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BUSINESS WEEK January13, 2014 #37

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January 13, 2014, Issue 37

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GEORGIA GEORGIA REPORTS 5.36 MLN VISITS BY FOREIGN CITIZENS IN 2013

isits to Georgia by foreign citizens increased 21.16% year-on-year in 2013 to total of 5,365,356, according to official figures released on January 6. Pg. 3

MAHIR MAMMADOV: “SOCAR PETROL STATIONS IN GEORGIA SELL ROMANIAN GASOLINE”

HEPATITIS C TREATMENT COSTS SHRINK BY 60%

ARMENIAN AND GEORGIAN WINEMAKERS CANNOT SHARE THE STATUS OF CRADLE OF WINE WITH EACH OTHER

eorgian wine companies surveyed by “Commersant” predict that the country’s popularity will increase if Georgia is given a status of the homeland of wine. Pg. 5

VAT-PAYERS TURNOVER INCREASED BY 15% IN NOVEMBER

eduction of petrol export by the State Oil Company of Azerbaijan has not influenced activity of SOCAR Petroleum Georgia Company, said the Director-General of SO-

DECEMBER RECORDS 2.4% ANNUAL INFLATION

nnual inflation level equaled to 2,4% in December in Georgia. According to preliminary data of Geostat, in December inflation level was 1,5% in comparison with previous months. Pg. 6

AZERBAIJAN AZERBAIJAN TO BUILD NEW CAR MANUFACTURING PLANT

he construction of a new car factory for manufacturing modern passenger cars in Azerbaijan is expected to start in 2014. Pg. 8

ARMENIA 10 SIGNIFICANT ECONOMIC EVENTS OF 2013

here have been a number of significant economic events held at the course of the old year. Pg. 9

CIS RUSSIA BANS IMPORTS OF FISH AND DAIRY PRODUCTS FROM ESTONIA

n January 9, the Russian Federal Service for Agricultural Control banned the shipments of dairy and fish products from eleven companies in Estonia. Pg. 11

WORLD NEWS FIAT SHELLS OUT $4.35BN TO GAIN FULL CONTROL OF CHRYSLER talian carmaker Fiat has clinched a $4.35 billion deal to buy the rest of Chrysler it doesn’t already own, avoiding a planned IPO of the third-biggest American carmaker. Pg. 13

CAR Petroleum Georgia Mahir Mammadov. “Unfortunately, Azerbaijan has not resources to export petrol, Azerbaijan can not provide petrol resources as previously. SOCAR produces petrol in accordance with the domestic demand”, he added. “We purchase the petrol for Georgian market Romanian RomPetrol company. This petrol meets Euro-4 stadard”. He noted that SOCAR Petroleum Georgia company purchased 80-90,000 tonnes of petrol last year. Note that SOCAR exported 52 tonnes of gasoline in December, 2013, down 38 times from previous year. Totally, SOCAR exported 14,250 tonnes of gasoline in 2013, down 4.2 times from 2012.

“BRIGHT STAR” FROM GEORGIA - ANOTHER GEORGIAN GOT IN “ FORBES “

nnual growth of VAT-payer enterprise turnover equaled to 15% in November. According to preliminary data of Geostat, turnover of VAT-payer enterprises equaled to 4,206 billion GEL. Pg. 6

caucasian1

nother Georgian got into teh list of successful people published by “Forbes” magazine. After former Prime Minister Bidzina Ivanishvili, the influential U.S. financial - economic journal was interested in the Co-investment Fund supervisor George Bachiashvili. One of the founders of the Co-investment Fund George Bachiashvili got into the list of successful people who are mentioned the brightest stars in 15 different fields under the age of 30.

Some are household names like Lena Dunham, LeBron James, Tumblr’s David Karp, and Maria Sharapova. Others like Lucas Duplan, Meg Gill, and Divya Nag are superstars in their own realms. Clinkle founder Duplan, 22, has shocked Silicon Valley with his ability to raise $30 million from the likes of Richard Branson, Peter Thiel and Andreessen Horowitz for an unreleased secret product. Gill, 28, is cofounder of Golden Road Brewing, one of the fastest growing breweries in the U.S.: it produced 15,000 barrels last year and expects to double output this year. Nag, 22, a Stanford University dropout, is working with a $20 million grant to create heart cells in a petri dish to test new cardiac drugs. A 6 billion private equity fund is backed by former Prime Minister billionaire Bidzina Ivanishvili,” - says the publication. Note: The Co-investment Fund was designed to attract funds from local and foreign investors to support commercially attractive investment projects. The Fund is registered as a limited partnership , according to British law, and the volume of mobilized capital currently amounts to 6 billion USD.

ESTONIA’S RICHEST MAN TO INVEST 200 MILLION USD IN GEORGIA

PN.ge reports that the richest man in Estonia will invest $ 200 million in Georgia. As Oleg Osinovsky told Estonian media, Georgia is the best place to invest in hydro power, as far as there are 26 thousand rivers in this country which originate in the mountains. The businessman says his company will build four hydropower stations, which will generate 100 megawatts of electricity annually. Osinovsky explains that he has no opportunity to invest so much money in Estonia. The tycoon’s property is estimated at 300 million Euro. Osinovsky owns Skinest Rail company which carries out the rail transportation and has its representation in Georgia as well as Spacecom AS which carries out leasing of rail tankers.

IMF: Contraction in State Expenditures and Neighboring Economies Caused Downturn in Georgia’s Economic Growth in 2013 Pg. 3 Giorgi Qadagidze: If we see that the volatility of GEL exchange rate will turn into inflationary processes, we will tighten policy

Pg. 4

Levan Kalandadze: Khudoni HPP Environmental Impact will Be Minimal Pg. 2

Georgia Plans to Prove Scientifically the Status of the Cradle of Wine Pg. 4

Named in the Black List in Ukraine Co-Investment Fund’s Managing Director Resigns from Position of Terra Food’s Director Pg. 3 “Crystal “ Evaluates the 2013: “Microfinance Sector Began to Decline Interest Rates as well as the Banks” Pg. 7

MAIN EVENTS caucasian business week

GEORGIAN HEALTH MINISTER PROMOTES ADOPTION

here are more than 3 000 applications of couples who want to adopt a child in Georgia, and only 20 children available for being adopted. Health Minister Davit Sergeenko said at press conference on Wednesday that the procedures aren’t difficult but the problem is requests and responses. He said normally families want to adopt a healthy child and the number of healthy children ready for adoption are too small, therefore the waiting time can be too long, even several years. “Fortunately, there are cases when a family agrees to adopt a child with disabilities and in this case

all the procedures are carried out fast,” he said. Sergeenko was responding to the Christmas epistle of the Georgian Patriarch, who condemned abortion, as well as criticized in vitro fertilization, the use of surrogate mothers and homosexuals. The Patriarch wrote that nowadays, many support abortion, euthanasia and suicide. He said that a family where an abortion has been carried out cannot be happy. “What a it is to imagine that every year according to unofficial information about a million abortions are carried out in Georgia,” he wrote. The health minister, however, said that last year about 40 000 abortions were registered. “In the ministry there is an assumption that [the number of] unregistered abortions may be more than this number,” he added. Sergeenko said the problem is not only the number of abortions but the attitudes to it, because selective abortion is a bigger problem. “I hope we will be able to form some type of strategy, and I call on each of you to support us in this,” he said, explaining that many selective abortions take place when the mother learns that she is going to have a daughter. Sergeenko said a total prohibition on abortion will bring negative results and will force the practice underground. In this case, the number of abortions will not be reduced, but will in fact increase the risk of death of mothers.

GEORGIA DOES NOT PLAN TO ADVERTISE FOR WINE AT SOCHI

he National Wine Agency of Georgia does not plan to advertise Georgian wine at the upcoming Sochi Winter Olympics, but it is still unknown whether private companies will do it on their own initiative. On Tuesday, Russian media reported that Georgia plans to advertise wine at the Olympics, but the Georgian National Wine Agency rejected this in a statement. The statement says that the agency doesn’t plan any advertising during the Olympics.

“However, we do not exclude initiatives from the private sector,” Levan Davitashvili, head of the agency, explains. Georgian wine was the first product that was banned by Russia in 2006, justified by claims that it had low quality, but it was seen by some as retribution against Georgia for arresting four Russian diplomats and accusing them of being spies. After the change of government in 2012, the new government started talks with Russia to reopen export of Georgian products, including wine.

LAND TRANSPORT AGENCY ACCEPTING APPLICATIONS FROM CARRIER COMPANIES SEEKING RUSSIAN VISAS

and Transport Agency accepting applications from carrier companies seeking Russian visas The Land Transport Agency of the Ministry of Economy and Sustainable Development has begun accepting applications from carrier companies for getting Russian visas. According to the Ministry of Economy, drivers of the carriers should be Georgian citizens and they should submit a special application and present necessary documents. On December 27, 2013 the Ministry of Foreign Affairs of the Russian Federation officially released

information through the Georgian Interests Section of the Swiss Embassy about granting facilitated visas to Georgian carrier companies. Georgian carriers will get multi-use visas for one year. The fee for getting a visa in three days costs 310 usd, while in ten days – 160 usd. International automobile movement with the Russian Federation is regulated by the agreement signed between the Georgian and Russian governments on 3 February 1994, which took effect on 6 June 1994. However, on 2 October 2006 automobile movement between Georgia and Russia was suspended by the initiation of the Russian Federation.

January13, 2014 #37

LEVAN KALANDADZE: KHUDONI HPP ENVIRONMENTAL IMPACT WILL BE MINIMAL “Fate of large energy projects should be based on competent studies, not emotions” Georgian Infrastructure Projects Initiative (GIPI), a non-governmental organization,has applied to the government with an initiative to proclaim the year of 2014 as the year of large-scale projects, such as Shah-Deniz -2 and Khudoni HPP. Levan Kalandadze, the Head of GIPI, shared the arguments and opinions circling the proposal. - Why should the year of 2014 be announced as the year of Shah Deniz and Khudoni? What makes these projects so important? - These projects are important because of the expected effects their implementation may bring to Georgia. Firstly, it will significantly increase the energy independence and energy security of the country. We shall not forget that our energy market in general still heavily depends on Russian electricity and energy resources. The recent example of Ukraine, where Russia have started to cause them problems, is quite sufficient to show the importance of growing energy independence and security for Georgia. Secondly, it is closely related with economic and social factors. The implementation of Shah Deniz and Khudoni Projects will create jobs and new additional sources for budget revenues, including local budgets, and the country s will thereafter have an alternate source of cheap natural gas and electricity thus reducing our dependence on Russian factor. Shah Deniz permits that the state acquires 5% of 16 billion m3natural gas going through the pipeline at an exclusively low tariff. After construction of Khudoni HPP, without any additional investments and efforts, it will be possible to increase the capacity of Enguri and Vardnili HPPs (generating the cheapest electricity at 1.18 Tetri) by 470 million kWh and simultaneously increasing service life for Enguri HPP by an additional 20 years. - There are many questions being asked by the public regarding these projects, especially concerning the environmental impact of Khudoni HPP. There have been evaluations and studies that are positive as well as negative – so public opinion is divided. Would you share these environmental concerns? - You are right, there are many questions and this is natural. High public interest towards these projects and especially Khudoni HPP makes it essential that the process is highly transparent and that the public is engaged and participates in it. It is very important that communication with the public is accurate and the population is well informed and understands the benefits this project may bring to the state and the community, on the one hand, and what problems and difficulties will be necessary to be overcome on the other. I agree that many positive studies and opinions have been conveyed with respect to Khudoni HPP. There are people who have expressed dissatisfaction or resistance toward this project, but such dissatisfaction and resistance is not based on any specific study or opinion of a competent organization. Instead these are based on emotional factors and fear that Khudoni HPP is going to ruin and devastate the country. Looking at opinions of competent organizations, the World Bank in 2008 Strategic Evaluation of Environmental Impact Inflicted by Georgian Energy Sectorwas carried out by S.E.E.C.,an extremely competent and well-known Serbian–Italian organization. This is in fact the standard by which the expediency of any energy project is ascertained in Europe. According to this study, if Georgia in the following years of development wants to ensure annual economic growth of at least 3%, the realization of Khudoni HPP will bean inevitable necessity and its replacement with any other alternative will be impossible. The second study - Evaluation of Environmental and Social Impact of Khudoni Project - ordered by the World Bank in 2010 was conducted by a

French–Italian Consortium BRL/Progetti S.P.A. The third and final study – Environmental Impact of Khudoni Project- was prepared by international non-governmental environmental network CENN in 2013. Moreover, the Swiss company STUCKY, one of the most prominent and competent companies in the world specializing in such types of projects conducted feasibility, geological, hydrology, seismic and engineer-geology studies of Khudoni HPP. In addition, well-grounded and detailed financial calculations were made by competent international organizations including Austrian Fundraising Group and another competent international banking-investment consortium. I’m not talking with emotions. I rely on analyses, opinions and recommendations of international competent research organizations. Based on these studies, we can discuss the environmental impact of the project. These researches prove that the scope and degree of impact on the environment will be minimal. - Concerning the social and economic situation in Svaneti region, this could make the problem of locals’ re-settlement even harder. What is your opinion? - I absolutely agree. This is one of the most painful problems and not only for Svaneti but for the whole highlands. In Svaneti, where the population used to be 24,000, only 14,000 remain of which 3,000 are socially insecure. The problem is that by applying the current approaches we are unable to keep the population in Svaneti. These people have neither jobs nor effective social-economic guarantees. Therefore, in the highlands there is no real effective motivation for people to stay there. Moreover, tomorrow we may face an even worse situation. I would like to remind you of one European trend. In European states, especially in France, Italy, Austria and Switzerland migration of mountainous population and outflow is quite high. Only in those mountainous regions of Switzerland, Italy and France, I mean the Alps, was at practically zero level of migration maintained where large infrastructure projects, including hydro dams and energy objects, were constructed. These are the regions, from which people do not migrate. For instance, very small regions such as Valle d’Aosta in Italy there are 10 hydro dams presented, in Tichino, Switzerland, 4 HPPs operate (with the height range of 111 – 225 m) and in Trentino, Italy, there are 37 HPPs. In these regions, after construction of power plants, the population even increased. That can be easily explained. The construction of hydro dams created motivation for locals to stay in mountainous regions. The number of available jobs increased, as well as revenues to the local budget, which ensured elementary living conditions and social–economic guarantees.

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TOP NEWS January13, 2014 #37

caucasian business week

GEORGIA REPORTS 5.36 MLN VISITS IMF: CONTRACTION IN STATE EXPENDITURES AND NEIGHBORING BY FOREIGN CITIZENS IN 2013 ECONOMIES CAUSED DOWNTURN IN GEORGIA’S ECONOMIC GROWTH IN 2013

Figures from the official statistics show number of entries into Georgia by foreign citizens per year starting from 2006 and year-on-year percentage change. The figures represent an aggregate number of entries into the country without breakdown by purpose of the visit. Source: Ministry of Internal Affairs

isits to Georgia by foreign citizens increased 21.16% year-on-year in 2013 to total of 5,365,356, according to official figures released on January 6. These statistics, compiled by the Interior Ministry, are based on border crossing data. In these data, travelers entering into Georgia and staying in the country for more than 24 hours are classified as “tourists”. Of these total of 5.36 million visits registered in 2013, slightly over 2 million were identified as “tourists”, a 16.3% increase over the previous year, according to these data. Number of visits to Georgia by foreign citizens increased significantly over the past several years; share of tourists was also increasing but pace of its growth was lagging behind compared to total visits, causing decline of its share. Number of travelers identified as tourists made 52.5% of total visits in 2010; the share stood at 46.7% in 2011, declining to 40.4% in 2012 and 38.8% in 2013.

Citizen from Georgia’s neighboring states made up the largest share in total visits in 2013. Turkish citizens lead the pack with 1.59 million entries into Georgia (3.8% y/y increase), followed by Armenian citizens with 1.28 million entries (39.4% y/y increase); Azerbaijani citizens – 1.07 million (15% y/y increase); Russian citizens – 765,458 (49% y/y increase). Number of visits by the Ukrainian citizens into Georgia increased 64.8% y/y in 2013 reaching 126,300. There was a 12.3% y/y decline in number of visits to Georgia by Iranian citizens in 2013, when the figure stood at 78,633. Georgia unilaterally scrapped visa-free entry to Iranian citizens starting from July 1, 2013. Visa-free rules for the Iranian citizens was in force from January 2011, leading to increase number of visits to Georgia by the Iranian citizens from about 21,000 in 2010 to slightly over 60,000 in 2011 and 89,700 in 2012. Number of visits to Georgia by citizens from the EU-member states increased 21.9% y/y, reaching 206,999 in 2013.

n 2013 the political unclearness, contraction in state expenditures and neighboring economies have lowered Georgia’s economic growth. The political unclearness, contraction in state expenditures and drop in state economies in several neighboring countries have lowered Georgia’s economic growth in 2013. Azim Sadikov, a resident representative of the International Monetary Fund (IMF) in Georgia, has discussed the issue in his interview to the Moambe TV program. The IMF resident representative in Georgia appraised the 2013 year in his interview and gave comments on the 2014 state budget bill too. Azim Sadikov urges the Georgian government to direct surplus budget revenues for replenishing the budget deficit and growing capital expenditures. Sadikov mentioned the last year as a transient year and named the initialing of the association agreement with EU and peaceful and democratic state of the transient period as positive factors. Georgia’s economy grew by 2.5% to 3% in 2013, Azim Sadikov noted. “The unclearness that has affected the activity of investors, as well as contraction in state expenditures and weakened economies in several neighboring countries have lowered Georgia’s economic growth. Furthermore, it was an important positive factor the transient period has passed peacefully and democratically”, Azim Sadikov noted. The IMF representative also explained the reasons for revising Georgia’s economic growth forecast several times. “The economy is not an exact science. We often face the processes that cannot be foreseen and forecast. We can make our best forecasts based on today’s indicators, but tomorrow everything may change and we may need to revise our forecasts. We had the same situation… We lowered the initial forecast that was higher than 2.5% to 3% growth. I think this happened because we expected the unclear period would quickly settle. The government has understood that strong eco-

nomic growth should be restored to regain investors confidence”, Sadikov noted. Azim Sadikov has also talked about the 2014 state budget bill and named it as the continuation of socially oriented policy. “Social expenditures have grown by 20% in 2013, but the government abstains to assume additional obligations. The annual amount increased as the government plans to cover all social expenditures in 2014. In July 2013 the government started covering general insurance expenditures, while pensions increased in September. In general, we back the government makes focus on social policy. We also back growth in social expenditures. Our recommendations call for making social expenditures as purposeful as possible to efficiently use limited budget resources. For two years the state wages increased by 25%. We are exploring this issue. What was the reason for growing expenditures, growth in wages or growth in number of employees in the state sector”, Sadikov said. The IMF resident representative also talked about the state budget deficit and noted discussions are underway with the government on the deficit indicators. “We think if the economy grows considerably and revenues are higher than the budget plan, surplus revenues should be partly directed to replenishing the deficit and growing capital expenditures”, Sadikov said.

NAMED IN THE BLACK LIST IN UKRAINE CO-INVESTMENT FUND’S MANAGING DIRECTOR RESIGNS FROM POSITION OF TERRA FOOD’S DIRECTOR

GEORGE KIKVADZE Managing Director Agriculture and Logistics Mr. George Kikvadze is a Managing Director of Georgian Co-Investment Fund. He is also a supervisory board member, responsible for strategy and investments, at Terra Food Holding - Ukraine’s leading dairy and agricultural company. Prior to this, Mr. Kikvadze held a position as Chief Investment Officer at Ukrlandfarming PLC, Eurasia’s leading farming company with 550,000 hectares under management. Before moving to Ukraine, he was a CEO of Russia/CIS office for the global hedge fund, York Capital Management. In the five years prior to this, Mr. Kikvadze was a managing director of AFK Sistema Telecom, where he was responsible for investments and capital markets. Previously, Mr. Kikvadze worked for a number of financial and professional services institutions, including, Morgan Stanley, PCG-CALPERS, KPMG Barents and GRC Capital. Mr. Kikvadze received his MBA in Finance from the Wharton School, University of Pennsylvania and holds a M.A. degree in International Relations and International Economics from Johns Hopkins University (SAIS). He also completed his BS studies at the University of Oregon where he was a Beta Gamma Sigma Scholar.

eorge Kikvadze, the managing director of Ukrainian agribusiness Terra Food who has lived in Ukraine for the past five years, announced on his Facebook page that he will move his Ukraine-born son and wife back to Georgia after not being let in to the country on Dec. 21. “Believing that nothing happens for any reason, I also realized this was a clear signal from above to move my family back to my country and help Georgia in attracting much needed investments and capital,” Kikvadze wrote on Facebook. “This is what I intend to do.” He is resigning from Terra Food and will become the managing director of GCF Private Equity Fund, a newly created private vehicle with access to $6 billion for drawing investments into Georgia. After spending the night at Boryspil airport, Kikvadze flew back to Tbilisi, Georgia’s capital, late on Dec. 22. The American-educated Georgian has permanent residency status in Ukraine. According to Kikvadze, he was told by border guards at the airport that the State Security Service, or the SBU, had refused him entry. On Dec. 8 Party of Regions lawmaker Oleh Tsaryov reportedly sent a list of 36 foreigners to the SBU and foreign ministry, the majority of which included Georgians, as part of an official inquiry asking the government bodies to not let them enter the country. Kikvadze’s name is listed 32nd on the list of 36 foreigners. Also on the list is Georgian citizen

Lasha Mikava, the chairman of Ukrtelecom, the nation’s largest fixed-line telephone operator that belongs to billionaire Rinat Akhmetov. The inquiry accuses foreigners on the list of being “national security threats.” The SBU on Dec. 25 confirmed that in November-December it took decisions not to let in certain foreign individuals to Ukraine “for national security reasons,” emphasizing that the measures were not based on any specific list, but on a caseby-case analysis. “I am appalled (at not being let in),” Kikvadze told the Kyiv Post on Dec. 21. “I’ve worked here for the past five years bringing in investments… my son is a Ukrainian citizen, I’ve permanent residency status.” Asked whether there could be legal grounds for not allowing him to enter Ukraine, Kikvadze said: “There was no reason given other than my great sympathy for the Ukrainian people in demonstrating for a better future and in freeing the country from the rampant corruption that is destroying the very fabric of society.” On Dec. 20 Ukrainian authorities deported Davit Kakulia from Ukraine, a Georgian journalist from Georgia’s Rustavi 2 television station, according to Radio Free Europe Radio Liberty. Prior to joining Terra Foods in March, Kikvadze worked as chief investment officer at Ukrlandfarming PLC, which belongs to billionaire Oleh Bakhmatiuk, the nation’s largest egg producer. Prior to that, Kikvadze was chief executive officer of York Capital Management CIS operations, a leading global alternative assets manager.

INTERVIEW caucasian business week

January13, 2014 #37

ECONOMY MINISTER NAMES A GIORGI QADAGIDZE - IF WE SEE VOLUME OF RUSSIAN INVESTMENTS THAT THE VOLATILITY OF GEL IN GEORGIA IN THE RECENT YEARS EXCHANGE RATE WILL TURN INTO mersant” about identity of investors, the Minister INFLATIONARY PROCESSES, WE just says that investors are interested in several areas in Georgia, including energy, and this time they are discussing proposals at the Ministry of WILL TIGHTEN POLICY Energy. “They are also interested in health centers

he biggest investment that was recently made in Georgia by the Russian side equals to 30 million USD - the Minister of Economy Giorgi Kvirikshvili states. When asked by “Com-

and have already implemented an investment in this field, but now we are discussing a new investment with the group, “ - says Kvirikashvili . According to him, Russian investors express their interest in the aviation market and meetings with investors are held in this regard as well. Note: “Commersant” reports that the Russian investors plan to carry out the rehabilitation of the Menji resort and construct a brick factory in Georgia. For this purpose they are going to arrive in Georgia in January.

GOVERNMENT TO ALLOCATE 135 MILLION DOLLARS FOR REGIONAL INFRASTRUCTURE PROJECTS

he government will allocate 135 million dollars for regional infrastructure projects. According to Regional Development and Infrastructure Minister Davit Narmania, the issue will be presented by the Finance Minister at the governmental session today. Marmania said the money will be spent on implementation of regional projects and programs. “We are working with the state commission about the above-mentioned issue’’, said Narmania. The Minister for Regional Development will specify the projects after the mentioned issue is approved at the governmental session.

HEAD OF TOURISM ADMINISTRATION TRIES TO APPOINT TBILISI-BEIJING FLIGHTS

ead of National Tourism Administration is having a business meeting in China. George Sigua met with Mayor, vice mayor of city Harbin, head of tourism depart-

ment of Heilongjiang Province, head of tourism department of city Harbin and other official persons. PUBLICITY>GE releases information about it. On the meetings the sides discussed cooperation issues in the tourism sphere. City hall of 9-million town Herbin assigned special area to Georgian Tourism Administration in the central park for free to advertise Georgian tourism potential. On Friday Sigua will leave for Beijing, where he will meet representatives of central government of China and headquarters of South China Airlines. Main issue will be appointment of Tbilisi-Beijing flights. They will also discuss other directions.

GEORGIA PLANS TO PROVE SCIENTIFICALLY THE STATUS OF THE CRADLE OF WINE Director of the National Wine Agency : We are confident that Georgia ‘s a wine country , but it must be proved scientifically

he government intends to implement a new project to scientifically prove that Georgia is the cradle of wine. Director of the National Wine Agency Levan Davitashvili told “Commersant”. He says that the project is scientific in nature and aims to scientifically determine the origin of Georgian vine and its identification in order a dispute about Georgia as the motherland of wine to be argumentative , and relevant scientific evidence “should be put on the table .” In his words, the industry ‘s leading scientists ( geneticists , DNA - researchers , archaeologists) from Germany , France and other countries will participate in the program. “We have fragmented entries. However, they are not recognized by leading scientists and the work should be carried out. We are convinced that we

are a wine country, but it must be proved scientifically, “ - Mr Davitashvli notes . As for the popularization of Georgian wine, Director of the National Wine Agency adds that the marketing plan has been developed. In his words, the Georgian side should make marketing of the Georgian wine as a single brand because it is difficult to separate advertising of Mukuzani and Khvanchkara when in general, there is a problem of Georgian wine’s awareness. According to Margvelashvili, the marketing campaign will be conducted in two directions – in the former Soviet Union where Georgian wines will be re-branded , and the second - in a world where Georgia is unknown, and here the challenge is greater. Davitashvili names the United States, China and the whole of South - East Asia the target markets in the second direction.

f we see that the volatility of GEL exchange rate will turn into inflationary processes, we will tighten policy, National Bank President Giorgi Qadagidze said at the meeting with members of the business association. He said that in the last two years due to the deflation background the monetary policy was mollified. `We have a floating exchange rate, which means that the exchange rate is the so-called automatic stabilizer of the processes ongoing in economy. We had deflation background in the last two years. Consequently, we had a softer monetary policy during this period’, he said. ‘’If we see that all this turns into inflationary processes, we will begin to tighten policy,” said Qadagidze. According to the National Bank President, particularly sensitive are those residents who have taken loan in dollars, while they have income in laris.

As for the subject of the meeting, Qadagidze said the main focus will be the current account deficit financing, payment balance and monetary policy. ‘The main goal is the business sector to have right expectations and adequate information about the current processes,” Qadagidze said.

PENSIONS NOT TO INCREASE, TEACHERS’ SALARIES TO GROW

ccording to the government’s promises, the social situation will somewhat improve in the new 2014. Commersant.ge was told at the Ministry of Finance that in accordance with the change in the 2014 budget, from 1 March allowance for IDPs will grow to 45 GEL, while the certified teachers ‘ salaries will be increased. Also, in the current year a basic salary of public school teachers are expected to grow by 70-80 GEL per month ( additional 50 million GEL). As for the taken steps, Ministry of Finance informs that in order to improve social conditions pensions grew 4 months ago and amounted to 150 GEL. The Finance Minister says that the 2014 budget remains a priority for social improvement. As the Minister states, pensions increased in April and September of 2013 as well as allowances. In his words, starting from January 2014 allowance for IDPs will increase and humanitarian aid in the amount of 500 GEL will be issued

to the families of the war dead. “By all accounts 2014 will be better than it was in 2013,” - he adds. As it is known , the opposition accuses the government of inappropriate increase of pensions that indicates that the increase in pensions is not expected in the 2014 budget. The government, however, says that they did not issue any promise in this regard and therefore, they have not broken the promise.

HEPATITIS C TREATMENT COSTS SHRINK BY 60%

epatitis C treatment price reduces by 60%; it will be free for prisoners. From July 1 Hepatitis C infected patients will get medicines with 60% less price, penitentiary system will supply medicines to the prisoners for free from March 1. Minister of Healthcare explains that Georgia will be first in the region and second in the world after Egypt with fixed price on Hepatitis C treatments. Project presentation was held on Thursday, in the National Center of Disease Control. Ministry of Healthcare signed contract with LTD GMP, which will supply Roche products to the state. Ministry of Healthcare will purchase Peginterpheron for 1000 prisoners for 158.67 GEL< which is 60% less than current market price on

this medicine in Georgia. The same price will be valid for the 10 000 civil sector patients. From July 1 they will be able to buy the medicine for $92.88 equivalent in GEL. Minister of Healthcare states that patient registration starts on February 1. He says that there are certain criteria to purchase the medicine with the low price. Because due to attractive price for the region not to sell them in a simple way. In particular, only those who are citizens of Georgia, temporary residents with approved diagnosis and prescription can buy the medicine with low price. Minister of Penitentiary mentioned that in addition to the fact that Hepatitis C medicine is supplied to 1000 prisoners for free, 5000 prisoners will be vaccinated on Hepatitis B, 12 000 prisoners will be researched.

BUSINESS January13, 2014 #37

caucasian business week

RATING OF AIR COMPANIES

4 - In 11 months 2013 Passenger flow on air has increased by 31% in comparison with the same period f previous year (01/10/13 -27%). Airports of Tbilisi, batumi, Kutaisi and Mestia served to 1 705 992 passengers in the reported period (01/12/12 - 1 300 518 ). Turkish Airlines remaines a leader with 14% share. Its market share has increased by 1,2% in comparison with the same period (has not changed in comaprison with previous month), share of Gerogian ariways reduced by 3%, reduced by 0,2% in comparison with November; share of Ukraine Airlines has reduced by 1,4%, Pegasus - by 5,8% in comaprison with the same period last year, Siberia - has increased by 0,1%, Belavia maintains 4% share.

“AIRZENA” PLANS TO PERFORM FLIGHTS TO FRANKFURT WITH NEW “ BOEING” “Pegasus “ promises lower prices

eorgian aviation market players interviewed by “Commersant” are going to offer new proposals to consumers in the current year. “ Airzena” CEO states that the company has already acquired a new Boeing aircraft , which will perform flights to Frankfurt from April. According to Iase Zautashvili , this time, except for domestic destinations, “Airzena” flies to Moscow, Yerevan, Tel Aviv, Vienna, Amsterdam and Iraq . He says that they will continue to offer innovations and competitive services

to consumers throughout the year. In his words, last year the number of passengers increased by 30%. ‘’Pegasus” airline also offers new services to passengers this year. According to the head of the Georgian representation, consumers are able to book a ticket in desired destinations in advance at a lower price. Mr Elizbarashvili notes that “Pegasus ‘’ flies to 54 cities. In his words, in 2013 the number of the company’s passengers increased by 100 %. Last year, the number of destinations increased as well, and “Pegasus ‘’ performs flights to Barcelona , Athens and Moscow.

TOBACCO ISSUE DIVIDED OPINIONS OF LAWMAKERS AND CENTER FOR DISEASE CONTROL After an increases in excise taxes, tax breaks will be introduced for tobacco companies

arliament did not consider the recommendations of the National Center for Disease Control Starting from this month, the tax benefits for tobacco producers entered into force. After a 12 % hike in tobacco excise, the government has canceled the import tax for market players.The Center for Disease Control states that the introduction of tax concessions does not come in line with the strategy approved by the government with regard to tobacco con-

sumption and a negative conclusion was sent to Parliament concerning the abovementioned initiative. Chairman of Sector Economy and Economic Policy Committee states “Commersant ‘’ that 85% of imported tobacco is not taxed within the free trade agreement, so the law is only for tobacco imported from European countries . As for the conclusion made by the National Center for Disease Control, in Zurab Tkhemaladze’s words, he is not aware of such a conclusion.

4.5 BILLION USD FLOWED ILLEGALLY FROM GEORGIA OVER 10 YEARS

ver the past 10 years, 27.5 billion USD were illegally flowed from the three South Caucasus countries. The American research organization published this data in a report devoted to illicit financial flows from developing countries in the years 2002-2011. According to the survey, over the past decade in total 17 billion USD were illegally flowed from Azerbaijan , from Armenia - 6.2 billion, and from Georgia – 4 billion USD. Authors of the financial

analysis don’t specify the data source. The report confirms that Turkey has a relatively good indicator of the cash flow, which amounts only to 987 million USD. Iran’s data is not specified in the survey. According to the report of the American organization, Russia is a record-holder in a negative list, a total of 881 billion USD have been illegally flowed from this country in the 10-year period. On the whole,illegal flows of money from developing countries increased by 14 % and total 946 billion USD.

BANKRUPTCY PROCEEDINGS STARTED AGAINST ARCHIMEDES

ankruptcy proceeding stared against Archimedes Global Georgia. On December 31 Head of State Insurance Supervision Service issued order on cancellation license to the insurance company and start of the bankruptcy case against it. It came into force on January 1, 2014. Kakhaber Vardiashvili was appointed as a bankruptcy manager, Due to company bankruptcy, beneficiaries of the state programs will get insurance services in the framework of the state insurance. The company accumulated great amount of the debt to the medical institutions.

Due to financial problems, State Insurance Supervision Service imposed forced administration in the company on August 19, 2013.

CARTU LEFT INSURANCE PROGRAM

nsurance company Cartu also left state insurance program after Alpha. As Minister of Healthcare explains, the state will take responsibility to insure beneficiaries of the companies, which left the program. It’s noteworthy that 380 000 beneficiaries of the Archimedes Global Georgia will also benefit from the universal insurance program. Ministry of Healthcare informs that involvement of the persons with state insurance to the united healthcare program will be completed by the end 2014.

ARMENIAN AND GEORGIAN WINEMAKERS CANNOT SHARE THE STATUS OF CRADLE OF WINE WITH EACH OTHER In addition, both parties recognize that this status will increase the competitiveness of Georgian wine

G GOODWILL IS LIKELY TO MOVE TO A REHABILITATION MODE

oodwill dispute resolution council chooses rehabilitation. The council reports that currently final decision has not been made, although considering company rating and perspective, facilitators support rehabilitation and they will declare final decision in several days. Goodwill has about 40 million GEL debt to 490 creditors and among them 18 million is to TBC, out of which major debt does not exceed 15,5 million. Remaining is bank securities. Goodwill’s insolvency case started on September 24. In parallel with it, a new legal process has started on the basis of Goodwill’s sue. The company requires reimbursement of 41,6 million

GEL loss from TBC. Supermarket network owner company considers that TBC appropriated the guaranteed property for a very low price, also the bank explains that it’s a legal, civilized procedure considered by loan contract and approved by debtor signature. Besides, TBC Bank makes a beneficial offer - to redeem the property with the same price as they appropriated. Although Goodwill does not wish it. The company wants TBC to approach the property price to the market one. Goodwill informs that TBC appropriated a 3-hectares land and attached buildings on Eristavi Street (with real value of 50 million GEL) for unpaid 14 million GEL loan.

eorgian wine companies surveyed by “Commersant” predict that the country’s popularity will increase if Georgia is given a status of the homeland of wine. As we reported, the government launches a new program, the project is scientific in nature and aims to scientifically determine the origin of Georgian vine and its identification in order a dispute about Georgia as the motherland of wine to be argumentative. “Tbilvino ‘’ Director General says that granting of the status of the vine homeland to Georgia is real, and if the Georgian side is able to do this, it will once again remind the world that Georgia is the oldest wine country. In his words, the main problem Georgia faces today is related to its popularity, but if it is recognized as a cradle of wine, it will further increase Georgia’s importance. According to “Badagoni” CEO, there are a number of sources which confirm that the grape berries came to Europe from Georgia and this indicates that

Georgia is a wine country. He adds that if the status ofthe motherland of wine is given to Georgia, it will significantly increase foreign investors’ interest and willdevelop winemaking and viticulture. Chairman of Armenian Wine- makers Union is confident that Georgia will be granted a status by falsifying scientific facts. Avag Harutyunyan recognizes that he meets this initiative “painfully “. In his words, it has long been scientifically proven that Georgia is not a motherland of wine and Georgia is capable of getting this title as other countries of the region , primarily Armenia. However, Harutyunyanclaims that archaeological findings discovered in the territory of Armenia put an end to the scientific discussion at this point that proved the existence of a wine “enterprise “ there 6 thousand years ago. At the same time, President of the Winemakers Union of Armenia recognizes that if Georgia will be granted a status of “the motherland of wine, “ the competitiveness of Georgian wine will sharply increase.

ECONOMY January13, 2014 #37

caucasian business week

VAT-PAYERS TURNOVER INCREASED BY 15% IN NOVEMBER

Dear Reader of Caucasus Business Week

ith only 4 weeks to go before the South Caucasus Infrastructure & New Energy Investment Summit opens its doors in Tbilisi, we kindly remind you and your colleagues to secure your place. This event is generating an enormous interest from both the international and local/regional business community, so we expect to reach capacity soon. Georgia is the organizing country this year and the event is thus hosted under the Auspices of the Ministry of Regional Development & Infrastructure and of the Ministry of Energy & Natural Resources. It will be the largest investors get together, bringing under one roof up to 250+ senior representatives both local and international, keen to exchange ideas and to receive first hand information on the increasing potential of the Region. Opportunities for business development and investment are plentiful in the area of environmental infrastructure, construction, roads, railways and public transport, urban utilities, cleaning and waste recycling as well as water supply and management. Other areas eyed up include terminals and warehousing, as South Caucasus is viewed as a transit corridor and an ideal regional transport and logistics hub. Equally importantly, the continuing growth will come from the alternative energy sector production and distribution ( hydro, wind, solar, etc ) with Georgia, Azerbaijan and Armenia keen to export to their neighbors and beyond. Taking place in the brand new conference venue of Expo Georgia, this is a unique occasion for you to network with key government officials, project owners, recognized industry players and SMEs operating in the sector, contractors, consultants and solution providers. Learn from the experiences of regional experts and their approaches, including best practices in project financing, PPP and execution as well as sustainability and green practices. Details on the agenda of this 2 day event, registration form and fees are available upon your written inquiry to: administration (at) euroconventionglobal.com KINDLY BE ADVISED THAT AS A READER OF CAUCASUS BUSINESS WEEK, YOU CAN BENEFIT FROM A 20% DISCOUNT ON THE NORMAL FEE WHEN REGISTERING DELEGATES OR ON ANY CORPORATE/SPONSORSHIP PACKAGES RATES . JUST MENTION IT WHEN REGISTERING or CONTACT THE ORGANIZER. If you think your company would benefit from branding, exhibiting or having a speaking slot in the agenda, please ask for the corporate/sponsorship packages available. Just pick up the one you are interested in, as there are many possibilities to participate in a pro active way. I will be personally at your attention to guide you or for any further clarification and a tailored pricing, if needed. Looking forward to hearing from you and to welcoming you at the Summit. Kind regards and wishing you a happy and fruitful New Year.

DECEMBER RECORDS 2.4% ANNUAL INFLATION

nnual inflation level equaled to 2,4% in December in Georgia. According to preliminary data of Geostat, in December inflation level was 1,5% in comparison with previous months. Compared to December 2012 price growth on consumer products equaled to 2,4%. Besides, average inflation level is -0,5%. In the formation of monthly inflation main influence had price change on food and non-alcohol beverages group. Prices increased by 4,8% in this group. Respectively, share of the group in December inflation equaled to 1,49%. Price growth is determined by 31,7% price increase on vegetables and melons. Prices also increased on milk, cheese and eggs sub-group (1,7%). Besides, prices reduced on fruits and grapes subgroup (-3,5%). In the given period prices increased by 0,9% on the group of accommodation, water, electricity, air, which was reflected by share of 0,08 percent points on the total inflation data of December. In the group Prices increased on the solid fuel (12,8%). Besides, prices reduced by 0,9% in healthcare,

share of the group equaled to -0,08 interest points in the monthly inflation. Prices reduced on the pharmaceutical products (-1,9%) and dentist service (-2,3%). Price changes in the following groups influenced formation of the annual inflation: Prices in the food and non-alcohol beverage group increased by 5,7%, which influenced overall annual inflation data by 1,75 interest points. Prices considerably increased in the vegetables and melons group (44%), prices increased in the sub-group of milk, cheese and egg (3%). Besides, prices reduced in the sub-group of fruits and grapes (-7,3%), oil and fats (-4%). Prices in the group of alcohol drinks, tobacco increased by 8,1%, which was reflected by 0,43 interest points share on the annual index of December. Price increase was mentioned on the tobacco products (13,6%). Prices reduced by 1,7% on the products (services) in the transport group, which contributed -0,22 interest points in the total annual inflation data. In this group prices reduced in the purchase of transport vehicles (-7,4%) and exploitation of the personal vehicles (-1,9%).

IMF REPRESENTATIVE: DEPRECIATION OF GEL IS SLIGHT

ccording to the Resident Representative of the International Monetary Fund in Georgia Azim Sadykov, the depreciation of the national currency, which takes place in the recent months, is not something specialand very dangerous too. “We must bear in mind that there is a floating rate regime in Georgia. The main objective of the monetarypolicy of the National Bank of Georgia, according to the law on the NBG, is to maintain price stability, i.e stable inflation,”- says Sadykov. In his words, these processes occur throughout the world, in-

cluding more advanced countries than Georgia. “The recent depreciation of the GEL against the U.S. dollar was 4 % since the end of October. Since the beginning of the year, the difference between the highest and lowest rate of GEL against the U.S. dollar is about 6%. Let’s compare it with other floating currencies. Over the same period, the same difference between the highest and lowest rate against the U.S. dollar was 8% for Euro, for the Hungarian forint - 12%, the Polish zloty - 12 %, and the Russian ruble - 11%. That is, there is nothing extraordinary in the recent changes in GEL exchange rate, “- said the IMF representative states.

nnual growth of VAT-payer enterprise turnover equaled to 15% in November. According to preliminary data of Geostat, turnover of VAT-payer enterprises equaled to 4,206 billion GEL in October, which is 15% more than in the same period 2012. Such sharp growth has not been mentioned during a year. Geostat also adjusted data published in November, namely, turnover of VAT-payer enterprises has increased by 5,7% in October, instead of 5,3%. In September it was reduced by 1,6% instead of 1,2%. In August it dropped by 1,5% instead of 1,7$ in comparison with last year. It’s noteworthy that in October 2013, compared to the same month of last year, number of newly registered enterprises has increased by 9%. 3 762 new enterprises registered in November 2013.

100 000 GEL DOTATION WAS ASSIGNED FOR TBILISI-MESTIA FLIGHTS

overnment allocated 100 000 GEL for partial funding of Tbilisi-Mestia flights. To partially refund cost of TbilisiMestia-Tbilisi flights, the amount will be assigned from the governmental reserve fund to Mestia municipality. Prime Minsiter already issued a respective order. Company Aviaservice serves to Tbilisi-Mestia flights by a helicopter. One-way ticket cost is 50 GEL. Performance of subsidized flights started at the beginning of September 2013.

GEORGIA, ALBANIA, KOSOVO PUT ON THE LIST OF SO-CALLED SECURE COUNTRIES

he Board of Directors of the French Bureau of Refugees put Georgia, Albania and Kosovo on the list of the so-called secure countries, servicepublic.fr says. According to the list, countries are regarded as safe if they ensure freedom, democracy, rule of law and protection of human rights. In addition, the citizens of the above-mentioned countries, who seek asylum in France, will not be able to get it any more. They can submit applications to the Board of Directors, though they will not be allowed to arrive in the country until the end of the consideration of the applications. 18 countries are on the list of secure countries at this time.

GOVERNMENT JOBS PORTAL TO WORK AT FULL CAPACITY FROM APRIL

GOVERNMENT FORECASTS 5% GROWTH IN 2014

eputy Head of the Parliamentary Committee on Sector Economy Paata Kvizhinadze states “Commersant” that based on the real situation and the tendencies of development, economic growth in 2014 may exceed 5%. “There are reasons for this - for example, to take at least a fact that in December 2013 , economic growth was 8%. This gives hope that within a year the growth will also be high, “ - he says. At the same time, according to the MP from the oppositional National Movement Giorgi Vashadze, based on the results of 2013, economic

growth in 2014 will not exceed 3-4%. “The government has no specific program to improve the business climate , it does not intend to reduce taxes and to introduce decriminalization of economic crimes. So there is no reason to expect economic growth of 5% or more, “ – says the opposition lawmaker. According to the expert Ramaz Gerliani, in 2014 the possibility of economic growth of 5% depends on the government’s economic policy . “The property should be privatized, since it will help to attract investment, and the growth rate of the economy is largely dependent on the inflow of investment , “ - the expert notes.

t is not employment , it’s the study of the labor market that will be useful for the people to search a successful job”. Vacancies on the government employment online - portal will be available from April 2014 . However, interested persons can be registered onwww.worknet.gov.ge already today. Government officials say that it is important not only to describe job seekers and create a database but to conduct a research of the entire labor market, strategic planning, what professions are required and how the job seekers can be trained. According to them, this in itself is not employment; it’s the study of the labor market, whose findings will be useful to the people to find a successful job. Online employment agencies state “Commersant” that they don’t expect the reduction in the number of vacancies due to the enactment of the government portal.

BANKING & STATISTICS January13, 2014 #37

NATIONAL BANK’S FOREIGN RESERVES SLIP

he international reserves of the Georgian National Bank amounted to $2.823.4 billion as of December 31, 2013, according to the preliminary data. This is $207.4 million less than in late November last year, the Georgian National Bank reported. The international reserves converted in foreign currency, hit $2.601.5 billion, including those placed in securities - $1.729.4 billion and on the accounts of foreign banks and the IMF - $872.1 million. The amount of funds placed in SDR is $222 million, while a reserve position in the IMF is $15,400. The international reserves of the Georgian National Bank decreased by $49.6 million and reached historic highs in 2013. The Georgian national currency rate reduced from 1.65 lari per dollar to 1.75 lari in December 2013. Georgian Finance Minister Nodar Khaduri said that the National Bank refused intervention in foreign currency trading to keep the lari rate. Despite this, the National Bank’s reserves reduced by more than $200 million in December.

VTB GIVES OPPORTUNITY TO DUBAI SHOPPING FESTIVAL PARTICIPANTS TO DEPART TO BRAZIL

TB gives opportunity to Dubai Shopping Festival participants to depart to2014 FIFA World Cup Brazil. The bank reports that transaction with VTB VISA card is necessary for it. The festival continues from January 2 to February 2 and everyone who makes transaction by ATM and POS Terminal of VTB, will get involved in the raffle. 3 2-person all-inclusive tours and tickets for 2014 FIFA World Cup Brazil. The raffle will be held in March 2014. Dubai International festival includes special offers, sales, fashion shows, exhibitions and special activities for the whole family. Especially interesting is Dubai World Cup, activities in Global Village and carnivals organized in various Dubai malls, throughout the city.

PRICE OF BANK OF GEORGIA SHARES EXCEEDS 25 GBP

rice of Bank of Georgia’s (BGEO LN) increased on London Stock Exchange. In the last reporting week (30/12/13-4/01/14) maximal price equaled to 25,01 pounds. BG Capital informs that in the reporting period minimal price equaled to 23,75 pounds. IN total 271624 stocks have been traded. Session week closed with 24,6 pounds (+1,19% w/w). Bank of Georgia’s stocks have been traded in the premium list of London Stock Exchange since February 28, 2012 (in the standard listing - since November 2006).

CONSTANTA INCREASED AUTHORIZED CAPITAL BY 3 MILLION

ank Constanta increased authorized capital by 3 million. By December 1, 2013 the capital equals to 50,8 million GEL, respectively it increased by 53,8 million GEL. Constanta completed 11 months of last year with 13,03 million GEL. According actives, the bank’s market share is 2%. Main stockholder of the bank (86.3%) is TBC Bank, which became owner of control package of its stocks in spring 2011. 9,4% belongs to Oiko Credit, 1.6% - to Tamar Lebanidze and 1,1% - to Levan Lebanidze. From TBC Ban’s side indirect large beneficiaries of Bank Constanta are: EBRD (17,09%), IFC (17,09%), DEG (9,9%) TBC Holdings (16,6%), Mamuka Khazaradze (15,4%), Badri Japaridze (7,7%).

caucasian business week

NATIONAL BANK’S INTERVENTION FAILED TO SOLVE A PROBLEM OF FAST PAYMENT COMPANIES The affected party states that steps towards the agreement have not been taken yet

espite the central bank’s intervention, prompt payment business and mobile operators have failed to agree. As a lawyer of representatives of prompt payment business explains to “Commersant”, the central bank expressed its attitude to the issue only indirectly , because the Communications Commission should show activity in the negotiation process. According to Akaki Chargeishvili, the steps towards the agreement with mobile operators have not bee taken so far. Mobile companies have commented on the issue as well. “Beeline ‘’ company states that negotiations are underway and he will not reveal any information until a specific decision is made.

Recall that mobile operators stopped subsidizing of the prompt payment companies and customers have to pay a 4% - fee. The exception is “Bank of Georgia “ pay boxes that causes protest of other companies.

“CRYSTAL “ EVALUATES THE 2013 : “MICROFINANCE SECTOR BEGAN TO DECLINE INTEREST RATES AS WELL AS THE BANKS”

FO “Crystal “ Director General Malkhaz Dzadzua assesses the outgoing year on the air of “Commersant” radio station. He says that despite the current difficult political environment, “Crystal” was able to achieve impressive growth and over- performed scheduled strategic plans. In particular, Dzadzua notes that his organization opened six new branches throughout the country, mainly in the eastern regions, and the number of branches reached 22 while a volume of loans increased by 40%. At this stage, the organization serves 22 thou-

sand citizens. According to Malkhaz Dzadzua, the decline in interest rates in the banking sector has launched in the microfinance sector as well. «We are expecting the Next Year and ready that prices for credits will fall even more. As a result, we expect the increased number of customers, “- “Crystal” Director General states in “Commersant “ New Year’s broadcast. He also stressed the award “Crystal” received this year - “ Crystal “ was named the winner of the international competition MIX-Market- “Responsible and transparent microfinance standards” and was awarded a special S.T.A.R. status.

AZERBAIJAN caucasian business week

January13, 2014 #37

ADB READY TO EXPAND COOPERATION WITH AZERBAIJANI BANKS

SOCAR EXPORTS OVER 1 MILLION TONS OF OIL GOODS

zerbaijan’s state energy company SOCAR exported around 1.04 million tons of oil goods produced in its own oil refineries in 2013, SOCAR said on January 7. This figure amounted to 1.24 million in 2012. Also, the company exported 14,250 tons of petrol, 899,905 tons of diesel fuel, 131,322 tons of aircraft gasoline, and 657 tons of furnace oil in January-December 2013. Azerbaijan’s oil products are produced on the base of two oil refineries in Baku with total capacity of 16 million tons of oil per year. Both refineries are part of SOCAR, which processes about seven million tons of oil a year. The oil production is carried out at ground and sea wells at the expense of its own funds. Azerbaijan produced 43.5 million tons of oil and

29.5 billion cubic meters of gas in 2013. SOCAR, which includes production associations Azerneft (companies involved in production of oil and gas onshore and offshore), Azerkimya (chemical industry enterprises), and Azeriqaz (gas distribution), is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in the domestic and international markets, and supplying natural gas to industry and the public in Azerbaijan. SOCAR owns gas stations in Azerbaijan, Switzerland, Georgia and Ukraine. It has representative offices in Georgia, Turkey, Romania, Austria, Switzerland, Kazakhstan, Britain, Iran, Germany and Ukraine, and trading companies in Switzerland, Singapore, Vietnam, Nigeria, and other countries.

AZERBAIJAN-WTO TALKS TO CONTINUE IN FEBRUARY 2014

he next round of negotiations on Azerbaijan’s joining the World Trade Organization (WTO) will be held in the second half of February, 2014. Chief Negotiator and Deputy Foreign Minister Mahmud Mammadguliyev said the negotiations will start from February 16 and last for a week. The meeting with the WTO’s working group was scheduled for late October-early November this year, but has been postponed due to the organization’s busyness with countries that are in the very last stage of accession to the WTO. “Everything is prepared from our side. All docu-

ments that were necessary to submit are already in the WTO secretariat,” Mammadguliyev said earlier. The Azerbaijani side has sent the answers to all questions that were addressed to the country following the previous working meeting, held in Geneva in early June, as well as tables related to multilateral negotiations on agriculture. Azerbaijan’s accession to the WTO is expected to help increase the country’s non-oil exports. Azerbaijan has been in talks with WTO since 2004 to join the organization. Talks are also being held at bilateral and multilateral levels with WTO member states. Work is underway to bring Azerbaijani laws in line with WTO regulations. The number of WTO member states seeking to start bilateral talks with Azerbaijan is growing. At present, Azerbaijan is in the process of bilateral negotiations with the U.S., Japan, Brazil, Ecuador, Sri Lanka, European Union, Norway, India, South Korea, Taiwan Province of China, Canada, Switzerland and Honduras. Negotiations have been completed and protocols signed with Turkey, the Sultanate of Oman, the United Arab Emirates, Georgia and Kyrgyzstan. Azerbaijan now is at the stage of signing the protocol with Moldova.

AZERBAIJAN, TURKEY EYE AGRICULTURAL CO-OP

zerbaijan and Turkey explored ways of developing the bilateral cooperation in the field of agriculture as Azerbaijani Agriculture Minister Heydar Asadov met

Turkish Minister for Food, Agriculture and Livestock Mehdi Eker in Ankara, AzerTag state news agency reported. The Turkish Minister said they had implemented several joint projects with Azerbaijan. He noted the necessity of continuing this cooperation under projects of the UN Food Programme`s Ankara Regional Center. “Turkey and Azerbaijan are now successfully implementing 17 joint projects. Experience exchanged between the specialists of the two brotherly countries is of profound importance as well, “ he said. Minister Asadov noted the necessity of increasing import and export between the two countries. He expressed Azerbaijan`s desire to benefit from Turkey`s experience in the agricultural area.

he Manila-based Asian Development Bank (ADB) is ready to expand the list of Azerbaijani banks for future cooperation within the credit lines with the aim of supporting small and middle business and operations on trade financing. The list includes six banks, particularly the International Bank of Azerbaijan, Accessbank, AGBank, Bank of Baku, DemirBank, and Bank Respublika at present, head of ADB’s Baku office Olly Norojono told Trend news agency on January 4. “The total volume of credit lines, open for the county’s bank sector, amounted to $40 million in 2013, and it was repaid to the ADB,” he said. Norojono went on to note that the ADB allocated a $50 million loan to Accessbank for a term of five years. This step was aimed at supporting micro, small, and medium business in rural areas where the bank has created a branching network covering most of Azerbaijani regions. This credit is a platform for cooperation with Accessbank for improving the financial ensurance of Azerbaijan’s rural regions and development of such business in Central Asia where AccessHolding, one of the founders of Accessbank, has left its mark. Norojono also said the ADB has no plans for participating in the banks’ shareholding structure.

The ADB started to actively finance Azerbaijani banks for supporting the development of the private sector in 2007. Established in 1966, the ADB is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. The bank is owned by 67 members, including 48 from the region. In 2012, ADB’s assistance totaled $21.6 billion, including co-financing $8.3 billion. Azerbaijan’s share in the bank’s capital is 0.5 percent. The ADB plans to allocate around $500 million for state projects in Azerbaijan in the next three years.

AZERBAIJAN TO BUILD NEW CAR MANUFACTURING PLANT

he construction of a new car factory for manufacturing modern passenger cars in Azerbaijan is expected to start in 2014, Azerbaijan Railways LTD’s press service director, Nadir Azmammadov, told Trend on January 6. The factory is projected to be established in Azerbaijan’s second largest city, Ganja, he added. He said the new plant, which will be established on the basis of Ganja train depot, will not only manufacture modern passenger cars, but also repair old ones. “Currently, the project is in the stage of preparation in order to start its implementation in the coming months,” Azmammadov said. Earlier, Azerbaijani Transport Minister Ziya Mammadov said at the opening ceremony of the administrative building of the Ganja Train Station that negotiations on the construction of the passenger car plant are currently underway with the Swiss company Stadler. Currently, the passenger cars of Azerbaijan Railways are repaired abroad, in particular in Ukraine and Russia due to the lack of necessary infrastructure. The State Statistics Committee reported that

Azerbaijan produced 326 passenger cars in the first six months of 2013, 3.4 times more than the same period in 2012. The Swiss Stadler Rail Group, with its ten sites in Bussnang, Altenrhein, Winterthur (Switzerland), Berlin (Germany), Siedlce (Poland), Pusztaszabolcs, Szolnok (Hungary), Czech Republic (Prague), Italy (Meran), and Algiers (Algeria), is focusing on regional and suburban service markets, regional express railway service, and streetcars. Stadler Rail has positioned itself as a supplier, complementing global rail vehicle builders such as Alstom, Bombardier, and Siemens.

BAKU TO HOST FIRST INTL. CASPIAN ENERGY FORUM

zerbaijan’s capital Baku is set to host the First International Caspian Energy Forum in April. The forum, which is part of the general meetings of the CaspianEuropean Club (CEIBC), is planned to be held annually. Reports say the one-day forum consists of two parts. The first part would focus on the development of the oil, gas, energy, and environment sectors while the second one would deal with the non-oil sector (issues of financial development, banking, insurance, leasing, telecommunications, tourism, machine engineering, construction, and other sectors of the non-oil industry). Each part will include both lectures and discussions. The forum will attract representatives of government agencies, top managers, experts from the countries of the Caspian-Black Sea region, and the EU. They would take advantages of professional opportunities available during coffee breaks, business lunch, and gala reception. Caspian Energy International Media Group has been operating since 1999. On different estimates, Caspian Energy Journal is among the five leading publications of the Caspian-Black Sea

and Baltic regions, and is a landmark for many investors in defining their activity in the CaspianBlack Sea and Baltic regions. Caspian Energy Journal is published in 50 countries worldwide. The journal publishes interviews of the Presidents and Prime Ministers of the CIS and EU countries and heads of large transnational companies, and also reviews and analytical materials of leading experts. CEIBC was established in June 2002 with the active participation of Caspian Energy International Media Group, with the support of the largest oilgas companies working in the Caspian-Black Sea region. Azerbaijan President Ilhm Aliyeve holds the presidency of the CEIBC.

ARMENIA January13, 2014 #37

caucasian business week

10 SIGNIFICANT ECONOMIC EVENTS OF 2013 national 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.

here have been a number of significant economic events held at the course of the old year. “Armenpress” News Agency introduces ten most significant events of 2013.

ARMENIA ANNOUNCED ABOUT ITS DECISION TO JOIN THE CUSTOMS UNION In the result of the negotiations on September 3, 2013 in Moscow the Presidents Sargsyan and Putin confirmed the aim of the Republic of Armenia and the Russian Federation in the direction of further development of economic integration processes in the Eurasian territory. In that context the President of the Republic of Armenia Serzh Sargsyan announced about the Armenia’s decision to join the C ustoms Union and the necessity of implementation corresponding steps for that aim and in future about participating in formation of the Eurasian economic union. The President of the Russian Federation Vladimir Putin expressed his support to the abovementioned decision of Armenia and informed about the readiness of the Russian side to support the process. ARMENIA ISSUES EUROBONDS FOR THE FIRST TIME Armenia 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 BBby Fitch. The Minister of Finance of the Republic of Armenia Davit Sargsyan noted that the inter-

ESTABLISHMENT OF THE FIRST FREE ECONOMIC ZONE IN ARMENIA Prime Minister of the Republic of Armenia Tigran Sargsyan together with Minister of Transport of Russian Federation Maxim Sokolov was present at the solemn opening ceremony of the first free economic zone in Armenia. “Armenpress” was informed from Information and public relations department of the government that the Prime Minister congratulated all the sides involved in formation of free economic zone on occasion of the important event, thanked for the joint work done since 2008 and wished success to the process of pilot program. The minister of the Transport of Russia also congratulated everybody and personally Prime Minister for the made efforts and implemented projects in direction of creation of the zone. After cutting the symbolic ribbon of entrance Tigran Sargsyan and Maxim Sokolov walked around the territory of the free trade zone, got acquainted with offered infrastructure and services. The aim of formation of free economic zone is the stimulation of foreign direct investments in our country, increase of export levels, creation of new workplaces and preconditions of stable economic development. ARMENIA’S CENTRAL BANK CHANGED THE REFINANCING RATE The Council of the Central Bank of Armenia decided to decrease the refinancing rate by 0.25 percentage points making it 7.75%. The session was held in the Training and Research C enter of the C entral Bank of Armenia in Dilijan, Armenia on December 24. The Public Relations Department of the C entral bank of the Republic of Armenia informed “Armenpress” that there was 0.9 percent inflation in November of 2013 against 1.4 percent inflation recorded in the same period of the previous year; the 12-month inflation continued to reduce and in late November it reached 6.6 percent. RUSSIA WILL SUPPLY GAS TO ARMENIA ON RUSSIAN INTERNAL MARKET’S PRICES

Russia significantly drops gas price for Armenia, 1000 cubic meters of gas to be supplied to Armenia for 189$. As Armenpress reports, this was announced by Russia’s Presidemnt Putin at the joint press conference of Armenian and Russian leaders, after bilateral talks, on December 2. Armenian Government and Russian Gazprom C ompany signed a new agreement for the gas supply from Russia to Armenia in 2014-2018. According to the agreement Gazprom will supply Armenia with 2,5 thousand billion cubic meters of gas. On July 7, 2013 Russia had increased the gas price for Armenia to 270 USD for 1000 cubic meters. Before that the price was 180 USD. The C EO of Gazprom Aleksei Miller has declared that the gas prices for Armenia will change and Armenia will be supplied with gas with Russian internal prices. 2013 MARKED THE “BIRTH” OF FIRST ARMENIAN TABLETS AND SMARTPHONES The preliminary wholesale price for the Armphone mobile phones (smartphones) of Armenian production will be about 80,000 drams. The C hairman of the Technology and Science Dynamics Inc/Armtab Technologies Vahan Shakaryan told Armenpress about it. “We have only one test phone ready. By preliminary calculations its price will be about $185-200”, - said Shakaryan. The phone works based on the Android 4.2.2 operational system. The markets of the phones’ sale are intended the nearest foreign countries, including C IS. On December 6 the Prime Minister of the Republic of Armenia Tigran Sargsyan presided over the session of the Industrial C ouncil by the Prime Minister of the Republic of Armenia. The session launched with the presentation of the first tablet (Armtab) and first telephone (Armphone) of Armenian production. Before the discussion of the issues involved in the session’s agenda, Prime Minister Tigran Sargsyan stated that the Armeniabased Armenian-American company Technology and Science Dynamics Inc/Armtab Technologies initiated the production of tablets in Armenia. The software and hardware design of the tablets is carried out in Armenia. The tablets are assembled in the United States and Hong Kong. It is considered to start the mass production and sale of the Armenian tablets on January-February 2014. 25-50 top Armenian experts of the realm will be engaged in the production. The C hairman of the C ompany Vahan Shakaryan presented the first tablet of Armenian production to the Prime Minister of the Republic of Armenia and stated that he is hopeful that it will be useful for Tigran Sargsyan in his daily activities.

ARG TO SEEK EXTERNAL MARKETS FOR EXPORT OF ELECTRICITY

EO of Armenia’s Russian-owned national gas distribution company ArmRosGazprom (ARG) Vardan Harutyunyan instructed today relating departments of the company to look for external markets to sell the electricity generated by the fifth unit of Hrazdan Power plant commissioned last December 2, during Russian president Putin’s visit to Armenia. The fifth unit’s capacity is 480 megawatts. It can generate 3.3 billion kWh of electricity annually.

The construction of the facility was started in the late 1980s, but ground to a halt following the Soviet Union’s collapse. The fifth unit is more powerful and efficient than the four other operating units of the plant. Its launch has significantly boosted Armenia’s power generating capacity. The fifth unit runs steam and gas turbines making it unique not only in the region, but also in the world. Vardan Harutyunyan also stressed the importance of expanding the capacity of Abovyan un-

derground gas storage facility. Last year ARG increased it 140 million cubic meters. The Abovyan gas storage is one of the principal elements of Armenia’s gas transportation system ensuing the country’s energy security. It was constructed in 1962 on rock salt deposits at a depth of 800-1,000 meters. ARG is the only company dealing with import and distribution of Russian natural gas coming to Armenia from Russia via Georgia. It was established in 1997 and is now fully owned by Russian Gazprom monopoly.

BANK VTB (ARMENIA) BEST BANK OF ARMENIA 2013 IN GALLUP INTERNATIONAL ASSOCIATION POLL

ank VTB (Armenia) has been recognized as the best bank of Armenia in 2013 in a poll carried out by Gallup International Association official representative in Armenia, the bank’s press office reported. Gallup International Association representative in Armenia Aram Navasardyan handed the diploma “Best Bank of Armenia 2013” to the general director and chairman of board of Bank VTB (Armenia) closed joint stock company Yury Gusev Thursday. The poll was conducted in October 2013 and covered all communities of Yerevan and Armenia’s regions. A total of 1,067 respondents par-

ticipated in the survey. Being asked “services of which bank you use”, majority of respondents pointed to Bank VTB (Armenia) and highest number of respondents said they will advise the bank to their friends. It is a great honor for Bank VTB (Armenia) to be the best in a poll by Gallup International Association, Gusev said adding they appreciate Armenian population’s confidence. The achievements are made owing to everyday efforts of the bank’s staff, he said. Director of Gallup International Association office in Armenia Aram Navasardyan said the success should be considered a step toward ongoing

improvements of the quality of services to meet the growing population demands. Navasardyan congratulated the management and the staff of the bank on the achievements and wished them to always be on the peak of success. Bank VTB (Armenia) closed joint stock company became a member of VTB financial group in April 2004. The second biggest Russian bank, Bank VTB ojsc is now the full owner of Bank VTB (Armenia). The bank is among leaders of Armenian banking system in a number of basic indicators. It currently has the biggest network in Armenia – 67 branch offices across the country.

GOVERNMENT WILL CARRY OUT ACTIVITIES ON REPLENISHMENT OF ENDEMIC FISH POPULATION IN LAKE SEVAN

he Government will carry out activities on the replenishment of endemic fish population in Lake Sevan this year. As reports Armenpress, the issue is included in the number of priorities 2014 for the Government. The activities envisage cultivating 366 million 667 thousand fish and omitting them into the lake once for the aim of the replenishment of the population of the endemic fish “gegharkun” and “summer ishkhan” in Lake Sevan. The Minister of Nature Protection will implement activities on the replenishment of endemic fish population.

SUGAR PRICE DROPS IN ARMENIA

he average price for the sugar has reduced by 14% in the Republic of Armenia in December 2013 in comparison with the same month of the previous year. According to the data, provided by the National Statistical Service of the Republic of Armenia, the average price for the sugar has reduced by 1,7% in December 2013 in comparison with November 2013. Armenpress reports that during the first eleven months of 2011 about 70,000 tons of sugar was produced in our country, which exceeded the indicator of the same period of the previous year by 39,5%.

CITRUS FRUITS BECOME CHEAPER IN ARMENIA

he average sale price for orange decreased in December by 11.6 % as compared with November, mandarin by 10.1 %, lemon by 2.6% and banana by 0.8% in the Republic of Armenia in 2013. According to the data of the National Statistical Service the average price for 1 kg mandarin amounted to 541 AMD in December, while it amounted to 596 AMD in November, 1 kg orange amounted to 765 AMD (it amounted to 868 AMD in November). The average price for 1 kg lemon amounted to 187 AMD in December, while banana amounted to 850 AMD. Armenpress reports that 0.9% inflation was recorded in fruit products in December 2013 as compared with December 2012, as compared with November 2013 4.3 %% inflation was recorded.

ARMENIA’S JEWELRY PRODUCTION IN JANUARY NOVEMBER 2013 AMOUNTS TO 18.4 BILLION DRAMS –STATISTICS

rmenia’s jewelry production in January-November 2013 amounted to 18.4 billion drams, an increase of 18 percent when compared to the same period of time in 2012, according to the National Statistical Service. Some 915.2 kg of jewelry was produced in the first 11 months of 2013, up from 812.8 kg in the same period last year (the growth was 12.6 %). Diamond production amounted to 78,871 carats, an increase of 47.9 % compared to JanuaryNovember 2012, the National Statistical Service said. At the same time, exports of precious and semi-precious stones, precious metals and products in January-November 2013 surged by 9.7 percent to $175.3 million, while imports of these types of products amounted to $ 273 million (up 67.1%) . ($ 1 - 405.95 drams).

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CIS & IRAN January13, 2014 #37

caucasian business week

KAZAKHSTAN, IRAN DISCUSS TRADE CO-OP

BELARUS SAYS RECEIVED 1ST PART OF RUSSIA’S $2BLN LOAN

azakhstan and Iran are discussing the prospects of trade cooperation within the third meeting of the Kazakh-Iran working group on trade and economic cooperation which kicked off in Kazakh capital Astana on January 9. Opening the meeting Kairat Torebayev, Director of the International Cooperation Department of Kazakh Economy and Budget Planning Ministry said the issues to be discussed at the meeting are cooperation between Kazakhstan and Iran in the field of industry and the mining industry, agriculture and agribusiness complex, transport and logistics, tourism and culture. The agenda of the meeting also includes the implementation of agreements reached at the previous meeting of the working group. Co-chairman from the Kazakh side is Deputy Economy and Budget Planning Minister Timur Zhaksylykov and from Iran - Deputy Minister of Industry, Mines and Commerce for the development of economic relations, chairman of the Trade Promotion Organization Valiolla Afkhami. The meeting will be resulted with the signing of a protocol of the third meeting of the KazakhIran working group. The cooperation with Iran is of significant importance for Kazakhstan. The two countries keen on increasing the trade turnover to $ 5-10 billion. There is a great potential for growth of trade turnover in the fields of food industry, transport sector and the development of transit transports. Kazakhstan’s main exports to Iran are grain and steel, while Iran’s exports to Kazakhstan are food products -- fruits, flowers, greens and vegetables. Iran also exports construction materials such as ceramics, tiles, plastics and petrochemical products to Kazakhstan. The Iranian companies are actively working in Kazakhstan, particularly, in the field of engineering, construction, road sector, agriculture and poultry farming. The parties also work on the joint telecommunication project.

RUSSIA BANS IMPORTS OF FISH AND DAIRY PRODUCTS FROM ESTONIA

n January 9, the Russian Federal Service for Agricultural Control (Rosselkhoznadzor) banned the shipments of dairy and fish products from eleven companies in

Estonia. Sergei Dankvert, the head of the service, said that the decision to restrict the shipments was made following the inspection of dairy and fish companies in Estonia. The official reason for the move is the absence of required control over the production of raw milk at the companies. In particular, the current system of control does not embrace all necessary groups of antibiotics that are provided in the control rules of the Customs Union. Meanwhile, milk products from Lithuania are expected to return to Russian stores. The Lithuanian products were absent from the Russian market for almost three months. The ban was introduced by Gennady Onishchenko, the previous head of the Federal Service for Consumer Rights Protection, who was not satisfied with the quality of the Lithuanian milk.

B ROXI PETROLEUM ANNOUNCES OPERATIONAL UPDATE ON KAZAKHSTAN

Central Asian oil and gas company with a focus on Kazakhstan announced operational update last week. Roxi Petroleum said it has recently resumed drilling operations and now expects to reach total depth by the end of the first quarter of 2014. Roxi has a 58.41 percent interest in the BNG Contract Area, which is located in the west of Kazakhstan, 40 kilometers southeast of Tengiz on the edge of the Mangistau region. The company resumed full control of BNG Ltd LLP in the second quarter of 2011. BNG Ltd LLP plans to drill five deep wells before the expiry of the existing license in June 2015, and the locations of the first two deep wells are already identified. The Contract Area has both shallow and deep prospects, and Roxi was founded to explore and develop following the $40 million equity funding commitment in January 2013. Roxi announced that Well 807 has reached it revised total depth of 2,301 meters and an oil casing string has been set and cemented. Based on early indications, Well 807 is expected to produce 225 barrels of oil per day, (131 barrels of oil per day net to Roxi), which is similar to the other successful shallow wells. Based on testing to date, Roxi expects Wells 54, 143, 805, 806, and 807 to be capable of producing some 1,200 barrels of oil per day (701 barrels of oil per day net to Roxi). During the next three months, three intervals of Valanginian age at Well 806 will be tested using a work-over rig, and the data from these tests will be used for calculating reserves for the Valanginian horizon. During the same period, a separate workover rig will be used at Well 143 and the test data will be similarly used to calculate reserves. BNG Ltd LLP, in which Roxi has a 58.41 percent

interest, plans to drill 5 deep wells before the expiry of the existing license in June 2015, with the locations of the first two deep wells already identified. It is expected that three of the five wells be drilled on the Ayrshaghal structure, and two on Yelemes structures. The first deep well, designated Well A5, will be drilled to an estimated depth of 4,700 meters and was dug in July 2013, targeting the Permian formation at 4,120 meters and the Carboniferous formation at 4,390 meters. Seismic analysis shows that the salt layer, which is now expected to be up to 250 meters thick, will be encountered at around 3,800 meters. Roxi Chairman Clive Carver believes that his company remains well-placed to continue building on the successes of 2013. “Most importantly, we have the funding in place to continue our multi-well development program. With the early indications from Well 807, we believe that the shallow wells at BNG have already demonstrated themselves to be commercial and we are poised to discover the value of the BNG’s deeper prospects in Q1,” he said. Kazakhstan, one of the five Central Asian countries, is rich with hydrocarbon reserves. The county’s largest hydrocarbon fields are Kashagan, Tengiz, and Karachaganak. The recoverable oil reserves of Kashagan field are estimated at 11 billion barrels, whereas total geological raw material reserves stand at 35 billion barrels. Besides, natural gas reserves are estimated at over 1 trillion cubic meters. The Tengiz oil field is one of the deepest and largest oil fields in the world. Reserves of the deposit are estimated at 750 million to 1.1 billion tons (6-9 billion barrels) of recoverable oil. Karachaganak is one of the world’s largest fields. Its oil reserves amount to 1.2 billion tons, while those of natural gas are 1.35 trillion cubic meters.

FORBES: TOTAL INCOME OF 25 UKRAINIAN REAL ESTATE OWNERS 5 PERCENT UP IN 2013

he total income of 25 Ukrainian real estate owners in the field of commercial real estate in 2013 increased by 5% compared to 2012 and amounted to $714 million, which indicates the stability of the real estate market, according to data in the annual ranking of landlords over the last year from the Forbes edition in Ukraine. The Forbes rentier rating for 2013 in Ukraine is headed by the businessmen Garik Korogodsky, Oleksandr Melamud and Oleh Krapivin (rental income of $55 million, via managing company Vita Veritas, 90,000 square meters of rental space, with the largest facility being the Dream Town trade and entertainment center, Kyiv). Ihor Humeniuk, Vasyl Mikulin and Iryna Fridman rank second in terms of income from leasing commercial real estate last year (rental income of $54 million, Investment and Development company, 180,000 square meters of rental space, the

number of rooms - 539, and the largest facility being the Donetsk City trade and entertainment center, Donetsk). Businessman Oleksandr Feldman ranked third in the Forbes ranking in 2013 (rental income of $51 million, AVEC company, 330,000 square meters of rental space, largest facility the Barabashove retail park, Kharkiv). Arkadiy Rotenberg, Oleksandr Ponomarenko and Oleksandr Skorobohatko ranked fourth (rental income of $43 million, TPS Property Kyiv company, 72,000 square meters of rental space, largest facility the Ocean Plaza trade and entertainment center, Kyiv). Businessman Leonid Yurushev is the fifth in the 2013 rentier ranking from Forbes (rental income of $42 million, Yaroslaviv Val company, 14,000 square meters of rental space, the number of rooms - 881, largest facility the InterContinental Hotel, Kyiv)

elarus has received the first part of a $2 billion Russian loan, worth $450 million, a spokesman for the Belarusian National Bank said Saturday. Russian President Vladimir Putin said at a meeting of the Supreme State Council of the RussiaBelarus Union State in December that Moscow would provide Minsk with up to $2 billion in loans in 2014. Later Russian Finance Minister Anton Siluanov said the funds would be provided from the Russian 2014 budget in the form of an intergovernmental loan for 10 years at 4-percent annual interest. Siluanov did not specify the sources of financing for the rest of the loan, but reiterated that no money for it would be taken from Russia’s National Welfare Fund, an off-budget reserve of accumulated oil and gas revenue. Russia and its close ally Belarus are formally a Union State, and are also part of theCustoms Union along with Kazakhstan.

UZBEKISTAN JOINS CIS FREE TRADE ZONE

zbek President Islam Karimov has ratified a protocol to join an agreement on free trade between former Soviet states, a presidential spokesman said Saturday. The protocol was signed at a meeting of prime ministers of the Commonwealth of Independent States (CIS), a loose association of former Soviet republics, in the Belarusian capital Minsk on May 31, 2013. In line with the deal, approved by Uzbekistan’s lower house of parliament on November 29, and by the upper house December 13, disputable issues are resolved through bilateral talks. Other members of the CIS free trade zone are Armenia, Belarus, Kazakhstan, Moldova, Russia and Ukraine. Kyrgyzstan and Tajikistan have signed the deal but not ratified it yet.

UKRAINE INCREASES CORN EXPORTS BY A THIRD IN 2013

kraine increased corn exports in 2013 by a third, to 9.5 million tonnes, the press service of the Agricultural Policy and Food Ministry has reported. “Corn remains a major crop exported by Ukraine. Therefore, we are rapidly increasing its exports. This is confirmed by the results of supplies in 2013. Before the New Year farmers supplied 9.5 million tonnes of corn of the new harvest to foreign markets, i.e. over three million tonnes more than in the same period of the previous marketing year,” Agricultural Policy and Food Minister Mykola Prysiazhniuk said. He said that corn exports had intensified after the end of the harvesting campaign. Thus, 3.6 million tonnes of this crop was sold abroad each in November and December, which is the maximum amount of corn ever supplied by Ukraine, he said. “We also have to preserve such high dynamics after the New Year. In general, we are planning to export about 19-20 million tonnes of corn. This is a record figure for Ukraine, which will help it take third place among the world’s leading suppliers of this type of grain,” Prysiazhniuk said. He also added that corn has high demand on global markets. Therefore, Ukraine will continue to expand its markets and search for new markets in 2014, he said.

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WORLD NEWS January13, 2014 #37

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LATVIA JOINS EUROZONE, BUT HALF OF POPULATION OPPOSED

atvia has celebrated the New Year by joining the eurozone, becoming the 18th member of the Europe-wide currency bloc. However, recent opinion polls show that a majority of Latvians oppose the move, with just one-fifth strongly in favor. The euro switchover ceremony took place Jan. 1 at the HQ of the state-owned Citatele Bank – the lender reconstituted from the collapsed Parex Bank, where Latvia’s worst 2008-10 economic crisis began. “It’s a big opportunity for Latvia’s economic development,” said the country’s acting prime minister, Valdis Dombrovskis, withdrawing the first 10-euro banknote from an ATM in Riga, Latvia’s capital.

But Dombrovskis, who led Latvia through its economic crisis, warned that joining the euro was an opportunity, but not a guarantee of wealth. “It’s not an excuse not to pursue a responsible fiscal and macroeconomic policy,” he said. EU policymakers congratulated Latvia’s on its accession to the eurozone. “For Latvia, it is the result of impressive efforts and the unwavering determination of the authorities and the Latvian people,” European Commission President José Manuel Barroso said. “Latvia will enter the euro area stronger than ever, sending an encouraging message to other countries undergoing a difficult economic adjustment.” However, opinions on the adoption of the euro are very mixed among people in Latvia. A Dec. 27 report by polling company SKDS shows that 50 percent of Latvians are opposed to the euro, though the figure is 8 percent down from a similar poll in October. About 83 percent of people fear the euro will trigger unwarranted price increases, according to a recent European Commission report. The country’s Finance Ministry estimates prices will rise 2.3 percent next year, while the economy is forecast to grow by 4.2 percent. “Latvians have been forced to adopt the euro and haven’t been allowed [to have] their say. The majority of the population is opposed to the move,” says Andris Orols, chairman of the Anti-Globalist Association, adding that Latvia will import “other goods at a cheaper rate which means [the country] will produce less and ruin the economy.” The Bank of Latvia has even launched a PR cam-

paign to convince its people that this year is the right time for the country to switch currency. “Latvia is a small, open economy with both loans and deposits, very much in euros already,” said Martin Gravitis, a spokesman for the Bank of Latvia. “[Latvia’s] people will have higher ratings and lower interest rates on their loans.” Some of the country’s politicians say the government simply had no choice. “It’s inevitable. We took the responsibility to join the eurozone when we entered the EU. It doesn’t matter how much money there is in our pockets, it matters how much money we have,” said Janis Urbanovich, leader of the country’s Social Democratic Party. The European Central Bank has recently warned the country that the high level of foreign deposits, mostly from Russia, in Latvian banks, was a risk factor. Now all prices in Latvia are displayed in euros and lats, the former national currency. These double prices will remain till June 30, until the country’s full transition to the European currency. Latvia’s economy, the fourth-smallest in the eurozone, shrank dramatically by almost one-quarter in two years, during the 2008-10 crisis. GDP recovered 5.6 percent in 2012, but to achieve this result Latvia had to implement one of the harshest austerity programs in Europe. The Baltic state, with a population of just 2 million people, joined the EU in 2005. It is only the second Baltic nation and ex-Soviet nation to join the eurozone, after Estonia. Its neighbour, Lithuania, is expected to join the eurozone at the beginning of 2015.

SPAIN EXITS MULTIBILLION EU BAILOUT SCHEME Spain has entered the New Year without Eurozone support for its banks, after the bloc’s aid program concluded after delivering 41 billion euros during the country’s crippling debt crisis. The support “has proven instrumental in recapitalizing and restructuring Spain’s troubled banks, which are today on a sound footing,” Klaus Regling, head of the European Stability Mechanism (ESM) was quoted by AFP. “Spain’s program exit after one year is an impressive success story,” Regling said. “Despite the challenges ahead I am confident that the ESM’s support, combined with structural reforms, will allow the Spanish economy to achieve stability and substantial growth,” he added. “Spain will not request any follow-up assistance from the ESM.” Amid a budget crisis in 2012, Madrid managed to negotiate a 100 billion euro deal with Eurozone states to bail out the nation’s banks, which were on the verge of collapse, following the burst of Spain’s real estate bubble. From the total loan secured, Spain ultimately spent only 41.3 billion euros. “The Spanish success shows that our strategy of providing temporary loans against strong conditionality is working,” Regling added. Spain has become the second of five Eurozone countries to have concluded a bailout effort.

Spain‘s official bailout exit is scheduled for January. Ireland, meanwhile, completely halted its aid program on December 15. But despite the success story, in mid-December Spain was warned by the EU Commission and the European Central Bank (ECB) to monitor its banks for shock resiliency and solvency. Spain emerged from its recession in the third quarter of 2013, and is expected to achieve a growth rate of at least 0.5 per cent in 2014. Yet, Spain faces the second largest unemployment crisis in the EU, at 26.7 percent, according to October figures. Greece is leading unemployment in the region with 27.4 percent. Overall, according to Eurostat, the EU has an unemployment rate of

10.9 percent. Meanwhile, Latvia became the 18th -- and one of the poorest countries -- to join the EU monetary union, largely against popular opinion. November’s SKDS poll revealed that only 20 percent of Latvians are in favor of adopting the Euro, while the majority, 58 percent, see the national currency, the Lats, as a symbol of sovereignty and independence. The euro, which was introduced 15 years ago, is now the official currency of 333 million Europeans. Latvia, the fourth smallest economy in the bloc after Malta, Estonia and Cyprus, hopes that the euro will lower its borrowing costs from the EU and encourage investment.

RECORD LOW TEMPERATURES IN US TO ‘FREEZE’ $5BN

he cold spell that has put almost half of the US in deep freeze will cost the country an estimated $5 billion, as millions of Americans stay at home instead of going to work, travelling

or shopping. The record low temperatures in some parts of the US are lower than at the South Pole, and have huddled some 200 million people in their homes in the eastern part of the country. That comprises about two-thirds of the population, according to Evan Gold, senior vice president at business weather intelligence company Planalytics.

“We think that the problem will be short-lived, but we estimate it will cost about $5 billion because of the sheer size of the population affected,” Gold said. In New York the temperature dropped to its lowest in more than a century. At the township of Embarrass, Minnesota the mercury plunged down to -35F (-37C) and touching as low as -45F (-43C) when the wind chill factor was taken into account. The cold spell dubbed a “polar vortex” will also reflect in next month’s consumer spending, according to Gold, as the abnormal cold will increase heating bills and eat into discretionary spending. The demand for natural gas in the northeastern US has reached a 5-year high, with prices for natural gas in New York rising by about $60 per million BTUs [British thermal units] at the beginning of the week. On a macroeconomic scale, the “polar vortex” could erode about 0.1 percent off the US GDP, driving it to 0.1 percent in the first quarter, ac-

cording to Nariman Behravesh, chief economist for IHS Global. However this “will probably all be gained back in the second quarter,” the economist added. Companies like restaurants and airlines are going to be hit the most, with some 2,380 flights already canceled and 2,912 delayed, according to the Telegraph. Friday’s job report could also be affected by the cold weather, with December auto sales being another victim of the low temperature, Goldman Sachs analyst Kris Dawsey said. However, certain businesses, like on-line firms, will win, as Americans stuck at home will switch to internet activities. “There was some $30 million in gift cards sold at Christmas and, if I am stuck at home, I will go online to buy that coat or sweater. And revenue is not recorded for the store until the card is redeemed,” Gold added. Food delivery companies and on-demand cable services for movies will be among other winners, the Planalytics vice president concluded.

FIAT SHELLS OUT $4.35BN TO GAIN FULL CONTROL OF CHRYSLER

talian carmaker Fiat has clinched a $4.35 billion deal to buy the rest of Chrysler it doesn’t already own, avoiding a planned IPO of the third-biggest American carmaker. Fiat SpA announced Wednesday that it has reached an agreement to take full ownership of Chrysler Group LLC in a $4.35 billion deal with the United Automobile Workers (UAW) retiree health care fund. Chrysler is worth $10.5 billion. The deal, which will see Fiat buy UAW’s 41.5 percent stake, will make the Italian company the world’s seventh-largest carmaker. Fiat and the UAW trust have shared ownership of Chrysler since the US automaker emerged from bankruptcy in 2009. “The unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique in terms of mix of experience, perspective and know-how – a solid and open organization that will ensure all employees a challenging and rewarding environment,” Sergio Marchionne, CEO of Fiat and chairman and chief executive of Chrysler Group, said in a statement Wednesday. Fiat will pay the UAW trust $1.75 billion in cash, while Chrysler will shell out $1.9 billion and hand over a further $700 million in four annual installments. The UAW trust will receive $3.65 billion in cash for its stake. The deal is expected to close around January 20. This means that Fiat will have paid a total of $3.7 billion to acquire Chrysler, compared with the $36 billion Daimler-Chrysler paid for the company in 1998. The Italian carmaker Fiat started accumulating Chrysler stock since June 2009. It now has a 58.5 percent stake in Chrysler. The UAW trust had been pushing for a payout of more than $5 billion and in September the trust exercised an option enshrined in bankruptcy documents to force Chrysler into an initial public offering (IPO). Wednesday’s deal will allow Chrysler to avoid that IPO. The merger will allow both companies to operate with a single set of financial statements, said Jack R. Nerad, the executive editorial director at Kelley Blue Book.It will create a company with enough global scale to challenge the world’s leading car makers, General Motors, Volkswagen and Toyota. “I have been looking forward to this day from the very moment that we were chosen to assist in the rebuilding of a vibrant Chrysler back in 2009,” John Elkann, the chairman of Fiat, told the New York Times. Chrysler’s sales have soared recently with a number of successful new models, including the Jeep Grand Cherokee, Ram pickup truck and the Dodge Dart compact car. The company reported a profit during the first quarter of 2011 for the first time in five years, which enabled it to repay its government loans. Chrysler’s overall market share in the US was 9.3 percent during the first 11 months of 2013, compared to Fiat’s tiny 1.4 percent. Worldwide the two companies sold 4.5 million vehicles. But Fiat has been losing sales in Europe and Machrionne’s plan to shore up its losses depends on the two companies successfully sharing technology and allowing Fiat to expand its model range. “This is an increasingly American company now, because in Europe, and especially in Italy, the business conditions remain difficult. Fiat has already lost many of its market positions in Europe and it won’t be easy to recover that,” Andrea Giuricin, a transport analyst at Milan’s Bicocca University, told Reuters.

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January13, 2014 #37

TBILISI GUIDE January13, 2014 #37

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 15 Gorgasali Exit, 0105 Tbilisi, Georgia Tel: +995 32 291 01 94; +995 32 291 01 95 Fax: +99 532 291 02 70 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, NIKORA AND SMART

PUBLICITY caucasian business week

January13, 2014 #37