: “Green Alternative” Always Opposes Important Initiatives Pg. 4

Preliminary Orders for SAMSUNG GALAXY Note 3 Underway in Georgia Pg. 6

Valeri Katukov: In Moscow Georgian wine is most in-demand after Italian and French Pg. 4

MAIN EVENTS caucasian business week

September 23, 2013 #22

GIORGI KVIRIKASHVILI – GEORGIA’S ECONOMY RISES

he Minister of Economy and Sustainable Development Giorgi Kvirikashvili states that Georgia’s economy is on the rise. “Of course after the presidential elections there will be higher forecasting in the country and it follows much business, though having a real increase, it is very important. Georgia’s economy rises and not decreases, as our opponents say. By today’s situation, according to the confirmed data, in two quarters, there is a 1.09% rise. We expect an increase in the last quarter too, hence we presume that by the end of the year there will be a 2.5-3% rise. I’m not saying that it is a very good figure, it would be better that 6% expectation be met, but this is still important”, Kvirikashvili told journalists on

the first international forum of business developments, that opened at Expo Georgia today. He says that the next year will be better and he can say this for sure. The Minister said that a purposeful campaign must be conducted and the effort must be spent on specific priorities. Sakstat published preliminary data for the 2nd quarter, saying that real GDP growth made up 1.5%. This rate is improved by 0.1 percentage point in comparison with the 2nd quarter’s preliminary data, published in the beginning of September. If compared with the same period of 2012, GDP growth declined by 6.7 percentage points. According to latest published preliminary data for the 1st quarter, GDP growth made up 1.9%.

GEORGIAN, RUSSIAN DIPLOMATS MEET IN PRAGUE

eorgian PM’s special representative for relations with Russia, Zurab Abashidze, and Russian Deputy Foreign Minister Grigory Karasin met in Prague September 19. It was the fourth such meeting between the two diplomats in frames of a format launched in December to address issues related mainly with trade, economy, humanitarian and cultural aspects of bilateral relations. The Russian Foreign Ministry said in a statement that the meeting was held in “constructive and benevolent atmosphere, which helped to make progress on number of practical issues.” It said this format of “informal dialogue” is aimed at “normalizing” bilateral relations in the areas where the progress is possible in the condition of absence of diplomatic relations between the two countries. The Russian Foreign Ministry said that the two diplomats noted “positive dynamic” in trade and transport as Georgian wines, mineral waters and some agriculture products were allowed back on the Russian market. “The Russian side is carrying out gradual liberalization of visa requirmnets for the purpose of

broadening contacts between business circles and of providing more flexible approach in issuing Russian visas upon private invitations, primarily for supporting ties between families and relatives,” the Russian Foreign Ministry said. Georgian PM’s special envoy for relations with Russia, Zurab Abashidze, said that during the meeting he conveyed to his Russian interlocutor Georgian government’s “deep concern” over continued installation of fences by the Russian troops across the South Ossetian administrative boundary line. “It represents a gross violation of international and humanitarian norms,” Abashidze said after the meeting. The Russian Foreign Ministry said that the both diplomats noted that this informal dialogue represents a separate, independent framework and its agenda does not overlap the one which is being discussed in frames of the Geneva talks, launched after the August, 2008 war. The two diplomats have also exchanged views about future prospects of the bilateral dialogue, the Russian Foreign Ministry said. The next meeting between Abashidze and Karasin is scheduled for December.

MATTHEW BRYZA: SOMETIMES THE USA WAS RUDELY WARNING GEORGIA NOT TO THINK OF MILITARY CONFRONTATION WITH RUSSIA

he USA was continuously, strictly and clearly warning Georgia even not to think of military confrontation with Russia, Matthew Bryza, the former assistance to the deputy Secretary of State in European and Eurasian Issues said in his exclusive interview the Washington bureau of the American Voice took for Imedi TV. Bryza has recalled and valued the developments in August 2008. “I remember the USA was continuously, clearly and strictly warning Georgia that Tbilisi should not even think of military confrontation with Russia. This message was strict and sometimes, even rude. We warned them if Georgia would start military confrontation, the country would lose the war. Georgia has no chance to win the war with Russia. The units we have equipped and trained will be fully demolished, even the small chance for NATO membership will disappear and we will not be able to assist you. We were sending these messages for months and years. We were also talking with Russia to assure them the more their pressure on Tbilisi would increase, the less the USA would be able to persuade Georgia avoid conforntation”,

Bryza noted and added, the Georgian side made the biggest mistake when Russian and Ossetian units started shelling Georgian villages and Georgian troops opened return fire. “It was July of 2008 and My Russian colleague told me for the next 1.5 months the Russian government had not time to discuss peaceful plans with Georgia. I realized then they did not want to do anything and they had decided to start war. Georgia could do nothing to prevent this. On August 7 the Georgian government made sure Russian troops were heading to Tskhinvali via Roki Tunnel and Georgian troops did leave positions due to our instructions. In this case all the world would know Russia invaded Georgia. The biggest mistake was that after Ossetian and Russian units started shelling Georgian villages, Georgia opened return fire. Georgia was not to start attack and Georgian units were to leave positions and the country would win political war. The biggest mistake was that Georgian officials erroneously perceived our intensions. We were clearly saying them you are not a NATO member country and we cannot assist you if the confrontation is unleashed”, Bryza noted.

BUSINESS WEEK

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MIKHEIL SAAKASHVILI HOSTS VIKTOR YUSHCHENKO IN KVARELI

he President of Georgia Mikheil Saakashvili hosted the former President of Ukraine Viktor Yushchenko in Kvareli. Yushchenko took part in harvesting of wine grapes. Local youngsters and wine makers from different parts of Georgia helped them, who attended the training conducted by the French oenologist at Mikheil Saakashvili’s vine-growing centre.

EBRD ADOPTS NEW STRATEGY FOR GEORGIA

he Board of Directors of the European Bank for Reconstruction and Development (EBRD) has adopted a new strategy for Georgia, setting out the Bank’s priorities in the period of 2013-16. The strategy aims to support the further development of the corporate sector, the growth of the renewable energy sector, and the country’s integration into regional and global markets, through the Bank’s investments and continuous policy dialogue. The new strategy acknowledges Georgia’s efforts to remain the region’s leading reformer, and the progress made on structural reforms in Georgia, which include improvements in the legal and regulatory framework for businesses, liberalisation of the customs regime, and further simplification of the tax system. The strategy, which covers the period 2013-16, defines the following priorities: • Fostering private investment. The Bank will continue to pursue operations with private sector clients, both directly, and indirectly via commercial banks operating in Georgia. • Completing the modernisation of the energy sector. The Bank will complete the energy sec-

tor projects that were started during the previous Georgia strategy, which aim to increase energy production and access to export markets. Future projects will foster private sector participation, and will be supported by policy dialogue in the areas of domestic markets reform and the introduction of modern regulatory frameworks. • Supporting Georgia’s regional and global economic integration. The Bank will focus on projects in various areas – including infrastructure, logistics, telecommunications and the financial sector – to further develop those sector, enhance the value added and support cross-border economic activities. The Bank will support opportunities for skills transfer to enable Georgian companies to take advantage of trade opportunities and to become more competitive in a wider regional and international context. The EBRD has been operating in Georgia since 1993 and to date has signed 159 projects, with a net cumulative business volume of €1.8 billion. Nearly 66 per cent of cumulative commitments are in the financial sector, followed by 19 per cent in the energy sector, 11 per cent in the industry, commerce and agribusiness sectors, and around 4.5 per cent in the infrastructure sector.

3 SOCAR SETS HIGH TARIFFS ON FUEL IN GEORGIA BUSINESS

September 23, 2013 #22

uel tariffs in Georgia have cheapened by 0.15 to 0.20 GEL year on year. As reported, in the 2012 pre-election period the Georgian Dream collation promised to lower fuel tariffs. Many statements were made by Levan Izoria, a member of Irakli Alasania’s team. According to him, the previous government used to grow fuel prices artificially. He was saying the new government would make fuel tariffs cheaper by at least 0.20 GEL by creating competitive business doing environment. Shortly after the election new Finance Minister Nodar Khaduri noted the market had become transparent and fuel prices had cheapened and prices had fallen under 2 GEL at non-branded filling stations. The Union of Oil Importers of Georgia has forwarded information on year on year prices. According to the information, as of October 1 fuel prices in Georgia’s fueling stations were as follows: Super – 2.35 GEL to 2.40 GEL; Premium – 2.30 GEL to 2.35 GEL, EuroRegular – 2.15 GEL to 2.20 GEL and Regular – 2.15 GEL, EuroDiesel – 2,37 GEL to 2.40 GEL, Diesel – 2.15 GEL to 2.20 GEL. The prices were as follows in September 2013: Super – 2.18 to 2.20 GEL; Premium – 2.12 GEL to 2.15 GEL; EuroRegular – 2 GEL to 2.02 GEL, Regular – 2 GEL. EuroDiesel – 2.07 to 2.20 GEL, Diesel 2.05 GEL. What are the reasons current fuel prices are lower by 0.15 to 0.20 GEL compared to the same period of 2012? Has the Georgian Dream kept the preelection promises or this is just coincidence and the reasons are related to the tendency of lowering oil prices on global markets? Vano Mtvralashvili, a chairman for the union of oil importers, says the year on year downturn in fuel prices is related to international prices. At the same time, fuel prices have also fallen because

caucasian business week

Petrol will not Cheapen without SOCAR’s Will

of public demand and pre-election promises, he added. “The public demand was to lower prices. Naturally, it is the interest of all companies to supply products to the customers as cheaper as possible”, Mtvralashvili said. Tengiz Chichinadze, a commercial director for Rompetrol, noted international prices have conditioned a downturn in fuel prices, but domestic factors have also driven the contraction in fuel prices, namely, appearance of new market players and withdrawal of older ones. “All companies set fuel prices due to international prices, but domestic factors also drive prices, namely, some companies may withdraw from the

market and new ones may appear”, Chichinadze said. The parliament’s majority explains the downturn in fuel prices by change in the power and international prices. Zurab Tkemaladze, a chairman for the parliament’s committee for branch economy and economic policy, says in the past years international prices could not immediately affect the Georgian market, but today the situation has changed and the business has been freed from pressure. Prices were artificially grown, but today we have a real picture and the companies are free of additional pressure”, Tkemaladze noted. ”We have promised to free the business from additional pressure. We have achieved this and fuel

prices have been lowered by 0.15 to 0.20 GEL”, Tkemaladze said. More evident and real factors for downturn in prices should be also mentioned. The main factor is related to a nearly monopolistic state of SOCAR and Azerbaijani oil products on Georgia’s markets. Basically, Azerbaijani oil products are sold in Georgia and their ratio in fuel imports is about 70%. A major part of domestic fueling stations buy SOCAR oil products. The quality of Azerbaijani oil is another issue, as the quality is lower compared to European standards. The business of two presidents. SOCAR blossoms in Georgia. The attempts of Ivanishvili to cheapen gas and oil products ended along with his visit to Baku soon after the elections. Fuel prices are still set by Azerbaijan and SOCAR. As a result, fuel prices are far lower in our neighboring and strategic ally Azerbaijan. Moreover, fuel prices are lower even in Armenia, where oil products are transported via Georgia. .. The fuel prices are highest in Georgia among all neighboring countries. SOCAR, namely, SOCAR Petroleum Georgia receives huge profits thanks to high tariffs and monopolistic state. The company is dominant on both wholesales and retail markets. Georgia is a sole country in Europe, where a foreign company dominates in both wholesale and retail sectors. David Zubitashvili, a director general for SOCAR Petroleum Georgia, the former energy Minister of the government of Eduard Shevardnadze, manages the business from the Georgian side. It would be wonderful if Zubitashvili cares for downturn in fuel prices. SOCAR can take decisive steps in this respect. In other case, discriminative high prices will be maintained in Georgia and this factor will make serious problems to the Georgian Economy.

GEORGIA LOSES TWO POSITIONS IN THE GLOBAL INNOVATION INDEX 2013

T From Pg. 1

he index comprises over 85 issues and Georgia’s score is 35.56 (the maximum score is 100). Georgia has got good positions in terms of market attractiveness (34th position), institutions (47th position). The country has recorded bad results in human capital and researches (97th), business attractiveness (95th) and creative results (95th). As to knowledge and technologies, the country ranks 63rd. Georgia is 72nd in terms of infrastructure. Georgia has showed the best results in terms of simplicity of quitting the job place (1st place), simplicity of taking credits (4th place) and busi-

ness inauguration components (5th place). The country has showed the worst results in the component of cooperation between universities and businesses (126th), the component of intensity of local competition (123rd), the correlation of the number of ISO certificates to the GDP volume (119th). Georgia ranks 5th in the Region (Armenia, Azerbaijan, Turkey, Russia, Kazakhstan, Ukraine, Belarus). The highest figure in the region is recorded for Armenia (59th place), Russia (62nd), Turkey (68th), Ukraine (71st), Belarus (77th), Kazakhstan (84th), Azerbaijan (105th). The best positions in the Post-Soviet states are recorded for Estonia (25th ), Latvia (33rd) and Lithuania (40th). The index leader countries are as follows: Switzerland, Sweden, Great Britain, the Netherlands, the USA, Finland, Hong Kong, Singapore, Denmark and Ireland. Madagascar, Sudan and Yemen occupy the last positions. The Global Innovation Index is published every year and unites seven directions that are also divided in 21 issues – 1) Institutions (political environment, regulations, business environment); 2) Human capital and researches (education, higher education, researches and development); 3) Infrastructure (internet and telecommunications, basic infrastructure, ecology); 4) Market attractiveness (credits, investments, commerce and competition); 5) Business attractiveness (qualified workforce, innovative communications, spread of knowledge); 6) Knowledge and technology achievements (creating the knowledge, influence of knowledge and dissemination of knowledge); 7) The results of the creativeness (nonmaterial assets, creativeness in making goods and services; creativeness in the internet space).

RUSTAVI METALLURGY PLANT PRODUCES LOW-QUALITY REINFORCEMENT OF SCRAP IRON

T From Pg. 1

he expert says contrary to their products that are made of iron ore, Rustavi Metallurgy Plant makes reinforcement of scrap iron and the quality is low. Therefore, domestic companies refuse to use Georgian products, Tsitaishvili says. Ukrainian reinforcements are made of iron ore under a full metallurgical cycle. The product has got an ISO certificate and this signifies the product is acknowledged in any country. Neither Georgian Steel, nor Rustavi Plant nor GeoSteel own similar certificate. Note that one ton of Ukrainian reinforcement comprises 92 rods, while Georgian one contains 88. Therefore, construction companies prefer imported products. Even if the price if lower per ton, the companies find Ukrainian product more profitable. Maybe, Georgian reinforcements will make mo problem in small size projects, but in large-scale projects companies prefer imported reinforcements”, Tsitaishvili noted. “Georgian reinforcement may be used in 2-3 floor houses, but higher buildings cannot be built with domestic reinforcements. I personally would not buy an apartment in similar building”, Nugzar Tsitaishvili noted.

At this stage, the price per ton of imported reinforcements makes up 800 USD, while the price is 680 to 690 USD for domestic reinforcements. GeoSteel products also cost about 800 USD. Giorgi Kapanadze, a director general for AXIS company, says he has no information on the quality of Georgian reinforcements, but he has a different approach to the issue of quality of construction materials and his company uses only high-quality products. The company set up good relations with Ukrainian partners from the very beginning and AXIS employs only Ukrainian reinforcements, he added. The head of Beruka company also says he has no information on Georgian products, because his company has used only Ukrainian reinforcements for large-scale projects. The chairman of the association of customers says it is incorrect to announce Georgian reinforcements as low-quality products. Laboratory exploration is required to determine the quality, Irakli Rostomashvili says. A major part of companies use Ukrainian reinforcements, but there are several other companies too that use Georgian products. The quality of Ukrainian reinforcements is worldwide acknowledged. Therefore, many Georgian companies prefer to say they use Ukrainian reinforcements to avoid additional questions, Rostomashvili added.

INTERVIEW September 23, 2013 #22

caucasian business week

EMZAR JGERENAIA: MAJOR PART OF GEORGIAN CITIZENS WILL BE WEALTHY BY 2020

“There will be an annual growth of 3-3.5 per cent.2014 will be very difficult. Especially, the firstquarter” An interview with the I.Javakhishvili Tbilisi State University professor EMZAR JGERENAIA - The discussion of the project of Georgia’s economic strategy was held a few days ago, whichwas attended along with government officials, by experts, including you. You became aware ofthis plan at a meeting with t Prime Minister. Ministries of Finance and Economics have beenworking on it for months. How have your expectations justified? - In the past few months we have been working around it. This is a list of the issues which need to beimproved and eventually take a form of a program. On Friday, directions were discussed. This programwill take shape in the near future. - Will the public hearings be held and will experts’ opinion be taken into account? - Of course. On Friday, we, as the Board members, have added several directions. The issues will be also reconciled. - Is the implementation of this program realistic considering Georgian economy and the reality?Are not these general provisions, which would work in any country? - General is what is adopted in the world. Nothing is original. Here we are talking about the fact thatthis part will be adapted to the reality. The experience of the world is also taken into account

butadapted to Georgia. - In your opinion, what is the most important point of this plan which should be implemented? - The main thing is people to live well. This is the purpose of this document. - According to the plan, should people’s wellbeing be achieved by 2020 ? - A major part of the Georgian population should feel the richness, abundance and abundance of reform by 2020, and our country should be one of the wealthiest countries by average turnover. - Will this document (considering past experience) remain a part of the program implementation of which will be extended for years? - Everything will appear after the election when the new Cabinet is formed. But I do not remember that such a strategic plan has been worked out in the last years. Businesses and residents should become the participants of the plan. When the new government comes in 1.5-2 months, I hope an approach to this plan will be as to a status document. Once and for all, we have to move to an era of stable and hereditary government programs. - Will the new government meet this document? - Of course.

- Last week commersant.ge conducted a survey. We were interested in how the population is satisfied with the new economic team activities. 16 percent of readers believe that thegovernment is very effective, a significant effect was not seen for 44 percent and 40 percentconsider this team inefficient. In total, 84 percent of the readers appreciate the work asunsatisfactory, why do you think we got this kind of result? - The survey results are completely natural, because the jobs are not created. Unemployment remains apressing problem. Nothing has changed in terms of revenues, people are suffering from poverty. - Does the government do everything or the new government could work more effectively? -It could be more effective and courageous. However, neither long nor short period has passed. Thetime of radical transformation has come in Georgian economy. - Taking into account the current economic situation, what is your forecast for the end of the year, what economic growth do you expect? -Annual growth rate will be 3-3.5 percent. 2014 will be very difficult. Especially, the first quarter.

ILYA ELOSHVILI: “GREEN ALTERNATIVE” ALWAYS OPPOSES IMPORTANT INITIATIVES An interview with the Deputy Minister of Energy ILYA ELOSHVILI

- Speaking about “KhudonHPP”, “Green Alternative” states that Khaishi residents have their demands and until they are not satisfied , they will not take part in the discussions. How the first public discussion of the project was held and what is the use of the project? - “The Green Alternative” belongs to a radical wing of the NGOs. It always opposes the initiatives which are very important for the country. This meeting was very important. It’s the first

time, when ti h an iinvestor t came openly l and d was pubb licly introduced to the population. Of course, this is an important fact. As for the fact that people have certain requirements, it is natural. These people have been living in uncertainty for 30 years. They wonder what fate awaits them. Now the main is a contractor to carry out the resettlement plan in accordance with the standards of the World Bank and offer a compensation in accordance with the international standards. - Will the scale of the project be reduced? - We must be sure that the size of the dam, an alternative and similar issues are decided by experts.The approach is as follows: we provide the most optimal variant, where our potential will be lost less.We’re doing it for future generations. That’s why we do not have the right to choose the alternative that would eliminate the possibility to use Enguri potential in full. We do not have a lot of potential, if we want economic development, and if we want to move forward as a state, this potential should beused.

Dam’s the mostt optimal D ’ size i iis th ti l variant. i t This project is of vital importance for the state. We’ll get additional 450 million kilowatt / hours in the winter period as a result of the implementation of this project. Accordingly, it is 15 - 20 percent of the total import. This is a very large figure. This will save for the state the cost that is paid today to Russia. Imagine we have to pay 50 million each year. In addition, each year an investor will leave 20 million to Svaneti. Just imagine, this is a great figure for Svaneti. In addition, he will pay taxes, it will be exported to Turkey and so on. Consequently, we want a dialogue with the people. - They appeal to the fact that there was talk before election that large power plants would not be built. In particular, in “Khudon HPP” case, there were promises that the project will be implemented considering the interests of the population. Has the Energy Ministry revised thepolicy? - Of course, the interests of the population will

“Green Alt Alternative” attended bbe considered. id d “G a public consultation, his representative acted very irritant. This organization was in the group that developed the amendments to the project. All non-governmental organizations were involved, and we are grateful for that. As for the interests of these people, their interests will be maximally taken into account, Prime Minister says. The fact is that this company is registered in offshore zone and has not any experience in the implementation of large projects. The company has already spent 28 million USD in research and each year pays 600 000 USD for the land to the local budget We extended a term for the company to ensure that all researches are completed. - For how long was a term extended? - On March 1, 2014 they must obtain a construction permit. Until now, they should complete the road and accommodation plan, as well as negotiations with the local population.

VALERI KATUKOV – IN MOSCOW GEORGIAN IRINA MILORAVA APPOINTED WINE IS MOST IN-DEMAND AFTER ITALIAN AS CHAIRMAN OF GNERC AND FRENCH

eorgian wine is third indemand in Moscow after Italian and French, Deputy Chairperson of the alcoholic product quality and security control commission of Rospotrebnadzor (The Federal Service for Control in the Sphere of Protection Consumers’ Rights

and Well-Being of Humans) Valeri Katukov visiting Georgia stated. He says that he arrived in Georgia on Monday and is going to leave with the third group of specialists of Rospotrebnadzor. Katukov says that the Russian specialists were pleasantly surprised by the Georgian wine quality. “We are pleasantly surprised how much was done by the Georgian producers in a short time span”, Katukov said. He says that Georgian high quality wine is in-demand in Russia and they’ve been assured of this after the research they conducted. He said that the most important thing now is to preserve the quality, as there are dangerous signals that there may be unquali-

fied beverage among the mainly high quality product. “I don’t want to name the companies and I don’t want to upset the colleagues, but the Rospotrebnadzor demand to have high quality concerns all the factories equally. I don’t want what happened to the Moldavian wine to repeat, when after many warnings Rospotrebnadzor was forced to stop Moldavian wine import. I don’t want the same to happen regarding Georgia, though I think it will not happen, as after meetings in Georgia, I’m convinced that Georgian entrepreneurs take the quality seriously”, Katukov said. He said that if any product doesn’t meet the quality standard, this product will be sent back. interpressnews.ge

eorgian National Energy and Water Supply Regulatory Commission (GNERC) reported that Irina Milorava has been appointed as a

chairperson. According to the Prime Minister’s order of September 16, Milorava was appointed for 6-year term as a member of GNERC, while according to order of September 17 – as GNERC chairperson. Milorava is a lawyer, she was served as deputy to director general of Electricity System Commercial Operator (ESCO) since its foundation in 2006, while became head of the company in 2009, being elected also for 4-year term in supervisory board of JSC TELASI (Tbilisi energy distributor). Respectively, on September 17, Vakhtang Ambokadze was appointed as acting di-

rector general of ESCO, serving as director general’s deputy for legal issues since 2007. To remind, term of office of former chairperson of GNERC Guram Chalagashvili expired in late August.

GEORGIAN RAILWAY September 23, 2013 #22

caucasian business week

INVITATION FOR EXPRESSION OF INTEREST

eorgian Railway JSC (the Company) announces its preliminary intention to enter into new project on ferry transportation service to the Black Sea basin countries. For this purposes the company intends to select a partner, which shall comply with requirements stated in this invitation for expression of intention and is willing to cooperate with the Company in order to successfully initiate and implement the Project. 1. COUNTRY OVERVIEW Georgia is located to the east of the Black Sea and has a land area of 69,700 square kilometres. The country is bordered by Russia to the north, Azerbaijan to the east, Armenia and Turkey to the south and the Black Sea to the west. Georgia is a key link in the shortest transit route between Western Europe and Central Asia for transportation of oil and gas as well as dry cargo. Country’soil and gas pipelines, Black Sea ports, well-developed railway system, together with its airports are playing an increasingly important role as part of so called “TRACECA” corridor. At the same time, Georgia functions as the vertical North-South transportation link between Russia and Turkey and Armenia. As a major regional transport-transit hub, Georgia offers significant distribution opportunities through its newly renovated and expanded transportation infrastructure, which includes: seaports/terminals an extensive national highway system, expanded railway routes, 2 renovated international airports and Black Sea ports. Number of taxes was reduced drastically from 21 in 2004 to only 6 flat taxes today, accompanied by reduction of almost all tax rates. Above all, Georgia now has a genuine, business friendly environment. As a result of the continuous improvement of the entrepreneurial environment in Georgia, the World Bank’s 2012 Doing Business Survey ranks the country 16th out of 183 economies in terms of ease of doing business. According to the Work Bank-IFC Doing Business Report, Georgia is ranked as the top reformer globally for 2005-2011. Georgia’s ranking jumped by five positions from 77th to 72nd place (with a 4.15 score), according to the World Economic Forum’s Global Competitiveness report 2013-2014. It is reasonably projected that with the opening of the Russian market for Georgia imported/exported freight volumes will increase in the near future. 2. COMPANY REVIEW JSC Georgian Railway is, by statute, Georgia’s only railway operator. It principally provides freight services, transhipping a variety of cargo, including oil, oil products, ores and grains, originating principally in the east from the Caspian Sea and Central Asia to the Black Sea. The Company also provides passenger services. It has a vertically integrated business model, owning and operating the tracks, stations, other infrastructure and rolling stock comprising Georgia’s entire national railway system, as well as the land adjoining the tracks. The Company sets its own tariffs without the need to obtain governmental approval. Maximum freight transit capacity amounts

Black Sea Project

to approximately 30mln tons per year. The Company’s mainline rail network, together with Azerbaijan Railway, forms the Caucasus railway corridor, a key segment of the TRACECA corridor. The Company’s mainline rail network is thus a link in the shortest route from the Caspian Sea and Central Asia to the Black Sea and the Mediterranean basin. As a key link in the transportation chain between Europe, and Central Asia, the Company believes that it is uniquely positioned to capitalise on trade between Europe and the Caspian Region and Central Asia. Three of the Company’s lines terminate at the Black Sea, at the port cities of Batumi, Kulevi and Poti. Access to these ports allows easy on-shipment of transit cargo to the Mediterranean basin and Europe. The Company believes that it has a number of key competitive strengths that will enable it to capitalise on its leading position in the Georgian and Caucasus transportation markets in the future. These include: A unique strategic location, highly attractive market fundamentals, favourable regulatory framework and strong Government support, track record of resilient and profitable growth with further upside and high quality customer portfolio. 3. PROJECT OVERVIEW Strategic objective of the Project is: - to enhance competitiveness of sea freight for exported, imported and transit cargos compared to other means of transportation and attract new types of cargo to the corridor. - to encourage increaseof transit/import freightvolume transported via Georgian railways by approximately 80 000 tons per year. The purpose of the Project is to offer ferry transportation service to the Black Sea basin countries in the following directions: - Georgia (Poti) – Russia ( Kavkaz) - Russia (Kavkaz) – Georgia (Poti) In order to implement the Project the Company intends to establish Special Purpose Vehicle (the SPV) together with the selected partner, with equity participation to be further agreed on the final stage of selection. Considering growing demand for the ferry transportation services and the market entry barriers for foreign competitors SPV is supposed to obtain advantage in the market with competitive prices as well. This means not only price competition with direct competitors, but also competition with alternative means of transportation maily with road transportation services and routes. .

4. BRIEF OVERVIEW OF REGULATIONS Georgia has ferry transportation service agreement with Ukraine, Russia and Bulgaria, also it’s planned to sign similar agreement with Turkey in the current year. At present, Georgian transport operators are not able to use quotas that are dedicated for the country, because they do not have appropriate vessels. The market is untapped from the Georgian side, while the Ukrainian and Russian ferries successfully use their allotted quotas, as Georgian ports serve approximately 5 foreign ferries a week. 5. SELECTION CRITERIA Companies (legal entities) interested in this invitation and wishing to express interest to cooperate with the Company on the general terms provided in this invitation are supposedto comply with following requirements: - successful candidates shall (i) own or (ii) have right to operate a ferryboat, on the basis of rental agreement or (iii) have preliminary agreement on purchase or rental of a ferryboat complying with following technical features :

- experience in the maritime transportation industry shall be an advantage; - Should be able to submit preliminary agreement with or letter of intention from freight owners willing to become customer of the SPVin case the Project is initiated and successfully implemented. 6.REQUESTED DOCUMENTS Candidates wishing to participate in the selection process have to submit following documents: - Intention to cooperate with the Company for the purposes of initiation and successful implementation of the Project;

- Overview of the candidate’s business, corporate structure and financial statements for last three years (if applicable); - document evidencing candidate’s ownership rights on a ferryboat or rental agreement or preliminary agreement on purchase or rental of a ferryboat; - document evidencing technical specifications of a ferryboat; - preliminary agreements or letters of intention from the freight owners envisaging their intention to become customers of the SPV 7.SELECTION PROCEDURES The candidates, complying with selection criteria as defined in clause 5 and wishing to express interest in the Project are advised to submit documents requested under clause 7 not later than 10 (ten) working days from the date of this Invitation. Documents should be submitted by sending photocopies to the following e-mail addresses: - Mamuka Talakhadze – Deputy Director of Freight SBU - Mamuka.Talakhadze@railway.ge - Vakhtang Mikelaishvili – Consultant of the Freight SBU - V.Mikelaishvili@mta.gov.ge As a next and final stage of the selection procedure only short listed candidates shall be contacted by duly authorised representative of the Company and provided with additional information regarding the Project. Short listed candidates shall be requested to submit additional documents needed for proper evaluation and selection of the candidates. List of such documents and additional information shall be communicated with short listed candidates within reasonable time frames after completion of the first stage selection procedure. Final decision on entering into legally binding contract with the selected candidate is subject to corporate authorisations to be obtained after finalisation of the second stage selection procedure. 8.DISCLAIMER The information contained herein in no case represents a legally binding document for the Company and in no case obliges the latter to enter into any contractual and/or other legal relationships with the candidate expressing interest. Expression of interest in no case entitles the candidate to claim the Company for not executing legally binding document therewith. The Company preserves the right to any time alter, amend, resubmit the information contained herein and no liability whatsoever can be imposed thereupon. The Company preserves the right to choose the candidate, with which it will carry on relationships at its sole discretion or the right to suspend/terminate negotiations at any stage and no claims of whatsoever nature can be submitted for doing so. The candidates shall bear their own costs, expenses and/or liabilities relating to submission of documents requested on any stage of selection and negotiations related to the project and shall have no right to request full and/or partial compensation of such costs and/or expenses from the Company in case of termination of selection/ negotiation procedures.

BUSINESS caucasian business week

PRELIMINARY ORDERS FOR SAMSUNG GALAXY NOTE 3 UNDERWAY IN GEORGIA

NEW FACT OF GOVERNMENT PRESSURE ON BUSINESS UNVEILED

esides giving luxury cars, “Goodwill” was forced to invest 3 million GEL in Rabati castle How did the former government force “Goodwill” to grantthem the expensive cars? We are talking about 44 “Toyota HiLux” and 5 “ToyotaLC-70” with the total value of 1 671 516 GEL given to the Ministry of Economy as a gift. “Banking and Finance” newspaper published an article which says that during Saakashvili’s reignbusinesses and property expropriation, business terrorizing was systematical. Election campaigns werefinanced, millions were transferred on the accounts of offshore companies. Businessmen were forced to give a share in the company or to give up a business or were arrested. 20 thousand complainants demand to restore justice, however, as “Banking and Finance” writes, in the light of imposed cohabitation, justice can-

he first sample of Samsung Galaxy Note 3 has already appeared in Georgia. The show model and its preliminary order became available in Georgia several days ago. The company announced a campaign for making preliminary orders a week ago. The campaign has drawn much interest of the consumers, the management says. The Samsung management has held the presentation of the first sample of Samsung Galaxy Note 3 at a Samsung official brand store in Georgia, after Berlin, Germany. The sample is powerful, rich with functions and quite expensive. Shota Lursmanashvili, a sales manager for Samsung mobile phones and IT technologies in Georgia, says everybody making preliminary orders for Samsung Galaxy Note 3 receives a 100% discount card for 150 GEL accessories for Samsung Galaxy Note 3. The mentioned accessory S-View Cover is re-

branded, multifunctional and more refined one that makes easier and more convenient to use the smartphone. At the same time, the consumer will receive a 50% discount card for Galaxy Gear accessory that enables to make calls, take photos and videos, check SMS and perform other functions. To receive the card, the consumer must place preliminary order for Galaxy Note 3. The orders may be made at Samsung brand stores through September 26, while the sales will officially start on September 27. “Galaxy Note 3 is a new leader on the global market of smartphones. It is the strongest multifunctional smartphone that is easy in use. Excellent screen and incomparable S pen will inspire all users of Note 3”, Shota Lursmanashvili noted. Samsung opened its first store in Georgia in August 2013. The company was founded in 1983 and today it represents a major manufacturer of electric technologies.

“DEXUS” COMPANY SUPPORTS THE IDEA OF TAX AMNESTY George Kananashvili: Amnesty should apply equallyto all developers

enter - Point” former manager “Dexus’’ supports an idea of tax amnesty, however, doesn’t share an initiative proposed by “Center - Point’’. As we reported, Maya

Rcheulishvili is forming an Advisory Council which will co-operate with the government for the purpose of the cancellation of VAT debts accumulated over the years. One of the founders of ‘’Dexus” company George Kananashvili explains to “Commersant” that the issue is pressing for the development sector, however, a golden mean should be found which put all on equalterms. Kananashvili notes that some developers paid VAT in good faith, and a part of them took a taxcredit. Kananashvili doubts regarding the effectiveness of the Advisory Council created by “Center - Point’’, and adds that the amnesty should apply equally to all developers. Note: VAT rate makes 18% for the developers.

September 23, 2013 #22

not be restored in this field so far. The newspaper intercepted a document signed between the Ministry of Economic Development and “Goodwill”. According to the document, the company purchased expensive vehicles with a total worth of 1,7million GEL and transferred as a gift to the Ministry of Economy. The document entitled as “An agreement on transfer of the movable property free of charge [as a gift]. “It was concluded in Tbilisi on December 11, 2008. “Goodwill” neither denies nor confirms the fact of donation and at this stage refrains from anycomment. However, in an informal conversation a company representative says “everything happened in our country and not only in relation to “Goodwill”. It became known to commersant.ge that apart from giving the expensive cars, “Goodwill” was forced to invest 3 million GEL in Rabati castle.

SECOND PHASE OF SHAH DENIZ PROJECT TO BRING $400M TO GEORGIA

nergy Ministry reported that the Minister Kakha Kaladze ended his 2-day working visit to Azerbaijan, where he attended signing ceremony of natural gas buy-sell agreement within second phase of Shah Deniz pipeline project. According to this agreement, Georgia is permitted to pay preferential price for 5% of transited gas, which makes up more than 1 billion cubic in a year in case of maximum load of the pipeline. The second phase envisages construction of pipeline, which will pass territories of Azerbaijan (387 km) and Georgia (55 km) in parallel with the existing Baku-Tbilisi-Erzurum pipeline. Within this construction, 2 additional compressor stations, new pressure-regulating and measuring facilities should be built in Georgia.

According to the Ministry, several hundreds of millions dollar will be invested in these works, including purchase of goods and service of $400 million in Georgia. Total cost of the second phase is estimated as $28 billion.

THIRD TURKISH AIRLINE ENTERS GEORGIA

hird Turkish air company entered to air market. Atlasjet (Atlasjet International Airlines) will start regular flights to Istanbul direction on October 2. Atlasjet has international flights to Asian and European countries, as well as domestic flights in Turkey. Air company operates since June 20001. Before

2004, before entering of ETS Group in the stockholders’ structure, it was united in Öger Holdings. By August 1, 2013 its fleet includes 15 Airbus planes (2 853 sits). Already 3 Turkish air companies operate on Georgian air market: Turkish Airlines, Atlasjet and Pegasus Airways. Atlasjet- is 28th on Georgian market, among them 26th foreign one.

LOSS OF JSC KAZBEGI DECREASED

ccording to semiannual report of JSC Kazbegi, the company had loss of 243,300 lari in the first half of the year (year-on-year decline – 6.8 times). As of June 30, the company’s current assets made up 5.28 million lari (year-on-year growth – 11.3%), while fixed assets – 2.05 million lari

(decline – 6%). Liabilities amounted to 3.36 million lari (year-on-year decline – 2.5 times). The company’s claims regarding supplies and services totaled to 4.2 million lari (year-on-year growth – 20%). Revenue from sales (net sales) amounted to 43,758 lari (decline – 41.4%), while prime cost of sold production made up 36,323 lari (decline – 41.6%). In the reporting period, Kazbegi owned commodity stocks of 1.05 million lari (year-on-year decline – 13.2%). Founded in 1998, JSC Kazbegi is engaged in production and realization of beer and non-alcoholic beverages. Currently, production list includes 4 types of beer and 7 names of lemonade and cold tea. For beer production, the company imports raw materials from Hungary and Germany.

FLIGHTS TO VILNIUS AND LVIV TO BE PERFORMED FROM KUTAISI INTERNATIONAL AIRPORT

izz Air Ukraine (Ukrainian subsidiary of Hungarian low-budget carrier Wizz Air) will launch new flights from Kutaisi International Airport in May 2014. The flights to Vilnius (Lithuania) and Lviv (Ukraine) will be implemented twice a week. As Georgian Airports Association reported, that plans were officially announced in Vilnius

today. At this stage, Wizz Air Ukraine performs flights to Warsaw, Katowice, Kiev, Kharkov and Donetsk – all from Kutaisi International Airport. Head of Georgian Airports Association Ketevan Aleksidze said that the company has requested to increase frequency for flights to Donetsk and Kharkov, being performed currently twice a week, up to 3 flights a week from November.

BANKING NEWS September 23, 2013 #22

caucasian business week

BTA ENDS JANUARY TO AUGUST PERIOD IN 2.9 MILLION GEL LOSSES

SC BTA Bank (Georgia) completed January-August 2013 with 2,9 million GEL loss (01/08/13 -1,9 million GEL). By September 1, deposits (without banks’ deposits) equals to 43,2 million GEL (01/08/13 - 41,4 million GEL), credit portfolio 66,3 million GEL (01/08/13 -69,4 million GEL), overall obligations -105,8 million GEL (01/08/13 - 102,1 million GEL).

Bank’s actives equal to 129,4 million GEL (01/08/13 - 127 million GEL). BTA Bank operates on Georgian market since 2001. 49% of its stocks belong to JSC BTA BANK, 51% - to Silk Road Financial Group. Large beneficiaries are Fun Samruk Kazina (39,9%) and George Ramishvili (31,6%). Bank’s stock capital is 23,6 million GEL (01/08/13 - 24,8 million GEL).

PROCREDIT BANK GEORGIA MOVES TO NEW BUILDING IN BATUMI

atumi branch of ProCredit Bank moved to the new building, adjusted to segment clients’ interests. Individuals and legal entities will get banking services with 1 operator quickly and comfortably. The bank informs that 3-store building of the modern design (1000 square meters) is energy efficient and enables comprehensive service for the clients. There are rooms for various meetings in the area planned according to new concept, with about 60 employees. The group bought the building 2 years ago and invested 5million GEL. “We knew that the building had historical impor-

tance for Batumi residents, that’s why we carried out renovation works with special care. None of the decisions had been made independently from Batumi city hall and Cultural Heritage Protection Service. The building was in the port condition, we trusted reinforcing works to experienced and qualified personnel. I think the result is evident we preserved old look of the building and got a very beautiful and solid building. The branch will offer high-level full banking services to Batumi residents and arrived guests”, - said Sasha Tarrens, director general of Pro Credit Bank. Currently ProCredit is represented with 5 branches in Batumi and serves to over 25 000 clients.

KFW INTERESTED IN ADDITIONAL PROJECTS IN GEORGIA

eorgian Ministry of Regional Development and Infrastructure declared that German Bank for Reconstruction (KfW) expressed readiness for more active cooperation with the Ministry. In this connection, the Ministry held today a meeting with KfW vice president Eva Vitt, KfW regional director Lars Oermans and representatives of Germany’s embassy to Georgia. The sides “have contoured the future cooperation”, said the Ministry. In particular, the discussion scoped construction of new landfills in Imereti and other regions of the country, course of water supply project in Ajara, decentralization reform, as well as a new

grant, which German government plans to allocate for pitching activities in Georgia. According to KfW, its Georgian portfolio as of 2012 was as follow: energy sector – 25.75 million EUR, banking and financial sector – 9 million EUR, water supply – 6.99 million EUR.

MONEY TRANSFERS IN AUGUST

n August 2013 money transfers of $129 million were made to Georgia. National Bank informs that amount of cash flows has reduced by 7,5 million in comparison with previous month. Compared to August of last year it has increased by $13 million (11,2%).

LIBERTY CONTINUES NETWORK EXPANSION

eputy director General of the bank Sandro Rtveladze opened a service center in Tbilisi (#38 Paliashvili street) on Friday. It will provide full banking services to individuals and legal entities. All kinds of loans, usage of international and local money transfer systems, opening of various

deposits, payment of communal taxes are available. In 2012-2013 Liberty Bank opened over 30 new branches and service centers throughout Georgia. Liberty Bank is represented by the largest banking network, through which it serves to over 1.4 million individual and 60 000 legal entities.

BANK CONSTANTA INCREASES STOCK CAPITAL

ank stockholders discuss this issue on the extraordinary session, which will be held by directorate invitation on October 8, at 18:00. According to II quarter data, overall stock capital of the bank is 42,3 million GEL. TBC Bank is the principal stockholder (86,3%) of the

bank, it became owner of control stock package in spring, last year. 9,4% belongs to Oiko Credit, 1,6%- Tamar Lebanidze and 1,1% - Levan Lebanidze. from TBC side, indirect stockholder large beneficiaries are EBRD (17,09%), IFC (17,09%), DEG (9,9%), TBC Holdings (16,6%), Mamuka Khazaradze, (15,4%), Badri Japaridze (7,7%).

Source: National Bank 93,6% of the transfers made from abroad to Georgia comes on the 12 largest donor countries, from where transfers exceeded to $1 milion in August (08/12 -94.8 %). In August 2013 money transfers from Georgia amounted to $13,459 million. According to National Bank’s statistic, compared to July, money transfers from Georgia have reduced. In previous reporting month $13,74 million was transfered from Georgia abroad.

Source: National Bank of Georgia Data includes transfers through banks and microfinance organizations. he structure of remittances transferred by electronic wire systems for the reference month is shown on the graph below.

HALYK BANK ENDS JANUARY TO AUGUST PERIOD IN 332 345 GEL PROFITS TBILISI INTERNATIONAL FESTIVAL OF THEATRE

SC Halyk Bank (Georgia) completed January-August with 332 345 GEL profit (II quarter 2013 - 85 000). By July 1, bank’s credit portfolio is 66,6 million GEL (II quarter 2013 - 59 million GEL), deposits - 11,2 million GEL (II quarter 2013 - 10,5 million GEL), overall obligations - 67,8 million GEL (II

quarter 2013 - 64 million GEL). Bank’s actives equal to 108,05 million GEL, market share - 0,7% (II quarter 2013 - 103,7 million GEL, 0,7%). JSC Kazakhstan People’s Bank (Halyk Bank) is founder of the bank. It got license at the beginning of 2008. Overall stock capital of the bank is 40,2 million GEL.

AUGUST RECORDS TBC BANK AS LEADER IN TERMS OF DEPOSITS

SC TBC Bank remained individual deposits market leader in August. The bank informs that by September 1, 2013 TBC Bank’s market share equaled to 33% (01/08/13 -33,2%). For the reporting period, individual deposits portfolio of TBC Bank equals to 1,433 billion GEL (01/08/13 -1,439 billion GEL). Total portfolio of TBC Bank’s clients is 2,6 billion GEL (01/08/13 -2,5 billion GEL).

INVESTBANK ENDS JANUARY TO AUGUST PERIOD IN 4.2 MILLION GEL LOSSES

SC Invest bank completed 8 months 2013 with 4,2 million GEL loss (01/08/13 -1,2 million GEL). By September 1, nonbanking deposits portfolio equaled to 8,3 million GEL (01/08/13 -10 million GEL), loans - 9,8 million GEL (01/08/13-8,5 million GEL), overall obligations - 16,8 million GEL (01/08/13-16,5 million GEL). Bank’s actives equal to 30,2 million GEL (01/08/13- 30,3 mil-

lion GEL), market share - 0,2% (2012 -0,2%). Invest Bank operates since 3002. 70% of the bank’s stocks belong to Law Firm Dimitri Alexidze and Vladimer Gabrielashvili, 30% - to TRENDFOR HOLDING LTD. Gabrielashvili and Alexidze own 35-35% of the stocks, Brenda Patricia Cocsage - 30%. Bank’s stock capital is 13,4 million GEL (01/08/13 -13,7 million GEL).

International Program NEW

22 September

German State Theatre Timişoara, ROMANIA

DERDIEDANS

Author and Director - Florin Fieroiu

25, 26 September Kallo Collective, FINLAND

MEMBERS OF OUR LIMBS

Devised by Jenni Kallo, Sampo Kurppa and Thom Monckton

27 September Sputnik Productions,

Fyodor Dostoyevsky

THE IDIOT. THE RETURN Directed by Grigory Kozlov

1 October

Autonomous municipal Institution of Culture «Youth theatre «Angagement» in the honour of V.S. Zagoruiko» Tyumen, RUSSIA Nikolay Kolyada

DENMARK ZENITH AM/FM NOSFERATU Author and Director - Moa Asklöf Prescott

29 September

Independent Project, ISRAEL

HOW INFINITE, ENDLESS IS THIS COLD Author and Director – Nana Beradze

29 September

The St.Petersburg Theatre Masterskaya, RUSSIA

Directed by Oleg Borisovich Getze

3 October

Provisorium Theatre, POLAND Fyodor Dostoyevsky

THE BROTHERS KARAMAZOV

Directed by Janusz Opryński www.tbilisiinternational.com; www.facebook.com/TbilisiInternational

STATISTICS September 23, 2013 #22

caucasian business week

AVERAGE SALARY IN FINANCIAL SECTOR INCREASED BY 10.5% IN APRIL-JUNE

akstat reported that as of the 2nd quarter, average monthly salary of employed in financial sector amounted to 1,755 lari, being increased by 10.5% quarter-onquarter and by 22.9% year-on-year. Public administration, where average monthly salary amounted to 1,165 lari, remains the second. The growth of salary in this sector made up 8% quarter-on-quarter. Salary in transport and telecommunications (maintained the third position) amounted to 1,091 lari (growth – 9.2%). Salaries in construction (average rate – 1,068 lari) increased by 26.2%, promoting the sector by two positions ahead. Lowest salaries were fixed in education (416.9 lari, growth – 5%) and agriculture, hunting and forestry (474 lari, growth – 15.9%). To note, in the reporting quarter, the salaries increased in all sectors, except mining, where decline of was fixed 1.4% (average monthly nominal salary made up 894 lari).

AVERAGE CONSUMER’S LIVING WAGE MADE UP 129.4 LARI IN AUGUST

akstat reported that living wage of average consumer in August amounted to 129.4 lari. Average family’s living wage made up 245.2 lari. In the same period of previous year, these showings were 128.9 lari and 244.1 lari, respectively. To remind, in July, living wage of average consumer made up 128.2 lari, while one of average family – 242.8 lari.

TOURISM’S SHARE IN GDP INCREASED BY 1 PERCENTAGE POINT

ead of National Tourism Administration Giorgi Sigua reported that tourism’s share in Georgian GDP increased by 1 percentage point. As of today, tourism accounts for 7.3% of GDP, instead of 6.37% in the same period of last year, he said, adding that the Administration expects this share to grow even more. The Administration forecasts more than 5 million tourists in Georgia this year. During 8 months, number of visitors totaled to 3.5 million, exceeding by 26% the last year’s showing. According to the Administration’s study, conducted in JanuaryJuly, visitors have spent 1.7 billion lari in Georgia, which means that average spending per visitor makes up 613 lari. Sigua reported also that Chinese delegation will arrive to Georgia on September 21, aiming to acquaint with tourism potential of the country.

AIR COMPANIES RATING ACCORDING TO 8 MONTHS STATISTICS

y September 1, 2013 Turkish Airlines is the market leader according to passengers flow. Its market share has increased by 0,9% since the beginning of the year. TOP-6 LEADING AIR COMPANIES:

Source: Civil Aviation Agency Currently 28 air companies are represented on Georgian air market; among them 3 is Georgian (Georgian Airways, Fly Georgia, Air Caucasus). Newly Entered Turkish Atlasjet starts flights from October. In January-August 2013 Tbilisi, Batumi and Kutaisi airports served to 1 193 330 passengers. Flights from Mestia Airport started in September. Mestia-Tbilisi domestic flights are made twice a week.

PUBLICITY September 23, 2013 #22

caucasian business week

AZERBAIJAN caucasian business week

September 23, 2013 #22

USAID, AZERBAIJAN TO LAUNCH $18 MILLION TRADE PROJECT

.S. Agency for International Development (USAID) and the Azerbaijani government are preparing a new trade project, USAID Mission Director in Azerbaijan Brooke Isham said on September 19. Baku hosted an event dedicated to the completion of the “Competition and trade in Azerbaijan” project on September 19. The project, estimated at a total of $22 million, was co-financed by USAID and Azerbaijan’s government. The new project will be a continuation of the “Competition and Trade in Azerbaijan” project, which draws to a close on September 30. According to Isham, the project, whose details are still being negotiated, will cost $18 million. Half of the funding will be provided by the government and the rest by USAID. The term of the new project is likely to be the same as the previous one -- three years, Isham said. According to the chief negotiator, Azerbaijani Deputy Foreign Minister Mahmud Mammadguliyev, the implementation of the project has played an important role in the process of Azerbaijan’s accession to the World Trade Organization. “We have made significant progress in this process in recent years, and U.S. support was very useful in this,” Mammadguliyev said. He expressed hope that the parties will sign an agreement on starting the new project ahead of the beginning of the next round of WTO negotiations, due in late October or early November. Work has been jointly carried out on the project

over three years on Azerbaijan’s private and public sectors to achieve progress in competition, taxes, banking, and job creation. In addition, work with the banking sector has been done under the project to increase the potential of agricultural producers on raising funds. U.S. Ambassador to Azerbaijan Richard Morningstar said at the event that the U.S. was seeking an immediate conclusion of bilateral negotiations with Azerbaijan on its WTO accession. “The U.S. strongly supports Azerbaijan’s accession to the WTO and believes that bilateral negotiations will be completed in the near future. Azerbaijan’s accession to the organization will contribute to the development of the non-oil sector of its economy, which is a priority for the Azerbaijani government,” he said. Morningstar expressed his hope that the project will be continued in the future. He also thanked the Azerbaijani government for its participation in financing joint projects, saying that such projects indicate success in bilateral relations. Azerbaijan’s accession to WTO is expected to increase the country’s non-oil exports. Azerbaijan has been represented at the WTO as an observer since 1997. Since starting accession talks in 2004, Azerbaijan has held bilateral negotiations with about 50 countries and adopted relevant documents. The country is holding bilateral negotiations on the issue with the United States, Japan, Brazil, Ecuador, Sri Lanka, Norway, India, South Korea, Taiwan Province of China, Canada, Switzerland, Honduras and the European Union.

AZERBAIJAN SAYS WTO ACCESSION WOULD HELP EXPAND NON-OIL EXPORTS

zerbaijan’s accession to the World Trade Organization (WTO) would help increase the country’s non-oil exports, Deputy Foreign Minister Mahmud Mammadguliyev said on September 18. “I think the rules of WTO will have a positive impact on the development of the country’s economy and help increase non-oil exports,” Mammadguliyev said at a meeting of the Caspian-European Integration Business Club (CEIBC) in Baku, the Azerbaijani capital. Azerbaijan has been in talks with WTO since 2004 to join the organization. Mammadguliyev said WTO accession talks are underway in four key areas. Negotiations are ongoing as part of a working group which plans to hold its next meet-

ing by the end of the year. Talks are also being held at bilateral and multilateral levels with WTO member states. Work is also underway to bring Azerbaijani laws in line with WTO regulations, the deputy foreign minister said. Mammadguliyev said that the number of WTO member states seeking to start bilateral talks with Azerbaijan is growing. Argentina recently expressed the desire to start talks with Azerbaijan, he said. While talking to an increasing number of WTO member states causes additional problems for Azerbaijan, the Caspian Sea nation is happy to see countries like Argentina showing interest in Azerbaijani market, Mammadguliyev said.

BP MOVES TO NEW OFFICES IN BAKU

P Azerbaijan has moved to its new offices in Baku called BP Xazar Centre, located in Port Baku Development area along the Neftchilar Avenue, the company said by e-mail on September 20. BP hosted an event in Baku to officially inaugurate its new office. Gordon Birrell, BP’s Regional President for Azerbaijan, Georgia and Turkey, and Rovnag Abdullayev, President of SOCAR, accompanied by guests representing various government and partner organisations, unveiled the plaque and toured the office building. BP Xazar Centre will occupy levels 5-14 of a 16 level building and will have 2,100 work stations and 135 meeting rooms. The new office will be equipped with the most advanced technology including Advanced Collaborative Environment (ACE), which will allow direct links with all BP remote facilities offshore and onshore, as well as tele-presence, secure printing facilities, e-booking of meeting rooms and VoIP (voice over IP) telephony. “We are pleased to have one single modern of-

fice in Baku that will bring almost all of our staff together creating “one family” spirit,” Gordon Birrell said addressing the event that marked the inauguration of the new office. “It will save staff from travelling around the city to different locations for meetings and other business purposes.” According to Birrel, the high technology of telepresence used in our meeting rooms will allow to connect with various parts of the world creating a more “in person” meeting experience over a converged network and enabling people to feel as if they were present in a location which they are not physically in. “I am proud that all my staff will benefit from the healthy, technologically friendly and nice working environment. I am particularly pleased that our new office will meet the internationally accepted practice for disabled facilities,” he emphasized. Construction started end of 2009 and is nearing completion. BP Azerbaijan staff have already started moving from the various locations around Baku, where they were previously based, to BP Xazar Centre.

AZERBAIJAN’S NON-OIL SECTOR SEES MORE INVESTMENTS

ADB DIRECTOR MAKES INTRODUCTORY VISIT TO AZERBAIJAN

AZERBAIJAN CUTS CAR IMPORTS

xecutive Director of the Asian Development Bank (ADB) Anthony Baker made an introductory visit to Baku on September 9-15, the ADB Baku office reports. Baker has been recently appointed to the post, and represents Azerbaijan in the ADB Board of Directors. During the visit, Baker held meetings with Azerbaijani Deputy Prime Minister Abid Sharifov, Economic Development Minister, alternate ADB Governor, Shahin Mustafayev, First Deputy Minister of Finance Ilgar Fatizadeh, Deputy Minister of Transport Musa Panahov, Chairman of Azersu company Gorkhmaz Huseynov and Chairman of Azeryolservis Javid Gurbanov. At the meetings, Baker discussed implementation process of current ADB-funded projects in various sectors, financial aspects of investment programs, as well as prospects of future coopera-

tion in different fields identified as priority fields by government of Azerbaijan. Baker also visited Goychay to inspect the on-going water supply project and Ganja to check the completed Ganja Bypass and local road projects. He also met with Head of Ganja Executive Power, and Head of Goychay Executive Power. Baker concluded his visit to Azerbaijan by touring the meeting site, which will host ADB’s Annual Meeting of Board of Governors to be held in Baku in 2015. ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth and regional integration. Established in 1966, it is owned by 67 members - 48 from the region. In 2012, ADB assistance totaled $21.6 billion, including cofinancing of $8.3 billion. Currently, ADB has seven active projects in Azerbaijan. Its current portfolio hits $990 million. Around 46 percent of the portfolio falls to the transport sector. According to the bank’s updated business plan on operations in Azerbaijan for 2012-2014, the total amount of funding for the ADB approved projects in Azerbaijan in this period will hit $575 million. Azerbaijan is a member of the ADB since 1999. The country’s share in the bank’s capital is 0.5 percent.

oughly 10.4 billion manat from all financial sources in Azerbaijan was invested in the development of economic and social spheres in January - August 2013, which is 22.7 percent more than during the same period in 2012. The Azerbaijani State Statistics Committee reported that the volume of investments in construction work increased by 35.4 percent, reaching 6.860.4 billion manat (66.1 percent of the total volume). Some 5.2 billion manat was invested in the construction of production facilities and non-production facilities. Also, 74.8 percent of the total investment accounted for domestic investments, which increased by 16.3 percent during the year. Most domestic investments (78.5 percent) accounted

he Azerbaijani State Statistical Committee reported that around 4,486 trucks were imported into Azerbaijan in January-July 2013, which is 19.8 per cent less than in the same period of 2012. The total cost of trucks delivered to the country amounted to $56.46 million, which is 58 per cent less than in the same period of 2012. In total, around 9,432 trucks were imported into Azerbaijan in 2012, which exceeds the figure of 2011 by 52.7 per cent. The total cost of trucks delivered to the country exceeded $213.4 million

for state enterprises and organizations, and 21.5 percent - for private enterprises. Around 4.309.3 billion (41.5 percent of a total volume of investments) was invested in fixed assets at the expense of enterprises and organizations, 552.7 million manat (5.3 percent) - bank loans, 4.864.7 billion manat ( 46.9 percent) - budgetary funds, 370.7 million manat (3.6 percent) - non-budgetary funds, 225.3 million manat (2.5 percent) - personal funds of the population and 26.1 million manat (0.2 percent) - other funds. About 70.7 percent (7.336.6 billion manat) of investments in fixed capital focused on the development of non-oil sector, while 3.042.2 billion manat (29.3 percent) was invested in the oil sector. Capital investments in the non-oil sector increased by 19 percent, while in the oil sector by 32.6 percent.

which is 45.6 per cent more than in 2011. Meanwhile, around 543 buses were imported into the country in January-July, 2013 which is 14.5 per cent less than in the same period of 2012. The total cost of imported buses amounted to $25.46 million which is by 29.3 per cent less than in the same period of 2012. About 1,038 buses were imported to the republic in 2012 which is 58.5 per cent more than in 2011. The total cost of imported buses amounted to $49.88 million which is 88.1 per cent more than in 2011. azernews.az

ARMENIA September 23, 2013 #22

caucasian business week

ARMENIAN CENTRAL BANK HEAD PREPARED TO HELP EBRD CARRY ON ITS PROJECTS HERE

he chairman of the Central Bank of Armenia, Arthur Javadyan, said yesterday he was prepared to show assistance to the European Bank for Reconstruction and Development (EBRD ) to carry on its projects in Armenia , the Central Bank of Armenia told ARKA. During a meeting with the outgoing head of EBRD Yerevan Resident Office, Valeriu Razlog , Javadyan commended Mr. Razlog for his input into the successful implementation of the Bank’s programs in Armenia. Javadian singled out the important role of EBRD in the stable economic development of Armenia, saying it has financed numerous effective pro-

grams in energy, agribusiness and finance. Valeriu Razlog was replaced as head of EBRD Yerevan Office by Mark Davis. Valeriu Razlog has been appointed as Senior Banker in the Natural Resources team at the EBRD’s headquarters in London. During the meeting, Javadyan welcomed Mark Davis, expressing hope for continued cooperation between the Central Bank EBRD. The EBRD has been working in Armenia since the country gained independence in 1991. Its focus is on helping to diversify the economy by supporting investment in various sectors, as well as supporting the development of the financial sector and small and medium-sized enterprises. The Bank’s priorities in Armenia for the next few years are to continue developing the financial sector and access to finance, upgrading municipal and urban transport infrastructure, developing agribusiness and high value-added, export-oriented industrial companies, improving the regulatory and institutional framework for sustainable energy, and raising corporate governance standards and increasing transparency in the mining sector. To date, the Bank has invested more than EUR 656 million across 120 projects in the country. arka.am

ARMENIA’S FOREIGN TRADE IN JAN.-AUG. RISES 2.8 PERCENT TO $3.656 BILLION

rmenia’s foreign trade in January-August saw a 2.8 percent rise from the same period last year to $3.656.5 billion, according to the latest numbers, released by the National Statistical Service. It said exports grew by almost 9 percent year-on-year to $952.2 million, while imports saw only a 0.8 percent rise to $2.704.3 billion resulting in a $1.752.1 billion trade deficit. ($1 – 407.49 drams).

ARMENIAN SOCKS AND TIGHTS DEMANDED IN UAE, GEORGIA AND FRANCE

he socks and tights produced in the Republic of Armenia are mainly sold in the local market, but they are demanded abroad as well. As Armenpress was reported by the Deputy Director of the Lentex LLC Anush Haykyan, about 80% of the production is sold in the Republic. “The socks and tights are not inferior to the imported products with their quality. They are demanded also in Georgia, the United Arab Emirates and even in France”, - said Anush Haykyan. The company produces 350-500,000 pairs of socks and tights monthly. Lentex produces about 100 products. The cotton fiber is being imported from abroad. The volumes of the import of the socks and tights to the Republic of

Armenia in the first half of 2013 made more than 2,2 million pairs and about 12,000 pairs were exported. At the beginning of its activity only women’s tights were manufactured with brand “Viva”. Afterwards a new department with socks-knitting machinery was actuated. Today Lentex LLC is the only Armenian factory with the absolutely full range of socks and hosiery, from babies to adults, of different color and size, suitable for every season. The production is made according to state standards and has got all appropriate licenses. Lentex performs high quality output in the assortment of more than 100 types. Renovation of color range and design every season, wonderful design in accordance with the latest fashion tendencies make the production actual at the product market. The increase of the brand acceptance confirms year-to-year growth of Lentex output. Thanks to flexible marketing policy the company reacts to consumers’ demand as quickly as possible. Customers can have tights or socks made to order, according to their desires. In Armenia the company has three brand shops, where the full variety of Lentex production is presented. Armenpress

ARMENIADOUBLEDEXPORT OF JAMS, JELLIES ANDFRUIT PUREES

he volumes of the jams, jellies and fruit purees exported from the Republic of Armenia during the first six months of the year of 2013 have increased in comparison with the same period of the previous year by more than twice and made 328,100 kilograms. According to the data provided by the State Revenue Committee of the Government of the Republic of Armenia, dur-

ing the first months of 2012 156,000 kilograms of jams, jellies and fruit purees were exported from Armenia. As reported by Armenpress, the major part of the jams, jellies and fruit purees exported from our Republic during the first six months of the year of 2013 was tasted in Russia (206,800 kilograms), Canada, Germany, the United States of America, Ukraine and other countries. Armenpress

ARMENIA’S ACCESSION TO CUSTOMS UNION WILL MAKE LOCAL PRODUCERS IMPROVE QUALITY OF THEIR GOODS

rmenia’s accession to the Customs Union will become a strong incentive for local producers to improve the quality of their goods, says Dean of the Faculty of History of Yerevan State University Edik Minasyan. In his view, this move will have an overall positive impact on the development of the Armenian economy, contributing to its prosperity, and the promotion of local products at foreign markets. Minasyan also said this is possible only if the national interests of Armenia are taken into account when entering the Customs Union, as well as the

existing relations with the European countries are maintained. The historian argued that Armenia’s joining the union not only does not poses a threat to its independence, but also increases its security guarantees “which today are very important for us.” Armenian president Serzh Sargsyan announced September 3 after talks with Russia’s Putin in Moscow that his country would join the Customs Union. Before that Armenia was expected to initial an association agreement with the European Union in late November. arka.am

ECONOMIC ACTIVITYIN ARMENIAINCREASED

he indicator of the economic activity of Armenia by the months of January-August has exceeded the indicator of the same period of the previous year by 3,8%. As Armenpress was informed by the National Statistical Service of the Republic of Armenia, growth has been registered nearly in all the spheres, except for the fields of construction and electric energy production. In comparison with the months of January-August of 2012 during the first eight months of 2013 the volumes of the services have increased by 3,2% and the volume of the gross agricultural output – by 7,1%. The trade turnover has grown by 2,5%. The volume of the industrial production has increased by 6,2%. The volume of the construction has made 91,5%. The electric energy production has decreased by 4,5% and the average monthly

salary has increased by 3,7%. The volumes of the foreign trade turnover have grown in comparison with the months of January-August of 2012 by 2,8%. The export has increased by 8,9% and the import – by 0,8%. Armenpress

ARMENIAALLOTS EUROBONDS WITHTOTAL VALUEOF USD 700MILLION

rmenia allotted first Eurobonds in the international capital market on September 19. The Information and Public Relations Department of the Ministry of Finance of the Republic of Armenia informed “Armenpress” that the main distributors such as Deutsche Bank AG, HSBC Bank plc, and J.P.Morgan Securities plc have already successfully finished the first allotment. The amount must be USD 700 million,

date of redemption – seven years, percentage – 6 percent. Armenia’s rating was assessed as Ba2 by Moody’s and BB- by Fitch. The Minister of Finance of the Republic of Armenia Davit Sargsyan noted that the international experts of the realm highly appreciated the results of the distribution of the first sovereign Eurobonds and the entrance of Armenia to the international capital market is considered to be successful. Armenpress

CITRUSES IMPORTEDTO ARMENIA MAINLY FROM GREECE AND EGYPT

he volumes of the fresh or dried citruses imported to the Republic of Armenia during the first six months of 2013 have increased by about 53% in comparison with the same period of the previous year and made 7 thousand 123,9 tons. According to the data provided by the State Revenue Committee of the Government of the Republic of Armenia, during the first six months of 2012 4 thousand 661 tons of fresh or dried citruses were imported to our Republic. The citruses imported to Armenia during the first

six months of 2013 are mainly from Greece (4 thousand 404,5 tons, that is about 62% of the total volume). The average customs value of one kilogram of the citrus fruits imported from Greece made $1,21. As reported by Armenpress, during the first six months of 2013 citrus fruits were imported to Armenia also from Egypt (1234,4 tons), Iran (562,3 tons), Georgia (436,7 tons), Pakistan (320,1 tons), South Africa (76,4 tons), Israel (66 tons) and China (23,1 tons). Armenpress

CIS & IRAN caucasian business week

olicy Analyst Amanda Paul has published a letter entitled “EU vs. Russia”. “Two weeks ago I wrote about the decision of Armenian President Serzh Sarksyan to join the Russian-led Customs Union instead of proceeding with a trade agreement Yerevan had spent over three years negotiating with the EU. Armenia’s turnaround acted as a wake-up call for the EU in terms of understanding how seriously Russia is working to repeat the Armenia case with Ukraine, Moldova and Georgia. With the EU’s Vilnius Eastern Partnership (EaP) Summit taking place in November and the Summit of the Commonwealth of Independent States due to take place on Oct. 25, a geopolitical battle is under way between the EU and Russia. For the EU, this is a battle it cannot afford to lose in terms of the success of its neighborhood policies. The EaP was never intended to be anti-Russian. Russia views its Western neighborhood as a strategic imperative and views the EaP as a tool for containment. Hence the creation of its own integrating projects. While there are no criteria or conditions for joining the Customs Union, joining countries not only need to give a hefty chunk of their budget to the new supranational institutions but also their sovereignty. Hence the only way Moscow can get them on board is by a lot of armtwisting and bullying. While Ukraine and Moldova are direct neighbors of the EU, with Ukraine being of particular importance because of its size, regional role and economic potential, Georgia should not be forgotten. Therefore, I was disappointed when during a recent speech by Lithuanian President Dalia Grybauskaitė, she stated that the EU would fight for Ukraine and Moldova, but when asked about Georgia she said Georgia had signaled that it was interested in both options. She was no doubt referring to the comments of Geor-

gian Prime Minister Bidzina Ivanishvili over Customs Union membership despite the fact that Georgia’s leadership has reiterated on numerous occasions that European integration is their priority. While Georgia may be further away and in a difficult neighborhood, it is equally important. While not everything is perfect, Georgia has worked hard to meet EU criteria. Furthermore, it is now the only country in the South Caucasus where the EU has real influence. Russia has already used a lot of sticks on Georgia. They have invaded the country, occupied two regions, consolidated a military presence, cut off gas supplies and banned Georgian wine and water. While Georgians want good ties with Moscow, it needs to be a relationship of mutual respect. I doubt Georgians will forget the image of Russian tanks rolling towards Tbilisi only a few years ago. A European Parliament resolution states that “MEPs deplored the unacceptable pressure that Russia has been putting on EU Eastern Partnership countries as the Vilnius Eastern Partnership Summit approaches. They call on Moscow to respect the independent states’ sovereignty and not to intervene in their internal affairs, as required by international law.” Unfortunately, this demand is about as likely to be met as asking a lion to no longer eat meat. Small and vulnerable states such as Georgia need to know the EU is fully behind them and that they will get adequate support both politically and economically. The EU needs to move away from what is often viewed as a passive approach and show some real strategic thinking. It needs to demonstrate that its neighborhood policies have teeth and are able to deliver. The EU should start to open its markets, increase financial assistance and proceed more rapidly with the lifting of visas,” the letter says. frontnews.ge

September 23, 2013 #22

RUSSIA, TURKMENISTAN AGREE TO COOP IN MARITIME TRANSPORT FIELD

ussia and Turkmenistan have signed an agreement on cooperation in the field of maritime transport, the Turkmen government reported. The agreement was signed within the seventh meeting of the Turkmen-Russian intergovernmental commission for economic cooperation which was held in Astana on Sept.17. The members of the joint commission expressed satisfaction with the agreement on cooperation in maritime transport sphere that was achieved at this meeting. During the meeting the Russian side was represented by Deputy Chairman of the Russian Government Arkady Dvorkovich, who was also received by Turkmen President Gurbanguly Berdymukhamedov. Russia holds a leading position in the ranking of Turkmenistan’s largest trade partners. In recent years, Turkmenistan intensified cooperation with Russia’s industrial regions, including Tatarstan, St. Petersburg, Sverdlovsk and Astrakhan. Over the past few years, the trade turnover between the Astrakhan region of Russia and Turkmenistan saw a ten-fold increase. In early September Krasnoye Sormovo Plant (Nizhniy Novgorod, Russia) sailed away the tanker built for Turkmenistan and designed for the transport of crude oil and petroleum products. Earlier four tankers were

built for Turkmenistan at this plant. Turkmenistan intends to expand ferry carriages with Russia on the Caspian Sea through Astrakhan port of Olya. The experts say that the direct railway-ferry communication between Russian ports of Olya near Astrakhan and Makhachkala and Turkmenbashi port could provide an increase in cargo traffic from Turkmenistan to Russia, Georgia, Ukraine and Belarus. Turkmenistan has begun construction of a new international sea port in Turkmenbashi on the Caspian Sea, designed to become a major hub passing through Turkmenistan international transit transport communications. azernews.az

IRAN’S CARPET EXPORTS SHARPLY CUT

ran exported handmade carpets worth $86 million in the first five months of the current calendar year (which started on March 21), Director of Iran’s National Carpet Center Mohammad Baqer Aqa-Alijani said . “The amount shows a 40-percent decrease compared to the same period of time the previous year,” the Fars News Agency quoted Aqa-Alijani as saying. He went on to say that the 22th edition of Iran Handmade Carper Exhibition will kick off in Tehran on September 23. “Some 110 foreign guests from Japan, China, Lebanon, Germany, Switzerland, England, Denmark, Brazil, Tajikistan, Turkey, France, New Zealand, Uruguay, Austria, the United Arab Emirates, Uzbekistan, Kazakhstan, North Korea, Romania, Iraq, Azerbaijan, and Indonesia

will take part in the event,” he said. Deputy Director of Iran’s National Carpet Center Mojtaba Feizollahi said earlier this month that Russia, Malaysia, South Africa, and China now buy Iranian carpets. He also said that the center is planning to export carpets to other countries, including Qatar and the UAE. Iran exports carpets to at least 70 world countries. There is an estimated population of 1.2 million carpet weavers in Iran, producing carpets for domestic and international markets. The value of exported handmade carpets across the world reached $1.35 billion last year, out of which the value of Iranian carpets amounted to $427 million. azernews.az

NEWS ANALYSIS: TRADE TENSIONS WITH RUSSIA MAY HELP UKRAINE SEAL PARTNERSHIP WITH EU

ith more than two months left before the scheduled signing of key political and economic agreements between Ukraine and the European Union (EU)... With more than two months left before the scheduled signing of key political and economic agreements between Ukraine and the European Union (EU), the Association Agreement and the Free Trade Agreement are already talked about here as almost a fait accompli, according to Xinhua. Ukraine has come a long way to rapprochement with Europe and now it has moved closer to satisfy its pro-western aspirations. Currently not only political declarations, but also reactions from other states have suggested that a close partnership between Europe and Ukraine is a realistic objective. RUSSIA’S SQUEEZE PLAY Russia, which has long been seeking chances to pull Ukraine back into its orbit after the collapse of the Soviet Union, has repeatedly expressed its concerns about Kiev’s plan to be closer with the EU. The ties between the two ex-Soviet neighbors have been soured since March last year, when Ukraine initiated a partnership agreement and a roadmap to create a free trade area with the 28-member block. Ukrainian experts admitted that after Russian President Vladimir Putin failed to convince his Ukrainian counterpart Viktor Yanukovych to change Kiev’s geopolitical course during his visit to Ukraine late July, Russia has taken a tougher stance against its neighbor. Shortly after Putin’s visit, Moscow has banned imports

from major Ukrainian candy maker Roshen, saying the carcinogen benzopyrene was found in analyzed product samples. On Aug. 14, Russia stopped nearly 1,000 Ukrainian cargo cars at the border for laborious checks, saying those actions were “preventative measures” in preparation for changes in customs procedures if Kiev signs the pact with the EU at a summit in Vilnius. Local experts attributed the move to both political and economic factors. Some experts said that Kremlin wants to protect its market, because after the free trade deal between Kiev and Brussels comes into force, a large amount of European goods will appear on the Ukrainian market. Those products will probably be re-exported to the Customs Union (CU) countries of Russia, Belarus and Kazakhstan free of import duties, they said. By taking tougher measures at the checkpoints, Moscow is preparing to enhance inspection of goods from Ukraine, said the experts. Other local experts see Russia’s actions as a tactic to press Kiev to abandon plans for closer EU integration and instead join the Russian-led CU. However, all analysts agree that widening trade disputes between the two post-Soviet states may translate into an advantage for Ukraine to speed up its efforts to secure an association pact with the EU. EU’S

Koval, chairman of the European Parliament delegation for relations with Ukraine, said that the pact should be signed not in Vilnius in mid-November, but the next week in Kiev or Brussels. However, Ukraine’s relations with the EU are still not cordial enough. The bloc has not confirmed whether it will sign the agreement. Many EU member states are concerned about the slow pace of economic, legal and political reforms in Ukraine. The conviction of Ukraine’s former Prime Minister Yulia Tymoshenko is also a key stumbling-block for Ukraine to forge a closer partnership with the EU. During his recent speech in parliament, EU enlargement commissioner Stefan Fuele emphasized that the union will not deliver an agreement to Ukraine on a silver platter, but will ask Kiev to meet all the specific criteria laid down by the 28-member bloc. At the same time, the Ukrainian authorities promised within the next two months to remove all barriers for signing the document. Ukrainian President Viktor Yanukovych said his country has all the instruments to fulfill all preconditions for sealing the pact. The country’s parliament speaker Volodymyr Rybak pledged that Kiev, before the summit in Vilnius, will work out new bills that are aimed at reforming the prosecutor’s office, the judicial system and the electoral law.

UNCERTAIN POSITION During the extraordinary meeting of the European Parliament (EP) Committee on Foreign Affairs on Aug. 28, the EP members broadly voiced their support for signing the EU-Ukraine association agreement in the near future. In interviews with Ukrainian media, Pavel

UKRAINE’S FENCE-SITTING Even if Ukraine fulfills all the preconditions for the partnership with Europe and the deals are signed, the post-Soviet country may face new challenges. Entering a trade union with the EU will eliminate trade duties on around 90 percent of the goods traded between the two

parties. It will give Ukraine opportunities to increase its exports. According to the Ukrainian Economic Development and Trade Ministry, the potential trade surplus could reach 624 million U.S. dollars annually. The pact with the EU would also provide a powerful spur for foreign investment into the East European country. The agreement will open Ukrainian market for affordable and high-quality goods from the European Union. It’s no secret that many Ukrainian producers, unable to withstand the competition, will be forced out of the market. In addition, Russia may adopt a series of protective measures to defend its markets should Kiev sign the document. Moscow on Tuesday told Kiev that it would lose its “strategic partner” status if it signs the association agreement with the EU. Ukrainian authorities are aware of the risks after Ukraine signs the agreement, and Kiev is trying to seek a compromise with Russia now. While saying that political association and free trade with the EU is a “reality” that Russia should accept, Ukrainian Prime Minister Mykola Azarov said whatever the circumstances may be, his country wants to increase trade with Russia, its biggest single trading partner, in the future. President Yanukovych has also expressed his readiness to further continue close cooperation with the CU and the Eurasian Economic Union, and to even join partial agreements existing within these blocs. The top priority for the Ukrainian government is to find an acceptable approach for cooperation with both the EU and the Russia-led blocs before Moscow or Brussels takes the opportunity to decide Ukraine’s future. unian.info

WORLD NEWS September 23, 2013 #22

caucasian business week

‘BANKING UNION IS ANOTHER NAIL IN THE COFFIN FOR THE EUROZONE’

ing weaker member states to fend for themselves. In the past failing banks dragged down government finances and forced Ireland, Portugal, and Cyprus into bailouts. ECB President Mario Draghi has said the new mega-regulator will “contribute to the restoration of confidence in the banking sector.”

Euro drag

s Europe moves closer to establishing a banking union in 2014, Saxo Bank CEO Lars Christensen tells RT it will destroy rather than strengthen the economy, warning the effects could be similar to the ones from the failed euro currency experiment. The Frankfurt-based European Central Bank will officially take over supervision of more than 6,000 eurozone banks as early as October 2014, after European lawmakers voted on uniting their banking regulators. Not all bankers are convinced creating more solidarity and liability between banks is the right prescription for Europe’s banks. The banking union is largely seen as a main driver for economic recovery and expansion in Europe, as it will facilitate trillions of euros in cheap loans and help restore credit-lending in Europe’s financially-crippled south. However, tying all the banks together in solidarity and liability may not be the prescription for economic growth, CEO of Saxo Bank Lars Christensen told RT in an interview. “Introducing the banking union is in effect intro-

ducing all the bad things in the eurozone through the backdoor,” Christensen said. The European banking supervisory authority will directly oversee some 130 banks representing about 80 percent of all bank assets in the 17country eurozone. Ten EU countries that do not use the euro currency have been invited into the banking union, but have so far refused, the Saxo Bank boss said. “It’s not only very unwise, but it’s undemocratic, because in essence it’s what people have said no to already,” said Christensen. Along with the London-based European Banking Authority, the ECB will perform stress tests to make sure banks have adequate capital requirements, and will try to re-capitalize weak but viable banks, and close “non-viable” banks. “In essence you will weaken the strong banks to support the weak banks – the banking union- is another nail in the coffin for the eurozone,” said Christensen. Since late 2011, the ECB has shelled out nearly 1 trillion euros in emerging loans to European banks. The new banking union will take up the job of rescuing struggling banks, rather than leav-

Christensen sees the banking union as an extension of the failed euro experiment. “The euro is a major drag on growth, it destroys economies- it has destroyed several already- and it will continue to do so.” Christensen also told RT the euro should be dismantled, not into 17 separate currencies, but perhaps into two, three or ten different ones. “We will never see growth in Europe until we have dealt with this problem. You cannot have Greece, Portugal and Germany in the same currency union- it simply won’t work.” Another option is Germany “leaving the euro and the rest to battle it out in a more benign environment.”

Germany, France

Germany and France have both resisted handing over economic sovereignty to Brussels, and Chancellor Merkel has remained quiet leading up to the September 22 elections. Completion of a eurozone banking union will depend on how quickly the EU can amend its Treaty which nationalizes banks, but Germany is working on a plan that could expedite this process. Germany still has supervision over national savings banks, and France is also defiant on bank union treaties. Switzerland, Norway, and other non-EU countries within Europe will still have jurisprudence over how to deal with bank failures. Rt.com

FORD TO HALT ROMANIA PRODUCTION ON SLOW EU DEMAND

he Romanian unit of U.S. carmaker Ford Motor Co (F.N) will halt production for 13 days in October, following a planned one week stoppage this month, due mainly to weak demand on the European market, it said on Friday. Ford, which took over struggling carmaker Automobile Craiova in 2008, began production of its B-Max model at the plant last year. It now roughly produces 370 cars a day and 1,000 engines. Its main exports markets are Germany, Italy, Spain and France, with Britain being its main customer. “We’re confident these are temporary measures and that the situation will improve as European vehicle sales will start to slowly recover,” said Ford Romania spokeswoman Ana Maria Timis. “Depending on the market’s evolution, we will also adjust our (production) volumes in November/December.” More than half of Ford Romania’s employees, or about 2,500 people, will be impacted by the production halt, but will receive 80 percent of their wages during the stoppage. Ford, which in July lifted its 2013 guidance to an unchanged pretax loss in Europe of about $1.8 billion from $2 billion, recently closed two ancillary plants in the UK and plans to shut its Genk assembly line in Belgium at the end of 2014. Reuters

SCANDALS COST JPMORGAN $1 BILLION IN FINES

t’s $1 billion in payouts that JPMorgan Chase & Co most likely wants to forget. In agreements with regulators totaling $1 billion and made public on Thursday, the nation’s biggest bank settled four civil investigations into its “London Whale” trading scandal and two more into the wrongful billing of credit-card customers. The deals, which involve five authorities from the United States and one from the UK, are a milestone in the company’s push to clean up its legal affairs but leave JPMorgan exposed to additional costs and embarrassment. The bank still faces criminal probes into the trading scandal, its conduct during an energy trading investigation, sales of mortgage securities in the United States and possible bribery in China. Investigators are also looking into its role in setting benchmark interest rates known as LIBOR. The settlements include $920 million of penalties for JPMorgan’s London Whale trading scandal, which Chief Executive Jamie Dimon at first dismissed as a “tempest in a teapot” and ultimately resulted in $6.2 billion in losses. The deals included an admission of wrongdoing, which has been rare in past settlements made by the U.S. Securities and Exchange Commission. A second set of settlements includes $80 million of payments for billing of credit-card customers for identity-theft protection services that they did not receive. The deals, made with the U.S. Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau, come after the company issued $309 million of refunds to customers. The Comptroller of the Currency also on Thursday ordered JPMorgan to improve its consumer debt-collection practices. That order did not include financial penalties and involved allegations made public more than two years ago. The London Whale deals, reached with the UK’s Financial Conduct Authority and the U.S. Federal Reserve, SEC and Comptroller of the Currency, resolve the biggest civil probes into the trading debacle. The deals include citations against JPMorgan for poor risk controls and failure to inform regulators about deficiencies in risk management identified by bank management.

The scandal took on the London Whale nickname that hedge funds had given to Bruno Iksil, a trader at JPMorgan’s Chief Investment Office in London, for the enormous size of the positions he took for the company.

ADMITTING THE FACTS

By coordinating the announcements, the regulators delivered a round $1 billion punishment in a single day. Regulators have been criticized by lawmakers and the public for not bringing more cases or sending Wall Street executives to jail for financial crisis-era misdeeds. The deal follows a decision by the SEC to allow fewer firms to settle without admitting or denying the facts of cases. In August, the SEC reached a settlement with hedge fund manager Philip Falcone, its first big case to include an admission of wrongdoing. But George Canellos, co-director of the SEC’s enforcement division, cautioned in a statement that officials will not demand admissions in all future settlements. Dimon and other JPMorgan executives had already admitted mistakes in the Whale debacle. Starting the day Dimon disclosed in May 2012

that the Whale trades were losing billions of dollars, he has apologized for the “tempest in a teapot” remark. He also testified before Congress that bank was “stupid” in handling the trades at its Chief Investment Office. The enforcement actions left some people dissatisfied because they did not blame any individuals specifically for wrongdoing. Senator Carl Levin, a Michigan Democrat and chairman of the Senate Permanent Subcommittee on Investigations, issued a statement pointing out that his panel had found that “senior bank executives made a series of inaccurate statements.” He said there is still time for other civil and criminal investigations to hold people accountable. David Weinstein, a former federal prosecutor who is now a partner at Clarke Silverglate in Miami, said, “Somebody else has to answer for this conduct rather than just paying money.” Dimon has said that JPMorgan executives did not intend to mislead anyone about the Whale losses, which the bank concluded were initially understated by its traders. Two traders have been indicted on conspiracy and fraud charges and Iksil has agreed to cooperate with prosecutors. Dimon, in a statement issued by the company on Thursday, said, “We have accepted responsibility and

acknowledged our mistakes from the start, and we have learned from them and worked to fix them.” In April, Dimon told shareholders that fixing risk controls had become bank’s top priority and that some projects aimed at building the company’s business had been put aside. JPMorgan called the Whale settlements “a major step in the firm’s ongoing efforts to put these issues behind it.” But the deals leave unresolved other issues that have helped drive the bank’s legal costs to $5 billion a year. The company continues to face a criminal probe by U.S. prosecutors into the London Whale scandal, despite Dimon’s public insistence that no bank executives intentionally misled investors. Even as JPMorgan was hailing the settlements, it said it had received a legal notice that the staff of another regulator, the U.S. Commodity Futures Trading Commission, intends to recommend an enforcement action against the bank for its derivatives trading in the London Whale debacle. The state of Massachusetts is also investigating, the bank said. And, despite the Comptroller of the Currency’s order on debt collections, a group of 13 states is investigating those practices. “You are seeing the regulators ratchet up the heat on the banks,” said analyst Charles Peabody of Portales Partners. “If you are too big to manage, they are going to make you pay.” The bank has been under intense scrutiny from the U.S. government since May 2012, when Dimon disclosed the mounting loss. Thursday’s civil penalties follow orders in January from the Office of the Comptroller of the Currency and the Federal Reserve directing JPMorgan to improve its risk control systems and step up its anti-money launder safeguards. The total penalties, which are among the highest ever paid by a bank, are well short of the $1.92 billion that London-based HSBC agreed to pay last year to settle money laundering charges. Fines are determined by laws governing the amount each agency can impose for each violation of a rule, and then are fine-tuned through negotiations between the regulators and the bank. Reuters

WORLD NEWS caucasian business week

September 23, 2013 #22

WORLD’S MOST COMPETITIVE COUNTRIES BY REGION - 2013

TBILISI GUIDE September 23, 2013 #22

Embassy United States of America Embassy 11 Balanchivadze St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 53-23-34 E-mail: tbilisivisa@state.gov; askconsultbilisi@state.gov United Kingdom of Great Britain and Northern Ireland Embassy 51 Krtsanisi Str., Tbilisi, Tel: 227-47-47 E-mail: british.embassy.tbilisi@fco.gov.uk Republic of France Embassy 49, Krtsanisi Str. Tbilisi, Tel: 272 14 90 E-mail: ambafrance@access.sanet.ge Web-site: www.ambafrance-ge.org Federal Republic of Germany Embassy 20 Telavi St. Tbilisi Tel: 44 73 00, Fax: 44 73 64 Italian RepublicEmbassy 3a Chitadze St, Tbilisi, Tel: 299-64-18, 292-14-62, 292-18-54 E-mail: embassy.tbilisi@esteri.it Republic of Estonia Embassy 4 Likhauri St., Tbilisi, Tel: 236-51-40 E-mail: tbilisisaatkond@mfa.ee Republic of Lithuania Embassy 25 Tengiz Abuladze St, Tbilisi Tel: 291-29-33 E-mail: amb.ge@urm.lt Republic of Latvia Embassy 4 Odessa St., Tbilisi Tel: 224-48-58 E-mail: embassy.georgia@mfa.gov.lv Greece Republic Embassy 37. Tabidze St. Tbilisi Tel: 91 49 70, 91 49 71, 91 49 72 Czech RepublicEmbassy 37 Chavchavadze St. Tbilisi Tel: 291-67-40/41/42 E-mail: czechembassy@gol.ge Web-sait: www.mzv.cz Japan Embassy 7 Krtsanisi St. Tbilisi Tel: 75 21 11, Fax: 75 21 20 Kingdom of Sweden Embassy 15 Kipshidze St. Tbilisi Tel: +995 32 2 55 03 20 , Fax: +995 32 2 22 48 90 Kingdom of the Netherlands Embassy 20 Telavi St. Tbilisi Tel: 27 62 00, Fax: 27 62 32 People’s Republic of China Embassy 52 Barnov St. Tbilisi Tel: 225-22-86, 225-21-75, 225-26-70 E-mail: zhangling@access.sanet.ge Republic of Bulgaria Embassy 61 Agmashenebeli Ave. Tbilisi Tel: 91 01 94, 91 01 95, Republic of Hungary Embassy 83 Lvovi Street, Tbilisi Tel: 39 90 08 E-mail: hunembtbs@gmail.com State of Israel Embassy 61 Agmashenebeli Ave. Tbilisi Tel: 95 17 09, 94 27 05 Embassy of Swiss Confederation’s Russian Federation Interests Section Embassy 51 Chavchavadze Av., Tbilisi Tel: 291-26-45, 291-24-06, 225-28-03 E-mail: RussianEmbassy@Caucasus.net Ukraine Embassy 75, Oniashvili St., Tbilisi Tel: 231-11-61, 231-12-02, 231-14-54 E-mail: ukraina_pu@wanex.net; emb_ge@mfa.gov.ua Consular Agency: 71, Melikishvili St., Batumi Tel: (8-88-222) 3-16-00/ 3-14-78 Republic of Turkey Embassy 35 Chavchavadze Av., Tbilisi Tel: 225-20-72/73/74/76 E-mail: turkemb.tbilisi@mfa.gov.tr Address: 8, M. Abashidze str. Batumi, Georgia tel: (8-88-222) 7 47 90 Republic of Azerbaijan Embassy Kipshidze II-bl . N1., Tbilisi Tel: 225-26-39, 225-35-26/27/28 E-mail: tbilisi@mission.mfa.gov.az Address: Dumbadze str. 14, Batumi Tel: 222-7-67-00 Fax: 222-7-34-43 Republic of Armenia Embassy 4 Tetelashvili St. Tbilisi Tel: 95-94-43, 95-17-23, 95-44-08 E-mail: armemb@caucasus.net Web: www.armenianembassy.ge Consulate General, Batumi Address: Batumi, Gogebashvili str. 32, Apt. 16

caucasian business week Kingdom of Spain Embassy Rustaveli Ave. 24, I floor, Tbilisi Tel: 230-54-64 E-mail: emb.tiflis@maec.es Romania Embassy 7 Kushitashvili St., Tbilisi Tel: 38-53-10; 25-00-98/97 E-mail: ambasada@caucasus.net Republic of Poland Embassy 19 Brothers Zubalashvili St., Tbilisi Tel: 292-03-98 Email:tbilisi.amb.sekretariat@msz.gov.pl Web-site: www.tbilisi.polemb.net Republic of Iraq Embassy Kobuleti str. 16, Tbilisi Tel: 291 35 96; 229 07 93 E-mail: iraqiageoemb@yahoo.com Federative Republic of Brazil Embassy Chanturia street 6/2, Tbilisi Tel.: +995-32-293-2419 Fax.: +995-32-293-2416 Islamic Republic of Iran Embassy 80, I.Chavchavadze St. Tbilisi, Tel: 291-36-56, 291-36-58, 291-36-59, 291-36-60; Fax: 291-36-28 E-mail: iranemb@geo.net.ge United Nations Office Address: 9 Eristavi St. Tbilisi Tel: 225-11-26/28, 225-11-29/31 Fax: 225-02-71/72 E-mail: registry.geo@undp.org Web-site: www.undp.org International Monetary Fund Office Address : 4 Freedom Sq., GMT Plaza, Tbilisi Tel: 292-04-32/33/34 E-mail: kdanelia@imf.org Web-site: www.imf.ge Asian Development Bank Georgian Resident Mission Address: 1, G. Tabidze Street

Freedom Square 0114 Tbilisi, Georgia Tel: +995 32 225 06 19 E-mail: adbgrm@adb.org; Web-site: www.adb.org World Bank Office Address : 5a Chavchavadze Av., lane-I, Tbilisi, Georgia Tel: 291-30-96, 291-26-89/59 Web-site: www.worldbank.org.ge Regional Office of European Bank for Reconstruction and Development Address: 6 Marjanishvili St. Tbilisi Tel: 244 74 00, 292 05 13, 292 05 14 Web-site: www.ebrd.com Representation of the Council of Europe in Georgia Address : 26 Br. Kakabadze, Tbilisi Tel: 995 32 291 38 70/71/72/73 Fax: 995 32 291 38 74 Web-site: www.coe.ge

Hotels in Georgia TBILISI MARRIOTT Tbilisi , 13 Rustaveli Ave. Tel: 77 92 00, www.marriott.com COURTYARD MARRIOTT Tbilisi , 4 Freedom Sq. Tel: 77 91 00 www.marriott.com RADISSON BLU HOTEL, TBILISI Rose Revolution Square 1 0108, Tbilisi Tel: +995 32 402200 radissonblu.com/hotel-tbilisi RADISSON BLU HOTEL, BATUMI Ninoshvili Str. 1, 6000 Bat’umi, Georgia Tel: 8 422255555 http://radissonblu.com/hotel-batumi SHERATON METECHI PALACE Tbilisi , 20 Telavi St. Tel: 77 20 20, www.starwoodhotels.com SHERATON BATUMI 28 Rustaveli Street • Batumi Tel: (995)(422) 229000 www.sheratonbatumi.com HOLIDAY INN TBILISI Business hotel Addr: 1, 26 May Square Tel: +995 32 230 00 99 E-mail: info@hi-tbilisi.com Website: http://www.hi-tbilisi.com BETSY’S HOTEL With Marvellous Tbilisi Views Addr: 32/34 Makashvili St. Tbilisi Tel: +995 32 293 14 04; +995 32 292 39 96 Fax: +995 32 99 93 11 E-mail: info@betsyshotel.com Website: http://www.betsyshotel.com

Restaurants CHARDIN 12 Tbilisi , 12 Chardin St. , Tel: 92 32 38 CHINA TOWN Tbilisi , 44 Leselidze St. (ent. from Chardin St.) Tel: 43 93 08, 43 93 80, Fax: 43 93 08 BREAD HOUSE Tbilisi , 7 Gorgasali St. , Tel: 30 30 30 BUFETTI - ITALIAN RESTAURANT Tbilisi , 31 I. Abashidze St. , Tel: 22 49 61 DZVELI SAKHLI Tbilisi , 3 Right embankment , Tel: 92 34 97, 36 53 65, Fax: 98 27 81 IN THE SHADOW OF METEKHI Tbilisi , 29a Tsamebuli Ave. , Tel: 77 93 83, Fax: 77 93 83 PICASSO Tbilisi , 4 Miminoshvili St. , Tel: 98 90 86 SAKURA - JAPANESE RESTAURANT Tbilisi , 29 I. Abashidze St. , Tel: 29 31 08, Fax: 29 31 08 SIANGAN - CHINESE RESTAURANT Tbilisi , 41 Peking St , Tel: 37 96 88 VERA STEAK HOUSE Tbilisi , 37a Kostava St , Tel: 98 37 67 BELLE DE JOUR 29 I. Abashidze str, Tbilisi Tel: (+995 32) 230 30 30 VONG 31 I. Abashidze str, Tbilisi Tel: (+995 32) 230 30 30 BRASSERIE L’EXPRESS 14 Chardin str, Tbilisi Tel: (+995 32) 230 30 30 TWO SIDE PARTY CLUB 7 Bambis Rigi, Tbilisi Tel: (+995 32) 230 30 30 LOFT 11. I. Mosashvili str, Tbilisi Tel: (+995 32) 230 30 30 RESTAURANT NERO 21 Abano Street, Tbilisi Tel: (+995 32) 292 10 15

SH. RUSTAVELI STATE THEATRE Tbilisi. 17 Rustaveli Ave. Tel: 93 65 83, Fax: 99 63 73 TBILISI STATE MARIONETTE THEATRE Tbilisi. 26 Shavteli St. Tel: 98 65 89, Fax: 98 65 89 THEATRE OF PANTOMIME Tbilisi. 37 Rustaveli Ave. Tel: 99 63 14, (77) 41 41 50 Z. PALIASHVILI TBILISI STATE THEATRE OF OPERA AND BALLET Tbilisi. 25 Rustaveli Ave. Tel: 98 32 49, Fax: 98 32 50

Galleries ART GALLERY LINE Tbilisi. 44 Leselidze St. BAIA GALLERY Tbilisi. 10 Chardin St. Tel: 75 45 10 GALLERY Tbilisi. 12 Erekle II St. Tel: 93 12 89 GEORGIAN NATIONAL MUSEUM - PICTURE GALLERY Tbilisi. 11 Rustaveli Ave. Tel: 98 48 14 KARVASLA’S EXHIBITION HALL Tbilisi. 8 Sioni St. Tel: 92 32 27, KOPALA Tbilisi. 7 Zubalashvilebi St. Tel: 99 99 02, Fax: 99 99 02 MODERN ART GALLERY Tbilisi. 3 Rustaveli Ave. Tel: 98 21 33, Fax: 98 21 33 M GALLERY Tbilisi. 11 Taktakishvili St. Tel: 25 23 34 ORNAMENT - ENAMEL GALLERY Tbilisi. 7 Erekle II St. Tel: 93 64 12, Fax: 98 90 13

Akhvledianis Khevi N13, Tbilisi, GE. +995322958377; +995599265432

Cinemas AKHMETELI Tbilisi. “Akhmeteli” Subway Station Tel: 58 66 69 AMIRANI Tbilisi. 36 Kostava St. Tel: 99 99 55, RUSTAVELI Tbilisi. 5 Rustaveli Ave. Tel: 92 03 57, 92 02 85, SAKARTVELO Tbilisi. 2/9 Guramishvili Ave. Tel: 8 322308080,

Theatres A. GRIBOEDOV RUSSIAN STATE DRAMA THEATRE Tbilisi. 2 Rustaveli Ave. Tel: 93 58 11, Fax: 93 31 15 INDEPENDENT THEATRE Tbilisi. 2 Rustaveli Ave. Tel: 98 58 21, Fax: 93 31 15 K. MARJANISHVILI STATE ACADEMIC THEATRE Tbilisi. 8 Marjanishvili St. Tel: 95 35 82, Fax: 95 40 01 M. TUMANISHVILI CINEMA ACTORS THEATRE Tbilisi. 164 Agmashenebeli Ave. Tel: 35 31 52, 34 28 99, Fax: 35 01 94 METEKHI – THEATRE OF GEORGIAN NATIONAL BALLET Tbilisi. 69 Balanchivadze St. Tel: (99) 20 22 10 MUSIC AND DRAMATIC STATE THEATRE Tbilisi. 182 Agmashenebeli Ave. Tel: 34 80 90, Fax: 34 80 90 NABADI - GEORGIAN FOLKLORE THEATRE Tbilisi. 19 Rustaveli Ave. Tel: 98 99 91 S. AKHMETELI STATE DRAMATIC THEATRE Tbilisi. 8 I. Vekua St. Tel: 62 59 73

THE BEST GEORGIAN HONEY OF CHESTNUTS,ACACIA AND LIME FLOWERS FROM THE VERY HART OF ADJARA MATCHAKHELA GORGE IN THE NETWORK OF GOODWILL

PUBLICITY caucasian business week

September 23, 2013 #22

Location City Batumi, Sarpi Black sea coast, on Silk Road, near Turkey-Georgia border checkpoint. 30 meters from the sea. There are shopping points near complex, Apsaros Castle and other sightseeings.

Hotel description Sarpi Resort Hotel & Restaurant â&#x20AC;&#x201C; at the Sarpi Black sea coast is located 3000 sq. m. modern hotel complex, near Turkey-Georgia border, 30 meters from the sea. Hotel complex is isolated, equipped with surveillance cameras, security and parking system, which provides safe and comfortable environment for guests. There is indoor and outdoor type of restaurant, cafĂŠ in the hotel complex. Our restaurant has Georgian and Turkish cuisine. Bar occupies 370 square meters in the hotel complex, with wide range of drinks. The hotel has fitness and entertainment room for guests (for free). Throughout the territory of the Hotel complex operates a 24-hour high-speed wireless Internet access, which is also free of charge. Sarpi Resort Hotel & Restaurant also offers sailing with boat and scooter in the sea. As well arranges special A la Furshets and banquets.

Cottage Description

WWW.SARPIRESORT.GE; Tel: +995 422 21 25 00 / 01; Mobile Phone: +995 577 43 00 03; FACEBOOK: Sarpi Resort Hotel

Hotel Complex has modern, luxerous 14 units cottage. Cottage is 2 storied, rooms 84 m2, with living room, bathroom, toilet, 3 bedrooms and 6 beds. Cottages has a sea view and balconies. Each room has air conditioning, TV, Phones and Mini-bars. You can order right from cottages from the restaurants and bars as well. Rooms are equipped with high-speed wireless internet access for free. Housekeeping service is provided during the day. Wake up service is provided upon request.